SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 200549
                                  -------------

                                    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         May 2, 1998

                                                        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 0-24902

                      CENTRAL TRACTOR FARM & COUNTRY, INC.
             (Exact Name of Registrant as Specified in its Charter)

Delaware                                                      42-1425562
(State or Other Jurisdiction of Incorporation)          (I.R.S. Employer No.)

3915 Delaware Avenue, Des Moines, Iowa                        50316-0330
(Address of Principal Executive Offices)                      (Zip Code)

Registrant's telephone number, including area code:  (515) 266-3101

                                 Not Applicable
              (Former Name, Former Address and Former Fiscal Year,
                         If Changed Since Last Report)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of May 31, 1998: 100. All of the registrant's  stock is held
by CT Holding, Inc. and is not publicly traded.
<PAGE>
<TABLE>
<CAPTION>

                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                      INDEX

PART I.           FINANCIAL INFORMATION                                                                        PAGE
<S>     <C>      <C>                                                                                            <C>

ITEM 1.          FINANCIAL STATEMENTS

        Condensed consolidated balance sheets, May 2, 1998 (unaudited) and November 1, 1997......................3

        Condensed consolidated statements of income (unaudited), for the three months and six months ended
        May 2, 1998 and the three months and six months ended May 3, 1997........................................4

        Condensed consolidated statements of cash flows (unaudited), for the six months ended May 2, 1998 and
        May 3, 1997..............................................................................................5

        Notes to condensed consolidated financial statements (unaudited).........................................6

ITEM 2.          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                 RESULTS OF OPERATIONS...........................................................................8

PART II.         OTHER INFORMATION

ITEM 1.          LEGAL PROCEEDINGS..............................................................................12

ITEM 2.          CHANGES IN SECURITIES..........................................................................12

ITEM 3.          DEFAULTS UPON SENIOR SECURITIES................................................................12

ITEM 4.          SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............................................12

ITEM 5.          OTHER INFORMATION..............................................................................12

ITEM 6.          EXHIBITS AND REPORTS ON FORM 8-K...............................................................12

INDEX TO EXHIBITS...............................................................................................14
        Exhibit 12 - Statement Re:  Computation of Ratio of Earnings to Fixed Charges
        Exhibit 27 - Financial Data Schedule (electronic copy only)
        Exhibit 99 - Important Factors Regarding Forward-Looking Statements

                                                         2
</TABLE>

<PAGE>
CENTRAL TRACTOR FARM & COUNTRY, INC.
Condensed Consolidated Balance Sheets
(In thousands except share data)
                                                         May 2,      November 1,
                                                         1998           1997
                                                      -----------    -----------
                                                      (unaudited)      (Note)
ASSETS
   Current assets:
      Cash and cash equivalents                        $ 14,979      $  7,378
      Recoverable income taxes                            2,175         2,513
      Trade receivables, net                              6,612         7,264
      Inventory                                         223,364       222,117
      Deferred income taxes                               1,936         4,000
      Other                                               4,409         3,136
                                                       --------      --------
   Total current assets                                 253,475       246,408
                                                                    
   Property, improvements and equipment, net             41,977        43,195
   Goodwill, net                                        133,614       135,612
   Other assets                                           8,902         9,020
                                                       --------      --------
   Total assets                                        $437,968      $434,235
                                                       ========      ========
                                                                    
LIABILITIES AND STOCKHOLDER'S EQUITY                                
   Current liabilities:                                             
      Note payable to bank                             $ 53,000      $ 60,750
      Current portion of long-term debt and capital                 
        lease obligations                                 3,165         3,170
      Accounts payable                                   85,774        68,015
      Accrued expenses and other liabilities             22,058        28,834
                                                       --------      --------
   Total current liabilities                            163,997       160,769
                                                                    
   Long-term debt, less current portion                 150,500       152,000
   Other long-term liabilities                            1,840         1,919
                                                       --------      --------
   Total liabilities                                    316,337       314,688
                                                                    
