<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                                WASHINGTON, D.C.

                                      20549

                                    FORM 10-Q

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

                 For the quarterly period ended: AUGUST 14, 2000

                                       OR

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

               For the transition period from _______ to ________

                         Commission File Number: 0-6054


                                STAR BUFFET, INC.
             (Exact name of registrant as specified in its charter)


           DELAWARE                                        84-1430786
(State or other jurisdiction of             (IRS Employer Identification Number)
incorporation or organization)

                               420 LAWNDALE DRIVE,
                            SALT LAKE CITY, UT 84115
               (Address of principal executive offices) (Zip Code)

                                 (801) 463-5500
              (Registrant's telephone number, including area code)

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
                                                                 -----     -----

There were 2,950,000 shares of the issuer's common stock, par value $.001 per
share, were outstanding as of September 18, 2000.

<PAGE>

                       STAR BUFFET, INC. AND SUBSIDIARIES

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                   Page
                                                                                                   ----
<S>                                                                                                <C>
PART I.  FINANCIAL INFORMATION

         Item 1. Consolidated Condensed Financial Statements:

                 Consolidated Condensed Balance Sheets as of August 14, 2000
                   (unaudited) and January 31, 2000................................................  3

                 Unaudited Consolidated Condensed Statements of Income for the
                   twelve and twenty-eight weeks ended August 14, 2000 and
                   August 9, 1999..................................................................  5

                 Unaduited Consolidated Condensed Statements of Cash Flows
                   for the twenty-eight weeks ended August 14, 2000 and August 9, 1999.............  6

                 Notes to Unaudited Consolidated Condensed Financial Statements....................  8

         Item 2. Management's Discussion and Analysis of Financial Condition and
                   Results of Operations........................................................... 10

PART II. OTHER INFORMATION

         Item 1. Legal Proceedings................................................................. 16

         Item 4. Submission of Matters to a Vote of Security Holders............................... 17

         Item 6. Exhibits and Reports on Form 8-K.................................................. 18

         Signature................................................................................. 19

</TABLE>



                                       2
<PAGE>

                       STAR BUFFET, INC. AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS


PART I: FINANCIAL INFORMATION

ITEM 1: CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                             AUGUST 14,         JANUARY 31,
ASSETS                                                                         2000                2000
                                                                            -----------         -----------
                                                                            (unaudited)
<S>                                                                         <C>                 <C>
Current assets:
   Cash and cash equivalents                                                $ 1,367,000         $ 1,039,000
   Current portion of notes and other receivables                               878,000           2,061,000
   Inventories                                                                  914,000           1,050,000
   Deferred income taxes, net                                                   221,000             221,000
   Prepaid expenses                                                             315,000              84,000
                                                                            -----------         -----------
   Total current assets                                                       3,695,000           4,455,000
                                                                            -----------         -----------
Property, buildings and equipment, at cost, less accumulated
   depreciation                                                              33,770,000          34,367,000
                                                                            -----------         -----------
Real property and equipment under capitalized leases, at cost, less
   accumulated amortization                                                   1,704,000           1,792,000
                                                                            -----------         -----------
Other assets:
   Notes receivable, net of current portion                                   3,494,000           3,494,000
   Deposits and other                                                           285,000             262,000
                                                                            -----------         -----------
   Total other assets                                                         3,779,000           3,756,000
                                                                            -----------         -----------
Goodwill, less accumulated amortization                                       3,910,000           4,034,000
Other intangible assets, less accumulated amortization                          519,000             596,000
                                                                            -----------         -----------
   Total intangible assets                                                    4,429,000           4,630,000
                                                                            -----------         -----------
Total assets                                                                $47,377,000         $49,000,000
                                                                            ===========         ===========

</TABLE>

See Accompanying Notes to Consolidated Condensed Financial Statements.


                                       3
<PAGE>

                       STAR BUFFET, INC. AND SUBSIDIARIES
                CONSOLIDATED CONDENSED BALANCE SHEETS (CONTINUED)

