<PAGE>

================================================================================

                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 quarterly period ended September 30, 2001
                                               ------------------

                                       OR

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

                         Commission File Number: 1-10982
                                                 -------

                           Cross Timbers Royalty Trust
             (Exact name of registrant as specified in its charter)

                     Texas                            75-6415930
     -------------------------------------      ----------------------
       (State or other jurisdiction of             (I.R.S. Employer
         incorporation or organization)            Identification No.)

    Bank of America, N.A., P.O. Box 830650, Dallas, Texas      75283-0650
    ------------------------------------------------------  --------------------
          (Address of principal executive offices)              (Zip Code)

                                 (877) 228-5084
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

                                      NONE
      --------------------------------------------------------------------
      (Former name, former address and former fiscal year, if change 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 units of beneficial interest outstanding, as of the
latest practicable date:

                        Outstanding as of October 1, 2001
                     --------------------------------------
                                    6,000,000

================================================================================

<PAGE>

CROSS TIMBERS ROYALTY TRUST

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001
-----------------------------------------------------------

               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                            Page
                                                                                                            ----
<S>                                                                                                         <C>
               Glossary of Terms ........................................................................     3

PART I.        FINANCIAL INFORMATION

 Item 1.       Financial Statements .....................................................................     4

               Report of Independent Public Accountants .................................................     5

               Condensed Statements of Assets, Liabilities and Trust Corpus
                at September 30, 2001 and December 31, 2000 .............................................     6

               Condensed Statements of Distributable Income
                for the Three and Nine Months Ended September 30, 2001 and 2000 .........................     7

               Condensed Statements of Changes in Trust Corpus
                for the Three and Nine Months Ended September 30, 2001 and 2000 .........................     8

               Notes to Condensed Financial Statements ..................................................     9

 Item 2.       Trustee's Discussion and Analysis ........................................................     11

 Item 3.       Quantitative and Qualitative Disclosures about Market Risk ...............................     14


PART II.       OTHER INFORMATION

 Item 6.       Exhibits and Reports on Form 8-K .........................................................     15

               Signatures ...............................................................................     16
</TABLE>

                                                                               2

<PAGE>

CROSS TIMBERS ROYALTY TRUST

GLOSSARY OF TERMS
-----------------

The following are definitions of significant terms used in this Form 10-Q:

Bbl                         Barrel (of oil)

Bcf                         Billion cubic feet (of natural gas)

Mcf                         Thousand cubic feet (of natural gas)

MMBtu                       One million British Thermal Units, a common energy
                            measurement

net profits interest        An interest in an oil and gas property measured by
                            net profits from the sale of production, rather than
                            a specific portion of production. The following are
                            defined net profits interests that were conveyed
                            from the underlying properties to the trust:

                            90% net profits interests - 90% of the net proceeds
                            from the underlying properties, which are royalty
                            and overriding royalty interests in Texas, Oklahoma
                            and New Mexico

                            75% net profits interests - 75% of the net proceeds
                            from the underlying properties, which are working
                            interests in Texas and Oklahoma

net proceeds                Gross proceeds received by XTO Energy Inc. from sale
                            of production from the underlying properties, less
                            applicable costs

royalty income              Net proceeds multiplied by the net profits
                            percentage of 75% or 90% and paid to the trust

royalty interest            A nonoperating interest in an oil and gas property
(and overriding             that provides the owner a specified share of
royalty interest)           production without any production or development
                            costs

underlying properties       XTO Energy's interest in certain oil and gas
                            properties from which the net profits interests were
                            conveyed. The underlying properties include royalty
                            and overriding royalty interests in producing and
                            nonproducing properties in Texas, Oklahoma and New
                            Mexico, and working interests in producing
                            properties located in Texas and Oklahoma.

working interest            An operating interest in an oil and gas property
                            that provides the owner a specified share of
                            production that is subject to all production and
                            development costs

                                                                               3

<PAGE>

CROSS TIMBERS ROYALTY TRUST

PART I - FINANCIAL INFORMATION
------------------------------

Item 1.  Financial Statements.