   Stockholder's equity:                                            
      Common stock, $.01 par value: Authorized                      
        shares-3,000; issued and outstanding                        
        shares-100 (wholly-owned by CT Holding,Inc.)       --            --
      Additional paid-in capital                        119,040       118,920
      Retained earnings                                   2,591           627
                                                       --------      --------
   Total stockholder's equity                           121,631       119,547
                                                       --------      --------
   Total liabilities and stockholder's equity          $437,968      $434,235
                                                       ========      ========

Note:   The balance  sheet at November 1, 1997 has been derived from the audited
        financial  statements  at that  date  but does  not  include  all of the
        information  and  footnotes  required by generally  accepted  accounting
        principles for complete financial statements.

     See accompanying notes to condensed consolidated financial statements.


                                        3
<PAGE>
<TABLE>
<CAPTION>
CENTRAL TRACTOR FARM & COUNTRY, INC.
Condensed  Consolidated Statements of Income (Unaudited)
(In thousands)
                                                              SUCCESSOR                    PREDECESSOR
                                                 ---------------------------------  |   -----------------
                                                  Three months      March 27, 1997  |    February 2, 1997
                                                     ended               to         |           to
                                                  May 2, 1998         May 3, 1997   |      March 26,1997
                                                 ---------------------------------  |   -----------------
                                                                                    |
<S>                                              <C>                  <C>                   <C>       
Net sales                                         $ 143,717            $  35,168    |        $  34,569 
Cost of sales                                       101,216               24,534    |           24,211
                                                  ---------            ---------    |        ---------
Gross profit                                         42,501               10,634    |           10,358
                                                                                    |       
Selling, general and administrative expense          33,473                7,595    |           11,431
Amortization of intangibles                             860                  207    |              158
                                                  ---------            ---------    |        ---------
Operating income (loss)                               8,168                2,832    |           (1,231)
                                                                                    |       
Interest expense                                      5,514                1,477    |            1,711
                                                  ---------            ---------    |        ---------
Income (loss) before income taxes                     2,654                1,355    |           (2,942)
Income taxes                                          1,279                  623    |           (1,094)
                                                  ---------            ---------    |        ---------
Net income (loss)                                 $   1,375            $     732    |        $  (1,848)
                                                  =========            =========    |        =========
                                                                                    |       
Ratio (deficiency) of earnings to fixed charges         1.4x                 1.8x   |        $  (2,942)
                                                  =========            =========    |        =========
<CAPTION>                                                                            
                                                                SUCCESSOR                   PREDECESSOR
                                                  --------------------------------  |   -----------------
                                                   Six months       March 27, 1997  |    November 3, 1996
                                                     ended                 to       |           to
                                                  May 2, 1998         May 3, 1997   |      March 26, 1997
                                                  --------------------------------  |   -----------------
                                                                                    |       
<S>                                              <C>                  <C>                   <C>      
Net sales                                         $ 288,110            $  35,168    |        $ 106,048
Cost of sales                                       203,990               24,534    |           75,281
                                                  ---------            ---------    |        ---------
Gross profit                                         84,120               10,634    |           30,767
                                                                                    |       
Selling, general and administrative expense          67,568                7,595    |           29,045
Amortization of intangibles                           1,726                  207    |              415
                                                  ---------            ---------    |        ---------
Operating income                                     14,826                2,832    |            1,307
                                                                                    |       
Interest expense                                     10,798                1,477    |            3,188
                                                  ---------            ---------    |        ---------
Income (loss) before income taxes                     4,028                1,355    |           (1,881)
Income taxes                                          2,064                  623    |             (634)
                                                  ---------            ---------    |        ---------
Net income (loss)                                 $   1,964            $     732    |        $  (1,247)
                                                  =========            =========    |        =========
                                                                                    |       
Ratio (deficiency) of earnings to fixed charges         1.3x                 1.8x   |        $  (1,881)
                                                  =========            =========    |        =========
                                                                                    
