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 30, 2000

                                       OR

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

Commission file number 1-7753

                           DECORATOR INDUSTRIES, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

        Pennsylvania                                     25-1001433
-------------------------------                      --------------------
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                        Identification No.)

    10011 Pines Blvd., Pembroke Pines, Florida             33024
    ------------------------------------------          ----------
    (Address of principal executive offices)             (Zip Code)

Registrant's telephone number, including area code:  (954) 436-8909

Securities registered pursuant to Section 12(b) of the Act:

        Title of each class           Name of each exchange on which registered
        -------------------           -----------------------------------------
Common Stock, Par Value $.20 Per Share        American Stock Exchange

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

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 ____

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]

Aggregate market value at March 15, 2001 of outstanding shares of Common Stock
other than shares held by officers, directors and their respective associates:
$6,828,385

Number of shares outstanding at March 15, 2001:  2,796,576

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

<PAGE>


Cautionary Statement: The Company's Reports on Form 10-K and Form 10-Q, any
Current Reports on Form 8-K, and any other written or oral statements made by or
on behalf of the Company contain or may contain statements relating to future
events, including results of operations, that are considered "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements represent the Company's expectations or
belief as to future events and, by their very nature, are subject to risks and
uncertainties which may result in actual events differing materially from those
anticipated. In particular, future operating results will be affected by the
level of demand for recreational vehicles, manufactured housing and hotel/motel
accommodations and may be affected by changes in economic conditions, interest
rate fluctuations, competitive products and pricing pressures within the
Company's markets, the Company's ability to contain its manufacturing costs and
expenses, and other factors. Any forward-looking statements by the Company speak
only as of the date made, and the Company undertakes no obligation to update or
revise such statements to reflect events or circumstances after such date or to
reflect the occurrence of unanticipated events.




NOTE: In this report, unless the context otherwise requires, Registrant or
Company means Decorator Industries, Inc. and its subsidiaries, herein sometimes
also called "Decorator Industries". Reference to a particular year or the
captions "For the Year" and "At Year End" refer to the fiscal periods as
follows:

                     2000 - 52 weeks ended December 30, 2000
                     1999 - 52 weeks ended January 1, 2000
                     1998 - 52 weeks ended January 2, 1999
                     1997 - 53 weeks ended January 3, 1998
                     1996 - 52 weeks ended December 28, 1996
                     1995 - 52 weeks ended December 30, 1995


                                     PART I
                                     ------

Item 1.  Business.

         The Company is engaged in the design, manufacture and sale of window
coverings, bedspreads and complementary products. These products are sold to
original equipment manufacturers of recreational vehicles and manufactured
housing and to the hospitality industry (motels/hotels) either through
distributors or directly to the customers.

         The Company has one industry segment and one class of products. The
business in which the Company is engaged is very competitive, and the Company
competes with manufacturers located throughout the country. However, no reliable
information is available to enable the Company to determine its relative
position among its competitors. The principal methods of competition are price,
design and service.

         During 2000, two customers, Fleetwood Enterprises and Champion
Enterprises, accounted for approximately 21.5% and 10.3% respectively of the
Company's total sales. In the event of the loss of one or both of these
customers, there would be a material adverse effect on the Company. Fleetwood
operates in the manufactured housing and recreational vehicle industries,
whereas Champion operates solely in manufactured housing.


<PAGE>


         The Company's backlog of orders at any given time is not material in
amount and is not significant in the business. No material portion of the
Company's sales or income is derived from customers in foreign countries.

         The chief raw materials used by the Company are largely fabrics made
from both natural and man-made fibers. The raw materials are obtained primarily
from converters and mills. The Company is not dependent upon one or a very few
suppliers. Most of its suppliers are large firms with whom, in the opinion of
management, the Company enjoys good relationships. The Company has never
experienced any significant shortage in its supply of raw materials.

         The Company has no significant patents, licenses, franchises,
concessions, trademarks or copyrights. Expenditures for research and development
during 2000 and 1999 were not significant.

         Compliance with federal, state and local environmental protection
provisions is not expected to have a material effect upon the capital
expenditures, earnings or competitive position of the Company.

         The Company employs approximately 520 sales, production, warehouse and
administrative employees and also uses the services of independent sales
representatives.

Item 2.  Properties.

         The following table summarizes certain information concerning the
Company's properties:
<TABLE>
<CAPTION>

                                                                        Approx.
      Location                            Principal Use               Square Feet      Owned/Leased
      --------                            -------------               -----------      ------------
<S>                          <C>                                        <C>              <C>
Haleyville, Alabama          Offices, manufacturing and warehouse       54,000           Owned
Red Bay, Alabama             Offices, manufacturing and warehouse       35,000           Leased
Lakeland, Florida            Offices, manufacturing and warehouse        7,500           Leased
Pembroke Pines, Florida      Offices                                     3,148           Leased
Eatonton, Georgia            Offices, manufacturing and warehouse        5,000           Leased
Elkhart, Indiana             Offices, manufacturing and warehouse       16,000           Leased
Elkhart, Indiana             Offices, manufacturing and warehouse       35,000           Leased
Goshen, Indiana              Offices, manufacturing and warehouse       55,700            Owned
Bossier, Louisiana           Offices, manufacturing and warehouse       20,000            Owned
Salisbury, North Carolina    Offices, manufacturing and warehouse       22,500           Leased
Berwick, Pennsylvania        Offices, manufacturing and warehouse       12,500           Leased
Bloomsburg, Pennsylvania     Offices, manufacturing and warehouse       56,500            Owned
Abbotsford, Wisconsin        Offices, manufacturing and warehouse       21,600           Leased
</TABLE>

         The Company considers that its offices, plants, machinery and equipment
are well maintained, adequately insured and suitable for their purposes and that
its plants are adequate for the presently anticipated needs of the business. The
Goshen, IN and Bloomsburg, PA facilities are subject to mortgages financed as
mentioned in Note 7 of the financial statements.

Item 3.  Legal Proceedings.

         None.

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

         None.

                                        2

<PAGE>
                                     PART II
                                     -------

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

         The Company's Common Stock is listed and traded on the American Stock
Exchange, AMEX symbol DII.

         Common Stock price information is set forth in the table below.
                        2000 Sales Prices           1999 Sales Prices
                        -----------------           -----------------
                      High            Low           High           Low
                      ----            ---           ----           ---
First Quarter         5.375          4.4375         8.250         6.000
Second Quarter        5.125          4.563          7.625         6.1875
Third Quarter         4.750          3.375          7.3125        5.3125
Fourth Quarter        4.250          2.500          5.875         5.000

         As of March 15, 2001, the Company had 338 shareholders of record of its
Common Stock.

         Total cash dividend payments were $.24 and $.28 per share in 2000 and
1999, respectively.

                                        3

<PAGE>

                           DECORATOR INDUSTRIES, INC.

                         Item 6. Selected Financial Data

<TABLE>
<CAPTION>


                                            2000           1999            1998            1997            1996            1995
                                            ----           ----            ----            ----            ----            ----
FOR THE YEAR
------------
<S>                                       <C>             <C>            <C>             <C>             <C>             <C>
    Net Sales                             $42,609,584     $49,206,018    $48,788,610     $41,877,163     $38,649,687     $34,207,259
    Income from Continuing Operations     $ 1,037,112     $ 2,717,418    $ 3,090,230     $ 3,094,084     $ 3,065,220     $ 2,414,678
    Net Income                            $   133,198     $ 2,552,278    $ 3,080,895     $ 2,898,339     $ 3,065,220     $ 2,414,678
                                          -----------     -----------    -----------     -----------     -----------     -----------
AT YEAR-END
-----------
    Total Assets                          $18,855,387     $21,665,523    $21,462,694     $20,301,268     $18,394,357     $16,415,659
    Long-term Obligations                 $ 1,709,686     $ 1,814,169    $   463,037     $   506,169     $   549,433     $   587,084
    Long-term Debt/Total Capitalization         12.49%          11.21%          2.89%           3.41%           4.05%           5.00
    Working Capital                       $ 5,154,647     $ 6,646,856    $ 8,244,161     $ 8,406,250     $ 9,003,836     $ 6,925,352
    Current Ratio                              2.07:1          2.30:1         2.59:1          2.61:1          2.94:1          2.54:1
    Stockholders' Equity                  $11,979,479     $14,364,969    $15,559,732     $14,347,297     $13,010,945     $11,147,754
                                          -----------     -----------    -----------     -----------     -----------     -----------
PER SHARE
---------
    Continuing Operations                 $      0.34     $      0.80    $      0.85     $      0.83     $      0.84     $      0.60
    Basic                                 $      0.04     $      0.76    $      0.85     $      0.78     $      0.84     $      0.60
    Diluted                               $      0.04     $      0.73    $      0.79     $      0.73     $      0.78     $      0.55
    Book Value                            $      4.29     $      4.50    $      4.37     $      3.94     $      3.52     $      2.99
    Cash Dividends Declared               $      0.24     $      0.28    $      0.28     $      0.28     $      0.28     $      0.27
</TABLE>



Note:    This schedule has been adjusted for the affect of discontinued
         operations. Per share amounts, except for cash dividends, have been
         adjusted for five-for-four stock splits effective July 21, 1998 and
         June 13, 1997 and a four-for-three stock split in June 1996.