The condensed financial statements included herein are presented, without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in annual
financial statements have been condensed or omitted pursuant to such rules and
regulations, although the trustee believes that the disclosures are adequate to
make the information presented not misleading. These condensed financial
statements should be read in conjunction with the financial statements and the
notes thereto included in the trust's latest annual report on Form 10-K. In the
opinion of the trustee, all adjustments, consisting only of normal recurring
adjustments, necessary to present fairly the assets, liabilities and trust
corpus of the Cross Timbers Royalty Trust at September 30, 2001, and the
distributable income and changes in trust corpus for the three- and nine-month
periods ended September 30, 2001 and 2000, have been included. Distributable
income for such interim periods is not necessarily indicative of the
distributable income for the full year.

                                                                               4

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



Bank of America, N.A., as Trustee
  for the Cross Timbers Royalty Trust:

We have reviewed the accompanying condensed statement of assets, liabilities and
trust corpus of the Cross Timbers Royalty Trust as of September 30, 2001 and the
related condensed statements of distributable income and changes in trust corpus
for the three- and nine-month periods ended September 30, 2001 and 2000. These
financial statements are the responsibility of the trustee.

We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit in accordance with
auditing standards generally accepted in the United States, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.

The accompanying condensed financial statements are prepared on a modified cash
basis as described in Note 1 which is a comprehensive basis of accounting other
than accounting principles generally accepted in the United States.

Based on our review, we are not aware of any material modifications that should
be made to the financial statements referred to above for them to be in
conformity with the basis of accounting described in Note 1.

We have previously audited, in accordance with auditing standards generally
accepted in the United States, the statement of assets, liabilities and trust
corpus of the Cross Timbers Royalty Trust as of December 31, 2000 included in
the trust's 2000 annual report on Form 10-K, and in our report dated March 19,
2001, we expressed an unqualified opinion on that statement. In our opinion, the
information set forth in the accompanying condensed statement of assets,
liabilities and trust corpus as of December 31, 2000 is fairly stated in all
material respects in relation to the statement of assets, liabilities and trust
corpus included in the trust's 2000 annual report on Form 10-K from which it has
been derived.


ARTHUR ANDERSEN LLP

Fort Worth, Texas
October 12, 2001


                                                                               5

<PAGE>

CROSS TIMBERS ROYALTY TRUST
--------------------------------------------------------------------------------

Condensed Statements of Assets, Liabilities and Trust Corpus

<TABLE>
<CAPTION>
                                                                    September 30,           December 31,
                                                                         2001                   2000
                                                                  -----------------      -----------------
                                                                     (Unaudited)
<S>                                                               <C>                    <C>
ASSETS

Cash and short-term investments ...............................   $         882,621      $       1,048,031

Interest to be received .......................................               1,095                  3,307

Net profits interests in oil and gas properties - net .........          29,388,598             30,755,456
                                                                  -----------------      -----------------

                                                                  $      30,272,314      $      31,806,794
                                                                  =================      =================


LIABILITIES AND TRUST CORPUS

Distribution payable to unitholders ...........................   $         883,716      $       1,051,338

Trust corpus (6,000,000 units of beneficial interest
    authorized and outstanding) ...............................          29,388,598             30,755,456
                                                                  -----------------      -----------------

                                                                  $      30,272,314      $      31,806,794
                                                                  =================      =================
</TABLE>


The accompanying notes to condensed financial statements are an integral part of
these statements.


                                                                               6

<PAGE>

CROSS TIMBERS ROYALTY TRUST
--------------------------------------------------------------------------------

Condensed Statements of Distributable Income (Unaudited)

<TABLE>
<CAPTION>
                                    Three Months Ended          Nine Months Ended
                                       September 30               September 30
                                -------------------------   -------------------------
                                    2001          2000         2001          2000
                                -----------   -----------   -----------   -----------
<S>                             <C>           <C>           <C>           <C>
Royalty income ..............   $ 3,451,168   $ 3,394,310   $11,779,958   $ 8,224,324

Interest income .............         4,479         8,441        17,751        18,309
                                -----------   -----------   -----------   -----------

Total income ................     3,455,647     3,402,751    11,797,709     8,242,633

Administration expense ......        57,007        56,419       171,197       170,875
                                -----------   -----------   -----------   -----------

Distributable income ........   $ 3,398,640   $ 3,346,332   $11,626,512   $ 8,071,758
                                ===========   ===========   ===========   ===========

Distributable income per unit
     (6,000,000 units) ......   $  0.566440   $  0.557722   $  1.937752   $  1.345293
                                ===========   ===========   ===========   ===========
</TABLE>

The accompanying notes to condensed financial statements are an integral part of
these statements.


