UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549
                            -------------------------


                                    FORM 10-Q


                   Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934


        For quarter ended                         Commission file number
         September 5, 2000                           0-19907
         -----------------                           -------


                       LONE STAR STEAKHOUSE & SALOON, INC.
             (Exact name of registrant as specified in its charter)



             Delaware                                   48-1109495
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                    Identification Number)

                           224 East Douglas, Suite 700
                              Wichita, Kansas 67202
               (Address of principal executive offices) (Zip code)

                                 (316) 264-8899
              (Registrant's telephone number, including area code)

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

            Indicate  the number of shares  outstanding  of each of the issuer's
classes of common stock, as of the latest practicable date.

                 Class                       Outstanding at October 16, 2000
Common Stock, $.01 par value                       24,982,319 shares



<PAGE>

                       Lone Star Steakhouse & Saloon, Inc.

                                      Index

                                                                       Page
                                                                     Number
PART I.   FINANCIAL INFORMATION

Item 1.  Financial Statements

      Condensed Consolidated Balance Sheets
      at September 5, 2000 and December 28, 1999                       2

      Condensed Consolidated Statements of
      Income (Loss) for the twelve weeks ended
      September 5, 2000 and September 7, 1999                          3

      Condensed Consolidated Statements of
      Income for the thirty-six weeks ended
      September 5, 2000 and September 7, 1999                          4

      Condensed Consolidated Statements of
      Cash Flows for the thirty-six weeks ended
      September 5, 2000 and September 7, 1999                          5

      Notes to Condensed Consolidated
      Financial Statements                                             6

Item 2.  Management's Discussion and
      Analysis of Financial Condition and
      Results of Operations                                            9

Item 3.  Quantitative and Qualitative
Disclosures about Market Risk                                         14

PART II.  OTHER INFORMATION
Items 1 through 5 have been omitted
since the items are either inapplicable or the
answer is negative


Item 6.  Exhibits and Reports on Form 8-K                             14


                                      -1-

<PAGE>
                       LONE STAR STEAKHOUSE & SALOON, INC.
                      Condensed Consolidated Balance Sheets
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                                                September 5, 2000   December 28, 1999
                                                                                -----------------   -----------------
                 ASSETS

Current assets:
<S>                                                                             <C>                 <C>
    Cash and cash equivalents                                                   $      27,960       $        50,673
    Inventories                                                                        12,656                11,440
    Other current assets                                                                6,707                 7,256
                                                                                  -----------           -----------
         Total current assets                                                          47,323                69,369

Property and equipment, net                                                           420,191               430,482
Intangible and other assets, net                                                       33,870                33,682
                                                                                  -----------           -----------
             Total assets                                                       $     501,384       $       533,533
                                                                                  ===========           ===========
                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Accounts payable                                                            $      19,354       $        11,726
    Other current liabilities                                                          31,131                37,428
                                                                                 ------------          ------------
             Total current liabilities                                                 50,485                49,154


Long-term debt                                                                              -                     -
Stockholders' equity:
    Preferred stock                                                                         -                     -
    Common stock                                                                          257                   299
    Additional paid-in capital                                                        199,310               238,000
    Retained earnings                                                                 262,923               253,923
    Accumulated other comprehensive loss                                              (11,591)               (7,843)
                                                                                 ------------          ------------
             Total stockholders' equity                                               450,899               484,379
                                                                                 ------------          ------------
             Total liabilities and stockholders' equity                         $     501,384       $       533,533
                                                                                 ============          ============
</TABLE>

                             See accompanying notes.

                                      -2-

<PAGE>
                       LONE STAR STEAKHOUSE & SALOON, INC.
               Condensed Consolidated Statements of Income (Loss)
                  (In thousands, except for per share amounts)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                     For the twelve weeks ended
                                                              ---------------------------------------
                                                              September 5, 2000     September 7, 1999
                                                              ---------------------------------------