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                        4
<PAGE>
<TABLE>
<CAPTION>
CENTRAL TRACTOR FARM & COUNTRY, INC.
Condensed Consolidated  Statements of Cash Flows (Unaudited)
(In thousands)

                                                                       SUCCESSOR                   PREDECESSOR
                                                         --------------------------------   |   -----------------
                                                          Six months       March 27, 1997   |    November 3, 1996
                                                            ended                 to        |           to
                                                         May 2, 1998         May 3, 1997    |      March 26, 1997
                                                         -----------       --------------   |   -----------------
                                                                                            |       
<S>                                                      <C>                  <C>                   <C>      
Operating Activities                                                                        |
Net income (loss)                                         $   1,964            $     732    |        $  (1,247)
Adjustments to reconcile net income (loss) to net                                           |       
   cash provided by (used in) operations:                                                   |       
   Depreciation and amortization                              4,887                  644    |            1,904
   Deferred income taxes                                      2,064                 --      |             --
   Changes in operating assets and liabilities                9,020                1,622    |          (12,916)
                                                          ---------            ---------    |        ---------
Net cash provided by (used in) operating activities          17,935                2,998    |          (12,259)
                                                                                            |       
Investing Activities                                                                        |       
   Purchases of property, improvements and equipment         (1,437)                (682)   |           (2,419)
   Cost of acquiring outstanding common                                                     |      
     stock from predecessor shareholders                       --               (158,903)   |             --
   Other                                                        318                  363    |           (1,338)
                                                          ---------            ---------    |        ---------
Net cash used in investing activities                        (1,119)            (159,222)   |           (3,757)
                                                                                            |      
Financing Activities                                                                        |       
   Capital contribution from parent                             120               69,170    |             --
   Net (repayments) borrowings under line of credit and                                     |       
     interim loan facility                                   (7,750)             (16,413)   |           29,244
   Payments on long-term debt                                (1,500)                --      |          (16,000)
   Proceeds from issuance of long-term debt                    --                113,000    |             --
   Financing costs related to new line of                                                   |       
     credit, term loan and Senior Notes                        --                 (5,908)   |             --
   Other                                                        (85)                 (16)   |              183
                                                          ---------            ---------    |        ---------
Net cash (used in) provided by financing activities          (9,215)             159,833    |           13,427
                                                                                            |       
Net increase(decrease) in cash and cash equivalents           7,601                3,609    |           (2,589)
                                                                                            |       
Cash and cash equivalents at beginning of period              7,378                1,220    |            3,809
                                                          ---------            ---------    |        ---------
Cash and cash equivalents at end of period                $  14,979            $   4,829    |        $   1,220
                                                          =========            =========    |        =========
                                                                                            
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                        5
<PAGE>
                      CENTRAL TRACTOR FARM & COUNTRY, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                 (IN THOUSANDS)

NOTE 1.           PRESENTATION OF FINANCIAL INFORMATION

                  Central  Tractor  Farm  &  Country,  Inc.  is  a  wholly-owned
subsidiary  of CT Holding,  Inc.  ("CT  Holding"),  an affiliate of J.W.  Childs
Equity Partners, L.P. ("Childs").  The consolidated financial statements include
Central Tractor Farm & Country,  Inc. and its wholly-owned  subsidiary,  Country
General, Inc. (hereinafter collectively the "Company").

                  The condensed unaudited consolidated financial statements have
been prepared by the Company in accordance  with generally  accepted  accounting
principles for interim  financial  information and with the instructions for the
Securities and Exchange Commission's Form 10-Q and Article 10 of Regulation S-X,
and do not include all of the  information  and footnotes  required by generally
accepted   accounting   principles  for  complete  financial   statements.   The
preparation  of financial  statements  in  conformity  with  generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial  statements and accompanying notes.
Actual results could differ from those estimates.