                                                                               7

<PAGE>

CROSS TIMBERS ROYALTY TRUST
--------------------------------------------------------------------------------

Condensed Statements of Changes in Trust Corpus (Unaudited)

<TABLE>
<CAPTION>

                                                               Three Months Ended                  Nine Months Ended
                                                                  September 30                       September 30
                                                         -------------------------------     ------------------------------
                                                              2001             2000              2001             2000
                                                         -------------    --------------     -------------   --------------
<S>                                                      <C>              <C>                <C>             <C>
Trust corpus, beginning of period .....................  $  29,872,361    $ 31,983,302       $ 30,755,456    $ 33,005,334

Amortization of net profits interests .................       (483,763)       (678,456)        (1,366,858)     (1,700,488)

Distributable income ..................................      3,398,640       3,346,332         11,626,512       8,071,758

Distributions declared ................................     (3,398,640)     (3,346,332)       (11,626,512)     (8,071,758)
                                                         -------------    ------------       ------------    ------------

Trust corpus, end of period ...........................  $  29,388,598    $ 31,304,846       $ 29,388,598    $ 31,304,846
                                                         =============    ============       ============    ============
</TABLE>

The accompanying notes to condensed financial statements are an integral part of
these statements.

                                                                               8




















<PAGE>

CROSS TIMBERS ROYALTY TRUST
--------------------------------------------------------------------------------

Notes to Condensed Financial Statements (Unaudited)

1.  Basis of Accounting

    The financial statements of the Cross Timbers Royalty Trust are prepared on
    the following basis:

    -   Royalty income recorded for a month is the amount computed and paid by
        the interest owner, XTO Energy Inc., to Bank of America, N.A., as
        trustee for the trust. Royalty income consists of net proceeds received
        by XTO Energy from the underlying properties in the prior month,
        multiplied by net profit percentages of 90% for the 90% net profits
        interests, and 75% for the 75% net profits interests.

        Costs deducted in the calculation of net proceeds for the 90% net
        profits interests generally include applicable taxes, transportation,
        marketing and legal costs, and do not include other production and
        development costs. For the 75% net profits interests, costs deducted in
        the calculation of net proceeds include production expenses, development
        costs, applicable taxes, operating charges and other costs.

    -   Royalty income is computed separately for each of five conveyances under
        which the net profits interests were conveyed to the trust. If monthly
        costs exceed revenues for any conveyance, such excess costs cannot
        reduce royalty income from other conveyances, but are carried forward
        with accrued interest to be recovered from future net proceeds of that
        conveyance. See Note 3.

    -   Interest income, interest to be received and distribution payable to
        unitholders include interest to be earned from the monthly record date
        (last business day of the month) through the date of the next
        distribution to unitholders.

    -   Trust expenses are recorded based on liabilities paid and cash reserves
        established by the trustee for liabilities and contingencies.

    -   Distributions to unitholders are recorded when declared by the trustee.

    The financial statements of the trust differ from financial statements
    prepared in accordance with generally accepted accounting principles
    ("GAAP") because revenues are not accrued in the month of production,
    expenses are recognized when paid or deducted in the calculation of net
    proceeds rather than when incurred, and certain cash reserves may be
    established for contingencies which would not be accrued under GAAP.

    The initial carrying value of the net profits interests ($61,100,449)
    represents XTO Energy's historical net book value on February 12, 1991, the
    creation date of the trust. Amortization of the net profits interests is
    calculated on a unit-of-production basis and is charged directly to trust
    corpus. Accumulated amortization was $31,711,851 as of September 30, 2001
    and $30,344,993 as of December 31, 2000.