<S>                                                               <C>             <C>
Net sales                                                         $ 130,953       $   134,801
Costs and expenses:
    Costs of sales                                                   46,904            47,314
    Restaurant operating expenses                                    64,504            62,418
    Depreciation and amortization                                     6,589             7,483
    Provision for impaired assets and restaurant closings               541            19,365
                                                                    -------         ---------
Restaurant costs and expenses                                       118,538           136,580
                                                                    -------         ---------
Restaurant operating income (loss)                                   12,415            (1,779)
General and administrative expenses                                   8,747             7,651
                                                                    -------         ---------
Income (loss) from operations                                         3,668            (9,430)
Other income, net                                                       271               639
                                                                    -------         ---------
Income (loss) before income taxes                                     3,939            (8,791)
Provision (benefit) for income taxes                                  1,392            (3,475)
                                                                    -------         ---------
Net income (loss)                                                 $   2,547       $    (5,316)
                                                                    =======         =========
Basic earnings (loss) per share                                   $    0.10       $     (0.15)
                                                                    =======         =========
Diluted earnings (loss) per share                                 $    0.10       $     (0.15)
                                                                    =======         =========
</TABLE>


                             See accompanying notes.

                                      -3-

<PAGE>

                       LONE STAR STEAKHOUSE & SALOON, INC.
                   Condensed Consolidated Statements of Income
                  (In thousands, except for per share amounts)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                          For the thirty-six weeks ended
                                                                    --------------------------------------------
                                                                   September 5, 2000         September 7, 1999
                                                                    --------------------     -------------------

<S>                                                                 <C>                        <C>
Net sales                                                           $    404,395               $   409,492
Costs and expenses:
    Costs of sales                                                       141,790                   145,504
    Restaurant operating expenses                                        190,275                   185,135
    Depreciation and amortization                                         19,749                    21,535
    Provision for impaired assets and restaurant closings                    541                    19,365
                                                                      ----------                  --------
Restaurant costs and expenses                                            352,355                   371,539
                                                                      ----------                  --------
Restaurant operating income                                               52,040                    37,953
General and administrative expenses                                       29,102                    24,040
                                                                      ----------                  --------
Income from operations                                                    22,938                    13,913
Other income, net                                                          1,080                     1,219
                                                                      ----------                  --------

Income before income taxes                                                24,018                    15,132
Provision for income taxes                                                 8,510                     5,583
                                                                      ----------                  --------
Net income                                                          $     15,508               $     9,549
                                                                      ==========                  ========

Basic earnings per share                                            $       0.58               $      0.26
                                                                      ==========                  ========

Diluted earnings per share                                          $       0.57               $      0.26
                                                                      ==========                  ========
</TABLE>


                             See accompanying notes.


                                      -4-

<PAGE>


                       LONE STAR STEAKHOUSE & SALOON, INC.
                 Condensed Consolidated Statements of Cash Flows
                                 (In thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                             For the thirty-six weeks ended
                                                                                         -------------------------------------------
                                                                                          September 5, 2000       September 7, 1999
                                                                                         -------------------   ---------------------
Cash flows from operating activities:
<S>                                                                                      <C>                   <C>
    Net income                                                                           $        15,508       $          9,549
    Adjustments to reconcile net income to net cash provided
         by operating activities:
         Depreciation and amortization                                                            22,020                 23,112
         Provision for impaired assets and restaurant closings                                       541                 19,365
         Net change in operating assets and liabilities:
                  Change in operating assets                                                        (827)                 5,729
                  Change in operating liabilities                                                    790                (11,662)
                                                                                               ---------             ----------
         Net cash provided by operating activities                                                38,032                 46,093
    Cash flows from investing activities:
         Purchases of property and equipment                                                     (19,012)               (26,970)
         Proceeds from sale of assets                                                              5,697                      -
         Other                                                                                    (2,182)                   148
                                                                                               ---------             ----------
         Net cash used in investing activities                                                   (15,497)               (26,822)
Cash flows from financing activities:
    Net proceeds from issuance of common stock                                                       181                     12
    Common stock repurchased and retired                                                         (38,913)               (37,774)
    Proceeds from long-term borrowings                                                             6,955                      -
    Payments on long-term borrowings                                                              (6,955)                     -
    Cash dividends paid                                                                           (6,508)                     -
                                                                                               ---------             ----------
         Net cash used in financing activities                                                   (45,240)               (37,762)
Effect of exchange rate on cash                                                                       (8)                    33
                                                                                               ---------             ----------
         Net decrease in cash and cash equivalents                                               (22,713)               (18,458)
Cash and cash equivalents at beginning of period                                                  50,673                 89,847
                                                                                               ---------             ----------
Cash and cash equivalents at end of period                                               $        27,960       $         71,389
                                                                                               =========             ==========

Supplemental disclosure of cash flow information:
    Cash paid for income taxes                                                           $        11,028       $         11,353
                                                                                               =========             ==========
</TABLE>

                             See accompanying notes.