                  The  condensed  unaudited  consolidated  financial  statements
include  the  accounts  of  the  Company  and  its   subsidiary.   All  material
intercompany  items and transactions have been eliminated in the  consolidation.
In the preparation of the condensed unaudited consolidated financial statements,
all adjustments  (consisting of normal recurring  accruals) have been made which
are,  in the  opinion  of  management,  necessary  for the fair  and  consistent
presentation of such financial statements. The operating results for the interim
periods are not  necessarily  indicative of the results that may be expected for
the year.

                  It is  suggested  that the  condensed  unaudited  consolidated
financial statements contained herein be read in conjunction with the statements
and  notes in the  Company's  Annual  Report  on Form  10-K  for the year  ended
November 1, 1997 ("Form 10-K").

NOTE 2.           ACQUISITIONS

                  As more fully  described  in the Form 10-K,  the  Company  was
acquired,  effective March 27, 1997, by Childs for  approximately  $159,393 (the
"Acquisition").  The  Acquisition  was partially  funded by a public offering of
$105,000  aggregate  principal  amount  of Senior  Notes.  The  Acquisition  was
accounted for as a purchase and a new basis of accounting  has been reflected in
the Company's financial statements  reflecting the fair values for the Company's
assets and  liabilities  as of March 27, 1997.  The financial  statements of the
Company for periods prior to March 27, 1997 are presented on the historical cost
basis of  accounting.  A line has been  placed in the  financial  statements  to
distinguish between Predecessor and Successor activity.

                  Effective  June 26,  1997,  the  Company  acquired  all of the
outstanding  capital stock of Country  General,  Inc.  ("Country  General"),  an
agricultural  specialty  retailer,  for  approximately  $136,995  (the  "Country
General  Acquisition").  Country  General  operates a chain of 114  agricultural
retail stores.  The transaction  was accounted for as a purchase.  As more fully
described in the Form 10-K, the Country General Acquisition was partially funded
by a $49,750 cash equity contribution from CT Holding and the remainder by funds
drawn on the Company's amended and restated credit facility,  which provides for
a $50,000  6-year term loan facility and a $100,000  revolving  credit  facility
(collectively, the "Credit Facility").

                  Country  General's  accounts and  transactions are included in
the accompanying  condensed  consolidated  financial statements from the date of
acquisition.

                                        6
<PAGE>
                  In allocating the purchase price to the assets and liabilities
based on fair values,  a $3,358  reserve was recorded  for the  estimated  cost,
principally lease liabilities, to close nine acquired stores during fiscal 1998;
and a  $2,866  reserve  was  recorded  for the  cost of  severance  payments  to
identified  employees  in  connection  with the  closing  of  Country  General's
corporate headquarters.  During March of 1998, the decision was made to close 12
of the  acquired  stores and  effective  April 1, 1998 the  liquidation  process
commenced.  The Company plans to be substantially  complete with the liquidation
process by the end of the third  quarter of fiscal  1998.  As of May 2, 1998 and
November  1, 1997,  the  reserve for  severance  had been  reduced to $1,398 and
$2,722, respectively, as a result of payments to terminated employees. As of May
2, 1998 and  November  1, 1997,  the  reserve  for closed  stores was $3,191 and
$3,358,  respectively,  as a result of  expenses of the  liquidation  process to
date.

NOTE 3.           INTEREST RATE SWAP AGREEMENT

                  In March of 1998,  the Company  entered into an interest  rate
swap  agreement  (the  "Swap  Agreement")  with a bank to reduce  the  impact of
changes in interest rates on its floating term loan facility.  Accordingly,  the
Swap  Agreement  was entered  into for  purposes  other than  trading.  The Swap
Agreement  has an  initial  notional  amount of  $48,500.  The  notional  amount
decreases  in tandem with the  outstanding  balance on the  Company's  term loan
facility  until  the Swap  Agreement's  maturity  on March  30,  2001.  The Swap
Agreement  effectively  fixes the  interest  rate on the term loan  facility  at
5.8525% plus the applicable margin. The Company is exposed to interest rate risk
in the  event of  nonperformance  by the  counter  party to the Swap  Agreement.
However, the Company does not anticipate nonperformance by the bank.