                                                                               9

<PAGE>

2.  Coal Seam Tax Credit

    XTO Energy has advised the trustee that the trust receives royalty income
    from coal seam gas wells. Production from coal seam gas wells drilled after
    December 31, 1979, and prior to January 1, 1993, qualifies for the federal
    income tax credit for producing nonconventional fuels under Section 29 of
    the Internal Revenue Code. This tax credit, which was approximately $1.06
    per MMBtu of gas produced from qualifying wells for 2000, is recalculated
    annually based on each year's qualified production through the year 2002.
    Such credit, based on the unitholder's pro rata share of qualifying
    production, may not reduce the unitholder's regular tax liability (after the
    foreign tax credit and certain other nonrefundable credits) below his
    tentative minimum tax. Any part of the Section 29 credit not allowed for the
    tax year solely because of this limitation is subject to certain carryover
    provisions. Unitholders should consult their tax advisors regarding use of
    this credit and other trust tax compliance matters.

    Based on 2001 qualifying sales volumes and the factors used in the
    calculation of the 2000 coal seam tax credit, the credit is estimated to be
    $0.028 per unit for the quarter ended September 30, 2001 and $0.079 per unit
    for the nine months ended September 30, 2001. The actual coal seam tax
    credit per unit was $0.033 for the quarter ended September 30, 2000 and
    $0.097 for the nine months ended September 30, 2000. Final 2001 coal seam
    tax credit data will be provided to unitholders with year-end tax
    information.

3.  Excess Costs

    During the nine months ended September 30, 2000, $383,836 ($287,877 net to
    the trust) of excess costs and accrued interest were recovered. There have
    been no excess costs since May 2000 when they were fully recovered.

4.  XTO Energy Inc.

    On June 21, 2001, the trust and XTO Energy filed an amended registration
    statement with the Securities and Exchange Commission to sell 1,360,000
    units (22.7% of outstanding units) held by XTO Energy. The trust did not
    participate in XTO Energy's decisions to acquire or sell units and will not
    receive any of the proceeds in the event of such sale.

                                                                              10

<PAGE>

Item 2.  Trustee's Discussion and Analysis.

The following discussion should be read in conjunction with the trustee's
discussion and analysis contained in the trust's 2000 annual report, as well as
the condensed financial statements and notes thereto included in this quarterly
report on Form 10-Q.

Distributable Income

Quarter

For the quarter ended September 30, 2001, royalty income was $3,451,168 compared
to $3,394,310 for the third quarter of 2000. This 2% increase in royalty income
is the result of higher gas prices largely offset by increased costs, lower oil
prices and lower sales volumes. See "Royalty Income" below.

After considering interest income of $4,479 and administration expense of
$57,007, distributable income for the quarter ended September 30, 2001 was
$3,398,640, or $0.566440 per unit of beneficial interest. For the quarter ended
September 30, 2000, distributable income was $3,346,332, or $0.557722 per unit.
Distributions to unitholders for the quarter ended September 30, 2001 were:

                                                               Distribution
           Record Date               Payment Date               per Unit
        -------------------        -------------------         -------------

        July 31, 2001              August 14, 2001             $    0.232232
        August 31, 2001            September 17, 2001               0.186922
        September 28, 2001         October 15, 2001                 0.147286
                                                               -------------

                                                               $    0.566440
                                                               =============

Nine Months

For the nine months ended September 30, 2001, royalty income was $11,779,958
compared to $8,224,324 for the same 2000 period. This 43% increase in royalty
income is because of higher gas prices partially offset by increased costs and
lower sales volumes. See "Royalty Income" below.

After considering interest income of $17,751 and administration expense of
$171,197, distributable income for the nine months ended September 30, 2001 was
$11,626,512, or $1.937752 per unit of beneficial interest. For the nine months
ended September 30, 2000, distributable income was $8,071,758, or $1.345293 per
unit.

Royalty Income

Royalty income is recorded when received by the trust, which is the month
following receipt by XTO Energy, and generally two months after oil production
and three months after gas production. Royalty income is generally affected by
three major factors:

    -   oil and gas sales volumes,

    -   oil and gas sales prices, and

    -   costs deducted in the calculation of royalty income.

                                                                              11

<PAGE>

Because properties underlying the 90% net profits interests are royalty and
overriding royalty interests, they generally bear no costs other than production
and property taxes, related legal costs, and marketing and transportation
charges. In addition to these costs, the 75% net profits interests are subject
to production and development costs since the properties underlying the 75% net
profits interests are working interests.

