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         August 1, 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 August 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
<S>      <C>     <C>                                                                                            <C>

PART I.           FINANCIAL INFORMATION                                                                        PAGE

 ITEM 1.          FINANCIAL STATEMENTS

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

         Condensed consolidated statements of income (unaudited), for the three months and nine months ended
         August 1, 1998 and the three months and nine months ended August 2, 1997.................................4

         Condensed consolidated statements of cash flows (unaudited), for the nine months ended August 1, 1998
         and August 2, 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 10.1 - Letter Amendment, dated as of February 18, 1998, to Amended and Restated Credit Agreement
         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
</TABLE>

                                                         2

<PAGE>
<TABLE>
<CAPTION>
CENTRAL TRACTOR FARM & COUNTRY, INC.
Condensed Consolidated Balance Sheets
(In thousands except share data )
                                                            August 1,     November 1,
                                                              1998           1997
                                                          -----------    ------------
                                                          (unaudited)       (Note)

<S>                                                      <C>            <C>
ASSETS
    Current assets:
       Cash and cash equivalents                          $  9,101        $  7,378
       Recoverable income taxes                              2,513           2,513
       Trade receivables, net                                5,598           7,264
       Inventory                                           205,826         222,117
       Deferred income taxes                                   264           4,000
       Other                                                 4,466           3,136
                                                          --------        --------
    Total current assets                                   227,768         246,408
                                                                         
    Property, improvements and equipment, net               40,828          43,195
    Goodwill, net                                          135,115         135,612
    Other assets                                             8,992           9,020
                                                          --------        --------
    Total assets                                          $412,703        $434,235
                                                          ========        ========
                                                                         
                                                                         
LIABILITIES AND STOCKHOLDER'S EQUITY                                     
    Current liabilities:                                                 
       Note payable to bank                               $ 29,750        $ 60,750
       Current portion of long-term debt and capital                     
           lease obligations                                 3,162           3,170
       Accounts payable                                     73,383          68,015
       Accrued expenses and other liabilities               25,798          28,834
                                                          --------        --------
    Total current liabilities                              132,093         160,769
                                                                         
    Long-term debt, less current portion                   149,000         152,000
    Deferred income taxes                                    2,315             748
    Other long-term liabilities                              1,052           1,171
                                                          --------        --------
    Total liabilities                                      284,460         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                          119,055         118,920
       Retained earnings                                     9,188             627
                                                          --------        --------
    Total stockholder's equity                             128,243         119,547
                                                          --------        --------
    Total liabilities and stockholder's equity            $412,703        $434,235
                                                          ========        ========
                                                                    


<FN>
    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.
</FN>
</TABLE>
    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
                                                       ------------------------------------------------

                                                         Three months ended         Three months ended
                                                           August 1, 1998            August 2, 1997
                                                       ------------------------   ---------------------
<S>                                                          <C>                        <C>     
Net sales                                                     $ 67,859                   $129,216
Cost of sales                                                   16,713                     92,567
                                                              --------                   --------
Gross profit                                                    51,146                     36,649
                                                                                        
Selling, general and administrative expense                     34,554                     26,414
Amortization of intangibles                                        896                        716
                                                              --------                   --------
Operating income                                                15,696                      9,519
                                                                                        
Interest expense                                                 4,560                      4,581
                                                              --------                   --------
Income before income taxes                                      11,136                      4,938
Income taxes                                                     4,539                      2,229
                                                              --------                   --------
Net income                                                    $  6,597                   $  2,709
                                                              ========                   ========
                                                                       
Ratio of earnings to fixed charges                              3.1 x                      1.9 x
                                                              ========                   ========