                                        4

<PAGE>

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

Liquidity and Financial Resources:

         The Company's financial condition continues to be strong, as evidenced
by the following statistical measures:

         1) Working capital at December 30, 2000 was $5,154,647 compared to
            $6,646,856 at January 1, 2000.

         2) The current ratio was 2.07:1 at year-end 2000 compared to 2.30:1 at
            year-end 1999.

         3) The liquid ratio changed to .99:1 at year-end 2000 from 1.18:1 at
            year-end 1999.

         4) The long-term debt ratio was 12.49% at December 30, 2000 compared to
            11.21% a year earlier. The increase is due to a reduction in
            stockholders' equity caused largely by the purchase of treasury
            shares.

         A significant use of working capital was made for purchases of Common
Stock to be held for the treasury, $1,856,253.

         Net accounts receivable decreased $230,880 (6%) and net inventories
decreased $536,063 (9%).

         Capital expenditures for 2000 were $631,064 compared to $2,234,157 in
1999 which included $1,500,000 for the construction of a new building in Goshen,
Indiana.

         The Company had no borrowings at year-end under its $5,000,000
revolving line-of-credit. The loss sustained in the fourth quarter caused the
Company to violate one of the financial covenants contained in the loan
agreement. The lender has waived this violation through May 15, 2001 and amended
the covenants to allow the Company to operate at the current levels without the
probability of additional violations. The lender has extended the term of the
loan agreement through June 30, 2003. Management believes that its liquidity and
available borrowing capacity are more than adequate to finance internal growth
and any additional acquisitions of businesses.

Results of Operations:

         The following table shows the percentage relationship to net sales of
certain items in the Company's Statement of Earnings:

                                            200           1999           1998
                                            ----          ----           ----
Net sales...............................    100.0%        100.0%         100.0%
Cost of products sold...................     79.6          77.3           77.2
Selling and administrative expenses.....     16.4          13.7           13.3
Interest and investment income.........       (.1)          (.1)           (.4)
Interest expense........................       .3            .1             --
Income from continuing operations.......      2.4           5.5            6.3
Net income.............................        .3           5.2            6.3


                                        5

<PAGE>



2000 vs. 1999

Net sales for the year 2000 were $42,609,584 compared to 1999 sales of
$49,206,018. Increased sales to the hospitality market were offset by reduced
sales to the manufactured housing and recreational vehicle markets. The
Company's sales to the manufactured housing market continue to be adversely
affected by a decline in manufactured housing production, caused by an excess
dealer inventory of manufactured homes. Sales to the recreational vehicle market
are down due to a softness in the market.

Cost of goods sold as a percentage of sales increased to 79.6% in 2000 from
77.3% in 1999. This increase is attributable to fixed expenses being absorbed
over a smaller sales volume, higher labor costs due to the inefficiencies of
operating at lower volumes and higher material costs resulting from competitive
conditions. Also, the Company established reserves against certain non-moving
and excess inventories.

Selling and administrative expenses as a percentage of sales increased in 2000
to 16.4% from 13.7% in 1999. The increase results largely from fixed expenses
being absorbed over reduced sales volume, higher commission expense due to the
increased hospitality sales, and a charge for impairment of goodwill.

Net income was $133,198 in 2000 compared to $2,552,278 in 1999. This decrease is
attributable to the reduced sales volume and after tax losses from discontinued
operations of $903,914. Without the losses from discontinued operations, net
income would have been $1,037,112.

1999 vs. 1998

Net sales for the year 1999 were $52,546,556 compared to 1998 sales of
$51,966,829. Increased sales to the recreational vehicle market were offset by
reduced sales to the manufactured housing market. The Company's sales to the
manufactured housing market were adversely affected by a decline in manufactured
housing production, caused by an excess dealer inventory of manufactured homes.

Cost of goods sold as a percentage of sales increased to 78.7% in 1999 from
78.0% in 1998. This increase is largely attributable to (1) a change in the
product mix including the increased sales to recreational vehicle manufacturers
and (2) productivity issues resulting in excessive labor costs.

Selling and administrative expenses as a percentage of sales increased slightly
in 1999 to 13.5% from 13.1% in 1998. The increase results largely from
additional personnel and the relocation of the Goshen facility.

Interest and investment income decreased by $144,000 in 1999 because investable
balances were lower in 1999 than in 1998 and the market downturn caused the
Company to recognize a market loss of $94,000 in 1999 versus a loss of $32,000
in 1998.

The provision for income taxes as a percentage of pre-tax income increased to
37.8% compared to 35.8% in 1998. The 1998 rate was lower due to a stock option
tax benefit that did not occur in 1999.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.

         Not applicable.

Item 8.  Financial Statements and Supplementary Data.

         The financial statements and reports of independent certified public
         accountants listed in Item 14(a) of this report are filed under this
         Item 8.

                                        6
<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.

         Information concerning the directors and executive officers of the
Company is set forth below.

         William A. Bassett, age 64, has been President and a director of the
Company since 1980, Chief Executive Officer since February 1993 and Chairman of
the Board since January 1994.

         Michael S. Baxley, age 44, has been Executive Vice President of the
Company since January 1999 and was appointed a director on August 2, 1999. He
was employed as Executive Vice President for the Apparel Group of Scovill
Fasteners, Inc., a manufacturer of apparel and industrial fasteners, from
February 1997 to July 1998. Previously he was in various management positions
with ACD Tridon, a subsidiary of Devtek (Automotive products), Johnston &
Murphy, a division of Genesco (Footwear), Fruit of the Loom (Apparel), Procter &
Gamble (Consumer Products) and the U.S. Navy.

         Michael K. Solomon, age 51, has been Vice President of the Company
since November 1994, Treasurer and Chief Financial Officer of the Company since
1985 and a director of the Company since 1987.

         William A. Johnson, age 41, was appointed an officer of the Company on
June 12, 1998. He has been Controller since January 6, 1997. From 1993 until
1996, he held various financial positions with Security Management Corporation.

         Jerome B. Lieber, age 80, has been Secretary and a director of the
Company since 1961. He is Senior Counsel to the law firm of Klett Rooney Lieber
& Schorling, a Professional Corporation, Pittsburgh, Pennsylvania, which serves
as general counsel to the Company. Mr. Lieber previously had been a senior
partner in that firm.

         Joseph N. Ellis, age 72, has been a director of the Company since 1993.
He founded LaSalle-Deitch Co., Inc. a distributor of products for the
manufactured housing and recreational vehicle industry, in 1963 and served as
its President, Chief Executive Officer and Chairman from 1971 until his
retirement in 1992. Mr. Ellis is currently a management consultant.

         Ellen Downey, age 48, has been a director of the Company since 1997.
She served as a director of FRD Acquisition Corporation from 1996 to 1998. Ms.
Downey was employed by Ryder System, Inc. in various financial positions from
1978 to 1991 and from 1991 to 1993 served as Vice President and Treasurer of
that company.

         Thomas L. Dusthimer, age 66, has been a director of the Company since
1997. Since 1992 he has served as a consultant to and director of Key Bank
(Elkhart, Indiana District). From 1973 until his retirement in 1992, Mr.
Dusthimer served in various executive positions, including President, Chief
Executive Officer and Chairman, with Ameritrust Indiana Corporation and
Ameritrust National Bank.

                                        7


<PAGE>


Item 11.  Executive Compensation.

         The following table shows the compensation of the named executive
officers of the Company for each of the last three fiscal years.