NOTE 4.           DEFERRED CATALOG COSTS

                  The direct cost of printing and mailing the  Company's  annual
mail order  catalog is deferred and amortized  against mail order  revenues over
the year the catalog is in use. The amount of unamortized deferred catalog costs
at May 2,  1998 and May 3,  1997 was $402  and  $272,  respectively,  and $48 at
November 1, 1997.

                                        7
<PAGE>
                      CENTRAL TRACTOR FARM & COUNTRY, INC.


         Certain  statements  in  this  Report  may  contain   "forward-looking"
information  (as  defined in the  Private  Securities  Litigation  Reform Act of
1995). All  forward-looking  statements involve  uncertainty,  and actual future
results and trends may differ materially  depending on a variety of factors. For
a discussion  identifying some important factors that could cause actual results
or trends to differ  materially  from those  anticipated in the  forward-looking
statements contained herein, please see Exhibit 99 to this Report.


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

         Second Quarter of Fiscal 1998 Compared to Second Quarter of Fiscal 1997

         Net sales for the second quarter of fiscal 1998 were $143.7 million, an
increase  of $74.0  million,  or 106.1%,  as compared to total net sales for the
second  quarter of fiscal 1997 of $69.7  million.  This  increase was due to the
acquisition of 118 stores in fiscal 1997,  including 114 in the Country  General
Acquisition,  a full quarter of operations for the 4 new stores opened in fiscal
1997 and a comparable  store sales increase of 16.5% for Central Tractor stores.
Net sales  includes  $59.6  million of Country  General  sales during the second
quarter of fiscal 1998. The increase in comparable  store sales is  attributable
in part to the  adverse  effect on fiscal  1997  sales of mild  winter  and cool
spring  weather  conditions  in the  Northeast  and in part to warm early spring
weather conditions in 1998.

         Gross profit for the second  quarter of fiscal 1998 was $42.5  million,
an increase  of $21.5  million or 102.5%,  as compared to $21.0  million for the
second  quarter of fiscal  1997,  primarily  as a result of the  increase in net
sales  discussed  above.  Gross  profit as a  percentage  of net sales  remained
relatively  constant at 29.6% for the second quarter of fiscal 1998, as compared
to 30.1% for the second quarter of fiscal 1997.

         Selling,  general  and  administrative  (SGA)  expenses  for the second
quarter of fiscal 1998 were $33.5  million,  an increase  of $14.4  million,  or
75.9%,  as compared to the second quarter of fiscal 1997.  This increase was due
primarily to costs  related to the operation of the Country  General  stores and
other stores opened or acquired during fiscal 1997. SGA expenses as a percentage
of net  sales  decreased  to 23.3% for the  second  quarter  of  fiscal  1998 as
compared  to 27.3% for the  second  quarter of fiscal  1997,  due  primarily  to
proportionately  lower  levels of SGA  expenses in the second  quarter of fiscal
1998 in stores opened and acquired during fiscal 1996 and increased sales in the
second quarter of fiscal 1998 in comparable stores.

         Amortization  of intangibles was $0.9 million for the second quarter of
fiscal 1998 and $0.4 million for the second quarter of fiscal 1997. The increase
is due to the additional  goodwill  incurred in the  Acquisition and the Country
General Acquisition.

         Operating  income  for the  second  quarter  of  fiscal  1998  was $8.2
million, an increase of $6.6 million, or 410.2%, as compared to $1.6 million for
the second quarter of fiscal 1997. Operating income as a percentage of net sales
increased to 5.7% for the second quarter of fiscal 1998 from 2.3% for the second
quarter of fiscal 1997.  The  increase  was the result of the factors  affecting
sales, gross profit and SGA discussed above.

