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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   **FORM 10-Q**

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

         For the period ended:   December 29, 2001

                                       OR

[   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                EXCHANGE ACT OF 1934
                        For the transition period from to

                        Commission file number: 333-64180

                            **PSF Group Holdings, Inc.**
             (Exact name of Registrant as specified in its charter)

                **Delaware                                            43-1818535**
      State or other jurisdiction of                    (I.R.S. Employer Identification No.)
      incorporation or organization

**423 West 8th Street, Suite 200, Kansas City, Missouri                                 64105**
     Address of principal executive office)                                          (Zip Code)

                       Registrant's telephone number, including area code: (816) 472-7675

                                **Not Applicable
-----------------------------------------------------------------------------------------------------------------**

             (Former name, former address and former fiscal year, if
                           changed since last report)

     Indicate by check mark whether the Registrant has (1) filed all documents
and 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 [ ]

     As of December 29, 2001, there were 100,000 shares of the Registrant's
Class A Common Stock outstanding and 113,301 shares of the Registrant's Class B
Common Stock outstanding.

**PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements****PSF Group Holdings, Inc. and Subsidiaries
                      Condensed Consolidated Balance Sheets
                      December 29, 2001 and March 31, 2001
                                   (in 000's)****(Unaudited)
                                                                 December 29,               March 31,
                                                                     2001                     2001
                                                           --------------------------------------------
ASSETS
CURRENT ASSETS:**
     Cash and cash equivalents                                    $   4,159                    $   8,560
   Accounts receivable, net                                        23,251                       25,749
   Inventories                                                    137,312                      127,827
   Federal income tax receivable                                    1,022                        2,954
   Deferred tax benefit                                            16,861                       14,448
   Prepaid expenses and other                                       2,876                       12,753
                                                                ---------                    ---------
      Total current assets                                        185,481                      192,291

**PROPERTY, PLANT, EQUIPMENT AND BREEDING STOCK, at cost:**
     Land and improvements                                           91,863                       89,364
   Buildings                                                      267,292                      255,196
   Machinery and equipment                                        224,602                      215,598
   Breeding stock                                                  37,532                       34,542
   Construction in progress                                        58,740                       23,437
                                                                ---------                    ---------
                                                                  680,029                      618,137
   Less accumulated depreciation                                  154,707                      121,255
                                                                ---------                    ---------
      Total property, plant, equipment and breeding stock         525,322                      496,882

**GOODWILL**                                                           75,998                       75,998
**OTHER LONG-TERM ASSETS:**
    Federal income tax receivable                                    1,192                        1,192
   Deferred financing costs, net                                    7,585                        2,290
   Other                                                            6,869                        4,787
                                                                ---------                    ---------
      Total other long-term assets                                 15,646                        8,269

**Total assets**                                                 $ 802,447                    $ 773,440
                                                                =========                     =========

**LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:**
     Accounts payable                                             $  11,415                    $   8,243
   Accrued expenses                                                34,603                       32,313
   Due to related party                                             1,009                        2,063
   Accrued interest                                                 2,350                        3,865
   Current maturities of long-term debt and capital leases         26,676                       26,043
                                                                ---------                    ---------
      Total current liabilities                                      76,053                       72,527

**LONG-TERM LIABILITIES:**
     Long-term debt and capital leases, less current maturities     235,344                      241,173
   Other long-term liabilities                                      8,109                       13,296
   Due to related party                                               921                        1,769
   Deferred income taxes                                           97,846                       86,838
                                                                ---------                    ---------
      Total long-term liabilities                                 342,220                      343,076
                                                                ---------                    ---------
      Total liabilities                                             418,273                      415,603

**SHAREHOLDERS' EQUITY:**
   Common stock                                                        213                          213
   Additional paid-in capital                                      373,457                      373,442
   Accumulated other comprehensive income                              255                         --
   Retained earnings (accumulated deficit)                         10,249                      (15,818)
                                                                ---------                    ---------
       Total shareholders' equity                                  384,174                      357,837

**Total liabilities and shareholders' equity**                       $ 802,447                    $ 773,440
                                                                 **=========                     =========****The accompanying notes are an integral part of the condensed consolidated
financial statements.****PSF Group Holdings, Inc. and Subsidiaries
                 Condensed Consolidated Statements of Operations
          13 and 39 weeks ended December 29, 2001 and December 23, 2000
                                   (in 000's)
                                   (Unaudited)****13 Weeks Ended                                 39 Weeks Ended
                                                December 29,             December 23,         December 29,       December 23,
                                                   2001                     2000                2001               2000
                                              -----------------      ----------------         ------------      -------------**
Net Sales                                             $ 173,278           $ 168,957           $ 521,006           $ 368,789
Cost of Goods Sold                                      162,272             153,767             442,984             304,175
                                                      ---------           ---------           ---------           ---------
     Gross Profit                                        11,006              15,190              78,022              64,614

Selling, General and Administrative Expenses              5,552               5,289              16,796              12,891
Amortization Expense                                       --                   635                --                 1,685
Other Income                                               (348)               (102)               (455)               (615)
                                                      ---------           ---------           ---------           ---------
     Operating Income                                     5,802               9,368              61,681              50,653