The following is a summary of the calculation of royalty income received by the
trust:

<TABLE>
<CAPTION>
                                       Three Months                              Nine Months
                                  Ended September 30 (a)     Increase       Ended September 30 (a)     Increase
                                 -------------------------                 ------------------------
                                     2001          2000     (Decrease)         2001          2000     (Decrease)
                                 ------------  ----------- ------------    ------------  ----------- ------------
<S>                              <C>           <C>         <C>             <C>           <C>         <C>
Sales Volumes
   Oil (Bbls) (b)
     Underlying properties ...        89,767        92,766     (3%)            251,905       262,258     (4%)
       Average per day .......           976         1,008     (3%)                923           957     (4%)
     Net profits interests ...        31,251        49,770    (37%)             96,337       121,955    (21%)

   Gas (Mcf) (b)
     Underlying properties ...       786,819       829,633     (5%)          2,155,922     2,396,704    (10%)
       Average per day .......         8,646         9,117     (5%)              7,897         8,747    (10%)
     Net profits interests ...       685,440       731,476     (6%)          1,882,935     2,090,802    (10%)

Average Sales Prices
   Oil (per Bbl) .............   $     24.07   $     27.91    (14%)        $     25.87   $     26.34     (2%)
   Gas (per Mcf) .............   $      4.77   $      3.47     37%         $      5.84   $      3.03     93%

Revenues
   Oil sales .................   $ 2,160,760   $ 2,589,444    (17%)        $ 6,517,105   $ 6,907,324     (6%)
   Gas sales .................     3,753,686     2,882,885     30%          12,593,542     7,271,384     73%
                                 -----------   -----------                 -----------   -----------
        Total Revenues .......     5,914,446     5,472,329      8%          19,110,647    14,178,708     35%
                                 -----------   -----------                 -----------   -----------
Costs
   Taxes, transportation
     and other ...............       871,073       736,444     18%           2,607,233     1,925,960     35%
   Production expense (c) ....       729,289       620,850     17%           2,176,803     1,862,604     17%
   Development costs .........       400,964       159,647    151%             970,661       507,840     91%
   Recovery of excess costs
     and accrued interest ....            --            --                          --       383,836     --
                                 -----------   -----------                 -----------   -----------
        Total Costs ..........     2,001,326     1,516,941     32%           5,754,697     4,680,240     23%
                                 -----------   -----------                 -----------   -----------

Net Proceeds .................   $ 3,913,120   $ 3,955,388     (1%)        $13,355,950   $ 9,498,468     41%
                                 ===========   ===========                 ===========   ===========
Royalty Income ...............   $ 3,451,168   $ 3,394,310      2%         $11,779,958   $ 8,224,324     43%
                                 ===========   ===========                 ===========   ===========
</TABLE>
________________________

(a)  Because of the interval between time of production and receipt of royalty
     income by the trust, (1) oil and gas sales for the quarter ended September
     30 generally represent oil production for the period May through July and
     gas production for the period April through June and (2) oil and gas sales
     for the nine months ended September 30 generally represent oil production
     for the period November through July and gas production for the period
     October through June.

(b)  Oil and gas sales volumes are allocated to the net profits interests based
     upon a formula that considers oil and gas prices and the total amount of
     production expenses and development costs. Changes in any of these factors
     may result in disproportionate fluctuations in volumes allocated to the net
     profits interests. Therefore, comparative discussion of oil and gas sales
     volumes is based on the underlying properties.

(c)  Includes an overhead fee which is deducted and retained by XTO Energy. This
     fee is currently $23,925 per month and is subject to adjustment each May
     based on an oil and gas industry index.

                                                                              12

<PAGE>

The following are explanations of significant variances from third quarter 2000
to 2001 and from the first nine months of 2000 to the comparable period in 2001:

Sales Volumes

Oil

Lower oil sales volumes for the third quarter and for the nine-month period were
primarily the result of natural production decline and timing of cash receipts.

Gas

Decreased gas sales volumes for the quarter are primarily because of natural
production decline. Decreased gas volumes for the nine-month period are
primarily because of natural production decline, prior period volume adjustments
recorded in 2001 and increased gas injection on one of the Texas working
interest properties. Natural production decline is primarily related to coal
seam properties.

