--------------------------------------------------------------------------------
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
(Mark One)
   (X)        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

              For the fiscal year ending December 31, 2000

   ( )        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
              For the transition period from _________ to  ___________

                          Commission file number 1-4719

                             THE DELTONA CORPORATION
             (Exact name of registrant as specified in its charter)

                DELAWARE                              59-0997584
     (State or other jurisdiction of               (I.R.S. Employer
      incorporation or organization)             Identification Number)

        8014 SW 135th Street Road
                Ocala, FL                                34473
 (Address of principal executive offices)             (Zip Code)

        Registrant's telephone number, including area code (352) 307-8100

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

                           COMMON STOCK, $1 PAR VALUE
                                (Title of Class)

               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 amendments to this Form 10-K. [ ]

               State the  aggregate  market  value of the  voting  stock held by
non-affiliates of the Registrant: $770,000 (based upon the average price of such
stock as traded  over-the-counter  ($.22) at December 31, 2000 multiplied by the
3,498,836 shares of stock owned by  non-affiliates,  excluding voting stock held
by directors,  executive  officers and beneficial owners of more than 10% of the
Registrant's voting stock ; however,  this does not constitute an admission that
any such holder is an "affiliate" for any purpose.)

               Indicate  the number of shares  outstanding  of the  Registrant's
classes of common stock, as of the latest practicable date: 13,544,277 shares of
common stock, $1 par value, as of March 16, 2001,  excluding  12,228 shares held
in treasury.


                       DOCUMENTS INCORPORATED BY REFERENCE
Document                                                    Incorporated Part(s)
  *  Registrant's 2000 Annual Meeting Proxy Statement
     to be filed with the Securities and Exchange
     Commission pursuant to Regulation 14A                        Part III
--------------------------------------------------------------------------------

<PAGE>



                             THE DELTONA CORPORATION

                                      INDEX


Form 10-K                                                               Page
Item No.                      Section Heading in Attached Material      Number

PART I
  Items 1 and 2 .........     Business............................        1
                                General...........................        1
                                Recent Developments...............        1
                                Real Estate.......................        2
                                Other Businesses..................        7
                                Employees.........................        7
                                Competition.......................        7
                                Regulation........................        7
  Item 3 ................     Legal Proceedings...................       10
  Item 4 ................     Submission of Matters to a Vote of
                               Security Holders (Refer to Registrant's
                               2001 Annual Meeting Notice and Proxy
                               Statement incorporated herein by
                               reference and to be filed with the
                               Securities and Exchange Commission
                               pursuant to Regulation 14A)

PART II
  Item 5 ................     Price Range of Common Stock and
                               Dividends..........................       11
  Item 6 ................     Selected Consolidated Financial
                               Information .......................       12
  Item 7 ................     Management's Discussion and Analysis
                               of Financial Condition and Results
                               of Operations......................       13
  Item 8 ................     Index to Consolidated Financial
                               Statements and Supplemental Data ..       20
  Item 9 ................     Independent Public Accountants......       36

PART III                      (Refer to Registrant's 2001 Annual
                               Meeting Notice and Proxy Statement
                               incorporated herein by reference
                               and to be filed with the Securities
                               and Exchange Commission pursuant to
                               Regulation 14A)
PART IV
  Item 14 ...............     Exhibits, Financial Statement
                               Schedules and Reports on Form 8-K .       38


<PAGE>

ITEMS 1 AND 2
                                    BUSINESS

General

     The  Company  was  founded  in  1962  and  is  principally  engaged  in the
development and sale of Florida real estate,  through the development of planned
communities on land acquired for that purpose.  The Company offers single-family
lots and multi-family and commercial tracts for sale, in communities designed by
the Company.  The Company is the  developer  of eleven  planned  communities  in
Florida, including TimberWalk, which is located in the western portion of Marion
Oaks.  Seven  communities  are  completed  and four  are in  various  stages  of
development.   The  Company  plans,  designs  and  develops  roads,   waterways,
recreational  amenities,  grading and drainage systems within these communities.
Since  1962,  the  Company  has  sold  over  157,000   single-family   lots  and
multi-family  and  commercial  tracts in its  communities,  in  addition to over
13,000 single-family homes and over 4,300 multi-family housing units.

     The   Company's   land   holdings  in  Florida   include  an  inventory  of
approximately  16,548 unsold platted  single-family  and  multi-family  lots and
commercial tracts.  (Platting is the process of recording, in the public records
of the county where the land is located,  a map or survey  delineating the legal
boundaries of the lots and tracts.) See "Real Estate: Land".

     The  Company  also  operates  other  businesses  related to its real estate
activities,  such as a  title  insurance  company  and a real  estate  brokerage
company.  In addition,  the Company has designed and constructed  country clubs,
golf courses and other recreational  amenities at its communities,  and operated
such amenities until their conveyance or sale.

     Historically,  the Company had designed,  constructed and operated  utility
systems  for the  distribution  of water and LP gas and for the  collection  and
treatment of sewage, primarily at the Company's communities. However, on June 6,
1989, Topeka Group  Incorporated  ("Topeka"),  a subsidiary of Minnesota Power &
Light Company ("MPL"), exchanged the Company's Preferred Stock which it acquired
in November,  1985 for the Company's utility  subsidiaries.  The Company entered
into a Developer  Agreement  for each of its  communities,  which  provides  the
policies for water and sewer  utility  services to the Company and the Company's
customers.

     The Company is  incorporated  in Delaware and has its  principal  office at
8014 SW 135th  Street  Road,  Ocala,  Florida  34473.  Its  telephone  number is
(352)307-8100.  The Company,  as used herein,  refers to The Deltona Corporation
and, unless the context otherwise indicates, its wholly-owned subsidiaries.

Recent Developments

     During 2000, Swan Development  Corporation ( "Swan")  continued to loan the
Company  funds  to  meet  its  working  capital   requirements.   The  Company's
outstanding  debt to Swan,  which is secured by a second  lien on the  Company's
receivables,  was  $5,399,000  as of December  31,  2000.  The Company  signed a
promissory note to Swan in March 1999 which provides that funds advanced by Swan
will be paid back by the Company monthly in contracts receivables at 90% of face
value,  with recourse.  There will be no interest for the first six months after
an  advance  of money is  received  from  Swan by the  Company;  thereafter  the
interest  shall  be 6% per  annum on the  outstanding  balance  of the  advance.
Effective January 1, 2001 and semi-annually  thereafter,  the interest rate will
be  adjusted  to equal the prime  rate then in  effect.  Each time an advance is
made, a  supplemental  note is signed.  The amount of each monthly  payment will
vary and will be  dependent  upon the  amount  of  contracts  receivable  in the
Company's portfolio, excluding contracts receivable held as collateral for prior
receivable  sales.  Pursuant to the terms of the promissory note, the Company is
required to transfer to Swan  monthly as debt  repayment  all current  contracts
receivable  in  the  Company's  portfolio  in  excess  of the  aggregate  sum of
$500,000.  Funds  advanced by Swan were used by the  Company to pay  outstanding
real estate taxes for unsold  properties  with the balance to meet the Company's
working capital requirements.


                                        1

<PAGE>



Real Estate

     The Company is primarily  involved  with the  development  and marketing of
planned  communities  in Florida  since  1962.  The  following  table sets forth
certain information about these communities and other land assets of the Company
as of December 31, 2000. For a detailed  description of these  communities,  see
"Existing Communities" and "Other Properties".

<TABLE>
<CAPTION>
                              Existing Communities

                                                                    Platted                 Unsold Platted
                           Acreage    Initial            Estimated  Lots & Tracts            Lots & Tracts
                           In         Acquisition Year   Current    in Masterplan  Unimproved           Improved
                           Masterplan Year        Opened Population     (a)         (a) (b)             (a) (b)
                           ---------- ----        ------ ---------- -------------  ----------           ---------
<S>                        <C>        <C>         <C>    <C>        <C>            <C>                  <C>

* Deltona Lakes ..........  17,203    1962         1962    73,290     34,964           --                   6
* Marco Island(c) ........   7,844    1964         1965    43,700      8,657           --                   --
* Spring Hill(d) .........  17,240    1966         1967    76,300     32,909           --                   7
* Citrus Springs(e)  .....  15,954    1969         1970     6,950     33,783           --                  10(h)
  St. Augustine Shores....   1,985    1969         1970     7,730      3,130           --                   -(h)
  Sunny Hills ............  17,743    1968         1971     1,410     26,251         12,478               677
* Pine Ridge .............   9,994    1969         1972     3,800      4,833           --                   3
  Marion Oaks(e)(f)  .....  14,644    1969         1973     8,560     27,537          2,683(f)            710(f)(h)
* Seminole Woods .........   1,554    1969         1979       530        262           --                  --

  There is no unplatted acreage in any community

Joint Venture Community:

* Tierra Verde ...........     666    1976         1977     5,530      1,036           --                  --
                               ---    ----         ----     -----      -----         ------             -----

        Total ............ 104,827                        222,270    173,362         15,161             1,413
                           =======                        =======    =======         ======             =====


                                Other Properties

                                      Initial
                                      Acquisition
                                      Year                 Acres
Other Land Assets:
Other land adjacent to
 existing communities(h)..            Various              92
                                                           --

             Total.....                                    92
                                                           ==
 <FN>

 *        Development completed.
 (a)        Excluded from these lots and tracts are  approximately  97  improved
            and 91 unimproved lots and tracts that are required for drainage and
            cannot be sold,  and  approximately  172 improved and 335 unimproved
            lots and tracts that have been removed from sale for encumbrances or
            additional  site  development,  which  can only be sold  when  these
            issues are resolved.  Also  excluded are  amenities  consisting of 2
            administration  facility sites, 2 recreational  facility sites and 1
            unimproved  golf course site , as well as  approximately  275 tracts
            reserved for community usage such as for  greenbelts,  buffer areas,
            church and school sites.

(b)         "Unimproved  Unsold  Platted  Lots & Tracts"  and  "Improved  Unsold
            Platted  Lots &  Tracts",  when added to lots and  tracts  sold,  as
            described in "Existing  Communities",  may not equal "Platted Lots &
            Tracts in Masterplan" for various  reasons,  such as the subdivision
            of tracts into two or more parcels for sale to different purchasers.

(c)         Excludes permit denial areas; reflects seasonal population.

(d)         Includes the South Hernando U.S. # 19 Commerce Center.

(e)         Excludes 83 Citrus  Springs and 63 Marion Oaks  improved lots deeded
            to a purchaser of the  Company's  contracts  receivable  as exchange
            inventory to be available for customers who pre-pay their  contracts
            prior to the  installation of water service lines within one mile of
            their  homesite  and who wish to  commence  immediate  construction.
            Unused  exchanged  inventory  will be reconveyed to the Company when
            all purchased receivables have matured and are paid in full.

                                        2


<PAGE>




(f)         Includes TimberWalk

(g)         Excludes  3,637 acres of unplatted  natural  preserve in  Washington
            County  restricted for  recreational,  open space/park use which can
            only be sold subject to the underlying land use restrictions.

(h)         Not included are 583 improved lots deeded to a collateral trustee on
            behalf of a purchaser of the Company's contract  receivables so they
            may be sold by the Company to create additional  receivables for the
            Company's  replacement  obligation.  These lots are comprised of 481
            lots in Citrus  Springs,  101 lots in  Marion  Oaks and 1 lot in St.
            Augustine Shores.
</FN>
</TABLE>

  Land

     In  selecting  sites for its  communities,  the  Company  examined  various
demographic and economic factors,  the regulatory  climate,  the availability of
governmental services and medical,  educational and commercial  facilities,  and
estimated  development  costs.  Its communities are accessible to major highways
and Florida's major  metropolitan  areas and are near at least one large body of
water that can be used for  recreational  purposes.  Other  criteria used by the
Company  in site  selection  are the  suitability  of the  land for  natural  or
engineered drainage and the availability of a sufficient supply of potable water
to support the community's anticipated population.

     The master plans of the Company's communities have been designed to provide
for amenities  such as golf courses,  greenbelt  areas,  parks and  recreational
areas, as well as for the basic infrastructure,  such as roads and water, and in
selected  development  areas,  sewer  lines.  Sites are set  aside for  shopping
centers,  schools, houses of worship, medical centers and public facilities such
as libraries and fire stations.

     In its major planned communities, the Company offers for sale lot and house
"packages" situated on paved streets.  In other areas of these communities,  the
Company historically has sold single-family lots and multi-family and commercial
tracts on an  installment  basis.  Prior to 1991,  the  Company  sold such land,
subject to a future development obligation, accepting down payments as low as 5%
of the sales price,  with the balance  payable over periods ranging from 2 to 15
years,  depending on the payment plan selected.  When the applicable  rescission
period  expired and the Company  received at least 10% of the  contracted  sales
price,  a substantial  portion of the revenue and related profit on the sale was
recognized,  with the remaining  revenue and profit  deferred and  recognized as
land improvements such as street paving occurred.

     Due to various  factors,  since 1986,  the Company had  utilized a deed and
mortgage  format  for  effecting  certain  sales in its  communities.  Beginning
September 29, 1990, the Company changed its method of recognizing  land sales by
recording the sale of lots,  subject to a future development  obligation,  under
the deposit method; since January 1, 1991, no sale has been recognized until the
Company  receives at least 20% of the contracted  sales price;  and beginning in
the fourth quarter of 1991, the Company  limited the sale of lots to those which
front on a paved  street  and are ready for  immediate  building.  See Note 1 to
Consolidated Financial Statements.

     A portion of the  contract  purchase  price is  discounted  and  treated as
interest  income to be amortized over the life of the contract.  Interest income
is also earned in accordance  with the interest  rate stated in the  installment
land sales  contract  or  promissory  note.  The  Company  further  provides  an
allowance for contract  cancellations based on the historical  experience of the
Company for such cancellations.