Interest Expense (Income):
   Interest Expense                                       5,116               7,293              17,246              17,392
   Interest Income                                          (95)               (322)               (363)               (416)
                                                      ---------           ---------           ---------           ---------
 Interest Expense, net                                    5,021               6,971              16,883              16,976
                                                      ---------           ---------           ---------           ---------
     Earnings before Income Taxes                           781               2,397              44,798              33,677

     Income Tax (Benefit) Expense                          (247)                982              17,416              13,664
                                                      ---------           ---------           ---------           ---------

Net Income before extraordinary items                     1,028               1,415              27,382              20,013

Loss on early extinguishment of debt, net of tax             -                   -                1,315                  -
                                                    ------------         -----------          ---------           ----------
Net Income                                               $ 1,028             $ 1,415           $ 26,067             $ 20,013
                                                    **=============      =============         ==========           ==========

The accompanying notes are an integral part of the condensed consolidated
financial statements.****PSF Group Holdings, Inc. and Subsidiaries
                 Condensed Consolidated Statements of Cash Flows
             39 Weeks ended December 29, 2001 and December 23, 2000
                                   (in 000's)
                                   (Unaudited)

                                                                    December 29,          December 23,
                                                                        2001                  2000
                                                            --------------------------------------------
OPERATING ACTIVITIES:**
   Net income                                                          $  26,067           $  20,013
 Adjustments to reconcile net income
 to net cash provided in operating activities:
   Depreciation and amortization                                          41,132              36,547
   Deferred income taxes                                                   8,596              15,566
   Gain on sale of assets                                                 (4,220)             (3,452)
   Changes in operating assets and liabilities, net:
     Accounts receivable                                                   2,498              (6,828)
     Inventories                                                          (9,485)              2,182
     Prepaid expenses and other assets                                    10,878              (1,393)
     Accounts payable, accrued expenses and other liabilities             (3,127)              9,976
                                                                       ---------            ---------
Net cash provided in operating activities                                 72,339              72,611

**INVESTING ACTIVITIES:**
  Acquistion of Lundy, net of cash acquired                                 --               (98,206)
  Acquistion of PSFNC, net of cash acquired                                 --               (15,847)
  Purchases of property, plant, equipment and breeding stock             (76,631)            (24,009)
  Proceeds from disposal of fixed assets                                  11,245               7,499
                                                                       ---------            ---------
Net cash used by investing activities                                    (65,386)           (130,563)

**FINANCING ACTIVITIES:**
  Proceeds from long-term debt                                           173,591             125,000
  Payments on revolving debt, net                                         (4,000)            (17,205)
  Deferred financing costs                                                (4,749)             (2,687)
  Repayments on long-term debt                                          (176,196)            (20,480)
                                                                       ---------           ---------
Net cash (used) provided by financing activities                         (11,354)             84,628

Net (decrease) increase in cash and cash equivalents                      (4,401)             26,676

CASH AND CASH EQUIVALENTS, beginning of period                             8,560               1,654
                                                                       ---------           ---------

CASH AND CASH EQUIVALENTS, end of period                               $   4,159           $  28,330
                                                                       =========           =========

SUPPLEMENTAL DISCLOSURES:
 Interest paid                                                         $  19,337           $  11,193
 Income tax paid                                                           5,197                 191

**The accompanying notes are an integral part of the condensed consolidated
financial statements.****PSF Group Holdings, Inc. and Subsidiaries**
              Notes to Condensed Consolidated Financial Statements

**Note 1 - Basis of presentation**

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the accounting policies described in the
consolidated financial statements and related notes included in PSF Group
Holdings financial statements for the year ended March 31, 2001, except as
described in Note 2. It is suggested that those consolidated statements be read
in conjunction with this report. Certain information and note disclosures
normally included in financial statements prepared in accordance with U.S.
generally accepted accounting principles have been condensed or omitted pursuant
to the rules and regulations of the Securities and Exchange Commission. The
year-end financial statements presented were derived from the Company's audited
financial statements. In the opinion of management, the accompanying
consolidated financial statements reflect all adjustments necessary for a fair
presentation of the financial position of PSF Group Holdings and the results of
its operations.

**Note 2 - New accounting pronouncements***Derivative instruments and hedging activities*
On April 1, 2001, the Company adopted Financial Accounting Standards Board
Statement No. 133 (SFAS 133), "Accounting for Derivative Instruments and Hedging
Activities" requiring every derivative instrument be recorded in the balance
sheet as either an asset or liability at its fair value, and changes in a
derivative's fair value be recognized in current earnings or other comprehensive
income.

The Company believes that its current derivative instruments are economic
hedges, however, as a result of the extensive record keeping requirements of
SFAS 133, management has elected not to designate and account for these
derivatives as hedges. Effective as of April 1, 2001, these instruments are
marked to market through earnings. On April 1, 2001, the Company recorded a
transition adjustment reflecting an unrealized loss on derivatives contracts of
approximately $7,300,000 as a liability and a decrease to shareholders' equity
(other comprehensive income) of $4,380,000, net of $2,920,000 of deferred taxes.
As of December 29, 2001, the Company has recorded $7,194,000 of this liability
as a reduction to gross profit as the related contracts expired during the first
three quarters. The remaining transition adjustment will be recorded as a
reduction to gross profit during the remainder of fiscal 2002. Changes in the
fair value of the existing contracts and those contracts entered into subsequent
to April 1, 2001 will be recorded in the period in which they occur. Net losses
recognized during the 39 weeks ended December 29, 2001 in gross profit were
$6,536,000. Net losses recognized during the 13 weeks ended December 29, 2001 in
gross profit were $338,000.