Sales Prices

Oil

The average oil price decreased 14% to $24.07 for the third quarter and 2% to
$25.87 for the nine-month period. During 2000, West Texas Intermediate ("WTI")
posted prices fluctuated between a low of $21.50 per Bbl in January to a high of
$34.25 in September, as increased demand buoyed prices. Lagging demand in 2001,
caused by a worldwide economic slowdown, has caused oil prices to decline. OPEC
members agreed to cut production by one million barrels per day in April and an
additional one million barrels per day in September to adjust for weak demand
and excess supply. The economic decline was steepened by the terrorist attacks
in the United States on September 11, 2001, placing additional downward pressure
on oil prices. OPEC has initially agreed to hold production at current levels to
help stimulate economic recovery. The average WTI posted price for August and
September 2001 was $23.73, while the average WTI price for October (through
October 15) was $19.47. Recent trust oil prices have averaged approximately
$0.35 higher than the WTI posted price.

Gas

Average gas prices for the third quarter increased 37% to $4.77 and for the
nine-month period increased 93% to $5.84. After declining briefly at the end of
1999, gas prices strengthened in 2000, reaching a record high of $10.10 per
MMBtu in December 2000 as winter demand strained gas supplies. Gas prices have
declined during the first nine months of 2001 because of milder weather and a
weaker economy which has reduced the demand for gas as fuel to generate
electricity and has allowed for increased storage. The average NYMEX price for
July through September 2001 was $2.77 per MMBtu. At October 1, 2001, the average
NYMEX price for the following twelve months was $2.77 per MMBtu. Recent trust
gas prices have averaged approximately $0.25 higher than the NYMEX price.

                                                                              13

<PAGE>

Costs

Taxes

Taxes, transportation and other increased 18% for the third quarter and 35% for
the nine-month period primarily because of higher production taxes and purchaser
deductions related to increased gas revenues.

Production Expenses

Production expenses were 17% higher for the third quarter and for the nine-month
period primarily because of subsurface maintenance projects and increased fuel
costs on the underlying working interest properties.

Development

Increased development costs for the third quarter and for the nine-month period
are primarily because of drilling activity on two of the underlying working
interest properties.

Excess costs

During the nine months ended September 30, 2000, $383,836 ($287,877 net to the
trust) of excess costs and accrued interest were recovered. These excess costs
had accumulated in 1999 as a result of low oil prices and increased development
costs. There have been no excess costs since May 2000 when they were fully
recovered.

Forward-Looking Statements

This report on Form 10-Q includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All statements other
than statements of historical fact included in this Form 10-Q including, without
limitation, statements regarding the net profits interests, underlying
properties and industry and market conditions, are forward-looking statements
that are subject to risks and uncertainties which are detailed in the trust's
annual report on Form 10-K for the year ended December 31, 2000, which is
incorporated by this reference as though fully set forth herein. Although XTO
Energy believes that the expectations reflected in such forward-looking
statements are reasonable, neither XTO Energy nor the trustee can give any
assurance that such expectations will prove to be correct.

Item. 3  Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes in the trust's market risks, as disclosed in
the trust's Form 10-K for the year ended December 31, 2000.

                                                                              14

<PAGE>

PART II - OTHER INFORMATION
---------------------------

Items 1 through 5. Not Applicable.

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

(a) Exhibits.

       Exhibit Number
       and Description                                                 Page
       ---------------                                                 ----

       (15)   Awareness letter of Arthur Andersen LLP                   17

(b) Reports on Form 8-K.

       No reports on Form 8-K have been filed during the quarter for which this
report is filed.

                                                                              15

<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.

                                             CROSS TIMBERS ROYALTY TRUST
                                             By BANK OF AMERICA, N.A., TRUSTEE


                                             By         RON E. HOOPER
                                               ---------------------------------
                                                        Ron E. Hooper
                                                    Senior Vice President



                                             XTO ENERGY INC.



Date: October 19, 2001                       By         LOUIS G. BALDWIN
                                               ---------------------------------
                                                        Louis G. Baldwin
                                                  Executive Vice President and
                                                     Chief Financial Officer

                                                                              16