                                      -5-

<PAGE>

                       Lone Star Steakhouse & Saloon, Inc.

              Notes to Condensed Consolidated Financial Statements
                  (All amounts in thousands, except share data)

1.    Basis of Presentation

      The unaudited  condensed  consolidated  financial  statements  include all
adjustments,  consisting  of  normal,  recurring  accruals,  which  the  Company
considers  necessary for a fair  presentation of the financial  position and the
results of operations for the periods presented.  The results for the thirty-six
weeks ended September 5, 2000 are not  necessarily  indicative of the results to
be expected for the full year ending December 26, 2000. This quarterly report on
Form 10-Q should be read in conjunction with the Company's audited  consolidated
financial statements in its 1999 Form 10-K.


2.    Comprehensive Income

Comprehensive income (loss) is comprised of the following:
<TABLE>
<CAPTION>

                                       For the twelve weeks ended          For the thirty-six weeks ended
                                       --------------------------          ------------------------------
                                 September 5, 2000  September 7, 1999  September 5, 2000  September 7, 1999
                                 -----------------  ------------------  -----------------  -----------------

<S>                                     <C>                <C>                <C>               <C>
Net income (loss)                       $ 2,547            $(5,316)           $15,508           $  9,549
Foreign currency translation
        adjustments                      (1,044)               679             (3,548)             2,228
                                        -------           --------           -------            --------
Comprehensive income(loss)              $ 1,503            $(4,637)           $11,960           $ 11,777
                                        ========          =========          =======            ========
</TABLE>

3.    Earnings Per Share

      Basic  earnings  per share  amounts  are  computed  based on the  weighted
average  number  of  shares  actually  outstanding.   For  purposes  of  diluted
computations,  the number of shares  that would be issued  from the  exercise of
stock  options  has been  reduced by the number of shares  which could have been
purchased from the proceeds at the average  market price of the Company's  stock
or price of the Company's  stock on the exercise date if options were  exercised
during the period presented.

      The weighted average shares  outstanding for the periods  presented are as
follows:
<TABLE>
<CAPTION>

                                               For the twelve weeks ended             For the thirty-six weeks ended
                                               --------------------------             ------------------------------
                                           September 5, 2000   September 7, 1999   September 5, 2000  September 7, 1999
                                           -----------------   -----------------   -----------------  -----------------

<S>                                             <C>                 <C>                  <C>              <C>
Basic average shares outstanding                25,680              35,395               26,763           36,241
Diluted average shares outstanding              26,227              35,395(a)            27,299           36,394
</TABLE>


(a) Basic and diluted shares outstanding are the same for the twelve weeks ended
September 7, 1999, since the diluted share computations would be anti-dilutive.

                                       -6-

<PAGE>

4.    Long - Term Debt

      The Company has entered into a $20,000  revolving term loan agreement with
a bank,  under which no borrowings  were  outstanding  at September 5, 2000. The
loan  commitment  matures  in April 2005 and  requires  interest  only  payments
through  April  2003,  at which  time the loan will  convert to a term note with
monthly principal and interest payments sufficient to amortize the loan over its
remaining term. The interest rate is at the daily prime rate as published in the
Wall Street Journal. In addition,  the Company pays a facility fee of 1/4 of one
percent on the unused portion of the facility.

5.    Treasury Stock Transactions

      The Board of Directors has  authorized  the Company to purchase  shares of
the  Company's  common  stock  in the open  market  or in  privately  negotiated
transactions.  Pursuant to the  authorization,  the Company purchased  4,202,475
shares of its common stock during the thirty-six  weeks ended  September 5, 2000
at an average price of $ 9.26 per share and 4,093,000 shares of its common stock
during the thirty-six weeks ended September 7, 1999 at an average price of $9.23
per share.  The Company is accounting for the purchases  using the  constructive
retirement method of accounting  wherein the aggregate par value of the stock is
charged to the  common  stock  account  and the excess of cost over par value is
charged to paid-in capital.

6.    Stock Options

      During the thirty-six  weeks ended  September 5, 2000, the Company granted
stock options to purchase  1,730,258  shares of common stock at exercise  prices
ranging from $8.47 to $8.88 per share pursuant to its 1992 stock option plan for
employees.