During the 13 weeks ended December 29, 2001 the Company entered into an interest
rate swap agreement in order to effectively convert the base interest rate on
the $75 million term note from variable to fixed rate debt.

The Company's comprehensive income includes net income, the change in the
transition adjustment discussed above and the change in the fair market value of
the interest rate swap, net of tax. Comprehensive income for the 13 weeks ended
December 29, 2001 and December 23, 2000 was $3,110,000 and $1,415,000,
respectively. Comprehensive income for the 39 weeks ended December 29, 2001 and
December 23, 2000 was $26,322,000 and $20,013,000 respectively.

*Business combination, goodwill, and intangible assets*
On June 30, 2001, the Financial Accounting Standards Board issued its Statements
of Financial Accounting Standards Nos. 141 (SFAS 141), "Business Combinations"
and 142 (SFAS 142), "Goodwill and Intangible Assets," which establish reporting
and accounting standards for business combinations, goodwill and intangible
assets. SFAS 141 requires all business combinations after June 30, 2001 to be
accounted for using the purchase method. Under SFAS 142, companies will no
longer amortize goodwill over the

estimated useful life. Goodwill will be assessed each year for impairment by
applying a fair value based test.

The Company has elected early adoption of these rules and will recognize the
effect of the new pronouncements in fiscal year 2002. Assessment of the fair
value of the relevant reporting units was completed during the second quarter,
resulting in no impairment of recorded goodwill. The effect of discontinuing
goodwill amortization increased income before income taxes by approximately
$1,965,000 for the 39 weeks ended and $655,000 for the 13 weeks ended December
29, 2001.

*Asset retirement obligations*
On June 30, 2001 the Financial Accounting Standards Board issued its Statement
of Financial Accounting Standards No. 143 (SFAS 143), "Accounting for Asset
Retirement Obligations." SFAS 143 applies to legal obligations associated with
the retirement of long-lived assets that result from the acquisition,
construction, development, and the normal operation of long-lived assets. This
statement requires that the fair value of a liability for an asset retirement
obligation be recognized in the period in which it is incurred if a reasonable
estimate of fair value can be made. The associated asset retirement costs are
capitalized as part of the carrying amount of the long-lived asset. This
statement is effective for financial statements issued for fiscal years
beginning after June 15, 2002 and earlier application is encouraged. The Company
has not determined the impact, if any, that the adoption of this new standard
will have on its financial statements.

**Note 3 - Inventories**

Inventories are valued at the lower of cost, determined on a first-in, first-out
(FIFO) basis, or market. Inventories consist of the following at December 29,
2001 and March 31, 2001 (in thousands):

                                                                 Dec. 29, 2001           March 31, 2001
                                                                 -------------           --------------
Hogs                                                          $       121,013           $      112,998
Processed pork and pork products                                       10,264                    9,420
Packaging and supplies                                                  2,436                    2,131
Grain, feed additives and other                                         3,599                    3,278
                                                                    ---------                  -------
                                                                     $137,312                 $127,827

**Note 4 - Segment information**

The accounting policies for the segments are the same as those described in the
footnotes included in the Company's March 31, 2001 audited financial statements.
The Company operates a vertically integrated business with two operating
segments, Pork Processing and Hog Production. The Pork Processing segment sells
fresh and value-added pork products to food retailers, distributors,
wholesalers, further processors, pharmaceutical and animal feed manufacturers in
both domestic and international markets. The Hog Production segment supplies a
majority of the live hogs used in the Pork Processing segment and sells the
excess production to other hog processing operations.

                                                Pork             Hog        Corporate
                                                Processing    Production     and Other       Total
                                            -------------   ------------- ------------ ------------
13 weeks ended December 29, 2001-

Net Sales                                    $ 145,136        108,229           --          253,365
Intersegment Sales                           $  (1,159)       (78,928)          --          (80,087)
Operating Income (Loss)                      $  11,989         (1,780)        (4,407)         5,802

13 weeks ended December 23, 2000-

Net Sales                                    $ 148,764        102,212           --          250,976
Intersegment Sales                           $    (845)       (81,174)          --          (82,019)
Operating Income                             $   6,497          7,527         (4,656)         9,368

39 weeks ended December 29, 2001-

Net Sales                                    $ 462,645        341,591           --          804,236
Intersegment Sales                           $  (2,814)      (280,416)          --         (283,230)
Operating Income                             $  20,496         54,780        (13,595)        61,681

39 weeks ended December 23, 2000-

Net Sales                                    $ 323,875        250,178           --          574,053
Intersegment Sales                           $  (1,678)      (203,586)          --         (205,264)
Operating Income                             $  12,381         50,124        (11,852)        50,653

December 29, 2001
Assets                                       $ 199,556        513,966         88,925        802,447

March 31, 2001-
Assets                                       $ 179,126        502,371         91,943        773,440