     Substantially  all of the Company's  single-family lot and multi-family and
commercial  tract  sales  have been made on an  installment  basis.  Of the over
157,000  lots and  tracts  sold since the  Company's  inception,  346  contracts
receivable  presently  exist with respect to lots and tracts with an outstanding
balance of approximately  $2,109,000 at December 31, 2000,  excluding  contracts
receivable of which the Company is a guarantor. See "Management's Discussion and
Analysis  of  Financial  Condition  and  Results  of  Operations"  and Note 2 to
Consolidated Financial Statements.

Housing

     Historically, the Company has been involved in the design, construction and
marketing  of  single-family  homes and  multi-family  housing,  including  both
condominium apartment complexes and a vacation ownership  (timesharing) project.
Since  commencing  operations,  the Company has constructed and sold over 13,000
single-family homes and over 4,300

                                        3

<PAGE>



multi-family  housing  units  in  its  communities,  with  much  of  the  actual
construction performed by subcontractors. Revenues, as well as related costs and
expenses,  from  single-family home and vacation ownership sales are recorded at
the time of closing.

     Single-Family Housing

     The Company's homes, constructed by an independent builder, are designed to
fit the needs and wants of a variety of  housing  customers:  models  range from
1,692 square feet to 2,895 square feet.  From the smallest  home to the largest,
these  homes  feature 2 car  garages,  cathedral  ceilings  over the main living
areas, ceramic tile foyers,  plant shelves,  large fully equipped kitchens (most
with breakfast nooks or good morning  rooms),  fully enclosed  laundry  centers,
impressive master suites with walk-in closets and large bedrooms. A model center
is open at  Marion  Oaks.  Houses  are sold with the lot  included  in the sales
price;  however,  the Company  also offers a "build on your own lot" program for
those  purchasers who have previously  acquired a lot. The  FeatherNest  Housing
Village in Marion Oaks,  where the lot is included in the price of the home,  is
owned by Conquistador  Development  Corporation and marketed by the Company. All
housing  sales are made  within  the local  market  and  through  the  Company's
independent  dealer  network.  See  "Management's  Discussion  and  Analysis  of
Financial Condition and Results of Operations".

     The Company is directing a greater portion of its marketing  efforts to the
sale of lots with homes or lots with compulsory  building  obligations to offset
the negative cash effects of installment land sales, where the purchase price of
the lot is paid over several years and there is no commitment to build.

     Multi-Family Housing

     The Company has designed,  constructed and sold more than 4,300 condominium
apartment  units at its  communities  in  buildings  ranging  from  garden-style
apartment  complexes  to luxury  high-rise  towers.  Every  condominium  complex
constructed  by the  Company  includes  at least one pool and patio  area;  many
feature tennis courts and other recreational amenities.

     The Company's limited inventory of multi-family  housing is at its vacation
ownership complex, The Surf Club, located on the Gulf of Mexico at Marco Island.
The bulk of its inventory at The Surf Club was sold prior to 1990.

  Marketing

     The  Company  has  historically  sold land and  housing on a  national  and
international basis through independent dealers in the United States, Canada and
overseas, as well as through Company-affiliated  salespeople. For the year ended
December 31, 2000,  sales by independent  dealers in the United States accounted
for  approximately  100% (in dollar volume) of new land sales  contracts;  while
overseas dealers accounted for a fraction of a percent.

     Existing Communities

     Deltona Lakes

     Deltona  Lakes is located 26 miles  northeast of Orlando,  with its popular
tourist  attractions  of Disney  World and Sea  World,  and is  bordered  on the
northwest by Interstate 4. Opened in 1962, Deltona Lakes now has a population of
approximately  73,290.  Over  30,000  lots and tracts and over 4,500  single and
multi-family housing units have been sold at this community.

     Recreational  amenities constructed by the Company include tennis courts, a
golf course and  country  club  (which  were sold in 1983),  and a  recreational
complex on the shores of Lake Monroe.  A 133-room motel,  an industrial  park, a
medical complex,  several shopping centers,  numerous houses of worship,  a fire
station, a public library and schools are located in the community.  The Company
has completed development of this community.


                                        4

<PAGE>



     Marco Island

     The Company's resort community of Marco Island is located 104 miles west of
Miami and approximately 17 miles south of Naples,  Florida.  Over 8,500 lots and
tracts and over 4,200 single and  multi-family  housing  units have been sold in
this community.

     More than 43,700  persons  reside at Marco  Island,  including a population
which more than triples during the winter season. It is the largest of Florida's
Ten  Thousand  Islands and is known for its  recreational  amenities  which,  in
addition  to its 3 1/2  mile  white  sand  beach,  sport  fishing,  sailing  and
shelling,  include golf, tennis, swimming and other recreational activities. The
island  community has several major shopping  centers,  banks and savings & loan
associations, and medical and professional centers.

     Since the community's  opening in January,  1965, the Company has built and
operated a yacht club and marina,  the Marco  Beach  Hotel & Villas,  and a golf
course and  country  club,  all of which have been sold.  The  Company  has also
constructed  and sold over  3,300  condominium  units on the island and The Surf
Club, a 44 unit vacation ownership  complex.  In 1990, the Company completed the
sale of substantially all of its remaining  vacation ownership weeks at The Surf
Club.

     Spring Hill

     Spring Hill,  with an estimated  population  of over 76,300,  is located 45
miles north of Tampa-St.  Petersburg. Over 32,000 lots and tracts and over 4,000
single-family  homes  have  been  sold  in  this  community.   The  Company  has
constructed a recreation  complex,  a country club, and two golf courses,  which
have been sold. Several shopping centers and medical centers,  schools, numerous
houses of worship and fire  stations are located in the  community.  The Company
has completed the development of this community.

     Citrus Springs

     Citrus Springs,  with an estimated  population of over 6,950, is located 28
miles southwest of Ocala and 25 miles from the Gulf of Mexico.  Over 30,000 lots
and tracts and over 700 single-family homes have been sold at this community.  A
golf  course and a  clubhouse  (sold in 1990) and a  community  center have been
completed by the Company.  Several churches,  schools and a convenience shopping
area are located in the  community.  In 1992,  most of the  Company's  remaining
inventory  at  this  community  was  sold  to  Citony  Development   Corporation
("Citony") for  approximately  $6,500,000.  The Company  provides  miscellaneous
administrative assistance and loan servicing to Citony for a fee.

     In February 1997, the Company finalized the sale of the undeveloped  second
Citrus  Springs Golf Course to a third party,  which  completed  the golf course
("El Diablo") in 1998.  See  "Management's  Discussion and Analysis of Financial
Condition and Results of Operations" .

     St. Augustine Shores

     St.  Augustine  Shores,  with a population  estimated to be over 7,730,  is
located seven miles south of St.  Augustine,  between the Intracoastal  Waterway
and U.S.  Highway 1. Over 2,000 single and  multi-family  housing units and lots
and  tracts  have been sold.  In  December  1997,  the  Company  sold all of its
remaining  inventory at St.  Augustine  Shores to Swan  Development  Corporation
("Swan").  As part of the purchase,  Swan assumed the  liability for  completing
improvements within St. Augustine Shores.

     Certain common areas of the community,  such as parks and swale areas,  are
maintained  by the  St.  Augustine  Shores  Service  Corporation,  a  non-profit
corporation,  of which  all  property  owners  are  members.  Several  houses of
worship,  shopping  facilities,  a recreational  building and a golf and country
club are also located in the community.




                                        5

<PAGE>



     Sunny Hills

     Sunny Hills,  with a population of over 1,410 residents,  is located in the
Florida  Panhandle,  45 miles  north of the Gulf of Mexico and 35 miles north of
Panama City. Over 12,000 lots and tracts and 300  single-family  homes have been
sold at this community.  The community  includes a golf course and country club,
which  was sold by the  Company,  several  houses  of  worship  and  convenience
shopping.

     Pine Ridge

     Pine Ridge,  with a population of approximately  3,800, is located 34 miles
southwest of Ocala.  The community's  facilities  include an equestrian club and
tennis  courts.  The  Company  sold over  3,500 lots and tracts and more than 53
single-family  homes in Pine Ridge prior to the sale of its remaining  inventory
in 1987.

     Marion Oaks

     Marion Oaks, with a population of over 8,560 residents, is located 18 miles
south of Ocala. Over 23,000 lots and tracts have been sold in the community. The
community  includes  playgrounds,  two golf courses  (both of which are owned by
third parties),  several  recreation  buildings,  community shopping centers and
several houses of worship. In addition,  this community is home to the Company's
corporate headquarters.

     The Company's homes, constructed by an independent builder, are designed to
fit the needs and wants of a variety of  housing  customers:  models  range from
1,692 square feet to 2,895 square feet.  From the smallest  home to the largest,
these  homes  feature 2 car  garages,  cathedral  ceilings  over the main living
areas, ceramic tile foyers,  plant shelves,  large fully equipped kitchens (most
with breakfast nooks or good morning  rooms),  fully enclosed  laundry  centers,
impressive master suites with walk-in closets and large bedrooms. A model center
is open at  Marion  Oaks.  Houses  are sold with the lot  included  in the sales
price;  however,  the Company  also offers a "build on your own lot" program for
those  purchasers who have previously  acquired a lot. The  FeatherNest  Housing
Village in Marion Oaks,  where the lot is included in the price of the home,  is
owned by Conquistador  Development  Corporation and marketed by the Company. All
housing  sales are made  within  the local  market  and  through  the  Company's
independent dealer network.

     Revenues in 2001 will be generated  from the sale of land  inventory,  from
housing  sales,  from the  recognition of deferred  revenue as land  development
proceeds,  from  collections  on  existing  contracts  receivable  and  from the
Company's real estate brokerage and title company subsidiary operations.

     Seminole Woods

     Seminole Woods,  with a population of over 530, is comprised of 1,554 acres
of property located 20 miles north of Orlando. The community's 262 single-family
lots,  each  with a  minimum  of five  acres,  have  been  sold and  development
completed.

     Tierra Verde

     Tierra  Verde,  with a population of over 5,220,  is a 666-acre  waterfront
subdivision  located eight miles south of St.  Petersburg.  It was developed and
marketed  pursuant to a 50% joint  venture,  which no longer  exists,  between a
wholly-owned  subsidiary  of the Company and an  unaffiliated  corporation.  The
community has been sold out and development completed.

     Other Land Assets

     The Company also owns 92 acres of land in Florida  adjacent to its existing
communities.



                                        6

<PAGE>



   Other Businesses

     The Company's title  insurance  subsidiary was established in 1978 in order
to reduce title  insurance,  legal and certain related closing costs incurred by
the Company in transferring title of its land and housing to its purchasers. The
subsidiary serves as an agent for TICOR Title Insurance  Company,  Chicago Title
Insurance  Company and other title  insurers.  The Company's  realty  subsidiary
performs real estate  brokerage and rental services at the Company's Marion Oaks
and Sunny Hills communities.

  Employees

     At  December  31,  2000,  the  Company  had 36  employees,  of whom 34 were
involved  in  executive,   administrative,   sales  and  community  development/
maintenance  capacities and 2 were involved with the title insurance subsidiary.
Certain  of  the   Company's   development   activities   are   carried  out  by
subcontractors  who separately employ additional  personnel.  For the most part,
the Company's  marketing  activities are carried out by independent  dealers and
marketing personnel employed by the Company and its subsidiaries.

  Competition

     The  Company  faces  competition  in the  sale of its lots  primarily  from
property owners in the Company's  communities  seeking to resell their land. The
Company is also facing competition, on a regional level, from other builders and
developers in the sale of single-family  housing.  Such competition is generally
based upon location, price, reputation,  quality of product and the existence of
commercial and recreational facilities and amenities.

  Regulation

     The  Company's  real estate  business is subject to  regulation  by various
local, state and federal agencies.  The communities are increasingly  subject to
substantial regulation as they are planned, designed and constructed, the nature
of such regulation extending to improvements,  zoning, building,  environmental,
health and related matters. Although the Company has been able to operate within
the  regulatory  environment  in the past,  there can be no assurance  that such
regulations  could not be made more restrictive and thereby adversely affect the
Company's operations.

     Community Development

     In Florida, as in many growth areas, local governments have sought to limit
or control population growth in their communities  through  restrictive  zoning,
density reduction,  the imposition of impact fees and more stringent development
requirements.  Although the Company has taken such factors into consideration in
its master  plans by  agreeing,  for example,  to make  improvements,  construct
public  facilities and dedicate  certain  property for public use, the increased
regulation  has  lengthened  the  development  process and added to  development
costs.

     The implementation of the Florida Growth Management Act of 1985 (the "Act")
precludes  the issuance of  development  orders or permits if public  facilities
such  as  transportation,  water  and  sewer  services  will  not  be  available
concurrent  with  development.  Development  orders have been  issued  for,  and
development  has  commenced  in,  the  Company's   existing   communities  (with
development  being  completed  in  certain  of  these  communities).  Thus,  the
Company's  communities  are  less  likely  to be  affected  by  the  new  growth
management policies than future communities. Any future communities developed by
the Company will be strongly impacted by new growth management  policies.  Since
the Act and its implications are  consistently  being  re-examined by the State,
together  with  local  governments  and  various  state and  local  governmental
agencies,  the Company  cannot  further  predict the timing or the effect of new
growth management policies,  but anticipates that such policies may increase the
Company's permitting and development costs.