7.    Provision for Restaurant Closings

      In August 2000,  the Company  closed 9 Australian  Lone Star  Steakhouse &
Saloon  restaurants  and recorded a charge of $541 for  severance  pay, rent and
certain other costs associated with closing the restaurants.

8.    Accounting Change - Stock Options

      In March  2000,  the  Financial  Accounting  Standards  Board  issued FASB
Interpretation  No. 44,  Accounting  for Certain  Transactions  involving  Stock
Compensation,  an interpretation of APB No. 25. The Interpretation requires that
stock option  modifications made after December 15, 1998 where the stock options
have been  modified  to reduce  the  exercise  price  must be  accounted  for as
variable.  The  Company has adopted the  accounting  change for  modified  stock
options  on a  prospective  basis  effective  July 1,  2000 as  required  by the
Interpreation.  Pursuant  to  the  rules  for  the  initial  application  of the
Interpretation,  imputed non-cash  compensation expense is to be recognized on a
prospective  basis to the extent that the market price of the  Company's  common
stock  after  July 1, 2000  exceeds  the common  stock  price on July 1, 2000 of
$10.125. The Company has repriced options during fiscal 1999 and in January 2000
which are  subject  to the  Interpretation.  At  September  5, 2000  there  were
approximately  4,734,000  shares under  options  subject to the  Interpretation.
These  options are accounted for as variable from July 1, 2000 until the options
are exercised, forfeited or expire unexercised. Prior to the Interpretation, the
Company accounted for these repriced options as fixed.  Because the market price
of the Company's  common stock has declined  since July 1, 2000, the adoption of
the  Interpretation  had no effect upon the Company's net income for the quarter
ended September 5, 2000.

                                      -7-

<PAGE>

9.  Recently Issued Accounting Standards

      In June 1998 the  Financial  Accounting  Statements  Board  (FASB)  issued
Statement  of  Financial  Accounting  Standards  (SFAS) No. 133  Accounting  for
Derivative  Instruments and Hedging Activities,  which is required to be adopted
in years beginning after September 7, 2000. The statement permits early adoption
as of the  beginning  of any fiscal  quarter  after its  issuance.  The  Company
expects to adopt the new statement  effective  December 27, 2000.  The statement
will require the Company to recognize  all  derivatives  on the balance sheet at
fair value.  Derivatives  not  considered  hedges must be adjusted to fair value
through  income.  If a  derivative  is a hedge,  depending  on the nature of the
hedge, changes in the fair value of the derivative will either be offset against
the change in fair  value of the  hedged  asset,  liability  or firm  commitment
through earnings,  or recognized in other comprehensive  income until the hedged
item is recognized in earnings. The ineffective portion of a derivative's change
in fair value will be immediately  recognized in earnings.  The Company does not
anticipate  the adoption of SFAS No. 133 will have a  significant  effect on its
results of operations or financial position.

10.   Subsequent Event

      On September  19,  2000,  the Board of  Directors  declared the  Company's
quarterly  cash  dividend  of $.125 per  share  payable  October  13,  2000,  to
stockholders of record on September 29, 2000.




                                      -8-
<PAGE>

                       Lone Star Steakhouse & Saloon, Inc.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

      The following  discussion and analysis should be read in conjunction  with
the  condensed  consolidated  financial  statements  including the notes thereto
included elsewhere in this Form 10-Q.
      The Company  opened one of the eleven  completed  Lone Star  Steakhouse  &
Saloon (Lone Star)  restaurants  during the third quarter of 2000 and intends to
open the remaining units during the fourth quarter of 2000 and the first quarter
of 2001.
      In addition, the Company has eight sites available for future development,
six of which  are  owned  and two of  which  are  under  lease.  There  were 242
operating  domestic Lone Star  restaurants as of September 5, 2000. In addition,
licensees  operate three Lone Star  restaurants in California,  one in Guam, and
one in Canada.
      The Company is currently  operating  five Del Frisco's  Double Eagle Steak
Houses  including  Las  Vegas,  Nevada  which  opened in July  2000.  A licensee
operates a Del Frisco's Steak House in Orlando, Florida.
      As of  September  5, 2000 the Company was  operating  fourteen  Sullivan's
Steakhouse  restaurants.  The Company  expects to open a  Sullivan's  Steakhouse
restaurant in the fall of 2000 in Tucson, Arizona.
      The  Company  believes  considerable  opportunities  exist in the  upscale
steakhouse market;  however, there are no current commitments to open additional
upscale units beyond the one Sullivan's  Steakhouse restaurant scheduled to open
in the fall of 2000.
      Internationally,  there are 31 Lone Star  Steakhouse & Saloon  restaurants
operated  through a joint venture in Australia.  During August 2000, the Company
closed 9 restaurants in Australia.