**Note 5 - Early extinguishment of debt**

On June 7, 2001, Premium Standard Farms, Inc., a wholly-owned subsidiary of the
Company, issued $175,000,000 of 9 1/4% senior unsecured notes due 2011 ("9 1/4%
Notes"). A portion of the net proceeds from the private placement debt offering
was used to redeem all $137.9 million principal amount of the 11% senior secured
payment-in-kind notes ("PIK Notes") with the remaining net proceeds used to pay
down its bank credit facility. An extraordinary charge of $2,191,483, net of tax
of $876,593, was recorded in the Condensed Consolidated Statement of Operations
for the 13 weeks ended June 30, 2001 resulting from the loss on the early
extinguishment of the PIK Notes. Premium Standard Farms, the Company, and the
Company's other wholly-owned subsidiaries subsequently filed a joint
registration statement on Form S-4 with the Securities and Exchange Commission,
as amended and declared effective on August 14, 2001, to register exchange notes
("Exchange Notes") and the guarantees of the Exchange Notes. The Exchange Notes
have substantially identical terms to the privately placed 9 1/4% Notes, except
that the Exchange Notes are freely tradeable. All of the holders of the
privately placed 9 1/4% Notes tendered their notes for the registered Exchange
Notes.
**Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations**

The terms "expect," "anticipate," "may," "believe," "will," and similar
expressions made with respect to the Company's earnings and outlook for the
future contain some forward-looking information. Naturally, all forward-looking
statements involve risk and uncertainty and actual results or events could be
materially different. Although the Company believes that its expectations are
based on reasonable assumptions, it can give no assurance that its goals will be
achieved. Important factors that could cause actual results to differ include:
economic conditions generally and in the Company's principal markets;
competitive practices in the pork production and processing industries; the
impact of current and future laws, governmental regulations and fiscal policies
affecting the Company's industry and operations, including environmental laws
and regulations; food safety; the availability of additional capital to fund
future commitments and expansion and the cost and terms of financing; outbreaks
of disease in the Company's herds; feed ingredient costs; fluctuations in live
hog and wholesale pork prices; customer demands and preferences; and the
occurrence of natural disasters and other occurrences beyond the Company's
control. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed might not occur. Please review the Company's
Registration Statement on Form S-4 for other important factors that could cause
results to differ materially from those in any such forward-looking statements.
Information in these archived materials may not be current and may be superceded
by more recent information published by the Company.

**Results of Operations

13 Weeks Ended December 29, 2001 Compared to the 13 Weeks Ended December 23, 2000**

The following table presents selected financial information for our production
and processing segments for the 13 weeks ended December 29, 2001 and December
23, 2000. Net sales, gross profit and operating income by segment are also
presented as a percentage of their respective totals. The two columns under
quarter-to-quarter change show the dollar and percentage change from the quarter
ended December 23, 2000 to the quarter ended December 29, 2001. Intersegment
sales are based on live hog prices.

                                              **For the 13 Weeks Ended                                            Qtr to Qtr Change**
                                          --------------------------------------------------------------     -------------------------

                                          December 29, 2001        %       December 23, 2000      %          2001 to 2000       %
                                          -------------------  ----------  -----------------  ----------     -------------  ----------
                                                                       **(In millions except percentages)****Net Sales**
     Production                                      $ 108.2       62.4%            $ 102.2       60.5%             $ 6.0        5.9%
     Processing                                        145.2       83.8%              148.8       88.0%              (3.6)      -2.4%
     Intersegment                                      (80.1)     -46.2%              (82.0)     -48.5%               1.9       -
                                          -------------------  ----------  -----------------  ----------     -------------  ----------
       **Total Net Sales**                               $ 173.3      100.0%            $ 169.0      100.0%             $ 4.3        2.5%
                                          ===================  ==========  =================  ==========     =============  ==========

**Gross Profit**
     Production                                       $ (1.9)     -17.3%              $ 7.5       49.3%            $ (9.4)      -
     Processing                                         12.9      117.3%                7.7       50.7%               5.2       67.5%
                                          -------------------  ----------  -----------------  ----------     -------------  ----------
       **Total Gross Profit**                             $ 11.0      100.0%             $ 15.2      100.0%            $ (4.2)     -27.6%
                                          ===================  ==========  =================  ==========     =============  ==========

**Operating Income**
     Production                                       $ (1.8)     -31.0%              $ 7.5       79.8%            $ (9.3)      -
     Processing                                         12.0      206.9%                6.5       69.1%               5.5       84.6%
     Corporate                                          (4.4)     -75.9%               (4.6)     -48.9%               0.2       -4.3%
                                          -------------------  ----------  -----------------  ----------     -------------  ----------
       **Total Operating Income**                         $ 5.8      100.0%              $ 9.4      100.0%            $ (3.6)     -38.3%
                                          ===================  ==========  =================  ==========     =============  ==========

**Consolidated**

Net Sales. Net sales increased by $4.3 million, or 2.5%, to $173.3 million in
the third quarter of fiscal year 2002 from $169.0 million in the comparable
period last year. The increase was attributed to an increase in volume of $14.1
million, which was offset by a decrease in prices of $9.8 million. See Segment
Analysis below for comments on changes in sales by business segment.