         Interest  expense  for the  second  quarter  of  fiscal  1998  was $5.5
million,  an increase of $2.3 million as compared to $3.2 million for the second
quarter of fiscal 1997.  This increase was primarily due to the additional  debt
incurred to the fund the Country  General  Acquisition,  the Acquisition and the
short term borrowing needs of the consolidated entity.

         Income taxes for the second  quarter of fiscal 1998 were $1.3  million,
an increase of $1.8  million as compared to the second  quarter of fiscal  1997.
Income tax as a percentage of pretax earnings (loss) was 48.2% in 1998, compared

                                        8
<PAGE>
to (29.7)% in 1997.  This increase is due primarily to  amortization of goodwill
related to the Acquisition, which is not deductible for income tax purposes.

         Net income for the second  quarter of fiscal 1998 was $1.4 million,  as
compared to a loss of $1.1 million for the second  quarter of fiscal 1997,  as a
result of the factors discussed above.

         Six Months Ended May 2, 1998 Compared to Six Months Ended May 3, 1997

         Net sales for the six months ended May 2, 1998 were $288.1 million,  an
increase of $146.9  million,  or 104.0%,  as compared to total net sales for the
six months  ended May 3, 1997 of $141.2  million.  This  increase was due to the
acquisition of 118 stores in fiscal 1997,  including 114 in the Country  General
Acquisition,  a full six months of  operations  for the 4 new  stores  opened in
fiscal 1997 and a comparable  store sales  increase of 9.2% for Central  Tractor
stores.  Net sales includes  $128.2 million of Country  General sales during the
six  months  ended May 2,  1998.  The  increase  in  comparable  store  sales is
primarily attributable to the adverse effect on fiscal 1997 sales of mild winter
and cool spring weather conditions in the Northeast.

         Gross profit for the six months ended May 2, 1998 was $84.1 million, an
increase of $42.7  million or 103.2%,  as compared to $41.4  million for the six
months  ended May 3, 1997,  primarily as the result of the increase in net sales
discussed above.  Gross profit as a percentage of net sales remained  relatively
constant at 29.2% for the six months ended May 2, 1998, as compared to 29.3% for
the six months ended May 3, 1997.

         Selling,  general and administrative  (SGA) expenses for the six months
ended May 2, 1998 were $67.6 million, an increase of $30.9 million, or 84.4%, as
compared to the six months ended May 3, 1997. This increase was due primarily to
costs  related to the operation of the Country  General  stores and other stores
opened or acquired during fiscal 1997. SGA expenses as a percentage of net sales
decreased to 23.5% for the six months ended May 2, 1998 as compared to 25.9% for
the six months ended May 3, 1997, due primarily to proportionately  lower levels
of SGA  expenses  in the six  months  ended  May 2, 1998 in  stores  opened  and
acquired  during fiscal 1996 and increased  sales in the six months ended May 2,
1998 in comparable stores.

         Amortization  of intangibles  was $1.7 million for the six months ended
May 2, 1998 and $0.6 million for the six months ended May 3, 1997.  The increase
is due to the additional  goodwill  incurred in the  Acquisition and the Country
General Acquisition.

         Operating  income  for the six  months  ended  May 2,  1998  was  $14.8
million,  an increase of $10.7 million,  or 258.2%,  as compared to $4.1 million
for the six months ended May 3, 1997.  Operating  income as a percentage  of net
sales  increased  to 5.2% for the six months ended May 2, 1998 from 2.9% for the
six  months  ended May 3,  1997.  The  increase  was the  result of the  factors
affecting sales, gross profit and SGA discussed above.

         Interest  expense  for the six  months  ended  May 2,  1998  was  $10.8
million,  an  increase of $6.1  million as compared to $4.7  million for the six
months ended May 3, 1997. This increase was primarily due to the additional debt
incurred to the fund the  Acquisition,  the Country General  Acquisition and the
short term borrowing needs of the consolidated entity.