<CAPTION>
                                                       -------------------------------------------------------------
                                                                              SUCCESSOR          |    PREDECESSOR
                                                       ------------------------------------------| -----------------
                                                                                                 |
                                                        Nine months ended    March 27, 1997 to   |  Nov 3, 1996 to
                                                         August 1, 1998        August 2, 1997    |   March 26,1997
                                                       -------------------   -----------------   |  --------------
                                                                                                 |
<S>                                                        <C>                   <C>                <C>       
Net sales                                                   $ 455,969             $ 164,384      |   $ 106,048 
Cost of sales                                                 320,703               117,100      |      75,281
                                                            ---------             ---------      |   ---------
Gross profit                                                  135,266                47,284      |      30,767
                                                                                                 | 
Selling, general and administrative expense                   102,122                34,010      |      29,045
Amortization of intangibles                                     2,622                   923      |         415
                                                            ---------             ---------      |   ---------
Operating income                                               30,522                12,351      |       1,307
                                                                                                 | 
Interest expense                                               15,358                 6,058      |       3,188
                                                            ---------             ---------      |   ---------
Income (loss) before income taxes                              15,164                 6,293      |      (1,881)
Income taxes                                                    6,603                 2,852      |        (634)
                                                            ---------             ---------      |   ---------
Net income (loss)                                           $   8,561             $   3,441      |   $  (1,247)
                                                            =========             =========      |   =========
                                                                                                 |
Ratio (deficiency) of earnings to fixed                                                          |
  charges                                                      1.9 x                 1.9 x       |   $  (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
                                                              -----------------------------------------------------------
                                                                 Nine months                         |
                                                                    ended        March 27, 1997 to   |   Nov 3, 1996 to
                                                               August 1, 1998      August 2, 1997    |   March 26, 1997
                                                              ----------------   -----------------   |  ----------------
                                                                                                     |
<S>                                                           <C>                   <C>                   <C>
Operating Activities                                                                                 |
Net income (loss)                                              $   8,561             $   3,441       |     $  (1,247)
Adjustments to reconcile net income (loss) to net                                                    |    
  cash provided by (used in) operations:                                                         |    
      Depreciation and amortization                                7,346                 2,696       |         1,904
      Deferred income taxes                                        6,603                  --         |          --
      Changes in operating assets and liabilities                 15,725                (4,702)      |       (12,916)
                                                                --------             ---------       |     ---------
Net cash provided by (used in) operating activities               38,235                 1,435       |       (12,259)
                                                                                                     |    
Investing Activities                                                                                 |    
      Purchases of property, improvements and equipment, net      (2,696)               (1,501)      |        (2,419)
      Cost of acquiring outstanding common                                                           |    
        stock from predecessor shareholders                         --                 158,903)      |          --
      Acquisition of Country General, Inc.                          --                 135,000)      |          --
      Other                                                          176                   446       |        (1,338)
                                                                --------             ---------       |     ---------
Net cash used in investing activities                             (2,520)             (294,958)      |        (3,757)     
                                                                                                     |    
Financing Activities                                                                                 |    
      Capital contribution from parent                               135               118,920       |          --
      Net (repayments) borrowings under line of credit and                                           |    
        margin loan facility                                     (31,000)               31,987       |        29,244
      Payments on long-term debt                                  (3,000)               (8,000)      |       (16,000)
      Proceeds from issuance of long-term debt                      --                 163,000       |          --
      Financing costs related to new line of                                                         |    
        credit, term loan and Senior Notes                          --                  (8,925)      |          --
      Other                                                         (127)                 (229)      |           183
                                                                --------             ---------       |     ---------
Net cash (used in) provided by financing activities              (33,992)              296,753       |        13,427
                                                                                                     |    
Net increase(decrease) in cash and cash equivalents                1,723                 3,230       |        (2,589)
                                                                                                     |    
Cash and cash equivalents at beginning of period                   7,378                 1,220       |         3,809
                                                               ---------             ---------       |     ---------
Cash and cash equivalents at end of period                     $   9,101             $   4,450       |     $   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  operated a chain of 114  agricultural
retail stores. The transaction was accounted for as a purchase. During the third
quarter  of  fiscal  1998,  the  Company   recorded  the  final  purchase  price
adjustments  related to the Country  General  Acquisition.  The  purchase  price
adjustments  amounted  to  $1,968  to  increase  the  total  purchase  price  to
approximately  $138,963.  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").

                                        6
<PAGE>
                  Country  General's  accounts and  transactions are included in
the accompanying  condensed unaudited consolidated financial statements from the
date of acquisition.

                  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.  In connection with the final purchase price adjustment,
the  reserve  for store  closings  was  increased  by $1,522 and the reserve for
severance payments was decreased by $704. During March of 1998, the decision was
made to close 12 of the acquired  stores and as of August 1, 1998 the  inventory
liquidation  process has been  completed.  As of August 1, 1998 and  November 1,
1997,   the  reserve  for  severance  had  been  reduced  to  $440  and  $2,722,
respectively,  as a result of payments  to  terminated  employees  and the final
purchase  price  adjustments.  As of August 1, 1998 and  November  1, 1997,  the
reserve  for  closed  stores was $4,065  and  $3,358,  respectively,  consisting
primarily of remaining lease costs for the closed stores.