                                        7

<PAGE>



     Environmental

     To varying  degrees,  certain  permits and  approvals  will be necessary to
complete the  development of Marion Oaks and Sunny Hills.  Despite the fact that
the Company has  obtained  substantially  all of the permits and  authorizations
necessary to proceed with its  development  work on communities  presently being
marketed,  additional  approvals  may be  required  to develop  certain  platted
properties to be marketed in the future. Although the Company cannot predict the
impact  of  such  requirements,  they  could  result  in  delays  and  increased
expenditures.   In  addition,   the  continued   effectiveness  of  permits  and
authorizations  already  granted  is  subject  to many  factors,  some of which,
including  changes in policies,  rules and regulations and their  interpretation
and application, are beyond the Company's control.

     The Company is aware of studies indicating that prolonged exposure to radon
gas may be hazardous to one's health.  Such studies further  indicate that radon
gas  is  apparently   associated  with  mining  and  earth  moving   activities,
particularly in phosphate-bearing  geological formations. Since phosphate mining
has,  over the years,  constituted a  significant  industry in Florida,  various
state and local  governmental  agencies  are in the  process  of  attempting  to
determine  the nature and extent of indoor radon gas  intrusion  throughout  the
state. Similar studies undertaken by the Company at its Citrus Springs community
indicate that less than 1% of its property in that  community may be affected by
radon gas; studies conducted at the Company's Marion Oaks community  revealed no
indications of potential indoor radon gas problems. None of the other properties
owned by the Company are situated over geological formations which are suspected
of causing  radon gas  problems.  Consequently,  the  existence  of radon gas in
Florida is not expected to materially affect the business or financial condition
of the Company.

     The Company  owns and operates one above ground fuel storage tank at Marion
Oaks. The Florida Department of Environmental  Regulation ("DER") is responsible
not only for regulating this tank, but for developing and implementing plans and
programs to prevent the discharge of pollutants by the facility. The Company has
registered  this storage tank with the DER,  constructed  a  containment  device
around the above  ground  storage  tank and conducts  periodic  inspections  and
monitoring of the facility.  The Company  surveyed  this site,  which  exhibited
evidence of potential  soil  contamination  to the DER prior to the deadline for
acceptance into the Early Detection  Incentive ("EDI") Program.  The EDI Program
provides for the State to assume the financial  responsibility for any necessary
clean-up operations when suspected  contamination has been voluntarily  reported
by the  facility  owner and  accepted  into the program by the DER. The site has
been  inspected  and reviewed  under the EDI program and is in  compliance  with
current DER regulations.

     Marketing

     The Company is also subject to a number of statutes imposing  registration,
filing and disclosure  requirements  with respect to homesites and homes sold or
proposed to be sold to the public.  On the state level, the Company's land sales
activities  are subject to the  jurisdiction  of the  Division  of Florida  Land
Sales,   Condominiums   and  Mobile  Homes  (the   "Division")   which  requires
registration  of  subdividers  and  subdivided  land;  regulates the contents of
advertising  and other  promotional  material;  inspects the Company's  land and
development work; exercises jurisdiction over sales practices; and requires full
disclosure to prospective  purchasers of pertinent  information  relating to the
property offered for sale.


     Other Obligations

     As a result of the delays in completing  the land  improvements  to certain
property  sold in certain of its  Central  and North  Florida  communities,  the
Company fell behind in meeting its contractual  obligations to its customers. In
connection  with these delays,  in 1980 the Company entered into a Consent Order
with the Division  which  provided a program for notifying  affected  customers.
Since  1980,  the  Consent  Order  was  restated  and  amended   several  times,
culminating in the 1992 Deltona Consent Order.

     On December 30, 1997, the Division approved the formation of a Lot Exchange
Trust into which the Company conveyed  sufficient  exchange inventory to provide
exchanges  to  customers  with  undeveloped  lots.  Concurrently,  the  Division
released its lien on the Company's contracts receivable,  satisfied its mortgage
on the Company's property and

                                        8

<PAGE>



approved a settlement  of all  remaining  issues under the 1992 Deltona  Consent
Order. The 1992 Deltona Consent Order was formally terminated on April 13, 1998.

     As of December 31, 2000, the Company had estimated development  obligations
of  approximately  $25,000 on sold property,  an estimated  liability to provide
title  insurance and deeding  costs of $251,000 and an estimated  cost of street
maintenance,  prior to assumption of such obligations by local  governments,  of
$585,000, all of which are included in deferred revenue. As of December 31, 2000
and  December  31,  1999  the  Company  had  in  escrow   approximately   $7,000
specifically  for land  improvements at certain of its Central and North Florida
communities. The Company's development obligation had been substantially reduced
in 1997 by the  consummation  of the Agreement  approved by the  stockholders on
November 4, 1997.  Approximately $7,400,000 of the development obligation at St.
Augustine  Shores was  assumed  by Swan.  In  addition,  the  creation  of a Lot
Exchange Trust reduced the development obligation at Marion Oaks and Sunny Hills
by approximately $5,800,000.

     On the federal level, the Company's homesite  installment sales are subject
to the Federal Consumer Credit Protection ("Truth-in-Lending") Act. In addition,
the Company's  activities are subject to regulation by the Interstate Land Sales
Registration  Division  ("ILSRD"),  which  administers the Interstate Land Sales
Full  Disclosure  Act. That Act requires that the Company file with ILSRD copies
of  applicable  materials  on  file  with  the  Division  as to  all  properties
registered;  certain  properties  must be  registered  directly  with ILSRD,  in
addition to being registered with the Division.

     The Company has either  complied  with  applicable  statutory  requirements
relative to the  properties  it is  offering or has relied on various  statutory
exemptions  which have relieved the Company from such  registration,  filing and
disclosure requirements. If these exemptions do not continue to remain available
to the  Company,  compliance  with  such  statutes  may  result in delays in the
offering of the Company's properties to the public.

     The Company's land sales activities are further subject to the jurisdiction
of the laws of various states in which the Company's  properties are offered for
sale.  In  addition,  Florida  and other  jurisdictions  in which the  Company's
properties  are offered for sale have  strengthened,  or may  strengthen,  their
regulation  of  subdividers  and  subdivided  lands in order to provide  further
assurances to the public. The Company has attempted to take appropriate steps to
modify its marketing programs and registration  applications in the face of such
increased  regulation,  but has  incurred  additional  costs  and  delays in the
marketing of certain of its  properties  in certain  states and  countries.  For
example,  the Company has complied with the  regulations of certain states which
require  that the Company  sell its  properties  to  residents  of those  states
pursuant to a deed and  mortgage  transaction,  regardless  of the amount of the
down payment. The Company intends to continue to monitor any changes in statutes
or regulations  affecting,  or anticipated to affect, the sale of its properties
and  intends to take all  necessary  and  reasonable  action to assure  that its
properties  and its  proposed  marketing  programs are in  compliance  with such
regulations,  but there can be no  assurance  that the  Company  will be able to
timely  comply with all  regulatory  changes in all  jurisdictions  in which the
Company's properties are presently offered for sale to the public.

     Real estate  salespersons must, absent exemptions which may be available to
employees of the property owner,  be licensed in the  jurisdiction in which they
perform their activities. Real estate brokerage companies in Florida, as well as
their  brokers and  salespersons,  must be  licensed by the Florida  Real Estate
Commission.

     Miscellaneous

     Various subsidiaries and divisions of the Company are subject to regulation
by local,  state and federal agencies.  Such regulation extends to the licensing
of operations,  operating areas and personnel;  the  establishment of safety and
service standards; and various other matters.

                                        9

<PAGE>



ITEM 3

                                LEGAL PROCEEDINGS


     From  time  to  time  the   Company   may  become  a  party  to  legal  and
administrative  proceedings  arising  in the  ordinary  course of  business.  At
present,  the Company is not a party to any legal or  administrative  proceeding
which  might  have a  material  adverse  effect  on the  business  or  financial
condition of the Company.


                                       10

<PAGE>



ITEM 5


                    PRICE RANGE OF COMMON STOCK AND DIVIDENDS

     The  Company's  Common  Stock was traded on the New York and Pacific  Stock
Exchanges  under the ticker symbol DLT. On April 6, 1994,  both the New York and
Pacific Stock  Exchanges  suspended the Company's  Common Stock from trading and
instituted  procedures to delist the Company's  Common Stock.  On June 16, 1994,
the Company's Common Stock was formally removed from listing and registration on
the New York Stock Exchange. As of December 31, 2000, the Company's Common Stock
was traded on a limited basis in the  over-the-counter  markets (on the bulletin
board) under the symbol DLTA. The weighted  average price at which the stock was
traded at the end of the first,  second, third and fourth quarters of 2000 is as
follows:


                March 31, 2000             $ .250
                June 30, 2000              $ .232
                September 30, 2000         $ .402
                December 31, 2000          $ .331

     The  Company  has never  paid  cash  dividends  on its  Common  Stock.  The
Company's loan agreements contain certain  restrictions which currently prohibit
the Company from paying dividends on its Common Stock.


                                       11

<PAGE>



ITEM 6

                   SELECTED CONSOLIDATED FINANCIAL INFORMATION

     The following table summarizes selected consolidated  financial information
and should be read in conjunction  with the Consolidated  Financial  Statements.
See "Management's  Discussion and Analysis of Financial Condition and Results of
Operations".
<TABLE>
<CAPTION>
                       Consolidated Income Statement Data
                    (in thousands except per share amounts)

                                                                     Year Ending
                                    ----------------------------------------------------------------------------
                                    December 31,    December 31,    December 31,    December 31,    December 31,
                                       2000            1999            1998            1997            1996
                                    ------------    ------------    ------------    ------------    ------------
<S>                                 <C>             <C>             <C>             <C>             <C>

Revenues ........................   $      9,617    $      8,837    $      6,487    $      9,425    $      8,650
Costs and expenses ..............         10,659           9,204           9,078          10,751           9,877
                                    ------------    ------------    ------------    ------------    ------------
Loss from continuing operations
 before taxes and extraordinary
 items ..........................         (1,042)           (367)         (2,591)         (1,326)         (1,227)
Provision for income taxes ......            -0-             -0-             -0-             -0-             -0-
                                    ------------    ------------    ------------    ------------    ------------
Loss from operations
 before extraordinary items .....         (1,042)           (367)         (2,591)         (1,326)         (1,227)
Extraordinary items:
Gain on settlement related to
  the Marco refund obligation ...            -0-             -0-             -0-             -0-             331
                                    ------------    ------------    ------------    ------------    ------------
Net income (loss) applicable
  to common stock ...............   $     (1,042)   $       (367)   $     (2,591)   $     (1,326)   $       (896)
                                    ============    ============    ============    ============    ============
Basic earnings per share amounts:
    Continuing operations .......   $       (.08)   $       (.03)   $       (.19)   $       (.20)   $       (.18)
    Extraordinary items .........            -0-             -0-             .00             .00             .05
                                    ------------    ------------    ------------    ------------    ------------
Net income (loss) ...............   $       (.08)   $       (.03)   $       (.19)   $       (.20)   $       (.13)
                                    ============    ============    ============    ============    ============
Weighted average common shares
 outstanding ....................     13,544,277      13,544,277      13,544,277       6,753,587       6,729,648
                                    ============    ============    ============    ============    ============


                         Consolidated Balance Sheet Data
                                 (in thousands)


                                                                     Year Ending
                                    ----------------------------------------------------------------------------
                                    December 31,    December 31,    December 31,    December 31,    December 31,
                                       2000            1999            1998            1997            1996
                                    ------------    ------------    ------------    ------------    ------------

Total assets ....................   $     13,968    $     11,913    $     11,915    $     13,560    $     19,422
                                    ============    ============    ============    ============    ============

Liabilities .....................   $     22,807          20,117    $     20,175    $     19,174    $     37,301
Stockholders' equity(deficiency).         (8,839)         (8,204)         (8,260)         (5,614)        (17,879)
                                    ------------    ------------    ------------    ------------    ------------
Total liabilities and
 stockholders' equity
 (deficiency) ...................   $     13,968    $     11,913    $     11,915    $     13,560    $     19,422
                                    ============    ============    ============    ============    ============
</TABLE>

                                       12

<PAGE>



ITEM 7

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


From June 19,  1992  through  March 1999,  the  Company  had  entered  into loan
agreements with Selex International B.V., a Netherlands  corporation  ("Selex"),
Yasawa  Holdings,  N.V., a Netherlands  Antilles  Corporation  ("Yasawa"),  Swan
Development  Corporation  ("Swan") and related parties,  including  Scafholding,
B.V.  ("Scafholding").  Since December,  1992, the Company has been dependent on
loans and advances from Selex, Yasawa Swan and their affiliates in order to meet
its working capital requirements.

Scafholding agreed to purchase  contracts  receivable at 65% of face value, with
recourse,  to meet  the  Company's  ongoing  capital  requirements.  Scafholding
purchased  the  following  contracts  receivables  from the  Company to generate
working capital for the Company:

                                         Approximate Contracts
       Date of Purchase                  Receivable Amount Purchased
       ----------------                  ---------------------------
       June 30, 1998                     $200,100
       July 15, 1998                     $115,200
       July 31, 1998                     $179,900
       August 31, 1998                   $250,400
       September 10, 1998                $153,400
       September 29, 1998                $497,100

As of December 31, 1999, the Company had satisfied its principal debt obligation
to Scafholding; the Company's outstanding debt to Yasawa was $5, 400,000 secured
by a first  lien  on the  Company's  receivables  and a  mortgage  on all of the
Company's  property.  The terms of repayment of this debt have been restructured
to provide for monthly  payments of principal in the amount of $100,000  payable
monthly  in cash or  with  contracts  receivable  at  100% of face  value,  plus
interest payable monthly on the declining  balance at the rate of 9.6% per annum
in cash or with contracts receivable at 65% of face value.  Effective January 1,
1999,  Yasawa and  Scafholding  agreed to reduce the annual  percentage rate for
their existing loans to the Company from 9.6% to 6% per annum. The interest rate
was again changed in November 2000 when it was agreed that effective  January 1,
2001 and semi-annually thereafter,  the interest rate would be adjusted to equal
the prime  rate then in effect.  Yasawa  and  Scafholding  did not  require  the
Company to make interest  payments for the period  September 1, 1998 to December
31,  2000.  As of December 31,  2000,  the total  amount of interest  accrued is
approximately $1,055,600.