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

                                                                                      Long-Term
                                                                                    Compensation
                                                   Annual Compensation                 Awards
                                        ------------------------------------------     ------
Name and                         Fiscal                                               Optioned        All Other Com-
Principal Position                Year     Salary($)     Bonus($)    Other($)(1)      Shares(#)      pensation($)(2)
------------------                ----     ---------     --------    -----------      ---------      ---------------
<S>                               <C>       <C>           <C>          <C>             <C>                <C>
William A. Bassett(3)             2000      300,000         ----          *             ----              36,832
Chairman of the Board,            1999      285,000        87,074         *            12,500             36,745
President and Chief               1998      262,000       127,000      89,977          31,250             36,745
Executive Officer

Michael S. Baxley(4)              2000      165,100         ----          *             ----               854
Executive Vice President          1999      161,925        39,183         *            20,000              ----


Michael K. Solomon                2000      118,820         ----          *             ----               1,464
Vice President, Treasurer         1999      118,820        20,000         *             5,000              1,553
and Chief Financial Officer       1998      114,650        24,000         *            12,500                447


</TABLE>
------------------------
(1)      Medical/dental reimbursement plan payments, country club memberships,
         relocation bonus, personal use of Company vehicles, and payments made
         in accordance with Company policy for disqualifying sales of Common
         Stock acquired upon the exercise of a qualified stock option. For 1998,
         payment to Mr. Bassett for such sales was $86,106. This payment
         provided a net benefit to the company of $16,359 for 1998. An asterisk
         indicates that the total of other annual compensation for that year was
         less than 10% of salary and bonus for that year.
(2)      Premiums paid by the Company on life and long-term disability insurance
         policies and Company contributions to the 401(k) Retirement Savings
         Plan.
(3)      The Company has an employment agreement with Mr. Bassett which provides
         for an annual salary of not less than $214,200. The agreement expires
         July 1, 2004.
(4)      The Company has an employment agreement with Mr. Baxley which provides
         a weekly salary of $3,175 and upon Mr. Baxley's termination, a
         continuation of salary and benefits for 12 months.


         The Company's medical and dental reimbursement plan provides
reimbursement to the corporate and certain divisional officers of the Company
and their dependents (as defined in Section 152 of the Internal Revenue Code)
for their medical and dental expenses. Benefits under the plan are limited to
10% of the participant's compensation during the plan year. The plan also
prohibits any participant from receiving "double reimbursement"; i.e., if a
participant receives reimbursement from another source, he or she must remit to
the Company benefits received under the plan.

         On September 1, 1998 the Company began a 401(k) Retirement Savings Plan
available to all eligible employees. To be eligible for the plan, the employee
must be at least 21 years of age and have completed one year of employment.
Eligible employees may contribute up to 15% of their earnings with a maximum of
$10,500 for 2000 based on the Internal Revenue Service annual contribution
limit. The Company will match 25% of the first 4% of the employee's
contributions up to 1% of the employee's earnings. Contributions are invested at
the direction of the employee in one or more funds. Company contributions begin
to vest after three years.

                                        8

<PAGE>


         The Company's 1984 Incentive Stock Option Plan, which expired February
22, 1994, authorized the granting to key employees of options to purchase up to
804,976 shares (as adjusted for stock splits) of the Company's Common Stock. The
purchase price of optioned shares was the fair market value of the Common Stock
on the date of grant, and the maximum term of the options is ten years; in the
case of options granted to employees who owned more than 10% of the outstanding
Common Stock, however, the purchase price was 110% of the fair market value of
the Common Stock on the date of grant and the term of the options is five years.
The number of optioned shares and the purchase price per share are subject to
adjustment for stock splits, stock dividends, reclassifications and the like.

         On April 3, 1995 the board of directors adopted, and on June 5, 1995
the stockholders approved, the Company's 1995 Incentive Stock Option Plan (the
"1995 Plan") which has a term of ten years. The 1995 Plan authorizes the
issuance of up to 520,830 shares (as adjusted for stock splits) of Common Stock
pursuant to stock options granted to key employees of the Company. The purchase
price of optioned shares must be the fair market value of the Common Stock on
the date of grant, and the maximum term of the options is ten years; in the case
of options granted to employees who own more than 10% of the outstanding Common
Stock, however, the purchase price must be 110% of the fair market value of the
Common Stock on the date of grant and the term of the option cannot exceed five
years. The number of shares that may be issued under the 1995 Plan, the number
of optioned shares and the purchase price per share are subject to adjustment
for stock splits, stock dividends, reclassifications and the like.

         The following table sets forth information concerning the exercise of
stock options during fiscal 2000 by the named executive officers and the value
of their unexercised, in-the-money stock options at the end of that fiscal year
December 30, 2000. All options outstanding at December 30, 2000, except for
those granted after fiscal 1995, were exercisable at any time prior to their
respective expiration dates.

                 AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                        AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>


                                    Shares                            Optioned         Value of
                                   Acquired         Value           Shares at       Options at
Name                              on Exercise     Realized ($)     12/30/00 (#)    12/30/00($)(1)
----                              -----------     ------------     ------------    --------------
<S>                                 <C>             <C>            <C>                <C>
William A. Bassett                  20,000          89,850         133,329(2)         80,484
                                                                    22,500(3)          ----
Michael S. Baxley                    ----            ----            7,000(2)          ----
                                                                    13,000(3)          ----
Michael K. Solomon                  14,290          66,877          38,704(2)          ----
                                                                     9,000(3)          ----
</TABLE>
--------------------------

(1)      Assumes a market value of $2.625 per share, which was the last reported
         sale price on the American Stock Exchange on December 29, 2000.
(2)      Exercisable.
(3)      Unexercisable.

Compensation of Directors

         Directors who are not employees of the Company are paid a fee of
$10,000 per year for their scheduled services as directors. The fee is paid
quarterly in shares of the Company's Common Stock valued at their closing price
on the American Stock Exchange on the third business day following the release
of sales and earnings for the preceding fiscal year. Under the Company's Stock
Plan for Non-Employee Directors, such directors may elect to defer receipt of
their shares, until after they leave the Board, by having them delivered to the
Trust established under the Plan. Directors are paid $1,000 per day for
additional meetings if needed. Members of the audit committee are paid ($1,000
per meeting for chairman and $500 per meeting for other members) for attending
audit committee meetings.


                                        9

<PAGE>


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

         Information concerning the common stockholding at March 15, 2001 of the
directors and named executive officers of the Company, and the directors and
executive officers as a group, is set forth in the following table. Unless
otherwise indicated, each stockholder has sole voting and investment power with
respect to the shares listed.

Name or Group                Shares Beneficially Owned     Percent of Class (1)
-------------                -------------------------     --------------------
William A. Bassett                   397,448(2)                   13.61%
Michael S. Baxley                     14,000(3)                   ------
Michael K. Solomon                   106,433(4)                    3.75%
Jerome B. Lieber                      13,705(5)(6)                ------
Joseph N. Ellis                        2,500(6)                   ------
Ellen Downey                           1,562(6)                   ------
Thomas L. Dusthimer                    1,250(6)                   ------
All directors and executive
officers as a group                  536,898(7)                    18.04%

----------------------------
(1)      Shares which the named stockholder has the right to acquire within 60
         days are deemed outstanding for the purpose of computing that
         stockholder's percentage.
(2)      Includes 133,329 optioned shares which may be acquired within 60 days
         and 26,182 shares held as Trustee of the trust established under the
         Company's Stock Plan for Non-Employee Directors (the "Trust"). Mr.
         Bassett disclaims beneficial ownership of the shares he holds as
         Trustee.
(3)      Includes 7,000 optioned shares, which may be acquired within 60 days.
(4)      Includes 38,704 optioned shares, which may be acquired within 60 days.
(5)      Includes 5,040 shares held in a charitable trust as to which Mr. Lieber
         disclaims beneficial ownership.
(6)      Excludes shares held in the Trust for his or her account.
(7)      Includes 179,033 optioned shares, which may be acquired within 60 days.

         FMR Corp. of Boston, Massachusetts, has furnished the Company a copy of
its Schedule 13G dated February 14, 2000 in which it reported that as of
December 31, 1999 Fidelity Management & Research Company, a wholly-owned
subsidiary of FMR Corp. and a registered investment adviser, had sole investment
power with respect to 200,015 shares (7.15%) of the Company's Common Stock. No
further reports have been received from FMR Corp.

         First Manhattan Co. of New York, New York has furnished the Company a
copy of its Schedule 13G dated February 9, 2000 in which it reported beneficial
ownership of a total of 261,868 shares (9.36%) of the Company's Common Stock
including sole power to vote and dispose of 17,112 shares, shared power to vote
236,401 shares and shared power to dispose of 244,756 shares. First Manhattan is
a registered broker-dealer and investment adviser. No further reports have been
received from First Manhattan Co.

         Robert Robotti of New York, New York has furnished the Company a copy
of his Schedule 13G dated February 2001 in which he reported beneficial
ownership of 235,656 shares (8.43%), of which Mr. Robotti has shared voting
power and shared dispositive power. Mr. Robotti is the owner of Robotti &
Company (134,995 shares), and a general partner in Ravenswood Investment
Company, L.P. (22,593 shares) and also in Wilmac Partners, Ltd. (78,068 shares).