                                      -9-

<PAGE>


                       Lone Star Steakhouse & Saloon, Inc.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS




Results of Operations
      The  following  table  sets  forth  for  the  periods  indicated  (i)  the
percentages   which  certain  items  included  in  the  condensed   consolidated
statements of income bear to net sales, and (ii) other selected operating data:
<TABLE>
<CAPTION>

                                                            Twelve Weeks Ended (1)                   Thirty-six Weeks Ended
                                                            ----------------------                   ----------------------
                                                     September 5, 2000   September 7, 1999   September 5, 2000   September 7, 1999
                                                     -----------------   -----------------   -----------------   -----------------
                                                            (dollars in thousands)                  (dollars in thousand)

Income Statement Data:
<S>                                                      <C>                  <C>                   <C>              <C>
      Net sales....................................      100.0%               100.0%                100.0%           100.0%
      Costs and expenses:
            Costs of sales.........................       35.8                 35.1                  35.1             35.5
            Restaurant operating expenses..........       49.3                 46.3                  47.0             45.2
            Depreciation and amortization..........        5.0                  5.5                   4.9              5.3
            Provision for impaired assets and
            restaurant closings....................        0.4                 14.4                   0.1              4.7
                                                          ------            -------                ------            ------

                  Restaurant costs and expenses....       90.5                101.3                  87.1             90.7
                                                          ------            -------                ------            ------


      Restaurant operating income (loss)...........        9.5                 (1.3)                 12.9              9.3
      General and administrative expenses..........        6.7                  5.7                   7.2              5.9
                                                          ------            -------                ------            ------

      Income (loss) from operations...............         2.8                 (7.0)                  5.7              3.4
      Other income, net...........................         0.2                  0.5                   0.2              0.3
                                                          ------            -------                ------            ------

      Income (loss) before income taxes...........         3.0                 (6.5)                  5.9              3.7
      Provision (benefit) for income taxes........         1.1                 (2.6)                  2.1              1.4
                                                          ------            -------                ------            ------

      Net income (loss)...........................         1.9%                (3.9)%                 3.8%             2.3%
                                                          ======            =======                ======            ======

      Average sales per restaurant
      on an annualized basis (2)                        $1,908              $ 1,810                $1,951           $ 1,830
      Number of restaurants at end of the period           292                  324                   292               324
</TABLE>

(1)   The Company operates on a fifty-two or fifty-three week fiscal year ending
      the last Tuesday in December.  The fiscal quarters for the Company consist
      of accounting periods of twelve,  twelve,  twelve and sixteen or seventeen
      weeks, respectively.

(2)   Average  sales per  restaurant  on an  annualized  basis are  computed  by
      dividing a  restaurant's  total  sales for full  accounting  periods  open
      during the reporting period, and annualizing the result.


                                      -10-
<PAGE>
Lone Star Steakhouse & Saloon, Inc.

            Twelve Weeks Ended September 5, 2000 Compared to Twelve
                          Weeks Ended September 7, 1999
                          (Dollar amounts in thousands)

      Net sales  decreased  $3,848 (2.9%) to $130,953 for the twelve weeks ended
September 5, 2000,  compared to $134,801 for the twelve weeks ended September 7,
1999. The decrease was  principally  attributable  to the closing of 24 domestic
Lone Star  restaurants in January 2000, and 9 Lone Star restaurants in Australia
in August 2000.  The decrease was largely  offset by additional  sales of $4,045
from two new domestic Lone Star restaurants,  one Sullivan's  restaurant and two
new Del Frisco's  restaurants  opened  since  September  1999.  Same store sales
decreased 0.8% compared with the comparable prior year period.

      Costs of sales, primarily food and beverages, increased as a percentage of
sales to 35.8% from 35.1% due  primarily to higher prices on beef offset in part
by lower prices on produce and dairy products.