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 August 1, 1998 and August 2, 1997 was $219 and $166, 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

         Third Quarter of Fiscal 1998 Compared to Third Quarter of Fiscal 1997

         Net sales for the third quarter of fiscal 1998 were $167.9 million,  an
increase  of $38.7  million,  or 29.9%,  as  compared to net sales for the third
quarter of fiscal 1997 of $129.2  million.  This increase was due to the Country
General  Acquisition,  offset  slightly by a comparable  store sales decrease of
0.2% for Central  Tractor  stores.  Net sales  includes  $71.4 million and $32.7
million of Country General sales during the third quarter of fiscal 1998 and the
third quarter of fiscal 1997, respectively.

         Gross profit for the third quarter of fiscal 1998 was $51.1 million, an
increase of $14.5  million or 39.6%,  as compared to $36.6 million for the third
quarter of fiscal 1997, as a result of the increase in net sales discussed above
and an increase in gross profit percentage.  Gross profit as a percentage of net
sales  increased to 30.5% for the third  quarter of fiscal 1998,  as compared to
28.4% for the third  quarter of fiscal  1997.  The  increase in the gross profit
percentage is attributable  to early warm spring weather,  which resulted in the
shift to the second  quarter in fiscal  1998 of  certain  sales of lower  margin
items historically occurring in the third quarter.

         Selling,  general  and  administrative  (SGA)  expenses  for the  third
quarter of fiscal 1998 were $34.6 million,  an increase of $8.1 million, or 30.8
%, as  compared  to the third  quarter of fiscal  1997.  This  increase  was due
primarily to costs related to the operation of the Country General  stores.  SGA
expenses as a percentage of net sales remained  relatively constant at 20.6% for
the third  quarter of fiscal 1998 as compared to 20.4% for the third  quarter of
fiscal 1997.

         Amortization  of intangibles  was $0.9 million for the third quarter of
fiscal 1998 and $0.7 million for the third quarter of fiscal 1997.  The increase
is  due to  the  amortization  for a full  quarter  of the  additional  goodwill
incurred in the Country General Acquisition.

         Operating  income  for the  third  quarter  of  fiscal  1998 was  $15.7
million,  an increase of $6.2 million, or 64.9%, as compared to $9.5 million for
the third quarter of fiscal 1997.  Operating income as a percentage of net sales
increased  to 9.4% for the third  quarter of fiscal 1998 from 7.4% for the third
quarter of fiscal 1997.  The  increase  was the result of the factors  affecting
sales and gross profit discussed above.

         Interest  expense was $4.6 million for both the third quarter of fiscal
1998 and the third  quarter of fiscal  1997.  The  increase in interest  expense
caused  by  the  additional  debt  incurred  to the  fund  the  Country  General
Acquisition was offset by decreased short term borrowing.

         Income taxes for the third quarter of fiscal 1998 were $4.5 million, an
increase of $2.3 million as compared to the third quarter of fiscal 1997. Income
tax as a percentage of pretax  earnings was 40.8% in 1998,  compared to 45.1% in
1997. This decrease is due primarily to amortization of goodwill  related to the
Acquisition,  which is not deductible for income tax purposes, being spread over
a larger pre-tax income base.

         Net income for the third  quarter of fiscal 1998 was $ 6.6 million,  as
compared to $2.7 million for the third  quarter of fiscal  1997,  as a result of
the factors discussed above.

                                        8

<PAGE>

         Nine Months Ended  August 1, 1998  Compared to Nine Months Ended August
2, 1997

         Net sales for the nine months ended August 1, 1998 were $456.0 million,
an increase of $185.6 million,  or 68.6%, as compared to total net sales for the
nine months ended August 2, 1997 of $270.4 million. This increase was due to the
acquisition of 118 stores in fiscal 1997,  including 114 in the Country  General
Acquisition,  a full nine months of  operations  for the 4 new stores  opened in
fiscal 1997 and a comparable  store sales  increase of 5.9% for Central  Tractor
stores.  Net sales includes  $199.7 million and $32.7 million of Country General
sales  during  the nine  months  ended  August  1,  1998  and  August  2,  1997,
respectively.  The increase in comparable store sales is primarily  attributable
to the adverse effect on fiscal 1997 sales of mild winter,  cool spring, and dry
summer  weather  conditions  in the  Northeast  and in part to warm early spring
weather conditions in the second quarter of 1998.