The Company recorded  interest expense on all outstanding debt balances for 2000
to Yasawa, Scafholding and Swan at 8%, the Company's incremental borrowing rate.
The difference  between  interest  calculated at 8% and the amount accrued under
the  terms of the  respective  notes  was  recorded  as a  capital  contribution
increase to capital surplus. The Company recorded interest expense and a capital
contribution in the amount of approximately $408,000 for 2000.

From  October 9, 1998 through the  present,  Swan  continued to loan the Company
funds to meet its working capital  requirements.  The Company's outstanding debt
to Swan,  which is secured by a second lien on the  Company's  receivables,  was
$5,572,000 as of December 31, 2000. The Company signed a promissory note to Swan
in March 1999 which  provides  that funds  advanced by Swan will be paid back by
the  Company  monthly  in  contracts  receivables  at 90% of  face  value,  with
recourse. There will be no interest for the first six months after an advance of
money is received from Swan by the Company;  thereafter the interest shall be 6%
per annum on the outstanding  balance of the advance.  Effective January 1, 2001
and  semi-annually  thereafter,  the interest rate will be adjusted to equal the
prime rate then in effect.  Each time an advance is made, a supplemental note is
signed.  The amount of each monthly payment will vary and will be dependent upon
the  amount  of  contracts  receivable  in the  Company's  portfolio,  excluding
contracts receivable held as collateral for prior receivable sales.  Pursuant to
the terms of the  promissory  note,  the Company is required to transfer to Swan
monthly as debt
                                      13

<PAGE>


repayment all current contracts  receivable in the Company's portfolio in excess
of the  aggregate  sum of  $500,000.  Funds  advanced  by Swan  were used by the
Company to pay  outstanding  real estate  taxes for unsold  properties  with the
balance to meet the Company's working capital  requirements.  As of December 31,
2000, the total amount of interest accrued is approximately $273,000.

During 1998,  the Company  transferred  14 lots and 4 tracts of land to Swan. In
return,  Swan built an office complex on part of the land for use by the Company
for a period of 54 months,  renewable  thereafter.  The Company  valued the land
transferred at approximately  $440,000 and recorded the net present value of the
use of the office  complex  of  approximately  $375,000  as  prepaid  rent.  The
difference  between the net  present  value of the rent and the cost of the land
was recorded as deferred profit and recognized over the lease term.

Results of Operations

  Years ended December 31, 2000 and December 31, 1999

     Revenues

     Total revenues were $9,617,000 for 2000 compared to $8,837,000 for 1999.

     Gross land sales were  $6,804,000 for 2000 versus  $4,959,000 for 1999. Net
land sales (gross land sales less estimated uncollectible  installment sales and
contract  valuation  discount)  increased  to  $4,896,000  for 2000  compared to
$4,4605,000 for  1999.  The  increase  reflects  higher  sales by the  Company's
independent dealers and a lower estimate of uncollectible installment sales .

     New retail land sales contracts  entered into,  including  deposit sales on
which  the  Company  has  received  less  than 20% of the  sales  price,  net of
cancellations,  for the years ended December 31, 2000 and December 31, 1999 were
$9,535,000 and $6,491,000, respectively. The Company had a backlog of $4,413,000
and  $2,139,000  in  unrecognized  sales  as of  December  31,  2000  and  1999,
respectively.  Such  contracts  are not  included in retail land sales until the
applicable  rescission  period has expired and the Company has received payments
totaling  20%  of the  contract  sales  price.  See  Note 1 to the  Consolidated
Financial Statements.

     Advertising  and marketing  costs are charges to operations  when incurred.
Sales  commissions  are recognized as a liability  when the related  contract is
accepted and charged to expense when the sale is recognized as revenue.

     Housing revenues are not recognized from housing sales until the completion
of construction  and the passage of title.  Housing revenues were $3,231,000 for
2000  compared to  $3,045,000  for 1999.  The  increase  in housing  revenues is
directly related to expanded promotional programs for housing.

     Improvement  revenues  result from  recognition  of revenues  deferred from
prior period  sales.  Recognition  occurs as  development  work  proceeds on the
previously  sold  property  or  customers  are  exchanged  to a  developed  lot.
Improvement  revenues  totaled $276,000 in 2000 as compared to $381,000 in 1999.
The decrease is a result of lower expenditures on development work.

     Interest  income was  $440,000  for 2000 as compared to $498,000  for 1999.
This decrease is the result of lower  contracts  receivable  balances  resulting
from the Company's repayment of debt to Swan and Yasawa.

     Other revenues were $774,000 for 2000 compared to $448,000 for 1999.  Other
revenues were generated  principally by the Company's  title  insurance and real
estate brokerage subsidiaries.

                                       14

<PAGE>


     Costs and Expenses

     Costs and expenses were  $10,659,000  for 2000  compared to $9,204,000  for
1999. Cost of sales totaled $4,351,000 for 2000 compared to $3,693,000 for 1999.
The increase reflects higher sales by the Company's independent dealers.

     Commissions,  advertising and other selling expenses totaled $3,455,000 for
2000 compared to $3,040,000 for 1999. Advertising was $351,000 for 2000 compared
to $359,000 in 1999.  Other selling expenses were $1,170,000 in 2000 as compared
to $1,075,000 in 1999.

     General and administrative  expenses were $1,362,000 in 2000 as compared to
$1,129,000 in 1999. General and administrative  expenses increased primarily due
to there being increased overhead.

     Real  estate tax  expense  was  $598,000 in 2000 as compared to $491,000 in
1999.

     Interest expense was $894,000 in 2000 and $851,000 in 1999. The increase in
interest  expense is the result of  increased  debt.  Interest  in the amount of
$99,000 and $62,000 was capitalized in 2000 and 1999, respectively.

     Net Income

     The Company  reported a net loss of  $1,042,000  for 2000 compared to a net
loss of $367,000 for 1999.

   Years ended December 31, 1999 and December 31, 1998

     Revenues

     Total revenues were $8,837,000 for 1999 compared to $6,488,000 for 1998.

     Gross land sales were  $4,959,000 for 1999 versus  $4,155,000 for 1998. Net
land sales (gross land sales less estimated uncollectible  installment sales and
contract  valuation  discount)  increased  to  $4,465,000  for 1999  compared to
$3,078,000  for  1998.  The  increase  reflects  higher  sales by the  Company's
independent dealers and a lower estimate of uncollectible installment sales .

     New retail land sales contracts  entered into,  including  deposit sales on
which  the  Company  has  received  less  than 20% of the  sales  price,  net of
cancellations,  for the years ended December 31, 1999 and December 31, 1998 were
$6,491,000 and $4,679,000, respectively. The Company had a backlog of $2,139,000
and  $630,000  in  unrecognized   sales  as  of  December  31,  1999  and  1998,
respectively.  Such  contracts  are not  included in retail land sales until the
applicable  rescission  period has expired and the Company has received payments
totaling  20%  of the  contract  sales  price.  See  Note 1 to the  Consolidated
Financial Statements.

     Advertising  and marketing  costs are charges to operations  when incurred.
Sales  commissions  are recognized as a liability  when the related  contract is
accepted and charged to expense when the sale is recognized as revenue.

     Housing revenues are not recognized from housing sales until the completion
of construction  and the passage of title.  Housing revenues were $3,045,000 for
1999  compared to  $1,622,000  for 1998.  The  increase  in housing  revenues is
directly  related to the  increase in the  Company's  promotional  programs  for
housing.

     Improvement  revenues  result from  recognition  of revenues  deferred from
prior period  sales.  Recognition  occurs as  development  work  proceeds on the
previously  sold  property  or  customers  are  exchanged  to a  developed  lot.
Improvement  revenues totaled $381,000 in 1999 as compared to $956,000 for 1998.
The decrease is a result of lower expenditures.

                                       15

<PAGE>

     Interest  income was $498,000 for 1999 compared to $548,000 for 1998.  This
decrease  is the  result  of lower  contracts  receivable  balances  due to debt
repayments to Swan, Scafholding and Yasawa.

     Other revenues were $448,000 for 1999 compared to $284,000 for 1998.  Other
revenues are generated  principally  by the Company's  title  insurance and real
estate brokerage subsidiaries.

     Costs and Expenses

     Costs and expenses were  $9,204,000  for 1999  compared to  $9,079,000  for
1998. Cost of sales totaled $3,693,000 for 1999 compared to $2,562,000 for 1998.
The increase reflects higher sales by the Company's independent dealers.

     Commissions,  advertising and other selling expenses totaled $3,040,000 for
1999 compared to $2,533,000 for 1998.  Advertising was $359,000 in 1999 compared
to $46,000 in 1998.  Other selling  expenses were $1,075,000 in 1999 compared to
$1,124,000 in 1998.

     General  and  administrative   expenses  were  $1,129,000  in  1999  versus
$2,144,000 in 1998. General and administrative  expenses decreased primarily due
to there being  reduced  payments due in 1999  pursuant to the 1998  termination
agreements to officers who resigned effective October 1998.

     Real estate tax expense was  $491,000  in 1999  compared to  $1,028,000  in
1998.  Included in real estate tax expense in 1998 is  delinquent  interest  and
administrative  fees on  delinquent  taxes,  which  accrued  interest at 18% per
annum.

     Interest expense was $851,000 in 1999 as compared to $812,000 for 1998. The
increase in interest  expense is the result of increased  debt.  Interest in the
amount of $99,000 and $62,000 was capitalized in 2000 and 1999, respectively. No
interest was capitalized in 1998.

     Net Income

     The Company reported a net loss of $367,000 for 1999 compared to a net loss
of $2,591,000 for 1998.

Regulatory Developments which may affect Future Operations

     In Florida, as in many growth areas, local governments have sought to limit
or control population growth in their communities  through  restrictive  zoning,
density reduction,  the imposition of impact fees and more stringent development
requirements.  Although the Company has taken such factors into consideration in
its master  plans by  agreeing,  for example,  to make  improvements,  construct
public  facilities and dedicate  certain  property for public use, the increased
regulation  has  lengthened  the  development  process and added to  development
costs.

     The implementation of the Florida Growth Management Act of 1985 (the "Act")
precludes  the issuance of  development  orders or permits if public  facilities
such  as  transportation,  water  and  sewer  services  will  not  be  available
concurrent  with  development.  Development  orders have been  issued  for,  and
development  has  commenced  in,  the  Company's   existing   communities  (with
development  being  completed  in  certain  of  these  communities).  Thus,  the
Company's  communities  are  less  likely  to be  affected  by  the  new  growth
management policies than future communities. Any future communities developed by
the Company will be strongly impacted by new growth management  policies.  Since
the Act and its implications are  consistently  being  re-examined by the State,
together  with  local  governments  and  various  state and  local  governmental
agencies,  the Company  cannot  further  predict the timing or the effect of new
growth management policies,  but anticipates that such policies may increase the
Company's permitting and development costs.

     The Company's land sales activities are further subject to the jurisdiction
of the laws of various states in which the Company's  properties are offered for
sale.  In  addition,  Florida  and other  jurisdictions  in which the  Company's
properties  are offered for sale have  strengthened,  or may  strengthen,  their
regulation  of  subdividers  and  subdivided  lands in order to provide  further
assurances to the public. The Company has attempted to take appropriate steps to
modify its marketing

                                       16

<PAGE>


programs and registration applications in the face of such increased regulation,
but has incurred  additional costs and delays in the marketing of certain of its
properties  in certain  states and  countries.  For  example,  the  Company  has
complied with the  regulations  of certain states which require that the Company
sell its properties to residents of those states pursuant to a deed and mortgage
transaction,  regardless of the amount of the down payment.  The Company intends
to continue to monitor any  changes in  statutes or  regulations  affecting,  or
anticipated  to  affect,  the sale of its  properties  and  intends  to take all
necessary and  reasonable  action to assure that its properties and its proposed
marketing programs are in compliance with such regulations,  but there can be no
assurance  that the Company  will be able to timely  comply with all  regulatory
changes in all  jurisdictions  in which the Company's  properties  are presently
offered for sale to the public.

Liquidity and Capital Resources

     Mortgages and Similar Debt

     As of December 31,  2000,  the Company had  satisfied  its  principal  debt
obligation  to  Scafholding;  the  Company's  outstanding  debt  to  Yasawa  was
$5,400,000  secured by a first lien on the Company's  receivables and a mortgage
on all of the Company's property.  The terms of repayment of this debt have been
restructured  to provide for  monthly  payments  of  principal  in the amount of
$100,000  payable  monthly in cash or with contracts  receivable at 100% of face
value,  plus interest  payable  monthly on the declining  balance at the rate of
9.6%  per  annum  in cash or with  contracts  receivable  at 65% of face  value.
Effective  January 1, 1999,  Yasawa and Scafholding  agreed to reduce the annual
percentage  rate for their  existing  loans to the  Company  from 9.6% to 6% per
annum.  The interest  rate was again changed in November 2000 when it was agreed
that effective January 1, 2001 and semi-annually  thereafter,  the interest rate
would be adjusted to equal the prime rate then in effect. Yasawa and Scafholding
did not require the Company to make interest  payments for the period  September
1, 1998 to December  31,  2000.  As of December  31,  2000,  the total amount of
interest accrued is approximately $1,055,600.