Gross Profit. Gross profit decreased by $4.2 million, or 27.6%, to $11.0 million
in the third quarter of fiscal year 2002 from $15.2 million in the comparable
period last year. The current year gross profit decrease is primarily the result
of lower live hog prices during the third quarter of fiscal year 2002 compared
to the same period last year.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased slightly as a percentage of net sales to 3.2%
in the third quarter of fiscal year 2002 from 3.1% in the comparable period last
year. In dollar terms, selling, general and administrative expenses increased by
$0.3 million, or 5.0%, to $5.6 million in the third quarter of fiscal year 2002
from $5.3 million in the comparable period last year.

Operating Income. Operating income decreased by $3.6 million, or 38.3%, to $5.8
million in the third quarter of fiscal year 2002 from $9.4 million in the
comparable period last year. The decrease is attributable to the factors
mentioned above.

Interest Expense, net. Interest expense, net, decreased by $2.0 million, or
28.0%, to $5.0 million in the second quarter of fiscal year 2002 from $7.0
million in the comparable period last year. The decrease was caused by a
decrease in interest rates. See Liquidity and Capital Resources below for more
information.

Income Tax Expense. Our effective tax rate was a benefit of 31.6% in the third
quarter of fiscal year 2002 compared to an expense of 41.0% in the comparable
period last year. The difference was attributable to reducing the effective tax
rate from 40.1% applied in the first two quarters to 38.9%.

   ***Segment Analysis****Hog Production.* Net sales increased by $6.0 million, or 5.9%, to $108.2 million
in the third quarter of fiscal year 2002 from $102.2 million in the comparable
period last year. The increase was accounted for by a 15.0% increase in volume
attributable to increased productivity, better growing conditions and additional
contract production, offset by a 7.8% decrease in net market hog sales prices.
Intersegment sales to our pork processing segment transferred at market prices
are eliminated in the Consolidated Statements of Operations.

Gross profit decreased by $9.4 million to a loss of $1.9 million in the third
quarter of fiscal year 2002 from a gross profit of $7.5 million in the
comparable period last year. The decrease was the result of a higher volume of
hogs coupled with the lower net market hog sales price mentioned above. Overall,
hog production costs were slightly higher during the third quarter of fiscal
year 2002 compared to the same period last year.

Operating income decreased by $9.3 million to an operating loss of $1.8 million
in the third quarter of fiscal year 2002 from an operating income of $7.5
million in the comparable period last year. The increase is attributed to the
factors mentioned above.

*Pork Processing.* Net sales decreased $3.6 million, or 2.4%, to $145.2 million in
the third quarter of fiscal year 2002 from $148.8 million in the comparable
period last year. The decrease was accounted for by a 5.0% decrease in
processing volume offset by a 2.8% increase in pork product sales prices
compared to the same period last year.

Gross profit increased by $5.2 million, or 67.5%, to $12.9 million in the third
quarter of fiscal year 2002 from $7.7 million in the comparable period last
year. The increase resulted from higher margins on pork products due to higher
pork product prices coupled with lower market hog costs.

Operating income increased by $5.5 million, or 84.6%, to $12.0 million in the
third quarter of fiscal year 2002 from $6.5 million in the comparable period
last year. The increase was attributed to the factors mentioned above.

**39 Weeks Ended December 29, 2001 Compared to the 39 Weeks Ended December 23, 2000**

The following table presents selected financial information for our production
and processing segments for the first three quarters ended December 29, 2001 and
December 23, 2000. Results of operations for the first three quarters ended
December 29, 2001 include information for both The Lundy Packing Company
("Lundy") and Premium Standard Farms of North Carolina, Inc. ("PSFNC"). Lundy
was acquired during, and PSFNC was acquired on the last day of, the quarter
ended September 23, 2000 and will affect the comparability of the results of
operations for the first three quarters ended December 29, 2001 and December 23,
2000.

                                           **For the 39 Weeks Ended                                                Year to Year Change**
                                          --------------------------------------------------------------     -------------------------

                                          December 29, 2001       %       December 23, 2000       %          2001 to 2000       %
                                          ------------------   ---------  ------------------  ----------     -------------  ----------
                                                                                       **(In millions except percentages)****Revenues**
     Production                                     $ 341.6       65.6%             $ 250.2       67.8%            $ 91.4       36.5%
     Processing                                       462.6       88.8%               323.9       87.8%             138.7       42.8%
     Intersegment                                    (283.2)     -54.4%              (205.3)     -55.7%             (77.9)      -
                                          ------------------   ---------  ------------------  ----------     -------------  ----------
      **Total Revenues**                             $ 521.0      100.0%             $ 368.8      100.0%           $ 152.2       41.3%
                                          ==================   =========  ==================  ==========     =============  ==========

**Gross Profit**
     Production                                      $ 55.1       70.6%              $ 49.7       76.9%             $ 5.4       10.9%
     Processing                                        22.9       29.4%                14.9       23.1%               8.0       53.7%
                                          ------------------   ---------  ------------------  ----------     -------------  ----------
       **Total Gross Profit**                       $ 78.0      100.0%              $ 64.6      100.0%            $ 13.4       20.7%
                                          ==================   =========  ==================  ==========     =============  ==========

**Operating Income**
     Production                                      $ 54.8       88.8%              $ 50.1       98.8%             $ 4.7        9.4%
     Processing                                        20.5       33.2%                12.4       24.5%               8.1       65.3%
     Corporate                                        (13.6)     -22.0%               (11.8)     -23.3%              (1.8)      15.3%
                                          ------------------   ---------  ------------------  ----------     -------------  ----------
       **Total Operating Income**                        $ 61.7      100.0%              $ 50.7      100.0%            $ 11.0       21.7%
                                          ==================   =========  ==================  ==========     =============  ==========

**Consolidated**

Net Sales. Net sales increased by $4.3 million, or 2.5%, to $173.3 million in
the third quarter of fiscal year 2002 from $169.0 million in the comparable
period last year. The increase was attributed to an increase in volume of $14.1
million, which was offset by a decrease in prices of $9.8 million. See Segment
Analysis below for comments on changes in sales by business segment.