         Gross  profit  for the nine  months  ended  August 1,  1998 was  $135.3
million, an increase of $57.2 million or 73.3%, as compared to $78.1 million for
the nine months ended August 2, 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 29.7% for the nine  months  ended  August 1,  1998,  as
compared to 28.9% for the nine months ended August 2, 1997.

         Selling,  general and administrative (SGA) expenses for the nine months
ended  August 1, 1998 were $102.1  million,  an increase  of $39.1  million,  or
62.0%,  as compared to the nine months ended August 2, 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 22.4% for the nine months ended August 1,
1998 as  compared  to 23.3%  for the nine  months  ended  August  2,  1997,  due
primarily  to  proportionately  lower  levels of SGA expenses in the nine months
ended  August 1, 1998 in stores  opened  and  acquired  during  fiscal  1996 and
increased sales in the nine months ended August 1, 1998 in comparable stores.

         Amortization  of intangibles was $2.6 million for the nine months ended
August 1, 1998 and $1.3 million for the nine months  ended  August 2, 1997.  The
increase is due to the additional  goodwill  incurred in the Acquisition and the
Country General Acquisition.

         Operating  income for the nine  months  ended  August 1, 1998 was $30.5
million,  an increase of $16.8 million,  or 123.5%, as compared to $13.7 million
for the nine months ended August 2, 1997.  Operating  income as a percentage  of
net sales  increased to 6.7 % for the nine months ended August 1, 1998 from 5.1%
for the nine months  ended  August 2, 1997.  The  increase was the result of the
factors affecting sales and SGA discussed above.

         Interest  expense  for the nine months  ended  August 1, 1998 was $15.3
million,  an increase of $6.1  million as compared to $9.2  million for the nine
months ended August 2, 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 nine  months  ended  August  1,  1998  were $6.6
million, an increase of $4.4 million as compared to the nine months ended August
2,  1997.  Income  tax as a  percentage  of pretax  earnings  was 43.5% in 1998,
compared to 50.3% in 1997.  This  decrease is due primarily to  amortization  of
goodwill  related to the  Acquisition,  which is not  deductible  for income tax
purposes, being spread over a larger pre-tax income base.

         Net income for the nine months ended  August 1, 1998 was $8.6  million,
as compared  to $2.2  million for the nine  months  ended  August 2, 1997,  as a
result of the factors discussed above.

         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.


                                        9
<PAGE>

         On August 1, 1998,  the Company had working  capital of $95.7  million,
which was a $10.1  million  increase  from working  capital of $85.6  million on
November 1, 1997. This increase resulted primarily from a $31.0 million decrease
in the  Company's  note  payable to bank,  partially  offset by a $16.3  million
decrease in inventory  and a $3.7 million  decrease in current  deferred  income
taxes.

         Net cash  provided by operating  activities  was $38.2  million for the
nine months ended August 1, 1998. This was an increase of $49.0 million from the
nine months ended August 2, 1997, during which $10.8 million of cash was used in
operating  activities.  This  increase  resulted  primarily  from  increased net
income,  a decrease in inventory and a smaller net increase in accounts  payable
and accrued  expenses during the nine months ended August 1, 1998 as compared to
the same period in the prior year. The Company's capital  expenditures were $2.7
million and $3.9  million for the nine months ended August 1, 1998 and August 2,
1997, respectively. In addition, the Company had net repayments of debt of $34.0
million  during  the  nine  months  ended  August  1,  1998 as  compared  to net
borrowings of $200.2 million during the nine months ended August 2, 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.  In addition,  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,   of  which  $47.0  million  remained
outstanding at August 1, 1998, and a $100.0 million  revolving  credit facility,
under which  $29.8  million was  outstanding  as of August 1, 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 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

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<PAGE>
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: September 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 10.1    Letter Amendment, dated as of February 18, 1998, to Amended and
                Restated Credit Agreement

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