     From  October 9, 1998  through  the  present,  Swan  continued  to loan the
Company  funds  to  meet  its  working  capital   requirements.   The  Company's
outstanding  debt to Swan,  which is secured by a second  lien on the  Company's
receivables,  was  $5,572,000  as of December  31,  2000.  The Company  signed a
promissory note to Swan in March 1999 which provides that funds advanced by Swan
will be paid back by the Company monthly in contracts receivables at 90% of face
value,  with recourse.  There will be no interest for the first six months after
an  advance  of money is  received  from  Swan by the  Company;  thereafter  the
interest  shall  be 6% per  annum on the  outstanding  balance  of the  advance.
Effective January 1, 2001 and semi-annually  thereafter,  the interest rate will
be  adjusted  to equal the prime  rate then in  effect.  Each time an advance is
made, a  supplemental  note is signed.  The amount of each monthly  payment will
vary and will be  dependent  upon the  amount  of  contracts  receivable  in the
Company's portfolio, excluding contracts receivable held as collateral for prior
receivable  sales.  Pursuant to the terms of the promissory note, the Company is
required to transfer to Swan  monthly as debt  repayment  all current  contracts
receivable  in  the  Company's  portfolio  in  excess  of the  aggregate  sum of
$500,000.  Funds  advanced by Swan were used by the  Company to pay  outstanding
real estate taxes for unsold  properties  with the balance to meet the Company's
working  capital  requirements.  As of December  31,  2000,  the total amount of
interest accrued is approximately $273,000.

     During 1998, the Company  transferred 14 lots and 4 tracts of land to Swan.
In  return,  Swan  built an  office  complex  on part of the land for use by the
Company for a period of 54 months, renewable thereafter.  The Company valued the
land transferred at approximately $440,000 and recorded the net present value of
the use of the office  complex of  approximately  $375,000 as prepaid rent.  The
difference  between the net  present  value of the rent and the cost of the land
was recorded as deferred profit and is recognized over the lease term.

     The Company recorded  interest expense on all outstanding debt balances for
1999 and 2000 to Yasawa,  Scafholding and Swan at 8%, the Company's  incremental
borrowing rate. The difference between interest  calculated at 8% and the amount
accrued  under  the terms of the  respective  notes  was  recorded  as a capital
contribution  increase to capital surplus. The Company recorded interest expense
and a capital contribution in the amount of approximately  $408,000 for 2000 and
$423,000 for 1999.
                                       17

<PAGE>

     The  following  table  presents  information  with respect to mortgages and
similar debt (in thousands):

                                                          Years Ended
                                                 -------------------------------
                                                 December 31,       December 31,
                                                    2000               1999
                                                 ------------       ------------
     Mortgage Notes Payable.................     $ 5,400            $ 6,600
     Other Loans............................       5,572              5,114
                                                 -------            -------
       Total Mortgages and similar debt.....     $10,972            $11,714
                                                 -------            -------

----------
     *      Included in  Mortgage  Notes Payable is the Yasawa loan  ($5,400,000
            at December 31, 2000);  included  in Other  Loans is the  Swan  loan
            ($5,572,000  as of December 31, 2000).

     Indebtedness  under various purchase money mortgages and loan agreements is
collateralized by substantially all of the Company's assets,  including stock of
certain wholly-owned  subsidiaries.  The Company's outstanding debt to Yasawa is
secured by a first lien on the  Company's  receivables  and a mortgage on all of
the Company's property; and the Company's outstanding debt to Swan is secured by
a second lien on the Company's receivables.

     Contracts and Mortgages Receivable Sales

     In 1990 and 1992,  the Company sold  contracts and mortgages  receivable to
thrid parties.  These transactions,  among other things require that the Company
replace or repurchase any receivable  that becomes 90 days  delinquent  upon the
request of the purchaser.  Such  requirement  can be satisfied from contracts in
which the purchaser holds a security  interest  (approximately  $1,445,000 as of
December 31,  2000).  The Company has fully  reserved for the  estimated  future
cancellations based on the Company's  historical  experience for receivables the
Company services and believes these reserves to be adequate. The Company did not
replace any  delinquent  receivables  in 1998,  1999 or 2000. As of December 31,
2000 and  1999,  $1,210,000  and  $1,083,000  in  receivables  were  delinquent,
respectively.

     During 1998,  Scafholding purchased  approximately  $1,400,000 in contracts
and mortgages  receivable  from the Company at sixty-five  percent (65%) of face
value  with  recourse  for  non-performing  contracts.   These  sales  generated
approximately $900,000 used to meet the Company's working capital requirements.

     The Company was the  guarantor of  approximately  $16,066,000  of contracts
receivable  sold or transferred  as of December 31, 2000,  for the  transactions
described  above.  There  are  no  funds  on  deposit  with  purchasers  of  the
receivables  as security to assure  collectibility  as of such date. A provision
has been established for the Company's  obligation under the recourse provisions
of which  $2,730,000  remains at  December  31,  2000.  The  Company has been in
compliance with all receivable transactions since the consummation of receivable
sales.

     The  Company  has an  agreement  with  Scafholding  and Citony  Development
Corporation  for the  servicing  of their  receivable  portfolios.  The  Company
received  approximately $75,300 and $86,700 in 2000 and 1999,  respectively,  in
revenue pursuant to these agreements.

     In the future,  if the Company elects to do so, Yasawa and Scafholding have
agreed to purchase contracts receivable at 65% of face value, with recourse. The
Company has an agreement  with Swan whereby Swan will loan the Company  funds to
be repaid with contracts receivable at 90% of face value, with recourse.

  Other Obligations

     As of December 31, 2000, the Company had estimated development  obligations
of  approximately  $25,000 on sold property,  an estimated  liability to provide
title  insurance and deeding  costs of $251,000 and an estimated  cost of street
maintenance,  prior to assumption of such obligations by local  governments,  of
$585,000, all of which are included in deferred revenue. As of December 31, 2000
and  December  31,  1998  the  Company  had  in  escrow   approximately   $7,200
specifically  for land  improvements at certain of its Central and North Florida
communities.

                                     18

<PAGE>

  Liquidity

     Retail land sales have  traditionally  produced  negative cash flow through
the  point  of  sale as a  result  of a  regulatory  requirement  to sell  fully
developed  lots and the  additional  requirement  to pay  marketing  and selling
expenses prior to or shortly after the point of sale. In an effort to offset the
negative cash flow effects of installment land sales, the Company is directing a
greater  portion of its marketing  efforts to the sale of lots with homes and is
now offering  lots for sale in compulsory  building  areas where a lot purchaser
must complete  payments for the lot and construct a home within a limited period
of time.

     The Company has been dependent on its ability to sell or otherwise  finance
its  contracts  receivable  and/or  secure  other  financing  to meet  its  cash
requirements.  Since 1992,  the Company has been  largely  dependent  on Yasawa,
Scafholding  and Swan and related  parties for the financing of its  operations.
Although  Scafholding has purchased contracts  receivables at the rate of 65% of
face value, with recourse,  and Swan has loaned the Company  additional funds to
be paid back with  contracts  receivable at the rate of 90% of face value,  with
recourse,  there can be no  guarantee  that the Company will be able to generate
sufficient  receivables  to obtain  sufficient  financing  in the future or that
Yasawa, Scafholding,  Swan and other related parties will continue to make loans
to the Company.
                                       19

<PAGE>


ITEM 8

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                              AND SUPPLEMENTAL DATA

                                                                        Page
                                                                        ----
Independent Auditors' Report.......................................      21

Consolidated Balance Sheets as of December 31, 2000 and
   December 31, 1999...............................................      22

Statements of Consolidated Operations for the years ended
   December 31, 2000, December 31, 1999 and December 31, 1998......      24

Statements of Consolidated Stockholders' Equity (Deficiency)
   for the years ended December 31, 2000, December 31, 1999
   and December 31, 1998...........................................      25

Statements of Consolidated Cash Flows for the years ended
   December 31, 2000, December 31, 1999 and December 31, 1998......      26

Notes to Consolidated Financial Statements.........................      28




                                       20

<PAGE>

                          INDEPENDENT AUDITORS' REPORT



TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF
THE DELTONA CORPORATION:


     We have audited the consolidated  balance sheets of The Deltona Corporation
and  subsidiaries  (the  "Company")  as of  December  31,  2000 and 1999 and the
related statements of consolidated operations, consolidated stockholders' equity
(deficiency) and consolidated  cash flows for the years ended December 31, 2000,
1999 and 1998. These consolidated financial statements are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
consolidated 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,  such consolidated  financial  statements referred to above
present fairly, in all material respects,  the financial position of the Company
at December  31, 2000 and 1999 and the  results of its  operations  and its cash
flows for the years ended  December 31, 2000,  1999 and 1998 in conformity  with
generally accepted accounting principles.

     The  accompanying  consolidated  financial  statements  have been  prepared
assuming the Company will continue as a going concern. As discussed in Note 1 to
the  consolidated   financial  statements,   the  Company  incurred  substantial
operating  losses and has continued to experience  problems with liquidity,  and
has a  stockholders'  deficiency  at December  31,  2000.  These  matters  raise
substantial  doubt about the Company's  ability to continue as a going  concern.
Management's  plans  concerning  these  matters  are  described  in Note 1.  The
consolidated  financial  statements  do not include any  adjustments  that might
result from the outcome of this uncertainty.


JAMES MOORE & CO.  P.L.
Certified Public Accountants
Gainesville, Florida
February 18, 2001


                                       21

<PAGE>

<TABLE>
<CAPTION>


                           CONSOLIDATED BALANCE SHEETS

                    THE DELTONA CORPORATION AND SUBSIDIARIES

                                     ASSETS
                                 (in thousands)


                                                       December 31, December 31,
                                                          2000         1999
                                                       ------------ ------------
<S>                                                    <C>          <C>

Cash and cash equivalents, including escrow
 deposits and restricted cash of $587 in 2000
 and $396 in 1999 (Note 7).......................      $      680   $       548
                                                       ----------   -----------

Contracts receivable for land sales
 (Notes 2, 5 and 8)..............................           2,109         2,448

Less: Allowance for uncollectible contracts......            (291)         (606)

      Unamortized valuation discount.............            (264)         (293)
                                                       ----------   -----------

Contracts receivable - net.......................           1,554         1,549
                                                       ----------   -----------

Mortgages and other receivables - net
 (Notes 2, 5 and 8)..............................             140           109
                                                       ----------   -----------

Inventories, at lower of cost or net realizable
 value (Notes 3 and 5):

Land and land improvements.......................           8,375         8,237

Other............................................           1,361            70
                                                       ----------   -----------
               Total inventories.................           9,736         8,307
                                                       ----------   -----------

Property, plant and equipment - net
 (Notes 4 and 5).................................             455           489
                                                       ----------   -----------

Prepaid expenses and other.......................           1,403           911
                                                       ----------   -----------

               Total.............................      $   13,968   $    11,913
                                                       ==========   ===========




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

</TABLE>

                                       22

<PAGE>

<TABLE>
<CAPTION>


                           CONSOLIDATED BALANCE SHEETS

                    THE DELTONA CORPORATION AND SUBSIDIARIES

                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
                        (in thousands except share data)



                                                       December 31, December 31,
                                                          2000         1999
                                                       ------------ ------------
<S>                                                    <C>          <C>
Mortgages and similar debt (Note 5):

       Mortgage notes payable ...................      $  5,400     $  6,600

       Other loans ..............................         5,572        5,114
                                                       --------     --------

              Total mortgages and similar debt...        10,972       11,714

Accounts payable-trade ..........................           217            7

Accrued interest payable (Note 5) ...............         1,329          744

Accrued taxes, principally real estate taxes ....           289           30

Accrued expenses and other (Notes 2 and 8) ......         3,258        3,209

Customers' deposits .............................         1,397          730

Deferred revenue (Notes 7 and 8) ................         5,345        3,683
                                                       --------     --------
Total liabilities ...............................        22,807       20,117
                                                       --------     --------

Commitments and contingencies (Notes 1, 2, 5, 7 and 8)

Stockholders' equity (deficiency) (Notes 1, 5, and 9):

       Common stock, $1 par value-authorized
       15,000,000 shares; issued and outstanding:
       13,544,277 shares in 2000 and 1999 (excluding
       12,228 shares held in treasury)...........        13,544       13,544

       Capital surplus ..........................        52,270       51,863

       Accumulated deficit ......................       (74,653)     (73,611)
                                                       --------     --------
Total stockholders' equity (deficiency) .........        (8,839)     ( 8,204)
                                                       --------     --------
                    Total........................      $ 13,968     $ 11,913
                                                       ========     ========

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

                                       23

<PAGE>

<TABLE>
<CAPTION>


                      STATEMENTS OF CONSOLIDATED OPERATIONS
                    THE DELTONA CORPORATION AND SUBSIDIARIES
                        (in thousands except share data)

                                                                    Years Ended
                                                    --------------------------------------------
                                                    December 31,    December 31,    December 31,
                                                       2000            1999            1998
                                                    ------------    ------------    ------------
<S>                                                 <C>             <C>             <C>
Revenues

 Gross land sales (Notes 2 and 7) ...............   $  6,804        $  4,959        $  4,155
 Less: Estimated uncollectible sales ............     (1,641)           (322)           (840)
       Contract valuation discount ..............       (267)           (172)           (237)
                                                    --------        --------        --------
 Net land sales .................................      4,896           4,465           3,078
 Sales-housing ..................................      3,231           3,045           1,622
 Recognized improvement revenue-prior period
  sales .........................................        276             381             956
 Interest income ................................        440             498             548
 Other ..........................................        774             448             284
                                                    --------        --------        --------
                                            Total      9,617           8,837           6,488
                                                    --------        --------        --------