Gross Profit. Gross profit decreased by $4.2 million, or 27.6%, to $11.0 million
in the third quarter of fiscal year 2002 from $15.2 million in the comparable
period last year. The current year gross profit decrease is primarily the result
of lower live hog prices during the third quarter of fiscal year 2002 compared
to the same period last year.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased slightly as a percentage of net sales to 3.2%
in the third quarter of fiscal year 2002 from 3.1% in the comparable period last
year. In dollar terms, selling, general and administrative expenses increased by
$0.3 million, or 5.0%, to $5.6 million in the third quarter of fiscal year 2002
from $5.3 million in the comparable period last year.

Operating Income. Operating income decreased by $3.6 million, or 38.3%, to $5.8
million in the third quarter of fiscal year 2002 from $9.4 million in the
comparable period last year. The decrease is attributable to the factors
mentioned above.

Interest Expense, net. Interest expense, net, decreased by $2.0 million, or
28.0%, to $5.0 million in the second quarter of fiscal year 2002 from $7.0
million in the comparable period last year. The decrease was caused by a
decrease in interest rates. See Liquidity and Capital Resources below for more
information.

Income Tax Expense. Our effective tax rate was a benefit of 31.6% in the third
quarter of fiscal year 2002 compared to an expense of 41.0% in the comparable
period last year. The difference was attributable to reducing the effective tax
rate from 40.1% applied in the first two quarters to 38.9%.

  ***Segment Analysis****Hog Production.* Net sales increased by $6.0 million, or 5.9%, to $108.2 million
in the third quarter of fiscal year 2002 from $102.2 million in the comparable
period last year. The increase was accounted for by a 15.0% increase in volume
attributable to increased productivity, better growing conditions and additional
contract production, offset by a 7.8% decrease in net market hog sales prices.
Intersegment sales to our pork processing segment transferred at market prices
are eliminated in the Consolidated Statements of Operations.

Gross profit decreased by $9.4 million to a loss of $1.9 million in the third
quarter of fiscal year 2002 from a gross profit of $7.5 million in the
comparable period last year. The decrease was the result of a higher volume of
hogs coupled with the lower net market hog sales price mentioned above. Overall,
hog production costs were slightly higher during the third quarter of fiscal
year 2002 compared to the same period last year.

Operating income decreased by $9.3 million to an operating loss of $1.8 million
in the third quarter of fiscal year 2002 from an operating income of $7.5
million in the comparable period last year. The increase is attributed to the
factors mentioned above.

*Pork Processing.*Net sales decreased $3.6 million, or 2.4%, to $145.2 million in
the third quarter of fiscal year 2002 from $148.8 million in the comparable
period last year. The decrease was accounted for by a 5.0% decrease in
processing volume offset by a 2.8% increase in pork product sales prices
compared to the same period last year.

Gross profit increased by $5.2 million, or 67.5%, to $12.9 million in the third
quarter of fiscal year 2002 from $7.7 million in the comparable period last
year. The increase resulted from higher margins on pork products due to higher
pork product prices coupled with lower market hog costs.

Operating income increased by $5.5 million, or 84.6%, to $12.0 million in the
third quarter of fiscal year 2002 from $6.5 million in the comparable period
last year. The increase was attributed to the factors mentioned above.
**Liquidity and Capital Resources**

Our primary source of financing has been cash flow from operations and bank
borrowings. Our ongoing operations will require the availability of funds to
service debt, fund working capital and make capital expenditures on our
facilities. We expect to finance these activities through cash flow from
operations and from amounts available under the revolving credit facility.

Net cash flow provided by operating activities was $72.3 million and $72.6
million for the first three quarters ended in fiscal years 2002 and 2001,
respectively. The slight decrease in the first three quarters of fiscal year
2002 compared to the same period last year was primarily due to an increase in
working capital requirements relating to inventory and margin calls on our risk
management program offset by an increase in non-cash charges and an increase in
net income. Non-cash charges increased in the first three quarters of fiscal
year 2002 compared to the same period last year due to incremental depreciation
expense of acquired businesses.

Net cash flow used in investing activities was $65.4 million and $130.6 million
for the first three quarters ended in fiscal years 2002 and 2001, respectively.
Net cash used in investing activities consisted of $76.6 million and $24.0
million for capital expenditures relating to property, plant and equipment and
breeding stock during the first three quarters ended in fiscal years 2002 and
2001, respectively. The Company received proceeds from disposal of fixed assets
of $11.2 million and $7.5 million during the first three quarters ended in
fiscal years 2002 and 2001, respectively. Additional net cash used in fiscal
2001 of $114.1 million was for the acquisitions mentioned earlier. The increase
in capital expenditures relating to property, plant and equipment and breeding
stock is the result of expansion projects at Lundy and our Texas production
facilities.