<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY                                                      AUGUST 14,            JANUARY 31,
                                                                                             2000                  2000
                                                                                         ------------          ------------
                                                                                          (unaudited)
<S>                                                                                      <C>                   <C>
Current liabilities:
   Accounts payable - trade                                                              $  6,189,000          $  5,164,000
   Payroll and related taxes                                                                1,918,000             2,633,000
   Sales and property taxes                                                                 1,333,000             1,136,000
   Rent, licenses and other                                                                 1,156,000               549,000
   Current maturities of obligations under capital leases and long-term debt                2,999,000             2,744,000
                                                                                         ------------          ------------
       Total current liabilities                                                           13,595,000            12,226,000
                                                                                         ------------          ------------
   Deferred income taxes, net                                                                 432,000               532,000
   Capitalized lease obligations, net of current maturities                                 1,785,000             1,854,000
   Long-term debt, net of current maturities                                               10,025,000            14,350,000
   Preferred stock, $.001 par value; authorized 1,500,000 shares; none issued or
     outstanding                                                                                   --                    --
   Common stock, $.001 par value; authorized 8,000,000 and 18,500,000 shares;
     issued and outstanding 2,950,000 and 2,950,000 shares                                      3,000                 3,000
   Additional paid-in capital                                                              16,351,000            16,351,000
   Officer's note receivable                                                                 (850,000)             (813,000)
   Retained earnings                                                                        6,103,000             4,593,000
   Treasury stock, at cost, 6,410 and 15,698 shares                                           (67,000)              (96,000)
                                                                                         ------------          ------------
       Total stockholders' equity                                                          21,540,000            20,038,000
                                                                                         ------------          ------------
Total liabilities and stockholders' equity                                               $ 47,377,000          $ 49,000,000
                                                                                         ============          ============

</TABLE>

See Accompanying Notes to Consolidated Condensed Financial Statements.

                                       4
<PAGE>

                       STAR BUFFET, INC. AND SUBSIDIARIES
                   CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                              TWELVE WEEKS ENDED                       TWENTY-EIGHT WEEKS ENDED
                                                      ----------------------------------          ---------------------------------
                                                       AUGUST 14,             AUGUST 9,            AUGUST 14,            AUGUST 9,
                                                         2000                   1999                  2000                  1999
                                                      ------------          ------------          ------------         ------------
<S>                                                   <C>                   <C>                   <C>                  <C>
Total revenues                                        $ 22,179,000          $ 22,836,000          $ 53,906,000         $ 54,371,000

Costs and expenses
   Food costs                                            7,065,000             7,461,000            17,602,000           17,933,000
   Labor costs                                           7,561,000             7,807,000            17,944,000           18,045,000
   Occupancy and other expenses                          4,397,000             4,494,000            10,543,000           10,727,000
   General and administrative expenses                     892,000               983,000             2,190,000            2,491,000
   Depreciation and amortization                           836,000               848,000             2,542,000            1,880,000
                                                      ------------          ------------          ------------         ------------
   Total costs and expenses                             20,751,000            21,593,000            50,821,000           51,076,000
                                                      ------------          ------------          ------------         ------------
Income from operations                                   1,428,000             1,243,000             3,085,000            3,295,000

   Interest expense                                       (374,000)             (281,000)             (857,000)            (652,000)
   Interest income                                           9,000                 3,000                21,000               21,000
   Other Income                                                 --                    --                 8,000                   --
                                                      ------------          ------------          ------------         ------------
Income before income taxes                               1,063,000               965,000             2,257,000            2,664,000

Income tax expense                                         369,000               386,000               747,000            1,066,000
                                                      ------------          ------------          ------------         ------------
Net income                                            $    694,000          $    579,000          $  1,510,000         $  1,598,000
                                                      ============          ============          ============         ============
Net income per common share - basic                   $       0.24          $       0.20          $       0.51         $       0.54
                                                      ============          ============          ============         ============
Weighted average shares outstanding - basic              2,950,000             2,950,000             2,950,000            2,950,000
                                                      ============          ============          ============         ============
Net income per common share - diluted                 $       0.24          $       0.20          $       0.51         $       0.54
                                                      ============          ============          ============         ============
Weighted average shares outstanding - diluted            2,950,000             2,950,000             2,950,000            2,950,000
                                                      ============          ============          ============         ============

</TABLE>

See Accompanying Notes to Consolidated Condensed Financial Statements.