Costs and expenses

 Cost of sales-land .............................      1,397             986             741
 Cost of sales-housing ..........................      2,716           2,402           1,269
 Cost of improvements-prior period sales ........         62             126             302
 Cost of sales-other ............................        175             179             250
 Commissions, advertising, and other selling
  expenses ......................................      3,455           3,040           2,533
 General and administrative expenses ............      1,362           1,129           2,144
 Real estate tax ................................        598             491           1,028
 Interest expense ...............................        894             851             812
                                                    --------        --------        --------
                                            Total     10,659           9,204           9,079
                                                    --------        --------        --------

Loss from operations before income
 taxes ..........................................     (1,042)           (367)         (2,591)

Provision for income taxes (Note 6) .............        -0-             -0-             -0-
                                                    --------        --------        --------
Net income (loss) ...............................   $ (1,042)       $   (367)       $ (2,591)
                                                    ========        ========        ========

Net income (loss) per common share ..............   $   (.08)       $   (.03)       $   (.19)
                                                    ========        ========        ========


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

                                       24

<PAGE>

<TABLE>
<CAPTION>


          STATEMENTS OF CONSOLIDATED STOCKHOLDERS' EQUITY (DEFICIENCY)

                    THE DELTONA CORPORATION AND SUBSIDIARIES
                                 (in thousands)

For the years ended December 31, 2000, December 31, 1999 and December 31, 1998


                                             Common Stock     Capital   Accumulated
                                             ($1 par value)   Surplus   Deficit       Total
                                             --------------   -------   -----------   ---------
<S>                                          <C>              <C>       <C>           <C>


Balances, December 31, 1997 ..............   $ 13,544         $ 51,495  $(70,653)     $ (5,614)
        Gain (loss)from Exchange
        of Land and Contracts
        Receivable with Related
        Party ............................        -0-             (55)       -0-           (55)
        Net (loss) for the year ..........        -0-             -0-     (2,591)       (2,591)
                                             --------        --------   --------      --------
Balances, December 31, 1998 ..............   $ 13,544        $ 51,440   $(73,244)     $ (8,260)
        Imputed Interest expense on
        debt with Related Party
        (See Note 5) .....................        -0-             423        -0-           423
        Net (loss) for the year ..........        -0-             -0-       (367)         (367)
                                             --------        --------   --------      --------
Balances, December 31, 1999 ..............   $ 13,544        $ 51,863   $(73,611)     $ (8,204)
        Imputed Interest expense on
        debt with Related Party
        (See Note 5) .....................        -0-             407        -0-           407
        Net (loss)for the year ...........        -0-             -0-     (1,042)       (1,042)
                                             --------        --------   --------      --------
Balances, December 31, 2000 ..............   $ 13,544        $ 52,270   $(74,653)     $ (8,839)
                                             ========        ========   ========      ========



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

</TABLE>

                                       25

<PAGE>
<TABLE>
<CAPTION>



                      STATEMENTS OF CONSOLIDATED CASH FLOWS

                    THE DELTONA CORPORATION AND SUBSIDIARIES
                                 (in thousands)

                                                          December 31,    December 31,    December 31,
                                                             2000            1999            1998
                                                          ------------    ------------    ------------
<S>                                                       <C>             <C>             <C>




Cash flows from operating activities:
 Cash received from operations:
  Proceeds from sale of residential units .............   $  3,282        $  2,846        $  1,768
  Collections on contracts and mortgages
   receivable .........................................      1,040           1,051           1,993
    Down payments on and proceeds from sales
      of homesites and tracts .........................      1,748             891           1,072
     Proceeds from sale of Contracts Receivables ......          0               0             868
     Proceeds (uses) from other sources ...............        490             (80)            240
                                                          --------        --------        --------
               Total cash received from operations ....      6,560           4,708           5,941
                                                          --------        --------        --------

 Cash expended by operations:
     Cash paid for residential units ..................      3,167           2,402           1,269
     Cash paid for land and land improvements .........      1,309           1,648           1,047
     Customer refunds .................................          0               0              35
     Commissions, advertising and other
      selling expenses ................................      4,737           3,274           2,620
     General and administrative expenses ..............      1,082           1,452           1,715
     Interest paid ....................................          0               0             299
     Real estate taxes paid ...........................        347           3,336             260
                                                          --------        --------        --------
               Total cash expended by operations ......     10,642          12,112           7,245
                                                          --------        --------        --------
               Net cash provided by (used in) operating
         activities ...................................     (4,082)         (7,404)         (1,304)
                                                          --------        --------        --------

Cash flows from investing activities:
 Proceeds from sale of property, plant
  and equipment .......................................          0               3               0
 Payment for acquisition and construction of
   property, plant and equipment ......................        (31)            (72)           (137)
                                                          --------        --------        --------
               Net cash provided by (used in) investing
                 activities ...........................        (31)            (69)           (137)
                                                          --------        --------        --------

Cash flows from financing activities:
 New borrowings .......................................      4,245           7,300             765
                                                          --------        --------        --------
               Net cash provided by (used in) financing
                 activities ...........................      4,245           7,300             765
Net increase (decrease) in cash and cash
 equivalents ..........................................        132            (173)           (676)
Cash and cash equivalents, beginning of year ..........        548             721           1,397
                                                          --------        --------        --------
Cash and cash equivalents, end of year ................   $    680        $    548        $    721
                                                          ========        ========        ========



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

</TABLE>


                                       26


<PAGE>
<TABLE>
<CAPTION>



               STATEMENTS OF CONSOLIDATED CASH FLOWS - (Continued)

                    THE DELTONA CORPORATION AND SUBSIDIARIES
                                 (in thousands)

                                                          December 31,    December 31,    December 31,
                                                             2000            1999            1998
                                                          ------------    ------------    ------------
<S>                                                       <C>             <C>             <C>
Reconciliation of net income (loss) to net cash
provided by (used in) operating activities:

Net income (loss) ..................................      $     (1,042)   $      (367)    $    (2,591)
                                                          ------------    -----------     -----------
Adjustments to reconcile net income (loss) to net
  cash provided by (used in) operating activities:
            Depreciation and amortization ..........                66             50              45
            Provision for estimated uncollectible
             sales and recourse obligations ........             1,641            322             840
            Contract valuation discount, net of
             amortization...........................                62             (5)            140
            Net (gain) loss on sale of property,
             plant and equipment ...................                 0             (3)            -0-
            Imputed Interest on debt with related
             party (See Note 5) ....................               408            423             -0-
(Increase) decrease in assets and increase (decrease)
   in liabilities:
            Gross contracts receivable plus
             deductions from reserves ..............            (7,558)        (3,844)         (1,689)
            Mortgages and other receivables ........               (31)            85             890
            Land and land improvements .............              (138)          (658)           (211)
            Housing completed or under construction
             and other..............................              (430)             6              23
            Prepaid expenses and other .............              (492)          (205)            (87)
            Accounts payable, accrued expenses and
             other .................................             1,103         (3,801)          2,049
            Customers' deposits ....................               667           (266)            243
            Deferred revenue .......................             1,662            859            (956)
                                                          ------------    -----------      ----------
                Total adjustments and changes ......            (3,040)        (7,037)          1,287
                                                          ------------    -----------      ----------
Net cash provided by (used in) operating
 activities ........................................      $     (4,082)   $    (7,404)     $   (1,304)
                                                          ============    ===========      ==========

Supplemental disclosure of non-cash investing
and financing activities:

Interest expense treated as contribution to
  capital (See Note 5)..............................      $        408    $       423      $      -0-
                                                          ============    ===========      ==========
Increase in inventory as a result of spec house
  acquisition and corresponding increase in debt ...      $        863    $       -0-      $      -0-
                                                          ============    ===========      ==========
Reduction of accrued interest and mortgage notes
  payable through transfer of contracts receivable .      $      5,850    $     4,151      $    1,233
                                                          ============    ===========      ==========
Sale of land to related party in return for future
  rent credits (see Note 8):
  Increase of prepaid expenses .....................      $        -0-    $       -0-      $      398
                                                          ============    ===========      ==========
  Reduction of land inventory ......................      $        -0-    $       -0-      $       81
                                                          ============    ===========      ==========
  Increase in deferred revenue .....................      $        -0-    $       -0-      $      291
                                                          ============    ===========      ==========


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

                                       27

<PAGE>


                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    THE DELTONA CORPORATION AND SUBSIDIARIES




1.   Basis of Presentation and Significant Accounting Policies

     Basis of Presentation - Going Concern

     The  accompanying  financial  statements  of The  Deltona  Corporation  and
subsidiaries (the "Company") have been prepared on a going concern basis,  which
contemplates  the  realization of assets and  satisfaction of liabilities in the
normal course of business.

     The Company has incurred a loss from operations for 2000 of $1,042,000, for
1999  of  $367,000  and for  1998 of  $2,591,000  resulting  in a  stockholders'
deficiency of $8,839,000 as of December 31, 2000.

     Following the  restructuring  of its debt in 1997 (see Note 5), the Company
commenced the  implementation  of its business plan by redirecting  its focus to
single-family  housing with the  development  of TimberWalk and other housing in
Marion Oaks. The transactions described in Note 5 with Selex International, B.V.
("Selex"),  Yasawa Holdings, N.V. ("Yasawa"),  Scafholding B.V.  ("Scafholding")
and Swan Development  Corporation ("Swan"),  provided the Company with a portion
of its financing requirements enabling the Company to commence implementation of
the marketing  program and attempt to accomplish  the objectives of its business
plan.  Selex,  Yasawa,  Scafholding  and Swan are related parties to the Company
either because they are shareholders or as a result of common control.

     The Company has been dependent on its ability to sell or otherwise  finance
contracts  receivable  and/or  secure other  financing  sources to meet its cash
requirements.  Additional  financing was required in 2000 and was funded through
additional loans from Swan. Additional financing will be required in the future.
Although in 1998 Scafholding  purchased contracts receivables at the rate of 65%
of face value, with recourse, and Swan loaned the Company additional funds to be
paid back  with  contracts  receivable  at the rate of 90% of face  value,  with
recourse in 1998, 1999 and 2000, there can be no guarantee that the Company will
be able to generate sufficient receivables to obtain sufficient financing in the
future or that Yasawa, Scafholding, Swan and other related parties will continue
to make loans to the Company. (See Notes 5 and 11.)

     The  consolidated  financial  statements  do not  include  any  adjustments
relating to the  recoverability  of asset amounts or the amounts of  liabilities
should the Company be unable to continue as a going concern.

     Significant Accounting Policies

     The Company's  consolidated financial statements are prepared in accordance
with generally accepted accounting  principles.  Material  intercompany accounts
and transactions are eliminated.

     The Company is principally  engaged in the  development and sale of Florida
real estate through the development of planned  communities on land acquired for
that purpose.  The Company sells  homesites  under  installment  contracts which
provide for payments over periods  ranging from 2 to 10 years.  Since 1991,  the
Company  has  offered  only  developed  lots for sale.  Sales of  homesites  are
recorded under the percentage-of-completion  method in accordance with Statement
of Financial  Accounting Standards No. 66, "Accounting for Sales of Real Estate"
("SFAS No. 66").  Since 1991, the Company has not recognized a sale until it has
received  20%  of  the  contract  sales  price.  During  2000,  1999  and  1998,
approximately 99%, 73% and 82% of sales were through two independent  brokers in
New York.



                                       28

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    THE DELTONA CORPORATION AND SUBSIDIARIES



1.   Basis of Presentation and Significant Accounting Policies (continued)

     As part of its  debt  repayment  obligation  as  described  in Note 5,  the
Company  transfers  contracts and mortgages  receivable,  with recourse,  to its
lenders,  many of which have not been  recognized  in the  financial  statements
under the  provisions of SFAS No. 66. The Company  recognizes the contracts when
transferred and records  deferred revenue until such time as the requirements of
SFAS No. 66 are met and the sale can be recognized.

     At the time of recording a sale the Company  records an  allowance  for the
estimated cost to cancel the related  contracts  receivable  through a charge to
the  provision for  uncollectible  sales.  The amount of this  provision and the
adequacy of the allowance is determined by the Company's  continuing  evaluation
of the portfolio and past  cancellation  experience.  While the Company uses the
best  information  available to make such  evaluations it is at least reasonably
possible,  future adjustments to the allowance may be necessary in the near term
as a result of future national and  international  economic and other conditions
that may be beyond the Company's  control.  Changes in the Company's estimate of
the allowance for  previously  recognized  sales are reported in earnings in the
period in which they  become  estimable  and are  charged to the  provision  for
uncollectible contracts.

     Land improvement costs are allocated to individual homesites based upon the
relationship  that the homesite's  sales price bears to the total sales price of
all homesites in the community.  The estimated costs of improving  homesites are
based upon independent  engineering estimates made in accordance with sound cost
estimation and provide for anticipated cost-inflation factors. The estimates are
systematically  reviewed.  When  cost  estimates  are  revised,  the  percentage
relationship  they bear to deferred  revenues is  recalculated  on a  cumulative
basis to determine future income recognition as performance takes place.

     Sales of houses and vacation  ownership units, as well as all related costs
and expenses, are recorded at the time of closing.

     Interest  costs  directly  related  to, and  incurred  during,  a project's
construction  period are  capitalized.  No interest was  capitalized in 1998. In
1999 and 2000, approximately $62,000 and $99,000 in interest,  respectively, was
capitalized.

