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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-K/A
                                 AMENDMENT NO. 2
                                       TO
                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended                             Commission File Number
     December 26, 1998                                         0-7166


                             DOUGHTIE'S FOODS, INC.
            (Exact name of Registrant as specified in its charter)


          VIRGINIA                                              54-0903892
(State or other jurisdiction of                             (I.R.S. employer
 incorporation or organization)                          identification number)


                 2410 WESLEY  STREET,  PORTSMOUTH,  VIRGINIA  23707  (Address of
                    principal executive offices)


Registrant's telephone number, including area code:  (757) 393-6007



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<PAGE>

     The undersigned  company (the "Company") hereby amends its Annual Report on
Form 10-K for the fiscal year ended  December  26, 1998,  by restating  Item 11,
which is restated as amended as follows:

ITEM 11.  EXECUTIVE COMPENSATION
--------------------------------

   Summary Compensation Table

         The following summary compensation table presents information about the
compensation  paid by the Company  during its three most recent  fiscal years to
those individuals who were, as of the end of the last completed fiscal year, the
Company's  Chief  Executive  Officer and its four next  highest  paid  executive
officers.

<TABLE>
<CAPTION>


                                                              LONG-TERM
                                ANNUAL COMPENSATION(1)        COMPENSATION
                                --------------------------    ------------
                                                     Other                   All
                                                    Annual                   Other
NAME AND                                            Compen-   Securities     Compen-
PRINCIPAL                                           sation    Underlying     sation
POSITION                   Year   Salary($) Bonus($) ($)(3)   Options (#)(4) ($)(2)
-----------------------------------------------------------   ------------   --------
<S>                        <C>    <C>       <C>      <C>      <C>            <C>
Steven C. Houfek           1998   140,041   29,000   5,448    15,000         4,624
  President and Chief      1997   130,489   25,000   5,045       -0-         4,666
  Executive Officer        1996   125,597   20,000   4,583       -0-         3,914

Vernon W. Mules            1998   152,573   15,000     -0-       -0-         4,577
  Chairman of              1997   152,573      -0-     -0-       -0-         4,577
  the Board                1996   152,573      -0-     -0-       -0-         4,577

Marion S. Whitfield, Jr.   1998   112,523   20,000   2,173     3,000         3,891
  Senior Vice President    1997   107,175   15,000   2,069       -0-         3,637
                           1996   102,339   12,000   1,973       -0-         3,129

Thomas G. Brown            1998    86,289   17,000     -0-     3,000         3,009
 Vice President --         1997    79,764   14,000   1,623       -0-         2,802
  Purchasing               1996    70,822   12,000   3,053       -0-         2,396

Robert F. Horton           1998    84,114   19,000     -0-     7,500         2,883
  Vice President --        1997    67,270   12,000     -0-       -0-         2,168
  Business Development     1996    54,635    5,000     -0-       -0-         1,639

</TABLE>
(1)      While the five named individuals received perquisites or other personal
         benefits in the years shown, in accordance with Securities and Exchange
         Commission  regulations,  the value of these benefits are not indicated
         since  they  did  not  exceed  the  lesser  of  $50,000  or  10% of the
         individual's salary and bonus in any year.

(2)      The  amounts  shown in the column  captioned  "All Other  Compensation"
         consist entirely of the Company's matching  contributions to the 401(k)
         Plan for the benefit of the named  executive.  The 401(k)  Plan,  which
         became  effective as of July 1, 1992,  covers  virtually  all full-time
         employees  except those covered by a collective  bargaining  agreement.
         The  Company  makes  contributions  to  the  plan  based  on 50% of the
         participants'  contributions,  which can  range  from 1% to 6% of total
         compensation.   Participating   employees   may  also  make   unmatched
         contributions to the 401(k) Plan up to 15% of total compensation.

(3)      The amounts shown in the column captioned  "Other Annual  Compensation"
         consist entirely of amounts paid in lieu of accrued vacation.

(4)      The  amounts  shown  in the  column  captioned  "Securities  Underlying
         Options"  represent  the number of options for Common Stock  granted on
         January 9, 1998,  subject to shareholder  approval,  which approval was
         obtained  at the  annual  meeting  of  shareholders  on May  21,  1998,
         pursuant to the terms of the 1998 Stock Incentive Plan. One-half of the
         options granted to each officer were exercisable on September 22, 1998,
         one-quarter of such options were exercisable after January 9, 1999, and
         one-quarter  of such  options are  exercisable  after  January 9, 2000.
         However, all options shall vest and become immediately exercisable upon
         a change in control of the Company.


OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
                                          INDIVIDUAL GRANTS(1)                POTENTIAL REALIZABLE VALUE
                               -------------------------------------------    AT ASSUMED ANNUAL RATES OF
                                                       % OF TOTAL OPTIONS      STOCK PRICE APPRECIATION
                               NUMBER OF SECURITIES        GRANTED TO              FOR OPTION TERM (3)
                                UNDERLYING OPTIONS     EMPLOYEES IN FISCAL    --------------------------
NAME                              GRANTED (#)(2)              YEAR              5%($)          10%($)
----                           --------------------    -------------------    ----------    ------------
<S>                            <C>                     <C>                    <C>           <C>
Steven C. Houfek                      15,000                 37.0%               61,317         155,390
Vernon W. Mules                          -0-                  0.0%                  -0-             -0-
Marion S. Whitfield, Jr.               3,000                  7.4%               12,263          31,078
Thomas G. Brown                        3,000                  7.4%               12,263          31,078
Robert F. Horton                       7,500                 18.5%               30,659          77,695

</TABLE>

(1)      All options  granted  expire  January 9, 2008 and are  exercisable at a
         base price of $6.50.

(2)      The options are  exercisable  with respect to the underlying  shares as
         follows:  50 percent on September 22, 1998; 25 percent after January 9,
         1999 and the remaining 25 percent after January 9, 2000.

(3)      The potential  realizable  value is calculated based on the fair market
         value on the date of grant, which is equal to the exercise price of the
         option,  assuming  that the shares  appreciate in value from the option
         grant date compounded  annually until the end of the option term at the
         rate specified (5% or 10%) and that the option is exercised and sold on
         the  last  day of the  option  term for the  appreciated  share  price.
         Potential  realizable  value is net of the option exercise  price.  The
         assumed  rates  of   appreciation   are  specified  in  the  rules  and
         regulations  of the SEC and do not represent the Company's  estimate or
         projection of future prices of the shares.

<TABLE>
<CAPTION>

          AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES

                                                              NUMBER OF SECURITIES        VALUE OF UNEXERCISED
                                                             UNDERLYING UNEXERCISED       IN-THE-MONEY OPTIONS
                                 SHARES                      OPTIONS AT 12/26/98            AT 12/26/98 ($)(1)
                              ACQUIRED ON       VALUE       --------------------------  --------------------------
            NAME              EXERCISE (#)   REALIZED ($)   EXERCISABLE  UNEXERCISABLE  EXERCISABLE  UNEXERCISABLE
            ----              ------------   ------------   -----------  -------------  -----------  -------------
<S>                           <C>            <C>            <C>          <C>            <C>          <C>
Steven C. Houfek                -0-              -0-              7,500          7,500        2,348          2,348
Vernon W. Mules                 -0-              -0-                -0-            -0-          -0-            -0-
Marion S. Whitfield, Jr.        -0-              -0-              1,500          1,500          470            470
Thomas G. Brown                 -0-              -0-              1,500          1,500          470            470
Robert F. Horton                -0-              -0-              3,750          3,750        1,174          1,174

</TABLE>

(1)      Value based on the closing  price of a share of Common  Stock of $6.813
         on December 24, 1998, as reported on the Nasdaq SmallCap Market,  minus
         the exercise price, rounded to the nearest dollar.


Directors' Compensation

         Directors who are not officers of the Company are paid an annual salary
of $4,000, plus a fee of $500 per meeting attended, as well as reimbursement for
travel and lodging expenses incurred in connection with such attendance. Each of
the non-employee  directors was awarded 400 nonstatutory stock options under the
terms  of the  1998  Plan on May  21,  1998,  with  one-third  of  such  options
exercisable on May 22, 1998,  one-third of such options  exercisable on the date
of the second annual  meeting after May 21, 1998,  and one-third  exercisable on
the date of the third annual  meeting after May 21, 1998.  However,  all options
shall vest and become  immediately  exercisable  upon a change in control of the
Company.

Compensation Committee Interlocks and Insider Participation

         Mr.  Waddell,  a director  since 1996 and a member of the  Compensation
Committee,  is a partner  in the law firm of  McGuire,  Woods,  Battle & Boothe,
L.L.P.,  which has  served as counsel to the  Company on a regular  basis  since
1974.

<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934,  the registrant has duly caused this report on Form 10-K/A
to be signed on its behalf by the undersigned, thereunto duly authorized.


                                          DOUGHTIE'S FOODS, INC.

Dated:   July 19, 1999                      /s/ Steven C. Houfek
                                          ------------------------
                                          Steven C. Houfek

                                          President and Chief
                                           Executive Officer