                                       5
<PAGE>

                       STAR BUFFET, INC. AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                      TWENTY-EIGHT WEEKS ENDED
                                                               ------------------------------------
                                                               AUGUST 14, 2000       AUGUST 9, 1999
                                                               ---------------       --------------
<S>                                                            <C>                  <C>
Cash flows from operating activities:
Net income                                                       $ 1,510,000          $ 1,598,000
Adjustments to reconcile net income to net cash provided
  by operating activities:
    Depreciation and amortization                                  2,569,000            1,880,000
    Amortization of loan cost                                         36,000               50,000
    Amortization of royalty fee                                           --               23,000
    Change in operating assets and liabilities:
          Receivables                                                998,000              420,000
          Inventories                                                136,000             (157,000)
          Prepaid expenses                                          (231,000)              34,000
          Deposits and other                                         (23,000)             (33,000)
          Deferred income taxes                                     (100,000)                  --
          Accounts payable                                         1,025,000            1,041,000
          Other accrued liabilities                                   89,000              301,000
                                                                 -----------          -----------
          Net cash provided by operating activities                6,009,000            5,157,000

Cash flows from investing activities:
  Proceeds from notes receivable                                          --            1,124,000
  Acquisition of property, buildings and equipment                (1,534,000)          (5,806,000)
  Loans to officer                                                   (37,000)            (341,000)
                                                                 -----------          -----------
          Net cash used in investing activities                   (1,571,000)          (5,023,000)

Cash flows from financing activities:
   Payments to extinguish long term debt                          (6,050,000)          (2,837,000)
   Principal payment on capital leases                               (64,000)            (147,000)
   Proceeds from line of credit                                    1,975,000            2,700,000
   Sale of treasury stock                                             29,000               40,000
                                                                 -----------          -----------
          Net cash used in financing activities                   (4,110,000)            (244,000)
                                                                 -----------          -----------
Net increase (decrease) in cash and cash equivalents                 328,000             (110,000)

Cash and cash equivalents at beginning of period                   1,039,000              121,000
                                                                 -----------          -----------
Cash and cash equivalents at end of period                       $ 1,367,000          $    11,000
                                                                 ===========          ===========

</TABLE>

See Accompanying Notes to Consolidated Condensed Financial Statements.

                                       6
<PAGE>

                       STAR BUFFET, INC. AND SUBSIDIARIES
           CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (CONTINUED)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                             TWENTY-EIGHT WEEKS ENDED
                                                          -------------------------------
                                                          AUGUST 14, 2000  AUGUST 9, 1999
                                                          ---------------  --------------
<S>                                                       <C>              <C>
Supplemental disclosures of cash flow Information:

CASH PAID FOR INTEREST                                      $508,000         $109,000
                                                            ========         ========
CASH PAID FOR INCOME TAXES                                  $ 37,000         $ 32,000
                                                            ========         ========
NON CASH INVESTING AND FINANCING ACTIVITIES:

    Exchange of receivables from Phoenix Restaurant
        Group for equipment                                 $185,000         $     --


</TABLE>

See Accompanying Notes to Consolidated Condensed Financial Statements.

                                       7
<PAGE>

                       STAR BUFFET, INC. AND SUBSIDIARIES
         NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

NOTE (A) BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements include the
accounts for Star Buffet, Inc., together with its direct and indirect wholly
owned subsidiaries Summit Family Restaurants Inc. ("Summit"), HTB Restaurants,
Inc. ("HTB"), Northstar Buffet, Inc. ("NSBI") and Star Buffet Management, Inc.
("SBMI") (collectively the "Company") and have been prepared in accordance with
generally accepted accounting principles, the instructions to Form 10-Q and
Article 10 of Regulation S-X. These financial statements should be read in
conjunction with the audited consolidated financial statements, and the notes
thereto, included in the Company's Annual Report on Form 10-K for the fiscal
year ended January 31, 2000. In the opinion of management, all adjustments,
consisting of normal recurring adjustments, necessary for a fair presentation of
the financial position and results of operations for the interim periods
presented have been reflected herein. Results of operations for such interim
periods are not necessarily indicative of results to be expected for the full
fiscal year or for any future periods. Certain reclassifications have been made
to the fiscal 2000 consolidated financial statements to conform to the fiscal
2001 presentation. The accompanying condensed financial statements include the
results of operations and assets and liabilities directly related to the
Company's operations. Certain estimates, assumptions and allocations were made
in preparing such financial statements.

The operating results for the 12-week period ended August 14, 2000 include
operations for each of the Company's sixteen franchised HomeTown Buffet
restaurants, eleven BuddyFreddys Country Buffet restaurants, ten franchised JB's
Restaurants, six JJ North's Grand Buffet restaurants, two BuddyFreddys
restaurants, two Casa Bonita restaurants, two Holiday House restaurants and one
North's Star Buffet restaurant. One restaurant property acquired in November
1999 for conversion to a BuddyFreddys Country Buffet was opened in June 2000.