     Property,  plant and equipment is stated at cost.  Depreciation is provided
by the  straight-line  method over the estimated  useful lives of the respective
assets,  which  range  from  5  to  33  years.  Additions  and  betterments  are
capitalized,  and maintenance  and repairs are expensed as incurred.  Generally,
upon the sale or  retirement  of assets,  the accounts are relieved of the costs
and  related  accumulated  depreciation  and any  gain or loss is  reflected  in
income.

     Advertising  and marketing  costs are charges to operations  when incurred.
Sales  commissions  are recognized as a liability  when the related  contract is
accepted and charged to expense when the sale is recognized as revenue.

     For the purposes of the statements of cash flows, the Company considers its
investments,  which are  comprised  of short  term,  highly  liquid  investments
purchased with a maturity of three months or less, to be cash equivalents.

     In accordance  with  Statement of Financial  Accounting  Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of" ( SFAS No. 121),  long-lived  assets,  such as  inventories  and
property,  plant  and  equipment  to be held  and used  are to be  reviewed  for
impairment  whenever  events  or  changes  in  circumstances  indicate  that the
carrying  amounts of an asset may not be  recoverable.  As of December 31, 2000,
there were no assets considered impaired under the provisions of the Statement.

                                       29

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    THE DELTONA CORPORATION AND SUBSIDIARIES



1.   Basis of Presentation and Significant Accounting Policies (continued)

     The estimated fair values of financial  instruments have been determined by
the  Company  using  available  market  information  and  appropriate  valuation
methods.  Considerable  judgment  is  required  in  interpreting  market data to
develop the estimates of fair value. Accordingly, the estimates presented herein
are not necessarily indicative of the amounts the Company could realize or incur
in a current market  exchange.  The use of different market  assumptions  and/or
estimation  methods  may have a  material  effect on the  estimated  fair  value
amounts.   The  Company's  financial   instruments  consist  of  cash  and  cash
equivalents,  contracts and mortgages receivable, and similar debt. The carrying
amount of cash and cash equivalents are reasonable  estimates of fair value. The
fair value of  contracts  and  mortgages  receivable  and similar  debt has been
estimated  using  interest  rates  currently  available for similar  terms.  The
carrying  value of the  contracts  and  mortgages  receivable  and similar  debt
approximates fair value.

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

     Certain  reclassifications have been made to the 1999 financial information
to conform to the 2000 presentation.

2.   Contracts and Mortgages Receivable

     At December 31, 2000,  interest rates on contracts  receivable  outstanding
ranged  from 5% to 12% per  annum  (weighted  average  approximately  7.8%.  The
approximate principal maturities of contracts receivable were:

                                                                  December 31,
                                                                     2000
                                                                  ------------
                                                                 (in thousands)
     2001......................................................     $  471
     2002......................................................        420
     2003......................................................        391
     2004 .....................................................        422
     2005......................................................        381
     2006 and thereafter.......................................         24
                                                                    ------
            Total..............................................     $2,109
                                                                    ======

     If a regularly scheduled payment on a contract remains unpaid 30 days after
its due date,  the  contract  is  considered  delinquent.  Aggregate  delinquent
contracts  receivable  at December  31, 2000 and 1999  approximate  $797,000 and
$856,000, respectively.

     Information  with respect to interest rates and average contract lives used
in valuing  new  contracts  receivable  generated  from sales  follows:

                                  Average      Average Stated     Discounted
     Years Ended                  Term         Interest Rate      to Yield
     -----------                  ---------    --------------     ----------

     December 31, 2000.......     98 months         7.8%             13.5%
     December 31, 1999.......     88 months         7.5%             13.5%
     December 31, 1998.......     94 months         8.3%             13.5%

                                       30

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    THE DELTONA CORPORATION AND SUBSIDIARIES



2.   Contracts and Mortgages Receivable (continued)

     In 1990 and 1992,  the Company sold  contracts and mortgages  receivable to
third parties. These transactions,  among other things, require that the Company
replace or repurchase any receivable  that becomes 90 days  delinquent  upon the
request of the purchaser.  Such  requirement  can be satisfied from contracts in
which the purchaser holds a security  interest  (approximately  $1,445,000 as of
December 31,  2000).  The Company has fully  reserved for the  estimated  future
cancellations based on the Company's  historical  experience for receivables the
Company services and believes these reserves to be adequate. The Company did not
replace any  delinquent  receivables  in 1998,  1999 or 2000. As of December 31,
2000 and  1999,  $1,211,000  and  $1,083,000  in  receivables  were  delinquent,
respectively.

     During  2000 and 1999,  the Company  transferred  contracts  and  mortgages
receivable, with recourse, in satisfaction of debt of $5,849,649 and $4,150,738,
respectively.  The  Company is required to make  monthly  principal  payments to
Yasawa and  Scafholding  with contracts  receivable at 100% of face value,  with
recourse.  The Company is also  required to make monthly  principal  payments to
Swan with contracts receivable at 90% of face value, with recourse.  The Company
transfers all current contracts receivable in excess of the net aggregate sum of
$500,000 to Swan on a monthly basis (See Note 5).

     During 1998,  Scafholding purchased  approximately  $1,400,000 in contracts
and mortgages  receivable  from the Company at sixty-five  percent (65%) of face
value  with  recourse  for  non-performing  contracts.   These  sales  generated
approximately $900,000 used to meet the Company's working capital requirements.

     The Company was the  guarantor of  approximately  $16,066,000  of contracts
receivable  sold or transferred  as of December 31, 2000,  for the  transactions
described  above.  There  are  no  funds  on  deposit  with  purchasers  of  the
receivables  as security to assure  collectibility  as of such date. A provision
has been established for the Company's  obligation under the recourse provisions
of which  $2,730,000  remains at  December  31,  2000.  The  Company has been in
compliance with all receivable transactions since the consummation of receivable
sales. Because of inherent  uncertainties in estimating the recourse provisions,
it is at least  reasonably  possible that the Company's  estimate will change in
the near term.

     The  Company  has an  agreement  with  Scafholding  and Citony  Development
Corporation  for the  servicing  of their  receivable  portfolios.  The  Company
received  approximately  $75,300,  $86,700 and $82,000,  in 2000, 1999 and 1998,
respectively, in revenue pursuant to these agreements. The Company also services
the Swan receivable  portfolio,  which consisted of 564 contracts as of December
31, 2000; however, the Swan portfolio is serviced at no charge to Swan under the
debt agreement.

3.   Inventories

     Information  with  respect to the  classification  of inventory of land and
improvements  including  land held for sale or transfer is as follows:

                                              December 31,    December 31,
                                                 2000            1999
                                              ------------    ------------
                                                    (in thousands)
     Unimproved land.....................     $  420          $   420
     Land in various stages of
      development........................      2,316            2,633
     Fully improved land.................      5,639            5,184
                                              ------          -------
            Total........................     $8,375          $ 8,237
                                              ======          =======




                                       31

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    THE DELTONA CORPORATION AND SUBSIDIARIES



4.   Property, Plant and Equipment

     Property,  plant and equipment and accumulated  depreciation consist of the
following:

                                         December 31, 2000    December 31, 1999
                                       --------------------  -------------------
                                               Accumulated          Accumulated
                                       Cost    Depreciation  Cost   Depreciation
                                       ------  ------------  ------ ------------
                                                     (in thousands)

     Land and land improvements...     $   74  $   -0-       $   74 $  -0-
     Other buildings, improvements
      and furnishings.............      1,122      803        1,116    789
     Construction and other
      equipment...................        783      721          758    670
                                       ------  -------       ------ ------
            Total.................     $1,979  $ 1,524       $1,948 $1,459
                                       ======  =======       ====== ======

     Depreciation  charged to operations  for the years ended December 31, 2000,
1999 and 1998 was approximately $66,000, $50,000 and $45,000, respectively.

5.   Mortgages and Similar Debt

     As of December 31,  1999,  the Company had  satisfied  its  principal  debt
obligation to  Scafholding.  As of December 31, 2000, the Company's  outstanding
debt  to  Yasawa  was  $5,400,000  secured  by a  first  lien  on the  Company's
receivables  and a  mortgage  on all of the  Company's  property.  The  terms of
repayment of this debt have been restructured to provide for monthly payments of
principal in the amount of $100,000  payable  monthly in cash or with  contracts
receivable at 100% of face value, plus interest payable monthly on the declining
balance at the rate of 9.6% per annum in cash or with  contracts  receivable  at
65% of face value.  Effective January 1, 1999, Yasawa and Scafholding  agreed to
reduce the annual  percentage  rate for their existing loans to the Company from
9.6% to 6% per annum.The  interest rate was again changed  effective  January 1,
2001 and semi-annually  thereafter,  the interest rate will be adjusted to equal
the prime  rate then in effect.  Yasawa  and  Scafholding  did not  require  the
Company to make interest  payments for the period  September 1, 1998 to December
31,  2000.  As of December 31,  2000,  the total  amount of interest  accrued is
approximately $1,055,600.

     From  October 9, 1998  through  the  present,  Swan  continued  to loan the
Company  funds to meet its  working  capital  requirements  (see Note  10).  The
Company's  outstanding  debt to Swan,  which is secured by a second  lien on the
Company's  receivables,  was  $5,572,000  as of December 31,  2000.  The Company
signed a  promissory  note to Swan in  March  1999  which  provides  that  funds
advanced  by  Swan  will  be  paid  back by the  Company  monthly  in  contracts
receivables at 90% of face value,  with  recourse.  There is no interest for the
first six months after an advance of money is received from Swan by the Company;
thereafter the interest shall be 6% per annum on the outstanding  balance of the
advance.  Effective January 1, 2001 and semi-annually  thereafter,  the interest
rate  will be  adjusted  to equal the prime  rate then in  effect.  Each time an
advance  is made,  a  supplemental  note is signed.  The amount of each  monthly
payment will vary and will be dependent upon the amount of contracts  receivable
in the Company's  portfolio,  excluding contracts  receivable held as collateral
for prior  receivable  sales.  Pursuant to the terms of the promissory note, the
Company is required to transfer to Swan  monthly as debt  repayment  all current
contracts  receivable in the Company's  portfolio in excess of the aggregate sum
of  $500,000.  Funds  advanced  by Swan  are  used by the  Company  to meet  the
Company's  working  capital  requirements.  As of December 31,  2000,  the total
amount of interest accrued as approximately $273,000.

     The Company recorded  interest expense on all outstanding debt balances for
2000 and 1999 to Yasawa,  Scafholding and Swan at 8%, the Company's  incremental
borrowing rate. The difference between interest  calculated at 8% and the amount
accrued  under  the terms of the  respective  notes  was  recorded  as a capital
contribution  increase to capital surplus. The Company recorded interest expense
and a capital contribution in the amount of approximately  $408,000 and $423,000
for 2000 and 1999, respectively.

                                       32

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    THE DELTONA CORPORATION AND SUBSIDIARIES



5.   Mortgages and Similar Debt (continued)

     In the future,  if the Company elects to do so, Yasawa and Scafholding have
agreed to purchase contracts receivable at 65% of face value, with recourse. The
Company has an agreement  with Swan whereby Swan will loan the Company  funds to
be repaid with contracts receivable at 90% of face value, with recourse.

     The  following  table  presents  information  with respect to mortgages and
similar debt (in thousands):

                                                          Years Ended
                                                    ---------------------------
                                                    December 31,   December 31,
                                                       2000           1999
                                                    ------------   ------------
     Mortgage Notes Payable......................   $ 5,400        $ 6,600
     Other Loans.................................     5,572          5,114
                                                    -------        -------
       Total Mortgages and similar debt..........   $10,972        $11,714
                                                    =======        =======
---------
    *       Included in Mortgage Notes Payable is the Yasawa loan ($5,400,000 at
            December 31, 2000);   included  in  Other  Loans  is  the  Swan loan
            ($5,572,000 as of December 31, 2000).

     The  following  table  presents  information  with  respect to the  minimum
principal  maturities  of  mortgages  and  similar  debt for the next five years
(excluding amounts owed to Swan):

                                                     For the year ended
                                                         December 31
                                                     ------------------
                                                       (in thousands)

     2001..........................                      $ 1,200
     2002..........................                        1,200
     2003..........................                        1,200
     2004..........................                        1,200
     2005..........................                          600
                                                         -------
                                                         $ 5,400
                                                         =======

     Indebtedness  under various purchase money mortgages and loan agreements is
collateralized by substantially all of the Company's assets,  including stock of
certain wholly-owned  subsidiaries.

6.   Income Taxes

     The Company  follows the  provisions  of Statement of Financial  Accounting
Standard No. 109 "Accounting for Income Taxes."  Differences  between accounting
rules and tax laws cause  differences  between  the basis of certain  assets and
liabilities for financial reporting purposes and tax purposes. The tax effect of
these  differences,  to the extent they are temporary,  are recorded as deferred
tax assets and liabilities.  Income tax expense is the tax payable or refundable
for the period plus or minus the change during the period in deferred assets and
liabilities.

     For the years ended December 31, 2000, 1999 and 1998, the Company had a net
loss for tax  purposes  and there was no  material  amount of taxes  payable  or
refundable. Accordingly, there was no tax provision for such years.

    As of  December  31,  2000,  the Company  had a net  deferred  tax asset of
approximately  $15,017,000,  which primarily resulted from the tax effect of the
Company's net operating loss carryforward of $11,057,000, losses on subsidiaries
sold in prior years of $ 3,960,000  and a difference  in  reporting  the sale of
land under the installment basis. A valuation  allowance of $15,017,000 has been
established against the net deferred tax asset.

                                       33

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    THE DELTONA CORPORATION AND SUBSIDIARIES



6.   Income Taxes (continued)

     As of  December  31,  1999,  the Company  had a net  deferred  tax asset of
approximately  $14,139,000  which primarily  resulted from the tax effect of the
Company's net operating loss carryforward of $8,610,000,  losses on subsidiaries
sold in prior years of $3,960,000 and a difference in reporting the sale of land
under the  installment  basis.  A valuation  allowance of  $14,139,000  has been
established against the net deferred tax asset.