Item 13.  Certain Relationships and Related Transactions.

         None.

                                       10

<PAGE>




                                     PART IV
                                     -------

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

         (a)      The following documents are filed as a part of this report:
                  ----------------------------------------------------------

                  Financial Statements and Schedules
                  ----------------------------------

                  (1)      Independent Auditors' Report

                  (2)      Balance Sheets - December 30, 2000 and January 1,2000

                  (3)      Statements of Earnings for the three fiscal years
                           ended December 30, 2000

                  (4)      Statements of Stockholders' Equity for the three
                           fiscal years ended December 30, 2000

                  (5)      Statements of Cash Flows for the three fiscal years
                           ended December 30, 2000

                  (6)      Notes to the Financial Statements

                  (7)      Independent Auditors' Report on Financial Statement
                           Schedule

                  Schedule VIII - Valuation and Qualifying Accounts

                  All other schedules are omitted because they are not required
                  or are inapplicable or the information is included in the
                  financial statements or notes thereto.

         Exhibits

         3A       Articles of Incorporation as amended to date, filed as Exhibit
                  3A to Form 10-K for the fiscal year ended December 28, 1985
                  and incorporated herein by reference.

         3B.1     By-laws as amended to date, filed as Exhibit 3B.1 to Form 10-Q
                  for the Quarter ended July 2, 1988 and incorporated herein by
                  reference.

         10E      Lease dated February 9, 1984 between registrant, as lessee,
                  and Leon and Eleanor Bradshaw covering property at 500 North
                  Long Street, Salisbury, North Carolina, filed as Exhibit
                  10(b)(4)(iv) to Registration Statement No. 2-92853 and
                  incorporated herein by reference.

         10H      Lease Agreement dated December 13, 1983 covering property at
                  101 West Linden Street, Abbotsford, Wisconsin, and assignment
                  thereof to the registrant, as lessee, dated October 2, 1985,
                  filed as Exhibit 10H to Form 10-K for the fiscal year ended
                  December 28, 1985 and incorporated herein by reference.

         10H.1    Lease Modification Agreement dated May 20, 1988 regarding
                  Exhibit 10H, filed as Exhibit 10H.1 to Form 10-K for the
                  fiscal year ended December 31, 1988 and incorporated herein by
                  reference.


                                       11
<PAGE>




         10H.2    Lease Modification Agreement dated September 30, 1996
                  regarding Exhibit 10H, filed as Exhibit 10H.2 to Form 10-K for
                  the fiscal year ended December 28, 1996 and incorporated
                  herein by reference.

         10K.1    1984 Incentive Stock Option Plan, as amended to date, filed as
                  Exhibit 10K.1 to Form 10-Q for the quarter ended October 3,
                  1987 and incorporated herein by reference.*

         10M.1    Medical and Dental Reimbursement Plan, as amended to date,
                  filed as Exhibit 10M.1 to Form 10-K for the fiscal year ended
                  January 3, 1987 and incorporated herein by reference.*

         10T      Employment Agreement dated August 2, 1994 between the
                  registrant and William Bassett, filed as Exhibit 10T to Form
                  10-Q for the quarter ended July 2, 1994 and incorporated
                  herein by reference.*

         10U      1995 Incentive Stock Option Plan, filed as Exhibit 10U to Form
                  10-K for the fiscal year ended December 30, 1995 and
                  incorporated herein by reference.*

         10W      Stock Plan for Non-employee Directors and related Grantor
                  Trust Agreement, filed as Exhibit 10W to Form 10-Q for the
                  quarter ended June 28, 1997 and incorporated herein by
                  reference.*

         10X      Employment Agreement dated January 5, 1999 between the
                  registrant and Michael S. Baxley, filed as Exhibit 10X to Form
                  10-K for the fiscal year ended January 1, 2000 and
                  incorporated herein by reference.*

         10Y      Revolving line of credit agreement with Comerica Bank dated
                  April 19, 2000, filed as Exhibit 10Y to Form 10-Q for the
                  quarter ended April 1, 2000 and incorporated herein by
                  reference.

         10Y.1    Amendment effective March 30, 2001 to Exhibit 10Y, filed
                  herewith.

         10Y.2    Promissory Note dated April 19, 2000, and Amendment thereto
                  effective March 30, 2001, relating to Exhibit 10Y, filed
                  herewith.


         11.P     Computation of diluted income per share, filed herewith.

         23.B     Consent of Independent Auditors, filed herewith.

         -----------------------
         *Management contract or compensatory plan.


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

                  No reports on Form 8-K were filed during the last quarter of
                  2000.


                                       12

<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.



                                               DECORATOR INDUSTRIES, INC.
                                                      (Registrant)


                                               By:   /s/ Michael K. Solomon
                                                     ---------------------------
                                                     Michael K. Solomon
                                                        Vice President

Dated:   March 27, 2001

         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 date indicated.
<TABLE>
<CAPTION>

Name                                  Title                            Signature                      Date
----                                  -----                            ---------                      ----

<S>                                                                                                    <C> <C>
William A. Bassett          Chairman, President,           /s/ William A. Bassett                March 27, 2001
                            Chief Executive Officer and    ---------------------------
                            Director



Michael S. Baxley           Executive Vice President and   /s/ Michael S. Baxley                 March 27, 2001
                            Director                       ---------------------------


Michael K. Solomon          Vice President, Treasurer,     /s/ Michael K. Solomon                March 27, 2001
                            Principal Financial and        ---------------------------
                            Accounting Officer,
                            And Director


Jerome B. Lieber            Director                       /s/ Jerome B. Lieber                  March 27, 2001
                                                           ---------------------------

Joseph N. Ellis             Director                       /s/ Joseph N. Ellis                   March 27, 2001
                                                           ---------------------------

Ellen Downey                Director                       /s/ Ellen Downey                      March 27, 2001
                                                           ---------------------------

Thomas Dusthimer            Director                       /s/ Thomas Dusthimer                  March 27, 2001
                                                           ---------------------------
</TABLE>
                                       13

<PAGE>




                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------

To the Board of Directors
 and Stockholders of
Decorator Industries, Inc.

         We have audited the accompanying balance sheets of Decorator
Industries, Inc. as of December 30, 2000 and January 1, 2000 and the related
statements of earnings, stockholders' equity and cash flows for each of the
three fiscal years in the period ended December 30, 2000. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

         We conducted our audits in accordance with generally accepted auditing
standards. Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Decorator
Industries, Inc. as of December 30, 2000 and January 1, 2000, and the results of
its operations and its cash flows for each of the three fiscal years in the
period ended December 30, 2000 in conformity with generally accepted accounting
principles.

                                          LOUIS PLUNG & COMPANY, LLP
                                          Certified Public Accountants







Pittsburgh, Pennsylvania
February 28, 2001 (March 20, 2001 as to Note 7)


                                       F-1


<PAGE>


                           DECORATOR INDUSTRIES, INC.
                                 BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                                    Fiscal Year End
                             ASSETS                                           2000                   1999
                             ------                                       ------------           ------------
<S>                                                                       <C>                    <C>
Current Assets:
    Cash and Cash Equivalents                                             $    307,819           $    484,328
    Short-term Investments                                                          --              1,455,796
    Accounts Receivable, less allowance for
      doubtful accounts ($144,395 and $158,996)                              3,494,676              3,725,556
    Inventories                                                              5,203,240              5,739,303
    Other Current Assets                                                       947,134                372,258
                                                                          ------------           ------------
Total Current Assets                                                         9,952,869             11,777,241
                                                                          ------------           ------------
Property and Equipment:
    Land, Buildings & Improvements                                           4,144,229              4,123,189
    Machinery, Equipment, Furniture and Fixtures                             5,326,181              4,808,280
                                                                          ------------           ------------
Total Property and Equipment                                                 9,470,410              8,931,469
    Less: Accumulated Depreciation and Amortization                          3,659,764              3,104,989
                                                                          ------------           ------------
Net Property and Equipment                                                   5,810,646              5,826,480
                                                                          ------------           ------------
Goodwill, less accumulated
    Amortization of $1,243,980 and $1,189,871                                2,836,306              3,648,965
Other Assets                                                                   255,566                412,837
                                                                          ------------           ------------
Total Assets                                                              $ 18,855,387           $ 21,665,523
                                                                          ============           ============


        LIABILITIES & STOCKHOLDERS' EQUITY
        ----------------------------------

Current Liabilities:
    Accounts Payable                                                      $  2,393,004           $  3,100,681
    Current Maturities of Long-term Debt                                       104,640                103,871
    Accrued Expenses:
      Compensation                                                             789,681              1,278,660
      Other                                                                  1,510,897                647,173
                                                                          ------------           ------------
Total Current Liabilities                                                    4,798,222              5,130,385
                                                                          ------------           ------------