The operating results for the 12-week period ended August 9, 1999 include
operations for each of the Company's sixteen franchised HomeTown Buffet
restaurants, thirteen BuddyFreddys Country Buffet restaurants, ten franchised
JB's Restaurants, six JJ North's Grand Buffet restaurants, two BuddyFreddys
restaurants, two Casa Bonita restaurants, two Holiday House restaurants and two
North's Star Buffet restaurants. One other North's Star Buffet restaurant was
closed during the quarter.

The Company utilizes a 52/53 week fiscal year which ends on the last Monday in
January. The first quarter of each year contains 16 weeks while the other three
quarters each contain 12 weeks.

NOTE (B) RELATED PARTY TRANSACTION

In connection with the company's employment contract with Mr. Robert E. Wheaton,
the Company's President and Chief Executive Officer, the Company has agreed to
provide Mr. Wheaton with certain loans solely for the purchase of the Company's
common stock. The loans are secured and bear interest at the prevailing rate set
forth in the Company's credit facility with Fleet National Bank. The current
rate is approximately 8.8 percent. At the end of the second quarter ended August
14, 2000, the loans totaled $850,000.

                                       8
<PAGE>

NOTE (C) CONTINGENCIES

On November 12, 1998, North's Restaurants, Inc. ("North's") filed a Demand for
Arbitration against the Company with the American Arbitration Association,
Irvine, California (District No. 949-251-9840), alleging breach of contract in
connection with the Company's failure to perform under a Business Services
Agreement between North's and the Company dated July 24, 1997. On June 22, 1999,
the parties agreed to dismiss the Arbitration Proceeding without prejudice since
the issues related to the Business Service Agreement are being litigated in the
Utah action described below.

On November 25, 1998, the Company filed an action against North's Restaurants,
Inc. ("North's") in the United States District Court, District of Utah, Case No.
2-98-CV-893, seeking damages for breach of a promissory note and an Amended and
Restated Credit Agreement (collectively, the "Credit Agreements") in the amount
of $3,570,935. On December 31, 1998, North's filed an answer to the Company's
Complaint, denying generally the allegations, and filed counterclaims against
the Company alleging (i) the Company fraudulently induced North's to enter into
various agreements with the Company relating to the Company's acquisition of
seven JJ North's Grand Buffet Restaurants and an option to acquire nine
additional restaurants operated by North's and (ii) the Company has breached the
Business Services Agreement. The Company plans to pursue vigorously its claims
against North's and to vigorously defend the counterclaims asserted by North's.
The litigation is continuing.

The Company is from time to time the subject of complaints or litigation from
customers alleging injury on properties operated by the Company, illness or
other food quality, health or operational concerns. Adverse publicity resulting
from such allegations may materially adversely affect the Company and its
restaurants, regardless of whether such allegations are valid or whether the
Company is liable. The Company also is the subject of complaints or allegations
from employees from time to time. The Company believes that the lawsuits, claims
and other legal matters to which it has become subject in the course of its
business are not material to the Company's business, financial condition or
results of operations, but an existing or future lawsuit or claim could result
in an adverse decision against the Company that could have a material adverse
effect on the Company's business, financial condition and results of operations.

                                       9
<PAGE>

                       STAR BUFFET, INC. AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

OVERVIEW

The following Management's Discussion and Analysis should be read in conjunction
with the unaudited consolidated financial statements, and the notes thereto,
presented elsewhere in this Report. Comparability of future periods may from
time to time be affected by the implementation of the Company's acquisition and
strategic alliance strategies, and the costs associated with integrating new
restaurants or under performing or unprofitable restaurants, if any, acquired or
otherwise operated by the Company may have a material adverse effect on the
Company's results of operations.

Consolidated net income for the 12-week period ended August 14, 2000 increased
$115,000 or 19.9% to $694,000 or $0.24 per share on a diluted basis as compared
with net income of $579,000 for the comparable prior year period. Consolidated
net income for the 28-week period ended August 14, 2000 decreased $88,000 or
5.5% to $1,510,000 or $0.51 per share on a diluted basis as compared with net
income of $1,598,000 for the comparable prior year period. The decrease in net
income is primarily due to pre-tax write offs in the first quarter of
approximately $590,000, the majority of which was associated with the cost of
terminating a joint venture with Phoenix Restaurant Group. The Company and
Phoenix Restaurant Group divide income and losses based on an agreed upon
formula. Included in notes and other receivables is $322,000 due from Phoenix
Restaurant Group as a result of the agreement.