     The  Company's  regular net  operating  loss  carryover for tax purposes is
estimated  to be  $39,729,000  at  December  31,  2000,  $542,000  of which  was
available  through  2002,  $9,189,000  through  2005,  $9,780,000  through 2006,
$5,029,000  through  2008,  $5,401,000  through 2009,  $1,977,000  through 2011,
$1,354,000  through 2019 and  $6,457,000  through  2020.  In addition to the net
operating  loss  carryover,  alternative  minimum tax  credits of  $386,000  are
available to reduce federal income tax liabilities  only after the net operating
loss carryovers have been utilized.

     The  utilization  of the  Company's  net  operating  loss  and  tax  credit
carryforwards could be impaired or reduced under certain circumstances, pursuant
to changes in the  federal  income  tax laws  effected  by the Tax Reform Act of
1986. Events which affect these carryforwards  include,  but are not limited to,
cumulative stock ownership  changes of 50% or more over a three-year  period, as
defined, and the timing of the utilization of the tax benefit carryforwards.

7.   Liability for Improvements

     The Company has an obligation to complete  land  improvements  upon deeding
which,  depending on contractual  provisions,  typically occurs within 90 to 120
days after the  completion  of payments by the customer.  The estimated  cost to
complete  improvements  to lots and tracts  from  which  sales have been made at
December  31,  2000  and  1999  was   approximately   $861,000   and   $921,000,
respectively.  The foregoing estimates reflect the Company's current development
plans at its  communities  (see  Note 8).  These  estimates  include:  estimated
development  obligations  applicable to sold lots of  approximately  $25,000;  a
liability to provide title insurance and deeding costs of $251,000 and $273,700,
respectively,  and an estimated cost of street maintenance,  prior to assumption
of  such   obligations   by  local   governments,   of  $583,000  and  $622,000,
respectively, all of which are included in deferred revenue. Included in cash at
December  31,  2000 and  December  31,  1999,  are  escrow  deposits  of  $7,200
restricted  for  completion  of   improvements   in  certain  of  the  Company's
communities.

     The anticipated  expenditures  for land  improvements,  title insurance and
deeding to complete  areas from which sales have been made through  December 31,
2000 are as follows:
                                                     December 31, 2000
                                                     -----------------
                                                       (in thousands)

     2001..........................                   $    274
     2002..........................                        191
     2003..........................                        307
     2004 and thereafter...........                         89
                                                      --------
         Total.....................                   $    861
                                                      ========

8.   Commitments and Contingent Liabilities

     Total rental  expense for the years ended  December 31, 2000,  December 31,
1999 and  December  31, 1998 was  approximately  $89,000,  77,000 and  $134,000,
respectively.

     The Company has a lease on its  headquarters  building in TimberWalk and on
its Miami office that extend through 2003.  Estimated rental expense under these
leases is  expected to be  approximately  $76,000  annually.  The Company has no
material equipment leases.


                                       34

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    THE DELTONA CORPORATION AND SUBSIDIARIES


8.   Commitments and Contingent Liabilities (continued)

     During 1998, the Company  transferred 14 lots and 4 tracts of land to Swan.
In  return,  Swan  built an  office  complex  on part of the land for use by the
Company for a period of 54 months, renewable thereafter.  The Company valued the
land transferred at approximately $440,000 and recorded the net present value of
the use of the office  complex of  approximately  $375,000 as prepaid rent.  The
difference  between the net  present  value of the rent and the cost of the land
was recorded as deferred profit and recognized over the lease term.

     Additionally during 1998, Scafholding advanced the Company $200,000 against
future   administrative   fees  due  the  Company  for  selling  lots  owned  by
Scafholding.  The Company recorded this advance as a deposit. In the years ended
December  31,  2000,  1999 and 1998,  the Company  earned  $38,520,  $74,240 and
$27,780, respectively, in fees for sold lots.

     Homesite  sales  contracts  provide  for the return of all  monies  paid in
(including   paid-in  interest)  should  the  Company  be  unable  to  meet  its
contractual  obligations after the use of reasonable  diligence.  If a refund is
made, the Company will recover the related homesite and any improvement thereto.

     Prior to 1999, the Company's  continuing  liquidity  problems precluded the
timely  payment  of the full  amount of  certain  real  estate  taxes.  In 1999,
delinquent  as well as  current  real  estate  taxes for all  properties  in the
Company's  saleable  inventory  were paid. On properties  where  customers  have
contractually  assumed the obligation to pay real estate taxes,  monies received
from  customers  for  payment  of such  taxes are  deposited  into a tax  escrow
maintained by the Company until paid.

     In addition to the matters discussed above, the Company is a party to other
litigation  relating to the conduct of its  business  which is routine in nature
and, in the  opinion of  management,  should  have no  material  effect upon the
Company's operation.

9.   Common Stock and Earnings Per Share Information

     Net income  (loss) per common  share is  computed  in  accordance  with the
requirements  of Statement of Financial  Accounting  Standards No. 128 "Earnings
Per Share" (SFAS  No.128).  SFAS No. 128  requires  net income  (loss) per share
information  to be computed  using a simple  weighted  average of common  shares
outstanding during the periods presented.

     The net  earnings  (loss)  for  2000,  1999  and  1998  were  $(1,042,000),
$(367,000)  and $ (2,591,000) ,  respectively.  The average  number of shares of
common  stock and common stock  equivalents  used to  calculate  basic  earnings
(loss) per share in 2000, 1999 and 1998 was 13,544,277.

10.  Subsequent Events

     Between  January 1, 2001 and  February  18,  2001,  Swan loaned the Company
$1,100,000  under similar terms as described in Note 5. These funds were used to
meet the Company's current working capital requirements.

     In January and February 2001, the Company transferred  contracts receivable
with a face value of $316,000 to  Scafholding  and contracts  receivable  with a
face value of $1,096,000 to Swan under the terms described in Note 5.



                                       35

<PAGE>




ITEM 9.

                         INDEPENDENT PUBLIC ACCOUNTANTS


Audit Fees

     The Company paid audit and review fees to James Moore & Co. P.L.  totalling
$65,800 for the year ended December 31, 2000.

Financial Information Systems and Implementation Fees

     The  Company  did not incur  and fees or costs  associated  with  financial
information systems or implementation fees.

All Other Fees

     The  Company  paid fees to James Moore & Co. P.L.  for  preparation  of tax
related  documentation  in the amount of $13,375 for the year ended December 31,
2000.






                                       36

<PAGE>

                 SUPPLEMENTAL UNAUDITED QUARTERLY FINANCIAL DATA
                    (in thousands, except per share amounts)



                             (Loss)
                             From
                             Operations
                             Before        (Loss)         Net
                             Income        From           Income
               Revenues      Taxes         Operations     (Loss)
               --------      ----------    -----------    ----------

2000
  First....    $ 2,087       $   (402)     $   (402)      $   (402)
  Second...    $ 2,503       $    (69)     $    (69)      $    (69)
  Third....    $ 2,794       $     69      $     69       $     69
  Fourth...    $ 2,233       $   (640)     $   (640)      $   (640)
               -------       ---------     --------       --------
Total......    $ 9,617       $ (1,042)     $ (1,042)      $ (1,042)
               =======       ========      ========       ========

1999
  First.....   $ 2,184       $   (297)     $   (297)     $   (297)
  Second....     2,277           (222)         (222)         (222)
  Third.....     2,046           (280)         (280)         (280)
  Fourth....     2,330            432           432           432
               -------        -------      --------      --------
Total.......   $ 8,837        $  (367)     $   (367)     $   (367)
               =======        =======      ========      ========

1998
  First....    $ 1,379        $  (621)     $   (621)     $   (621)
  Second...      1,946           (304)         (304)         (304)
  Third....      1,338         (1,269)       (1,269)       (1,269)
  Fourth...      1,825           (397)         (397)         (397)
               -------        --------      --------     --------
Total......    $ 6,488        $(2,591)     $ (2,591)     $ (2,591)
               =======        =======      ========      ========




Earnings (Loss) Per Share(a)
                                                                      Net Income
                                                        Operations    (Loss)
                                                        ----------    ----------
2000
               First...............................       $  (.03)    $   (.03)
               Second..............................          (.01)        (.01)
               Third...............................           .01          .01
               Fourth..............................          (.05)        (.05)
                                                          -------     --------
Total..............................................       $  (.08)    $   (.08)
                                                          =======     ========

1999
               First...............................       $  (.02)    $   (.02)
               Second..............................          (.02)        (.02)
               Third...............................          (.02)        (.02)
               Fourth..............................           .03          .03
                                                          -------     --------
Total..............................................       $  (.03)    $   (.03)
                                                          =======     ========

1998
               First...............................       $  (.05)    $   (.05)
               Second..............................          (.02)        (.02)
               Third...............................          (.09)        (.09)
               Fourth..............................          (.03)        (.03)
                                                          -------     --------
Total..............................................       $  (.19)    $   (.19)
                                                          =======     ========



                                       37

<PAGE>

ITEM 14

         EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K


(a)  1.   Financial Statements

     See Item 8, Index to  Consolidated  Financial  Statements and  Supplemental
Data.


(a)  2.   Financial Statement Schedules

                                                                          Page
     Independent Auditors' Report..................                        39

     Schedule VIII - Valuation and qualifying accounts
                     for the three years ended
                     December 31, 2000.............                        40

     All other  schedules are omitted  because they are not applicable
     or not required,  or because the required information is included
     in the Consolidated  Financial Statements or Notes thereto or the
     2001  Annual  Meeting  Proxy  Statement  to  be  filed  with  the
     Securities and Exchange  Commission  pursuant to Regulation  14A,
     incorporated herein by reference.


(a)  3.   Exhibits

     See the Exhibit Index included herewith.

(b)  Reports on Form 8-K

     No report on Form 8-K was filed during the year ended December 31, 2000.


                                       38

<PAGE>




                          INDEPENDENT AUDITORS' REPORT



TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF THE DELTONA CORPORATION:


     We have  audited  the  consolidated  financial  statements  of The  Deltona
Corporation  and  subsidiaries  (the "Company") as of December 31, 2000 and 1999
and for the years ended  December  31,  2000,  1999 and 1998 and have issued our
reports thereon dated February 18, 2001 (which expresses an unqualified  opinion
and  includes an  explanatory  paragraph  relating to the  Company's  ability to
continue as a going concern),  included  elsewhere in this Annual Report on Form
10-K. Our audit also included the financial  statement  schedules listed in Item
14(a)2 of this Annual Report on Form 10-K. These financial  statement  schedules
are the  responsibility of the Company's  management.  Our  responsibility is to
express an opinion based on our audit. In our opinion, such financial statement
schedules,  when  considered  in  relation to the basic  consolidated  financial
statements  taken  as a whole,  present  fairly  in all  material  respects  the
information set forth therein.




JAMES MOORE & COMPANY P.L.
Certified Public Accountants
Gainesville, Florida
February 18, 2001


                                       39

<PAGE>


<TABLE>
<CAPTION>

                                                                                            SCHEDULE VIII

                    THE DELTONA CORPORATION AND SUBSIDIARIES

                        VALUATION AND QUALIFYING ACCOUNTS
                                 (in thousands)


                                                                                 Additions
                                                                                 Charged to
Those Valuation and Qualifying Accounts                Balance at  Revenues,     Deductions     Balance at
Which are Deducted in the Balance Sheet                Beginning   Costs, and    from           End of
  from the Assets to Which They Apply                  of Period   Expenses      Reserves       Period
---------------------------------------                ----------  -----------   ----------     ----------
<S>                                                    <C>         <C>           <C>            <C>

Year ended December 31, 2000


  Allowance for uncollectible contracts(a) .........   $  606      $ 1,641        $  1,956       $  291
                                                       ======      =======        ========       ======

  Unamortized contract valuation discount(b)........   $  293      $   267        $    296       $  264
                                                       ======      =======        ========       ======

Year ended December 31, 1999


  Allowance for uncollectible contracts(a) .........   $  945      $   322        $    661       $  606
                                                       ======      =======        ========       ======

  Unamortized contract valuation discount(b)........   $  401      $   172        $    280       $  293
                                                       ======      =======        ========       ======


Year ended December 31, 1998

  Allowance for uncollectible contracts(a) .........   $1,150      $   840        $  1,045       $  945
                                                       ======      =======        ========       ======

  Unamortized contract valuation discount(b)........   $  508      $   237        $    344       $  401
                                                       ======      =======        ========       ======





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

(a) Represents estimated uncollectible contracts receivable (see Notes 1 and 2
    to Consolidated Financial Statements).

(b) Represents the unamortized  discount generated from initial  valuations  of
    contracts receivable (see Notes 1 and 2 to Consolidated Financial
    Statements).
</TABLE>



                                       40

<PAGE>





                                   SIGNATURES

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

THE DELTONA CORPORATION
  (Company)


By:/s/ Donald O. McNelley                           DATE:         March 16, 2001
   ----------------------
   Donald O. McNelley, Treasurer

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



  /s/  Antony Gram
------------------------------------------------
Antony Gram, Chairman of the Board of Directors,
        Chief Executive Officer and President

  /s/ Christel DeWilde
------------------------------------------------
      Christel DeWilde, Director

  /s/George W. Fischer
------------------------------------------------
        George W. Fischer, Director

 /s/Rudy Gram
------------------------------------------------
        Rudy Gram, Director

 /s/Thomas B. McNeill
------------------------------------------------
        Thomas B. McNeill, Director              DATE:            March 16, 2001

                                       41

<PAGE>