Net cash flow used in and provided by financing activities was ($11.3) million
and $84.6 million for the first three quarters ended in fiscal years 2002 and
2001, respectively. As of December 29, 2001, our total debt was $262.0 million.
In the first quarter of fiscal year 2002, we issued $175 million of 9 1/4%
senior unsecured notes due 2011("9 1/4% Notes"), which were used to retire
$137.9 million of 11% senior secured payment-in-kind notes ("PIK Notes") on July
7, 2001. An associated 1% prepayment penalty on these PIK Notes, which was also
paid on July 7, 2001, resulted in an extraordinary charge of $1.3 million, net
of taxes. With the remaining proceeds, we also prepaid $25 million of bank term
debt, made a $6.3 million quarterly payment on bank term debt and paid down $4.0
million on our revolving credit facility.

At December 29, 2001, we had $75.0 million outstanding under our term loan
facility, $6.0 million outstanding under our revolving credit facility, and $7.5
million in letters of credit. As a result, we could borrow an additional $86.5
million under our revolving credit facility as of December 29, 2001. All
borrowings under the revolving credit facility mature on August 21, 2003 and all
borrowings under the term credit facility mature on August 21, 2004.

In fiscal 2002, we plan to spend approximately $88 million on capital
expenditures, of which we expect to spend:

o    approximately $34 million in connection with the implementation of
     improvements to our Clinton, North Carolina pork processing facility;

o    approximately $24 million in connection with our expansion of our Texas hog
     production facilities;

o    the rest for continuing improvements of our facilities, and investments and
     research to develop and implement new technologies for improved waste
     handling.

Under our consent decree with the Attorney General of the State of Missouri we
are required to spend $14.2 million on additional investments in research and
development over the next three years.

We believe that available borrowings under our credit facility, available cash
and internally generated funds will be sufficient to support our working
capital, capital expenditures and debt service requirements for the

foreseeable future. Our ability to generate cash, however, is subject to a
certain extent to general economic, financial, competitive, legislative,
regulatory and other factors beyond our control. We cannot assure you that our
business will generate sufficient cash flow from operations or that future
borrowings will be available under our revolving credit facility in an amount
sufficient to enable us to pay our indebtedness, including the Exchange Notes,
or to fund our other liquidity needs. If we consummate any acquisitions, we may
need to raise additional capital. In addition, it is our long-term intent to add
a processing plant to our Texas operations when justified by market conditions,
customer relationships and other circumstances. If we consummate any material
acquisitions or expand our Texas operations in this manner, we will need to seek
additional sources of funding, which might potentially come from the issuance of
additional equity, debt or the pursuit of joint ventures to the extent that such
options are available.

**Market Risk**

Our operating results are influenced by fluctuations in the price of our primary
feed components, corn and soybean meal, and by fluctuations in market hog and
wholesale pork sales prices. The cost and supply of feed components and market
hog and wholesale pork sales prices are determined by constantly changing market
forces of supply and demand, which are driven by matters over which we have no
control, including weather, current and projected worldwide grain stocks and
prices, grain export prices and supports, hog production and governmental
agricultural policies. In our hog production segment we use forward contracts,
as well as futures and options contracts, to establish adequate supplies of
future grain requirements, to secure margins and to reduce the risk of market
fluctuations. To secure margins and minimize earnings volatility in our pork
processing segment, we utilize lean hog futures to hedge future pork product
sales. While this may tend to limit our ability to participate in gains from
favorable commodity price fluctuation, it also tends to minimize earnings
volatility and secure future margins. For the 39 weeks ended December 29, 2001,
we recognized losses under SFAS 133 of $8.4 million in net sales for losses
related to lean hog futures and losses of $5.3 million in costs of goods sold
relating to the hedging of feed components. As of December 29, 2001, we had
deposits with brokers for outstanding futures contracts of $3.7 million,
included in prepaid expenses and other current assets. For open futures
contracts, we use a sensitivity analysis technique to evaluate the effect that
changes in the market value of commodities will have on these commodity
derivative instruments. As of December 29, 2001, the potential change in fair
value of open future contracts, assuming a 10% change in the underlying
commodity price, was $4.4 million.

We are exposed to changes in interest rates. Our term and revolving credit
facilities have variable interest rates. Interest rate changes therefore
generally do not affect the market value of such debt but do impact the amount
of our interest payments and, therefore, our future earnings and cash flows,
assuming other factors are held constant. Conversely, for fixed rate debt,
interest rate changes do not impact future cash flows and earnings, but do
impact the fair market value of such debt, assuming other factors are held
constant. During the third quarter ended December 29, 2001, the Company entered
into an interest rate swap agreement to convert the variable base interest rate
of its $75.0 million term debt to a fixed rate of 3.0125% plus its spread
(currently 1.625% at December 29, 2001). The swap has an identical maturity
schedule as the term debt. At December 29, 2001, the Company recognized a $0.3
million gain into Other Comprehensive Income for the market value of the swap.