This Quarterly Report on Form 10-Q contains forward looking statements, which
are subject to known and unknown risks, uncertainties and other factors which
may cause the actual results, performance, or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, the following: general economic and business conditions; success
of integrating newly acquired under performing or unprofitable restaurants; the
impact of competitive products and pricing; success of operating initiatives;
advertising and promotional efforts; adverse publicity; changes in business
strategy or development plans; quality of management; availability, terms and
deployment of capital; changes in prevailing interest rates and the availability
of financing; food, labor, and employee benefits costs; changes in, or the
failure to comply with, government regulations; weather conditions; construction
schedules; implementation of the Company's acquisition and strategic alliance
strategy; the effect of the Company's accounting polices and other risks
detailed in the Company's Form 10-K, for the fiscal year ended January 31, 2000,
and other filings with the Securities and Exchange Commission.

COMPONENTS OF INCOME FROM OPERATIONS

Total revenues include a combination of food and beverage sales and are net of
applicable state and city sales taxes.

Food costs primarily consist of the costs of food and beverage items. Various
factors beyond the Company's control, including adverse weather and natural
disasters, may affect food costs. Accordingly, the Company may incur periodic
fluctuations in food costs. Generally, these temporary increases are absorbed by
the Company and not passed on to customers; however, management may adjust menu
prices to compensate for increased costs of a more permanent nature.

                                       10
<PAGE>

Labor costs include restaurant management salaries, bonuses, hourly wages for
unit level employees, various health, life and dental insurance programs,
vacations and sick pay and payroll taxes.

Occupancy and other expenses are primarily fixed in nature and generally do not
vary with restaurant sales volume. Rent, insurance, property taxes, utilities,
maintenance and advertising account for the major expenditures in this category.

General and administrative expenses include all corporate and administrative
functions that serve to support the existing restaurant base and provide the
infrastructure for future growth. Management, supervisory and staff salaries,
employee benefits, data processing, training and office supplies are the major
items of expense in this category.

Other income represents gain from the sell of an investment.


                                       11
<PAGE>

RESULTS OF OPERATIONS

The following table summarizes the Company's results of operations as a
percentage of total revenues for the 12 and 28 weeks ended August 14, 2000 and
August 9, 1999.

<TABLE>
<CAPTION>
                                                   TWELVE WEEKS ENDED           TWENTY-EIGHT WEEKS ENDED
                                               --------------------------      --------------------------
                                               AUGUST 14,      AUGUST 9,       AUGUST 14,       AUGUST 9,
                                                  2000           1999            2000             1999
                                               ----------      ---------       ----------       ---------
<S>                                            <C>             <C>             <C>             <C>
Total revenues                                   100.0%          100.0%          100.0%          100.0%
                                                 -----           -----           -----           -----
Costs and expenses
   Food costs                                     31.9            32.7            32.6            33.0
   Labor costs                                    34.1            34.2            33.3            33.2
   Occupancy and other expenses                   19.8            19.7            19.6            19.7
   General and administrative expenses             4.0             4.3             4.1             4.6
   Depreciation and amortization                   3.8             3.7             4.7             3.4
                                                 -----           -----           -----           -----
     Total costs and expenses                     93.6            94.6            94.3            93.9
                                                 -----           -----           -----           -----
Income from operations                             6.4             5.4             5.7             6.1

   Interest expense                               (1.7)           (1.2)           (1.6)           (1.2)
   Interest income                                 0.1            --               0.1            --
   Other income                                   --              --              --              --
                                                 -----           -----           -----           -----
   Income before income taxes                      4.8             4.2             4.2             4.9

Income tax expense                                (1.7)           (1.7)           (1.4)           (2.0)
                                                 -----           -----           -----           -----
Net income                                         3.1%            2.5%            2.8%            2.9%
                                                 =====           =====           =====           =====
Effective income tax rate                         34.7%           40.0%           33.1%           40.0%
                                                 =====           =====           =====           =====

</TABLE>

Total revenues decreased $657,000 or 2.9% from $22.8 million in the 12 weeks
ended August 9, 1999 to $22.2 million in the 12 weeks ended August 14, 2000.
Total revenues decreased $465,000 or 0.9% from $54.4 million in the 28 weeks
ended August 9, 1999 to $53.9 million in the 28 weeks ended August 14, 2000. The
decrease in revenues is primarily due to the closure of three restaurants
related to the termination of a joint venture with Phoenix Restaurant Group.