Long-Term Debt                                                               1,709,686              1,814,169
Deferred Income Taxes                                                          368,000                356,000
                                                                          ------------           ------------
Total Liabilities                                                            6,875,908              7,300,554
                                                                          ------------           ------------

Stockholders' Equity
    Common stock $.20 par value: Authorized shares, 10,000,000;
       Issued shares, 4,444,997 and 4,408,831                                  888,999                881,766
    Paid-in Capital                                                          1,441,655              1,427,788
    Retained Earnings                                                       17,777,461             18,368,158
                                                                          ------------           ------------
                                                                            20,108,115             20,677,712
    Less: Treasury stock, at cost: 1,653,437 and 1,219,801 shares            8,128,636              6,312,743
                                                                          ------------           ------------
Total Stockholders' Equity                                                  11,979,479             14,364,969
                                                                          ------------           ------------
Total Liabilities and Stockholders' Equity                                $ 18,855,387           $ 21,665,523
                                                                          ============           ============
</TABLE>



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


                                       F-2


<PAGE>


                           DECORATOR INDUSTRIES, INC.
                             STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>

                                                                                              For the Fiscal Year
                                                                                               -------------------
                                                                               2000                 1999                   1998
                                                                           ------------          ------------          ------------
<S>                                                                          <C>                   <C>                   <C>
Net Sales                                                                  $ 42,609,584          $ 49,206,018          $ 48,788,610

Cost of Products Sold                                                        33,906,006            38,055,987            37,659,324
                                                                           ------------          ------------          ------------
Gross Profit                                                                  8,703,578            11,150,031            11,129,286
Selling and Administrative Expenses                                           6,987,203             6,762,698             6,500,415
                                                                           ------------          ------------          ------------
Operating Income                                                              1,716,375             4,387,333             4,628,871

Other Income (Expense):

    Interest and Investment Income                                               55,899                50,183               194,456

    Interest Expense                                                           (114,162)              (70,098)               (9,097)
                                                                           ------------          ------------          ------------
Earnings Before Income Taxes                                                  1,658,112             4,367,418             4,814,230

Provision for Income Taxes                                                      621,000             1,650,000             1,724,000
                                                                           ------------          ------------          ------------
Income from Continuing Operations                                             1,037,112             2,717,418             3,090,230

Loss from Discontinued Operations, net of income tax
benefit of $93,000, $101,000, and $6,000                                       (152,433)             (165,140)               (9,335)

Loss on Disposal of Discontinued Operations, net of
income tax benefit of $460,000                                                 (751,481)                   --                    --
                                                                           ------------          ------------          ------------
Net Income                                                                 $    133,198          $  2,552,278          $  3,080,895
                                                                           ============          ============          ============

Earnings Per Share:

    Continuing Operations                                                  $       0.34          $       0.80          $       0.85
                                                                           ============          ============          ============
    Basic                                                                  $       0.04          $       0.76          $       0.85
                                                                           ============          ============          ============
    Diluted                                                                $       0.04          $       0.73          $       0.79
                                                                           ============          ============          ============

Average Number of Shares Outstanding:

    Basic                                                                     3,041,364             3,378,721             3,631,457

    Diluted                                                                   3,077,260             3,517,681             3,880,619
</TABLE>



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

                                       F-3


<PAGE>


                           DECORATOR INDUSTRIES, INC.
                       STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>

                                                COMMON          PAID-IN            RETAINED          TREASURY
                                                STOCK           CAPITAL            EARNINGS            STOCK               TOTAL
                                               --------       ------------        -----------       -----------        ------------
<S>                                         <C>             <C>                 <C>                <C>                 <C>
Balance at
January 3, 1998                             $ 692,794       $  1,513,280        $ 14,588,269       $ (2,447,046)       $ 14,347,297

Transactions for 1998
    Net profit                                                                     3,080,895                              3,080,895

    Issuance of stock for
    exercise of options                         7,138             14,731                                                     21,869

    Issuance of stock for
    directors compensation                                        28,377                                 23,720              52,097

    Stock option tax
    benefit                                                       16,350                                                     16,350

    Purchase of common
    stock for treasury                                                                               (1,044,240)         (1,044,240)

    Dividends paid                                                                  (912,787)                              (912,787)

    Record stock split                        174,852           (176,601)                                                    (1,749)

                                            ---------       ------------        ------------       ------------        ------------
Balance at
January 2, 1999                             $ 874,784       $  1,396,137        $ 16,756,377       $ (3,467,566)       $ 15,559,732

Transactions for 1999
    Net profit                                                                     2,552,278                              2,552,278

    Issuance of stock for
    exercise of options                         6,982             11,850                                                     18,832

    Issuance of stock for
    directors compensation                                        19,801                                 33,503              53,304

    Purchase of common
    stock for treasury                                                                               (2,878,680)         (2,878,680)

    Dividends paid                                                                  (940,497)                              (940,497)

                                            ---------       ------------        ------------       ------------        ------------
Balance at
January 1, 2000                             $ 881,766       $  1,427,788        $ 18,368,158       $ (6,312,743)       $ 14,364,969

Transactions for 2000
    Net profit                                                                       133,198                                133,198

    Issuance of stock for
    exercise of options                         7,233             14,227                                                     21,460

    Issuance of stock for
    directors compensation                                          (360)                                40,360              40,000

    Purchase of common
    stock for treasury                                                                               (1,856,253)         (1,856,253)

    Dividends paid                                                                  (723,895)                              (723,895)

                                            ---------       ------------        ------------       ------------        ------------
Balance at
December 30, 2000                           $ 888,999       $  1,441,655        $ 17,777,461       $ (8,128,636)       $ 11,979,479
                                            =========       ============        ============       ============        ============
</TABLE>

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


                                       F-4


<PAGE>


                           DECORATOR INDUSTRIES, INC.
                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>


                                                                                      For the Fiscal Year
                                                                                      -------------------
                                                                         2000                1999                  1998
                                                                    -----------          -----------          -----------
<S>                                                                 <C>                  <C>                  <C>
Cash Flows From Operating Activities:
    Net Income                                                      $   133,198          $ 2,552,278          $ 3,080,895
    Adjustments to Reconcile Net Income to Net Cash
    Provided by Operating Activities:
        Depreciation and Amortization                                   752,672              682,821              569,681
        Write-off of goodwill                                           705,976
        Provision for Losses on Accounts Receivable                     168,709               93,000               68,471
        Deferred Taxes                                                 (151,000)              64,000               41,000
        (Gain) Loss on Disposal of Assets                                 7,868              (10,579)              (5,206)
    Increase (Decrease) from Changes in:
        Accounts Receivable                                              62,171               28,879             (272,403)
        Short-term Investments                                        1,455,796             (594,764)           1,145,850
        Inventory                                                       536,063              (14,077)          (1,146,845)
        Prepaid Expenses                                               (411,876)               2,136             (137,969)
        Other Assets                                                    157,271              179,110             (417,547)
        Accounts Payable                                               (707,677)             230,792             (244,772)
        Accrued Expenses                                                374,745             (334,070)             180,185
                                                                    -----------          -----------          -----------
Net Cash Provided by Operating Activities                             3,083,916            2,879,526            2,861,340
                                                                    -----------          -----------          -----------

Cash Flows From Investing Activities:
    Capital Expenditures                                               (631,064)          (2,234,157)          (1,166,032)
    Proceeds from Property Dispositions                                   2,539               20,049               16,742
    Note Receivable                                                          --                   --               60,000
    Deferred Purchase Price Payments                                     (9,498)            (479,918)            (385,030)
                                                                    -----------          -----------          -----------
Net Cash Used in Investing Activities                                  (638,023)          (2,694,026)          (1,474,320)
                                                                    -----------          -----------          -----------

Cash Flows From Financing Activities:
    Long-term Debt Payments                                            (103,714)             (88,130)             (42,422)
    Proceeds on debt from new building                                       --            1,500,000                   --
    Dividend Payments                                                  (723,895)            (940,497)            (912,787)
    Proceeds from Exercise of Stock Options                              21,460               18,832               21,869
    Cash in Lieu of Fractional Shares                                        --                   --               (1,749)
    Issuance of Stock for Director's Compensation                        40,000               53,304               52,097
    Stock Option Tax Benefit                                                 --                   --               16,350
    Purchase of Common Stock for Treasury                            (1,856,253)          (2,878,680)          (1,044,240)
                                                                    -----------          -----------          -----------
Net Cash Used in Financing Activities                                (2,622,402)          (2,335,171)          (1,910,882)
Net Increase (Decrease) in Cash and Cash Equivalents                   (176,509)          (2,149,671)            (523,862)
Cash and Cash Equivalents at Beginning of Year                          484,328            2,633,999            3,157,861
                                                                    -----------          -----------          -----------
Cash and Cash Equivalents at End of Period                          $   307,819          $   484,328          $ 2,633,999
                                                                    ===========          ===========          ===========

Supplemental Disclosures of Cash Flow Information:
Cash Paid for:
    Interest                                                        $    92,340          $    71,639          $    25,630
    Income Taxes                                                    $   685,345          $ 1,423,178          $ 1,794,790

</TABLE>


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

                                       F-5

<PAGE>


                           DECORATOR INDUSTRIES, INC.
                          NOTES TO FINANCIAL STATEMENTS

(1)      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         ------------------------------------------

         Nature of Operations
         --------------------

         The Company is engaged in the design, manufacture and sale of window
         coverings, bedspreads, furniture and complementary products. These
         products are sold to original equipment manufacturers of recreational
         vehicles and manufactured housing and to the hospitality industry
         (motels/hotels) either through distributors or directly to the
         customers.