We completed the sale of our 9 1/4% Notes in June, 2001, and completed our offer
to exchange the Exchange Notes for the 9 1/4% Notes in September, 2001. The
Exchange Notes had a fair value of approximately $176.8 million as of December
29, 2001 based on inter-dealer prices, as compared to the book value of $175.0
million as of December 29, 2001.

**Item 3.  Qualitative and Quantitative Disclosures About Market Risk**

Please see "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Market Risk" above.

**PART II - OTHER INFORMATION

Item 1.  Legal Proceedings**

We have settled two citizens' action suits which sought to enforce alleged
violations of the Clean Air Act, Clean Water Act and CERCLA against our Company
and ContiGroup Companies, Inc. ("ContiGroup"). In 1998, we engaged in a series
of transactions with ContiGroup pursuant to which we purchased from ContiGroup
its North Missouri Farms hog production operations and ContiGroup purchased a
51.0% ownership interest in our Company (the "1998 ContiGroup transaction"). The
U.S. Environmental Protection Agency (the "E.P.A.") had intervened in the same
action and filed a separate notice of violation against the Company under the
Clean Air Act. This settlement resolves all outstanding issues with the E.P.A.
To the extent that ContiGroup incurs any liability in this litigation, we
assumed that liability pursuant to the terms of our 1998 ContiGroup transaction.
This consent decree built upon the 1999 consent decree with the State of
Missouri referenced below. The recent consent decree with the E.P.A. (the "2001
Consent Decree") requires the Company and ContiGroup to meet certain performance
standards, such as a 50 percent reduction in nitrogen content concentration of
effluent applied to area fields over a prescribed time period. Other key
elements of the 2001 Consent Decree include: monitoring air emissions from
lagoons and barns; compliance with certain best management practices to reduce
the risk of spills; testing of selective lagoons to ensure integrity, and the
payment of $350,000 civil penalty. The 2001 Consent Decree has been lodged with
the court and published in the Federal Register for comments. It is anticipated
that the Judge will enter the decree within the next ninety days.

In 1999, we settled a suit filed by the Attorney General of the State of
Missouri against our Company and ContiGroup. We assumed ContiGroup's liability
in this action in connection with the 1998 ContiGroup transaction. The
settlement required us and ContiGroup to enter into a consent judgment pursuant
to which we are obligated to spend $25 million over the course of five years for
researching, installing and operating improved technology to control wastewater,
air and odor emissions from our Missouri farms. We are currently in the third
year of that five year period and have spent $10.8 million to satisfy the
settlement. In addition, pursuant to the consent judgment our Company and
ContiGroup were issued a $1 million civil penalty. Of this, $650,000 has been
paid and $350,000 is suspended pending certain conditions.

In addition to the suits discussed above, we have received notices of violations
from the Attorney General of the State of Missouri alleging releases of
wastewater. We have responded to these notices in an effort to resolve these
matters. If we do not successfully resolve these matters we may be required to
obtain additional permits and expend capital resources to comply with those
permits and we may also be subject to fines. We may receive similar notices in
the future.

In addition, we are involved from time to time in routine litigation incidental
to our business. Although no assurance can be given as to the outcome or expense
associated with any of these routine proceedings, we believe that none of such
proceedings currently pending should, individually or in the aggregate, have a
material adverse effect on our financial statements.

**Item 2.  Changes in Securities**

         Not applicable

**Item 3.  Defaults Upon Senior Securities**

         Not applicable

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

         The annual meeting of shareholders was held on October 4, 2001 in
         Kansas City, Missouri. One item was submitted to a vote of shareholders
         as described in the Company's Proxy Statement dated September 18, 2001.
         The table below briefly describes the proposals and results of the
         shareholders' vote.

                                                     For             Withheld

                To elect Class A directors:
           Ronald Justice                       82,050            17,950
                Maurice McGill                       82,050            17,950
                Dean Mefford                         82,050            17,950
                Mitch Petrick                        82,050            17,950
                To elect Class B directors:
                Paul Fribourg                       113,301               0
                John Meyer                          113,301               0
                Vart Adjemian                       113,301               0
                Michael Zimmerman                   113,301               0

**Item 5.  Other Information**

         Not applicable

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

         (a)      Exhibits

                  None.

(b)      Reports on Form 8-K.

1.            A Current Report on Form 8-K was filed with the SEC on November 1,
              2001 to report, under Item 5, the Company's second quarter
              earnings. The earnings release, including the Company's Unaudited
              Condensed Consolidated Statements of Operations for the 13 and 26
              weeks ended September 29, 2001, and September 23, 2000, was filed
              as Exhibit 99.1 to the Form 8-K.

2.            A Current Report on Form 8-K was filed with the SEC on November
              20, 2001 to report, under Item 5, the Company's agreement to
              settle environmental claims of the Environmental Protection Agency
              (EPA) and the Citizens Legal Environmental Action Network (CLEAN).

**SIGNATURES**

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 thereunto duly authorized.

                                    PSF GROUP HOLDINGS, INC.

February 5, 2002                   /s/ Stephen A. Lighstone
----------------                   --------------------------------------------
Date                               Stephen A. Lightstone
                                   Executive Vice President, Chief Financial
                                   Officer and Treasurer
                                   (Principal Financial and
                                    Accounting Officer)
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