      Restaurant  operating  expenses  for the twelve  weeks ended  September 5,
2000,  increased  $2,086 from  $62,418 in 1999,  to $64,504 and  increased  as a
percentage  of net  sales  from  46.3% to  49.3%.  The  increase  in  restaurant
operating  expenses  is  primarily  attributable  to a $3,651  increase in media
advertising.  The  increase  was  offset  in part by the  impact  of the  closed
restaurants and decreases in various operating costs.

      Depreciation  and  amortization  decreased  $894 in the twelve weeks ended
September  5,  2000,  compared  to the same  period  in 1999.  The  decrease  is
primarily attributable to the restaurants closed since September 1999.

      Provision  for  impaired  assets and store  closings  for the twelve weeks
ended  September  5, 2000  reflects the costs  associated  with the closing of 9
restaurants  in  Australia  in August  2000.  The  provision  of $19,365 for the
comparable  period in 1999  reflects the asset  impairment  charge for the write
down of certain under-performing restaurants in 1999.

      General and administrative  expenses increased $1,096 compared to the same
period in 1999.  The  increases  in general  and  administrative  expenses  were
primarily  attributable  to (1)  increased  salaries and wage  related  expenses
reflecting the costs  associated  with the new positions added to strengthen the
Company's  corporate  infrastructure,  general salary  increases and the Company
costs related to employee  retirement  benefit  plans,  (2) increased  costs for
software amortization and (3) increased training and recruiting expenses.

      Other income,  net for the twelve weeks ended  September 5, 2000 was $271,
as compared to $639 in 1999. The decrease is  attributable to an increase in the
net loss on the disposition of assets and an increase in interest expense.

      The  effective  income tax rates for the twelve  weeks ended  September 5,
2000,  and the  twelve  weeks  ended  September  7, 1999 were  35.3% and  39.5%,
respectively. The difference in the effective tax rate is primarily attributable
to changes in valuation allowances associated with Australian losses.


                                      -11-

<PAGE>

Lone Star Steakhouse & Saloon, Inc.

   Thirty-six Weeks Ended September 5, 2000 Compared to Thirty-six Weeks Ended
                                September 7, 1999

                          (Dollar amounts in thousands)

      Net sales  decreased  $5,097 (1.2%) to $404,395 for the  thirty-six  weeks
ended  September 5, 2000,  compared to $409,492 for the  thirty-six  weeks ended
September 7, 1999. The decrease was  principally  attributable to the closing of
two  domestic  Lone Star  restaurants  in fiscal  1999,  24  domestic  Lone Star
restaurants  in January 2000 and 9 Lone Star  restaurants in Australia in August
2000. The decrease was partially  offset by additional  sales of $9,005 from two
new domestic Lone Star  restaurants,  one Sullivan's  restaurant and two new Del
Frisco's  restaurants  opened since  September  1999. Same store sales increased
0.2% compared with the comparable prior year period.

      Costs of sales, primarily food and beverages, decreased as a percentage of
sales to 35.1% from 35.5% due  primarily  to lower  prices on produce  and dairy
products.

      Restaurant  operating expenses for the thirty-six weeks ended September 5,
2000,  increased  $5,140 from  $185,135 in 1999,  to $190,275 and increased as a
percentage  of net  sales  from  45.2% to  47.0%.  The  increase  in  restaurant
operating  expenses  is  primarily  attributable  to a $7,291  increase in media
advertising  and an $859  increase  in  restaurant  preopening  expenses.  These
increases  were  offset in part by the  impact  of the  closed  restaurants  and
decreases in various operating costs.

      Depreciation  and  amortization  decreased  $1,786 in the thirty-six weeks
ended  September 5, 2000,  compared to the same period in 1999.  The decrease is
primarily attributable to the restaurants closed since September 1999.

      Provision for impaired assets and store closings for the thirty-six  weeks
ended  September  5, 2000  reflects the costs  associated  with the closing of 9
restaurants  in  Australia  in August  2000.  The  provision  of $19,365 for the
comparable  period in 1999  reflects the asset  impairment  charge for the write
down of certain under-performing restaurants in 1999.

      General and  administrative  expenses  increased $5,062 as compared to the
same period in 1999. The increases in general and  administrative  expenses were
primarily  attributable  to (1)  increased  salaries and wage  related  expenses
reflecting the costs  associated  with the new positions added to strengthen the
Company's  corporate  infrastructure,  general salary  increases and the Company
costs related to employee  retirement  benefit  plans,  (2) increased  costs for
software  amortization and consulting costs related to the Company's information
systems and (3) increased training and recruiting expenses.