Food costs as a percentage of total revenues decreased from 32.7% during the
12-week period ended August 9, 1999 to 31.9% during the 12 weeks ended August
14, 2000, and from 33.0% during the 28-week period ended August 9, 1999 to 32.6%
during the 28 weeks ended August 14, 2000. The decrease as a percentage of total
revenues was primarily attributable to lower food costs in the converted Florida
Buffets Division stores and the Casa Bonita Division stores.

Labor costs as a percentage of total revenues decreased from 34.2% during the
12-week period ended August 9, 1999 to 34.1% during the 12-week period ended
August 14, 2000. The decrease as a percentage of total revenues was primarily
attributable to lower labor costs in the converted Florida Buffet Division
stores. Labor costs as a percentage of total revenues increased from 33.2%
during the

                                       12
<PAGE>

28-week period ended August 9, 1999 to 33.3% during the 28-week period ended
August 14, 2000. The increase as a percentage of total revenues was primarily
attributable to increases in benefits and workers compensation from the prior
year.

Occupancy and other expenses as a percentage of total revenues increased from
19.7% during the 12-week period ended August 9, 1999 to 19.8% during the 12-week
period ended August 14, 2000. The increase as a percentage of total revenues
primarily reflects decreased revenues. Occupancy and other expenses as a
percentage of total revenues decreased from 19.7% during the 28-week period
ended August 9, 1999 to 19.6% during the 12-week period ended August 14, 2000.
The decrease as a percentage of total revenues primarily reflects lower
occupancy expenses in the North's Star Division restaurants.

General and administrative costs as a percentage of total revenues decreased
from 4.3% during the 12-week period ended August 9, 1999 to 4.0% during the
12-week period ended August 14, 2000, and from 4.6% during the 28-week period
ended August 9, 1999 to 4.1% during the 28-week period ended August 14, 2000.
The decrease as a percentage of total revenues primarily reflects better
controls of administrative expenses.

Interest expense as a percentage of total revenues increased from 1.2% during
the 12-week period ended August 9, 1999 to 1.7% during the 12-week period ended
August 14, 2000, and from 1.2% during the 28-week period ended August 9, 1999 to
1.6% during the 28-week period ended August 14, 2000. The increase as a
percentage of total revenues was primarily attributable to increasing interest
rates on the Company's credit facility.

Interest income of $9,000 and $21,000 for the 12 and 28-week periods ended
August 14, 2000, and interest income of $3,000 and $21,000 for the 12 and
28-week periods ended August 9, 1999, respectively, was generated by the
Company's cash and outstanding notes receivable balances during the period.
Management has suspended the interest accrual on the notes receivable from
North's Restaurants, Inc. ("North's") pending the resolution of the Company's
dispute with North's.

IMPACT OF INFLATION

The impact of inflation on the cost of food, labor, equipment and construction
could affect the Company's operations. Many of the Company's employees are paid
hourly rates related to the federal and state minimum wage laws. Recent
legislation increasing the federal minimum wage has resulted in higher labor
costs to the Company. In addition, the cost of food commodities utilized by the
Company are subject to market supply and demand pressures. Shifts in these costs
may have a significant impact on the Company's food costs. The Company
anticipates that increases in these costs can be offset through pricing and
other cost control efforts; however, there is no assurance that the Company
would be able to pass such costs on to its guests or if it were able to do so,
it could do so in a short period of time.


                                       13
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

The Company historically financed operations through a combination of cash on
hand, cash provided from operations and, prior to the Company's initial public
offering in September 1997, borrowings available to its predecessor under bank
lines of credit.

As of August 14, 2000, the Company had $1,367,000 in cash. Cash and cash
equivalents increased by $328,000 during the 28 weeks ended August 14, 2000.
Total cash provided by operations was approximately $6.0 million. The Company
used approximately $1.5 million on capital improvements and approximately $4.1
million to extinguish long term debt.

The Company intends only limited unit expansion, primarily through the
acquisition of regional buffet chains or through the purchase of existing
restaurants, which would be converted to one of the Company's existing
restaurant concepts. In many instances, management believes that existing
restaurant locations can be acquired and converted to the Company's prototype at
a lower cost. Management estimates the cost of acquiring and converting leased
property to one of the existing concepts to be approximately $150,000 to
$450,000. These costs consist primarily of exterior and interior appearance
modifications, new table, chairs and food bars and the addition of certain
kitchen and food service equipment. There can be no assurance that the Company
will be able to acquire additional restaurant chains or locations or, if
acquired, that these restaurants will have a positive contribution to the
Company's results of operations.