         Income taxes for the six months ended May 2, 1998 were $2.1 million, an
increase of $2.1 million as compared to the six months ended May 3, 1997. Income
tax as a percentage  of pretax  earnings  (loss) was 51.2% in 1998,  compared to
(2.1)% in 1997.  This  increase is due  primarily  to  amortization  of goodwill
related to the Acquisition, which is not deductible for income tax purposes.

         Net income for the six months  ended May 2, 1998 was $2.0  million,  as
compared  to a loss of $0.5  million  for the six months  ended May 3, 1997 as a
result of the factors discussed above.

                                        9
<PAGE>
         Liquidity and Capital Resources

         In addition to cash to fund operations,  the Company's primary on-going
cash  requirements  are those  necessary  for the Company's  expansion  program,
including inventory purchases and capital  expenditures,  and debt service.  The
Company's primary sources of liquidity have been funds provided from operations,
borrowings  pursuant to the  Company's  revolving  and term  credit  facilities,
short-term trade credit and additional equity investments.

         On May 2, 1998, the Company had working capital of $89.5 million, which
was a $3.9 million increase from working capital of $85.6 million on November 1,
1997. This increase resulted  primarily from a $7.6 million increase in cash and
cash  equivalents  and the repayment of $7.8 million on the Company's  revolving
credit  facility,  partially  offset by a net  increase in accounts  payable and
accrued expenses.

         Net cash provided by operating activities was $17.9 million for the six
months  ended May 2, 1998.  This was an increase of $27.2  million  from the six
months  ended  May 3,  1997,  during  which  $9.3  million  of cash  was used in
operating  activities.  This  increase  resulted  primarily  from a  larger  net
increase in accounts  payable and  accrued  expenses  and a smaller  increase in
inventory,  respectively, during the six months ended May 2, 1998 as compared to
the same period in the prior year. The Company's capital  expenditures were $1.4
million and $3.1  million for the six months  ended May 2, 1998 and May 3, 1997,
respectively.  In  addition,  the  Company  had net  repayments  of debt of $9.3
million during the six months ended May 2, 1998 as compared to net borrowings of
$109.8 million during the six months ended May 3, 1997.

         In connection with the  Acquisition,  the Company  consummated a public
offering  of $105.0  million  aggregate  of 10 5/8%  Senior  Notes (the  "Senior
Notes").  The  Senior  Notes  mature  on April 1,  2007  with  interest  payable
semiannually  in  arrears  on April 1 and  October  1. The  Senior  Notes may be
redeemed beginning April 1, 2002 at a price of 105.3125% of the principal amount
decreasing  approximately 1.77% annually thereafter until April 1, 2005 at which
time  they  are  redeemable  at face  value.  Furthermore,  notwithstanding  the
foregoing,  the Company may redeem up to 35% of the original aggregate principal
amount of the Senior Notes at a price of 110% of the  principal  amount with the
net cash  proceeds of a public  equity  offering  within 60 days of closing such
offering.

         In connection  with the Country General  Acquisition,  on July 3, 1997,
the Company  amended and restated  the Credit  Facility  (consisting  of a $50.0
million,  six-year term loan facility, which has been fully funded, and a $100.0
million revolving credit facility,  under which $53.0 million was outstanding as
of May 2, 1998). The Credit Facility will mature on June 30, 2003 and borrowings
will bear  interest  at rates  based  upon  prime or  Eurodollar  rates  plus an
applicable  margin.  In March of 1998, the Company entered into an interest rate
swap  agreement  with a bank for a notional  amount of $48.5 million in order to
fix the interest rate on the term loan facility.  The notional amount  decreases
in tandem with the outstanding  balance on the term loan facility until the swap
agreement's maturity on March 30, 2001. The swap agreement effectively fixes the
interest rate on the term loan facility at 5.8525% plus the  applicable  margin.
The Company is exposed to interest rate risk in the event of  nonperformance  by
the  counter  party  to the  swap  agreement.  However,  the  Company  does  not
anticipate nonperformance by the bank.