         The Company has one industry segment and one class of products. The
         business in which the Company is engaged is very competitive, and the
         Company competes with manufacturers located throughout the country.
         However, no reliable information is available to enable the Company to
         determine its relative position among its competitors. The principal
         methods of competition are price, design and service.

         Principles of Consolidation
         ---------------------------

         The consolidated financial statements include the accounts of the
         Company and all subsidiary companies. All significant intercompany
         accounts and transactions have been eliminated in consolidation.

         Fiscal Year
         -----------

         The Company's fiscal year is a 52-53 week period ending the Saturday
         nearest to December 31, which results in every sixth year containing 53
         weeks. Fiscal year 2000 was a 52-week period ending December 30, 2000;
         1999 was a 52-week period ending January 1, 2000 and 1998 was a 52-week
         period ending January 2, 1999.

         Inventories
         -----------

         Inventories are stated at the lower of cost (first-in, first-out
         method) or market.

         Property and Depreciation
         -------------------------

         Buildings and equipment are stated at cost, and depreciated on both
         straight-line and accelerated methods over estimated useful lives.
         Leasehold improvements are capitalized and amortized over the assets'
         estimated useful lives or remaining terms of leases, if shorter.
         Equipment is depreciated over 3-10 years, buildings over 20-30 years
         and leasehold improvements over 5-10 years.

         Excess of Cost over Net Assets Acquired
         ---------------------------------------

         The excess of investment costs over the fair value of net assets
         related to the acquisitions of Haleyville Manufacturing (1973), Liberia
         Manufacturing (1985) and Specialty Windows (1997) are being amortized
         over a period of 40 years. Amortization of $116,182 was charged to
         income during fiscal year ended December 30, 2000, $119,535 in fiscal
         year ended January 1, 2000, and $106,870 in fiscal year ended January
         2, 1999. For the year ended December 30, 2000 management wrote off
         $140,495 of excess cost related to Paragon Interiors (1995) and
         $565,481 related to Southern Interiors (1997). (See Note 13)

                                      F-6
<PAGE>

                           DECORATOR INDUSTRIES, INC.
                          NOTES TO FINANCIAL STATEMENTS

(1)      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
         -----------------------------------------------------

         The Company evaluates the impairment of goodwill on the basis of
         whether goodwill is recoverable from the projected undiscounted net
         income before goodwill amortization of the related assets.

         Reclassification
         ----------------

         Certain prior year amounts have been reclassified to conform to the
         current year presentation.

         Cash and Cash Equivalents
         -------------------------

         For purposes of the consolidated statements of cash flows, the Company
         considers all highly liquid investments with a maturity of three months
         or less at the time of purchase to be cash equivalents.

         Cash and cash equivalents consist of the following:

                                                    2000                1999
                                                    ----                ----
               General Funds                   $   36,989          $ (152,789)
               Overnight repurchase
                     agreements                   270,830             637,117
                                               ----------         -----------
                                               $  307,819         $  $484,328
                                               ==========         ===========


         Short-term Investments
         ----------------------

         Short-term investments are categorized as trading securities. The
         estimated fair values of the Company's trading securities, which are
         the amounts reflected in the balance sheet, are based on quoted market
         prices. A loss of $7,907 is included in income for the year ended
         December 30, 2000 compared to a loss of $94,013 for the year ended
         January 1, 2000.

         Deferred Income Taxes
         ---------------------

         The Company accounts for income taxes in accordance with the Statement
         of Financial Accounting Standards No. 109 "Accounting for Income
         Taxes," which requires the recognition of deferred tax liabilities and
         assets at currently enacted tax rates for the expected future tax
         consequences of events that have been included in the financial
         statements or tax returns.

         Credit Risk
         -----------

         The Company sells primarily on thirty day terms. The Company's
         customers are spread over a wide geographic area. As such the Company
         believes, that it does not have an abnormal concentration of credit
         risk within any one geographic area.



                                      F-7

<PAGE>

                           DECORATOR INDUSTRIES, INC.
                          NOTES TO FINANCIAL STATEMENTS

(1)      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
         -----------------------------------------------------

         Estimates
         ---------

         The preparation of financial statements in conformity with generally
         accepted accounting principles requires management to make estimates
         and assumptions that affect certain reported amounts and disclosures.
         Actual results may differ from these estimates and assumptions.

         Fair Value of Financial Instruments
         -----------------------------------

         Marketable securities are carried at fair value. All other financial
         instruments are carried at amounts believed to approximate fair value.

         Stock Split
         -----------

         The Company declared a five-for-four stock split effective July 21,
         1998. Per share and share data have been adjusted to reflect this stock
         split.

         Earnings Per Share
         ------------------

         Basic earnings per share is computed by dividing net income by
         weighted-average number of shares outstanding. Diluted earnings per
         share includes the dilutive effect of stock options. See note 11
         "Earnings Per Share" for computation of EPS.

         Stock Based Compensation
         ------------------------

         In accordance with the provisions of SFAS No. 123, the Company follows
         the intrinsic value based method of accounting as prescribed by APB 25,
         "Accounting for Stock Issued to Employees," for its stock-based
         compensation. Accordingly, no compensation cost is recognized.

         Segment Information
         -------------------

         The Company has one business segment, the interior furnishings
         business, and follows the requirements of SFAS No. 131, "Disclosures
         about Segments of an Enterprise and Related Information."

         Recent Accounting Developments
         ------------------------------

         The following Statements of Financial Accounting Standards (SFAS) were
         issued by the Financial Accounting Standards Board. These statements
         will have no effect on the Company.

         SFAS No. 138, "Accounting for Certain Derivative Instruments and
         Certain Hedging Activities--an amendment of FASB Statement No. 133"
         issued June 2000.

         SFAS No. 139, "Recission of FASB Statement No. 53 and amendments to
         FASB Statements No. 63, 89 and 121" issued June 2000.

         SFAS No. 140, "Accounting for Transfers and Servicing of Financial
         Assets and Extinguishments of Liabilities--a replacement of FASB
         Statement 125" issued September 2000.


                                       F-8
<PAGE>

                           DECORATOR INDUSTRIES, INC.
                          NOTES TO FINANCIAL STATEMENTS

(2)      ACQUISITIONS
         -------------

         As of March 15, 1997, the Company acquired the business and certain
         assets of Specialty Window Coverings Corp. for $2,455,783. Additional
         consideration of $705,415 was paid based on Specialty's earnings over
         the two years ending April 3, 1999. Specialty is an Elkhart, Indiana
         based manufacturer of pleated shades for the recreational vehicle
         market.

         As of May 12, 1997, the Company acquired the business and certain
         assets of Southern Interiors, Inc. for $844,313 and future
         consideration, not to exceed $500,000, based on Southern's sales over
         the three years ending July 1, 2000. Southern is located in Memphis,
         Tennessee and manufactures draperies for the hospitality market from
         fabric supplied by its customers, largely hotel design and supply
         firms. During the second quarter of 2000, the Company disposed of this
         operation. (See note 13.)

         These acquisitions have been included in the consolidated financial
         statements from the dates of acquisition. They have been accounted for
         as a purchase. In each case, the purchase price has been allocated to
         the underlying assets based upon their estimated fair values at the
         date of acquisition. The excess of purchase price over the fair value
         of the net assets acquired ("goodwill") is $1,965,743 and $605,548
         respectively, which is being amortized over 40 years.

         In December 1997 the Company decided to discontinue the manufacturing
         and sale of products for the retail market. This resulted in an
         after-tax loss of $136,918 on net sales of $412,492.

         The cash payments for deferred purchase price of $9,498, $479,918 and
         $385,030 represents the additional consideration paid for the
         acquisitions of Specialty Window Coverings and Southern Interiors.