On October 23, 1998, the Company entered into a $20 million syndicated bank
financing agreement led by FleetBoston Financial Corporation (formerly known as
BankBoston, N.A.). The credit facility consists of a $13 million, 5-year term
loan (the "Term Loan Facility") and a $7 million, 5-year revolving credit
facility (the "Revolving Credit Facility"). The Term Loan Facility refinanced
existing indebtedness and will provide capital for the repurchase of Star Buffet
common stock and acquisitions. The Term Loan Facility balance was $9,400,000 as
of September 18, 2000. Principal payments under the Term Loan Facility are due
in quarterly installments, beginning in November 1999 and continue until the
final maturity in October 2003. Borrowings under the Revolving Credit Facility
will be used for the Company's new unit development and working capital needs.
All outstanding amounts under the Revolving Credit Facility will become due in
October 2003. The Revolving Credit Facility balance was $3,800,000 on September
18, 2000.

The Company believes that available cash, cash flow from operations and amounts
available under the Term Loan Facility and Revolving Credit Facility will be
sufficient to satisfy its working capital, and capital expenditure requirements
for the foreseeable future. If the Company requires additional funds to support
its working capital requirements or for other purposes, it may seek to raise
such additional funds through public or private equity and/or debt financing or
from other sources. There can be no assurance, however, that changes in the
Company's operating plans, the unavailability of a credit facility, the
acceleration of the Company's expansion plans, lower than anticipated revenues,
increased expenses, potential acquisitions of other events will not cause the
Company to seek additional financing sooner than anticipated. There can be no
assurance that additional financing will be available on acceptable terms or at
all.

                                       14
<PAGE>

SEGMENT AND RELATED REPORTING

The Company has five reportable operating segments: HomeTown Buffet, Casa
Bonita, North's Star, Florida Buffets Division and JB's Restaurants. The
Company's reportable segments are based on the brand similarities.

The HomeTown Buffet segment includes the Company's 16 franchised HomeTown Buffet
restaurants. The Casa Bonita segment includes two Casa Bonita restaurants. The
North's Star segment includes six JJ North's Grand Buffet restaurants and one
North's Star Buffet Restaurants. The Florida Buffets Division includes two
BuddyFreddys restaurants, twelve BuddyFreddys Country Buffet restaurants and two
Holiday House restaurants. The JB's Restaurants segment includes the Company's
ten franchised JB's Restaurants.

The accounting policies of the reportable segments are the same as those
described in Note 1. The Company evaluates the performance of its operating
segments based on income before income taxes.

Summarized financial information concerning the Company's reportable segments is
shown in the following table. The other assets presented in the consolidated
balance sheet and not in the reportable segments relate to the Company as a
whole, and not individual segments. Also certain incomes and expenses in the
consolidated statements of income are not included in the reportable segments.

<TABLE>
<CAPTION>
                             (Dollars in Thousands)
    28 WEEKS ENDED                   HOMETOWN        CASA       NORTH'S        FLORIDA
    AUGUST 14, 2000                   BUFFET        BONITA       STAR          BUFFET          JB'S          OTHER         TOTAL
    ---------------                  --------       ------      -------        -------         -----         -----         -----
<S>                                  <C>            <C>         <C>            <C>            <C>           <C>           <C>
Revenues                             $ 23,402       $7,040      $  5,413       $ 11,846       $ 6,205       $    --       $ 53,906
Interest income                             5           --            --             --            --            16             21
Interest expense                          (79)          --            --             --            (4)         (774)          (857)
Deprecation & amortization                827           99           370          1,049           183            14          2,542
Income (loss) before income taxes       2,684        1,436            (9)          (418)          378        (1,814)         2,257

Total assets                           13,446        2,140         8,410         16,725         5,483         1,173         47,377

    28 WEEKS ENDED
    AUGUST 9, 1999
    --------------
Revenues                             $ 23,344       $6,975      $  6,347       $ 12,161       $ 5,544       $    --       $ 54,371
Interest income                            --           --             6             --            --            15             21
Interest expense                          (86)          --            (4)           (11)           (5)         (546)          (652)
Deprecation & amortization                985           82           236            454           111            12          1,880
Income (loss) before income taxes       2,684        1,495            36            (85)          373        (1,839)         2,664

Total assets                           14,248        1,772        11,089         16,372         3,282            93         46,856

</TABLE>



                                       15
<PAGE>

PART II: OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On November 12, 1998, North's Restaurants, Inc. ("North's") filed a Demand for
Arbitration against the Company with the American Arbitration Association,
Irvine, California (District No. 949-251-9840), alleging breach of contract in
connection with the Company's failure to perform under a Business Services
Agreement between North's and the Company dated July 24, 1997. On June 22, 1999,
the parties agreed to dismiss the Arbitration Proceeding without prejudice since
the issues related to the Business Service Agreement are being litigated in the
Utah action described below.