         The  Company  anticipates  that  its  principal  uses  of  cash  in the
foreseeable   future  will  be  working  capital   requirements,   debt  service
requirements  and  capital  expenditures,  as well as  expenditures  relating to
acquisitions.  Based upon  current and  anticipated  levels of  operations,  the
Company  believes  that its cash flow from  operations,  together  with  amounts
available  under the Credit  Facility,  will be adequate to meet its anticipated
requirements in the foreseeable future for working capital, capital expenditures
and  interest  payments.  The  Company  expects  that  if it were  to  pursue  a
significant  acquisition,   it  would  arrange  prior  to  the  acquisition  any
additional debt or equity financing required to fund the acquisition.

         There can be no assurance,  however,  that the Company's  business will
continue  to  generate  sufficient  cash flow from  operations  in the future to
service its debt,  and the Company may be required to refinance all or a portion
of its existing debt or to obtain additional  financing or to reduce its capital
spending. There can be no assurance that any such

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<PAGE>
refinancing  would  be  possible  or that  any  additional  financing  could  be
obtained.  The inability to obtain  additional  financing  could have a material
adverse effect on the Company.

         Seasonality

         Unlike many specialty retailers, historically the Company has generated
positive operating income in each of its four fiscal quarters.  However, because
the  Company  is an  agricultural  specialty  retailer,  its  sales  necessarily
fluctuate with the seasonal  needs of the  agricultural  community.  The Company
responds to this  seasonality by attempting to manage  inventory levels (and the
associated working capital requirements) to meet expected demand, and by varying
its use of part-time employees.  Historically, the Company's sales and operating
income  have been  highest in the third  quarter of each  fiscal year due to the
farming industry's  planting season and the sale of seasonal  products.  Working
capital needs are highest during the second  quarter.  The Company expects these
trends to continue for the foreseeable future.

         Inflation

         Management  does  not  believe  its  operations  have  been  materially
affected by inflation.

         Year 2000

         The  Company  has  conducted  a  comprehensive  review of its  computer
systems to identify  the systems that could be affected by the "Year 2000" issue
and has  developed an  implementation  plan to resolve the issue.  The Year 2000
problem is the result of computer programs being written using two digits rather
than four to define the applicable year. Any of the Company's programs that have
time-sensitive  software may recognize a date using "00" as the year 1900 rather
than  the  year  2000.   This  could  result  in  a  major  system   failure  or
miscalculations.  The Company  presently  believes that, with  modifications  to
existing software and converting to new software, the Year 2000 problem will not
pose significant  operational  problems for the Company's computer systems as so
modified and converted.  The expenditures for the  modifications and conversions
are not  expected to have a material  impact on the  operations  of the Company.
However,  if such  modifications and conversions are not completed  timely,  the
Year 2000 problem may have a material impact on the operations of the Company.

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<PAGE>



                      CENTRAL TRACTOR FARM & COUNTRY, INC.

                           PART II - OTHER INFORMATION

ITEM 1.       LEGAL PROCEEDINGS                                            None

ITEM 2.       CHANGES IN SECURITIES                                        None

ITEM 3.       DEFAULTS UPON SENIOR SECURITIES                              None

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF
              SECURITY HOLDERS                                             None

ITEM 5.       OTHER INFORMATION                                            None

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K

         (a)  EXHIBITS - See Index to Exhibits included elsewhere herein.

         (b)  FORM 8-K                                                     None

                                       12

<PAGE>

                                   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.

Date: June 15 , 1998                     Central Tractor Farm & Country, Inc.




                                         /s/Denny L. Starr
                                         Denny L. Starr
                                         Senior Vice President, Finance and
                                         Chief Financial Officer

                                       13

<PAGE>


                      CENTRAL TRACTOR FARM & COUNTRY, INC.

                                INDEX TO EXHIBITS





EXHIBIT 12    Statement Re:  Computation of Ratio of Earnings to Fixed Charges

EXHIBIT 27    Financial Data Schedule (electronic copy only)

EXHIBIT 99    Important Factors Regarding Forward-Looking Statements

                                       14