(3)      INVENTORIES
         -----------

         Inventories consisted of the following classifications:

                                                      2000             1999
                                                      ----             ----
               Raw materials & supplies            $4,876,287       $5,363,747
               In process & finished goods            326,953          375,556
                                                   ----------       ----------
                                                   $5,203,240       $5,739,303
                                                   ==========       ==========

(4)      LEASES
         ------

         The Company leases certain buildings and equipment used in its
         operations. Building leases generally provide that the Company bears
         the cost of maintenance and repairs and other operating expenses. Rent
         expense was $536,987 in 2000, $519,971 in 1999 and $478,635 in 1998.

         Commitments under these leases extend through November 2006 and are as
         follows:

                                      2001              $455,286
                                      2002              $256,075
                                      2003              $110,086
                                      2004               $65,005
                                      2005               $62,379
                                Thereafter               $57,181



                                       F-9
<PAGE>

                           DECORATOR INDUSTRIES, INC.
                          NOTES TO FINANCIAL STATEMENTS

(5)      COMMITMENTS
         -----------

         The Company has commitments under certain employment and non-compete
         agreements entered into with individuals in management positions. The
         commitments under these agreements are payable $379,300, $214,200 and
         $214,200, respectively, from 2001 through 2003 and $107,100 thereafter.

(6)      SIGNIFICANT CUSTOMERS
         ---------------------

         Sales to Fleetwood Enterprises accounted for 21.5%, 20.3% and 20.1% of
         Company sales in 2000, 1999 and 1998, respectively. Fleetwood operates
         in the manufactured housing and recreational vehicle industries. Sales
         to Champion Enterprises accounted for 10.3%, 12.7% and 13.5% of Company
         sales in 2000, 1999 and 1998, respectively. Champion operates solely in
         the manufactured housing industry.

 (7)     LONG TERM-DEBT AND CREDIT ARRANGEMENTS
         --------------------------------------
<TABLE>
<CAPTION>

         Long-term debt consists of the following:
                                                                                       2000           1999
                                                                                       ----           ----
        <S>                                                                        <C>             <C>
        Note payable in monthly payments of $2,088 through August 2007 at 4%
        interest. This note is secured by the first mortgage on the Bloomsburg,
        PA building.                                                               $ $144,326      $  163,040

        Bond payable in monthly installments through November 2008.  The
        interest rate is variable and is currently less than 4%.  This bond is
        secured by the Company's Bloomsburg, PA property.                             275,000         300,000

        Bond payable in quarterly installments through March 2014.  The interest
        rate is variable and is currently less than 4%.  This bond is secured by
        the Company's Goshen, IN property.                                          1,395,000       1,455,000
                                                                                   ----------      ----------
                                                                                    1,814,326       1,918,040
        Less amount due within one year                                               104,640         103,871
                                                                                   ----------      ----------
                                                                                   $1,709,686      $1,814,169
                                                                                   ==========      ==========
</TABLE>

         The principal payments on long-term debt for the five years subsequent
         to December 30, 2000 are as follows:
                                            2001     $104,640
                                            2002     $105,440
                                            2003     $126,273
                                            2004     $127,140
                                            2005     $128,042

         On April 19, 2000 the Company signed an agreement for a $5,000,000
         revolving line of credit. The maximum borrowed under this agreement was
         $1,413,000 and there were no outstanding borrowings at December 30,
         2000. This agreement contains certain financial covenants, including a
         minimum net income requirement. The Company was in violation of that
         covenant as of December 30, 2000. The lender has waived this violation
         through May 15, 2001 and amended the covenants. This amended agreement
         will expire on June 30, 2003.


                                      F-10
<PAGE>

                           DECORATOR INDUSTRIES, INC.
                          NOTES TO FINANCIAL STATEMENTS

(8)      EMPLOYEE BENEFIT PLANS
         ----------------------

         On September 1, 1998 the Company began a 401(k) Retirement Savings Plan
         available to all eligible employees. To be eligible for the plan, the
         employee must be at least 21 years of age and have completed 1 year of
         employment. Eligible employees may contribute up to 15% of their
         earnings with a maximum of $10,500 for 2000 based on the Internal
         Revenue Service annual contribution limit. The Company will match 25%
         of the first 4% of the employee's contributions up to 1% of each
         employee's earnings. Contributions are invested at the direction of the
         employee to one or more funds. Company contributions begin to vest
         after three years. Company contributions to the plan were $53,261 in
         2000 and $59,745 in 1999.

(9)      STOCK OPTIONS
         -------------

         At December 30, 2000, the Company had options outstanding under two
         fixed stock option plans, which are described below. The Company
         applies APB Opinion 25 and related Interpretations in accounting for
         its plans. Accordingly, no compensation cost has been recognized for
         its fixed stock option plans. Had compensation cost for the Company's
         two fixed stock option plans been determined based on the fair value at
         the grant dates for awards under these plans consistent with the method
         of SFAS No. 123, the Company's net income and earnings per share would
         have been reduced to the pro forma amounts indicated below:
<TABLE>
<CAPTION>

                                                               2000                 1999               1998
                                                               ----                 ----               ----
<S>                                                          <C>                 <C>                <C>
        Pro forma net income (loss)                         $(21,147)         $2,426,020           $3,026,032
        Pro forma earnings (loss) per share:
            Basic                                             ($0.01)              $0.72               $0.83
            Diluted                                           ($0.01)              $0.69               $0.78
</TABLE>

         During the initial phase-in period of SFAS No. 123 the pro forma
         disclosure may not be representative of the impact on the net income in
         future years.

         Under the 1984 Incentive Stock Option Plan, which expired in 1994, the
         Company granted options to its employees for 804,976 shares (as
         adjusted for stock splits). Under the 1995 Incentive Stock Option Plan,
         the company may grant options to its key employees for up to 520,830
         (as adjusted for stock splits) shares of common stock. Under both
         plans, the exercise price of the option equals the fair market price of
         the Company's stock on the date of the grant and an option's maximum
         term is 10 years. Under the 1995 Incentive Stock Option Plan 260,410
         (as adjusted for stock splits) shares were granted in 1996, 7,813 (as
         adjusted for stock splits) shares were granted in 1997, 168,750 (as
         adjusted for stock splits) shares were granted in 1998 and 98,250
         shares were granted in 1999. The options granted in 1997 and 1996 vest
         20% each year starting with the date of the grant. The options granted
         in 1999 and 1998 vest 20% each year beginning at the end of the first
         year.



                                      F-11

<PAGE>

                           DECORATOR INDUSTRIES, INC.
                          NOTES TO FINANCIAL STATEMENTS

(9)      STOCK OPTIONS (Continued)
         ------------------------

         The fair value of 1996 and 1997 option grants are estimated on the date
         of grant using the Flexible Binomial options-pricing method with the
         following weighted-average assumptions used for the grants in 1997 and
         1996: dividend yield of 3.6 percent for all years; expected volatility
         of 40.6 percent for all years; risk-free interest rate of 6.4 percent
         for all years; and expected life of 3.7 years for all grants. The 1998
         grant used the Black-Sholes options-pricing method with the following
         weighted-average assumptions: dividend yield of 2.6 percent; expected
         volatility of 47.7 percent; risk-free interest rate of 5.6 percent; and
         expected life of 5 years. The 1999 grant used the Black-Sholes
         options-pricing method with the following weighted-average assumptions:
         dividend yield of 2.5 percent; expected volatility of 42.8 percent;
         risk-free interest rate of 5.8 percent; and expected life of 5 years.

         A summary of the status of the Company's outstanding stock options as
         of December 30, 2000, January 1, 2000 and January 2, 1999, and changes
         during the years ending on those dates is presented below:
<TABLE>
<CAPTION>

                                                        2000                     1999                     1998
                                                        ----                     ----                     ----
                                                            Exercise                 Exercise                 Exercise
                                               Shares(1)    Price(2)    Shares(1)    Price(2)    Shares(1)    Price(2)
                                               ---------    --------    ---------    --------    ---------    --------
<S>                                             <C>          <C>         <C>           <C>        <C>          <C>
         Outstanding at beginning of year       619,717      $5.60       554,507       $5.03      424,124      $3.40
         Granted                                  ----        ----        98,250       $7.13      168,750      $8.10
         Exercised                              (36,166)     $0.59       (33,040)      $0.57      (38,367)     $0.57
         Forfeited                              (14,750)     (7.43)       ----         ----        ----         ----
                                              ---------               ----------                ---------
         Outstanding at year-end                568,801      $5.87       619,717       $5.60      554,507      $5.03

         Options exercisable at year-end        397,939                  335,428                  285,242
         Weighted-average fair value of
         options granted during the year          ----                    $2.59                    $3.21
</TABLE>

         The following information applies to fixed stock options outstanding at
         December 30, 2000:

                  Number outstanding (1)                       568,801
                  Range of exercise prices                       $0.57 to $8.10
                  Weighted-average exercise price                $5.87
                  Weighted-average remaining contractual life     5.9 years

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

         (1)      As adjusted for the five-for-four stock splits in June 1997
                  and July 1998.