On November 25, 1998, the Company filed an action against North's Restaurants,
Inc. ("North's") in the United States District Court, District of Utah, Case No.
2-98-CV-893, seeking damages for breach of a promissory note and an Amended and
Restated Credit Agreement (collectively, the "Credit Agreements") in the amount
of $3,570,935. On December 31, 1998, North's filed an answer to the Company's
Complaint, denying generally the allegations, and filed counterclaims against
the Company alleging (i) the Company fraudulently induced North's to enter into
various agreements with the Company relating to the Company's acquisition of
seven JJ North's Grand Buffet Restaurants and an option to acquire nine
additional restaurants operated by North's and (ii) the Company has breached the
Business Services Agreement. The Company plans to pursue vigorously its claims
against North's and to vigorously defend the counterclaims asserted by North's.
The litigation is continuing.

The Company is from time to time the subject of complaints or litigation from
customers alleging injury on properties operated by the Company, illness or
other food quality, health or operational concerns. Adverse publicity resulting
from such allegations may materially adversely affect the Company and its
restaurants, regardless of whether such allegations are valid or whether the
Company is liable. The Company also is the subject of complaints or allegations
from employees from time to time. The Company believes that the lawsuits, claims
and other legal matters to which it has become subject in the course of its
business are not material to the Company's business, financial condition or
results of operations, but an existing or future lawsuit or claim could result
in an adverse decision against the Company that could have a material adverse
effect on the Company's business, financial condition and results of operations.

                                       16
<PAGE>

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The annual meeting of stockholders was held on June 26, 2000. Of the 2,950,000
shares of the Company's common stock issued and outstanding and entitled to vote
at the meeting, there were present at the meeting, in person or by proxy, the
holders of 2,479,885 common shares, representing 84.06% of the total number of
shares entitled to vote at the meeting. This percentage represents a quorum. The
following matters were voted upon at the stockholders' meeting:

     1.   Each of the five nominees to the Board of Directors was elected to
serve a one-year term expiring at the annual meeting of stockholders to be held
in 2001 or until their successors are elected and qualified:

<TABLE>
<CAPTION>
                   Name                           Number of Votes Cast
                   ----                      ----------------------------------
                                                For          Authority Withheld
                                             ---------       ------------------
<S>                                          <C>             <C>
          Robert E. Wheaton                  2,433,805            46,080

          Jack M. Lloyd                      2,455,579            24,306

          Thomas G. Schadt                   2,454,435            25,450

          Phillip "Buddy" Johnson            2,434,949            44,936

          Craig B. Wheaton                   2,454,435            25,450

</TABLE>

     2.   A proposal to reduce the number of authorized shares of common stock
from 18,500,000 to 8,000,000 shares was approved by the following vote:


<TABLE>
<CAPTION>
          Votes Cast              Number of Shares
          ----------              ----------------
<S>                               <C>
          For                         2,472,241

          Against                         7,304

          Abstain                           340

          Broker Non-Votes              470,115

</TABLE>

     3.   The ratification of the selection of KPMG LLP as independent public
accountants of the Company for the current fiscal year was approved by the
following vote:

<TABLE>
<CAPTION>
          Votes Cast              Number of Shares
          ----------              ----------------
<S>                               <C>
          For                         2,479,055

          Against                           430

          Abstain                           400

          Broker Non-Votes              470,115

</TABLE>



                                       17
<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  The following exhibits are attached to this report:

<TABLE>
<CAPTION>
     Exhibit       Description
      Number       of Exhibit
     -------       -----------
<S>                <C>
       11          Calculation of Earnings per Share
       27.1        Financial Data Schedule (EDGAR version only)
</TABLE>

     (b)  Current Reports on Form 8-K:
          None.

          There were no other items to be reported under Part II of this report.


                                       18
<PAGE>

                                    SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                       STAR BUFFET, INC. AND SUBSIDIARIES


September 27, 2000                     By: /s/ Robert E. Wheaton
                                           ------------------------
                                           Robert E. Wheaton
                                           President and
                                           Chief Executive Officer



                                       19