         (2)      Based on the weighted-average exercise price.

(10)     INCOME TAXES
         ------------

         A summary of income taxes is as follows:

                                    2000              1999              1998
                                    ----              ----              ----
        Current:
          Federal               $  207,000         $1,222,000        $1,410,000
          State                     12,000            263,000           275,000
        Deferred                  (151,000)            64,000            33,000
                                 ----------         ----------        ----------
        Total                   $   68,000         $1,549,000        $1,718,000
                                 ==========         ==========        ==========


                                      F-12
<PAGE>

                           DECORATOR INDUSTRIES, INC.
                          NOTES TO FINANCIAL STATEMENTS

(10)     INCOME TAXES (Continued)
         ------------------------

         Temporary differences between the financial statement carrying amounts
         and tax bases of assets and liabilities that give rise to net deferred
         income tax liability relate to the following:
<TABLE>
<CAPTION>

                                                                                       2000              1999
                                                                                       ----              ----
<S>                                                                                  <C>               <C>
         Property and equipment, due to differences in depreciation                   $367,000          $307,000
         Inventories, due to additional cost
            recorded for income tax purposes                                          (23,000)          (24,000)
         Accounts receivable, due to allowance
            for doubtful accounts                                                     (55,000)          (60,000)
         Accrued liabilities, due to expenses not yet
            deductible for income tax purposes                                       (204,000)            13,000
                                                                                     ---------         ---------

         Net deferred income tax liability                                            $ 85,000          $236,000
                                                                                     ========          =========
</TABLE>

         The net deferred income tax liability is presented in the balance
         sheets as follows:

                                                      2000              1999
                                                      ----              ----
         Current Asset                               $283,000         $120,000
         Long-term Liability                          368,000          356,000

         The effective income tax rate varied from the statutory Federal tax
         rate as follows:

                                                      2000      1999     1998
                                                      ----      ----     ----
         Federal statutory rate                        34.0%    34.0%    34.0%
         State income taxes, net of
            federal income tax benefit                  4.3      4.4      4.0
         Other                                         (4.5)    (0.6)    (2.2)
                                                     ------   ------   ------
         Effective income tax rate                     33.8%    37.8%    35.8%
                                                     ======   ======   ======

 (11)    EARNINGS PER SHARE

         In accordance with SFAS No. 128, the following is a reconciliation of
         the numerators and denominators of the basic and diluted EPS
         computations.

                                              2000         1999          1998
                                              ----         ----          ----
          Numerator:
          Net income                      $  133,198    $2,552,278    $3,080,895
                                          ==========    ==========    ==========
          Denominator:
          Weighted-average number of
          common shares outstanding        3,041,364     3,378,721     3,631,457

        Dilutive effect of
        stock options on net income           35,896       138,960       249,162
                                          ----------    ----------    ----------

                                           3,077,260     3,517,681     3,880,619
                                          ==========    ==========    ==========

        Diluted earnings per share:       $     0.04    $     0.73    $     0.79
                                          ==========    ==========    ==========



                                      F-13
<PAGE>

                           DECORATOR INDUSTRIES, INC.
                          NOTES TO FINANCIAL STATEMENTS

 (12)    QUARTERLY FINANCIAL INFORMATION
         -------------------------------
<TABLE>
<CAPTION>

                                              First            Second             Third             Fourth
            2000                             Quarter           Quarter           Quarter            Quarter                Year
            ----                             -------           -------           -------            -------                ----
 <S>                                      <C>                <C>                <C>                <C>                 <C>
           Net Sales                     $ 12,443,014       $ 12,163,649       $  9,731,021       $  8,271,900        $ 42,609,584
           Gross Profit                  $  2,674,956       $  2,723,753       $  2,052,297       $  1,252,572        $  8,703,578
           Net Earnings                  $    580,945       $     58,724       $    211,076       $   (717,547)       $    133,198
           Earnings Per
           Common Share:
               Continuing Operations     $       0.19       $       0.16       $       0.08       ($      0.09)       $       0.34
               Basic                     $       0.18       $       0.02       $       0.07       ($      0.23)       $       0.04
               Diluted                   $       0.18       $       0.02       $       0.07       ($      0.23)       $       0.04
           Average Common
           Shares Outstanding:
               Basic                        3,180,033          3,165,186          3,028,757          2,791,480           3,041,364
               Diluted                      3,222,562          3,199,699          3,063,037          2,823,740           3,077,260

                                              First            Second             Third             Fourth
            1999                             Quarter           Quarter           Quarter            Quarter                Year
            ----                             -------           -------           -------            -------                ----

           Net Sales                     $ 12,332,923       $ 13,464,381       $ 12,384,308       $ 11,024,406        $ 49,206,018
           Gross Profit                  $  2,850,183       $  3,159,843       $  2,716,869       $  2,423,136        $ 11,150,031
           Net Income                    $    703,016       $    844,679       $    558,267       $    446,316        $  2,552,278
           Earnings Per
           Common Share:
               Continuing Operations     $       0.20       $       0.25       $       0.19       $       0.16        $       0.80
               Basic                     $       0.20       $       0.25       $       0.17       $       0.14        $       0.76
               Diluted                   $       0.19       $       0.24       $       0.16       $       0.14        $       0.73
           Average Common
           Shares Outstanding:
               Basic                        3,526,904          3,418,314          3,335,317          3,234,350           3,378,721
               Diluted                      3,694,190          3,575,523          3,479,267          3,321,742           3,517,681
</TABLE>


         The quarterly information shown above has been adjusted to reflect the
         discontinued operations.

(13)     DISCONTINUED OPERATIONS
         -----------------------

         During the second quarter of the current year, the Company adopted a
         plan to dispose of its contract sewing operations for the hospitality
         industry through liquidation. At July 1, 2000, the net assets of this
         operation consisted primarily of goodwill ($565,481), inventories,
         machinery and equipment, and trade receivables. This decision resulted
         in an after-tax loss of $422,000 for disposal of this operation.
         Included in the loss on disposal was a pre-tax provision of $60,000 for
         estimated operating losses during the phase-out period.

         In the fourth quarter of 2000, the Company decided to discontinue the
         manufacturing of furniture for sale to the recreational vehicle and
         hospitality industries. At December 30, 2000, the assets of this
         operation consisted primarily of inventories, equipment and trade
         receivables. This decision resulted in an after-tax loss of $329,000
         for disposal of this operation. Included in the loss on disposal is a
         pre-tax provision of $160,000 for estimated operating losses during the
         phase-out period.


                                      F-14


<PAGE>


                     REPORT OF INDEPENDENT AUDITORS' REPORT
                         ON FINANCIAL STATEMENT SCHEDULE




The Board of  Directors
  and Stockholders of
Decorator Industries, Inc.



         The audit referred to in our opinion dated February 28, 2001 (March 20,
2001 as to Note 7) of the financial statements as of December 30, 2000 and for
each of the three fiscal years then ended includes the related supplemental
financial schedule as listed in item 14 (a), which, when considered in relation
to the basic financial statements, presents fairly in all material respects the
information shown therein.





                                                   LOUIS PLUNG & COMPANY, LLP
                                                   Certified Public Accountants





Pittsburgh, Pennsylvania
February 28, 2001 (March 20, 2001 as to Note 7)




                                      F-15
<PAGE>

                           DECORATOR INDUSTRIES, INC.
                SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>

                COLUMN A                       COLUMN B                  COLUMN C                 COLUMN D          COLUMN E
                                                                        Additions
                                                                    (1)              (2)
                                                                Charged to       Charged to
                                              Balance at           Costs            Other                          Balance at
                                              Beginning             And           Accounts       Deductions           End
Description                                   of Period          Expenses         Described       Described        of Period
-----------                                   ---------          --------         ---------       ---------        ---------
<S>               <C>                          <C>               <C>                  <C>        <C>                <C>
DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:

ALLOWANCE FOR
DOUBTFUL ACCOUNTS

                  2000                         $158,996          $168,709            -0-         $183,310(A)        $144,395

                  1999                         $111,706           $93,963            -0-         $ 46,673(A)        $158,996

                  1998                          218,018            68,471            -0-          174,783(A)         111,706

(A) Write-off bad debts

</TABLE>

                                      F-16