      Other income,  net for the thirty-six  weeks ended  September 5, 2000, was
$1,080, as compared to $1,219 in 1999. The decrease is primarily attributable to
interest expense incurred under the loan agreement.

      The effective income tax rates for the thirty-six weeks ended September 5,
2000,  and the  thirty-six  weeks ended  September 7, 1999 were 35.4% and 36.9%,
respectively.  The decrease in the effective tax rate is primarily  attributable
to the reduction in valuation allowances associated with Australian losses.


                                      -12-

<PAGE>

Impact of inflation

      The  primary  inflationary  factors  affecting  the  Company's  operations
include food and labor costs, utility rates, real estate taxes, and lease common
area maintenance  charges. A large number of the Company's  restaurant personnel
are  paid  at the  federal  and  state  established  minimum  wage  levels  and,
accordingly,  changes in such wage levels  adversely  affect the Company's labor
costs.  Many of the  Company's  personnel  are  tipped  employees,  consequently
increases in the minimum wage rate are mitigated.  To date,  inflation has had a
minor impact on operating margins.

Liquidity and Capital Resources
      The following  table  presents a summary of the  Company's  cash flows for
each of the thirty-six  weeks ended  September 5, 2000 and September 7, 1999 (in
thousands):

<TABLE>
<CAPTION>

                                                                            Thirty-six weeks ended
                                                                            ----------------------
                                                                    September 5, 2000     September 7,1999
                                                                    -----------------     ----------------

<S>                                                                 <C>                     <C>
Net cash provided by operating activities...............            $       38,032          $  46,093
Net cash used in investing activities...................                   (15,497)           (26,822)
Net cash used in financing activities...................                   (45,240)           (37,762)
Effect of exchange rate on cash.........................                        (8)                33
                                                                    ---------------         ---------
Net decrease in cash....................................            $      (22,713)         $ (18,458)
                                                                   ===============          ==========
</TABLE>

      During the thirty-six  week period ended  September 5, 2000, the Company's
investment  in property and  equipment  was $19,012  compared to $26,970 for the
same period in 1999.

      The Company does not have significant receivables or inventory.

      At  September  5,  2000,   the  Company  had  $27,960  in  cash  and  cash
equivalents.  The  Company  has  entered  into a  $20,000  revolving  term  loan
agreement with a bank. See Note 4 to Notes to Condensed  Consolidated  Financial
Statements.  At September 5, 2000, the Company had no outstanding borrowings and
had available borrowing capacity of $20,000 pursuant to the revolver.

      The Company's  Board of Directors has  authorized the repurchase of shares
of the  Company's  common  stock  from  time to time in the  open  market  or in
privately negotiated  transactions.  During the thirty-six weeks ended September
5, 2000, the Company purchased 4,202,475 shares at a cost of $38,913.

      In March  2000,  the  Financial  Accounting  Standards  Board  issued FASB
Interpretation  No. 44,  Accounting  for Certain  Transactions  involving  Stock
Compensation,  an interpretation of APB No. 25. The Interpretation requires that
stock option  modifications made after December 15, 1998 where the stock options
have been  modified  to reduce  the  exercise  price  must be  accounted  for as
variable.  The  Company has adopted the  accounting  change for  modified  stock
options on a  prospective  basis  effective  July 1, 2000,  as  required  by the
Interpreation.  Pursuant  to  the  rules  for  the  initial  application  of the
Interpretation,  imputed non-cash  compensation expense is to be recognized on a
prospective  basis to the extent that the market price of the  Company's  common
stock  after July 1, 2000  exceeds the common  stock  price on July 1, 2000,  of
$10.125.  The Company has  repriced  options  during  fiscal 1999 and in January
2000, which are subject to the  Interpretation.  At September 5, 2000 there were
approximately  4,734,000  option  shares  subject to the  Interpretation.  These
options are accounted  for as variable from July 1, 2000,  until the options are
excised,  forfeited  or  expire  unexercised.  Prior  to  the  adoption  of  the
Interpretation,  the  Company  accounted  for these  repriced  options as fixed.
Because the market price of the Company's  common stock has declined  since July
1, 2000, the adoption of the Interpretation had no effect upon the

                                      -13-


<PAGE>

Company's  net income for the quarter  ended  September  5, 2000;  however,  the
Company may incur significant volatility in reporting earnings in future periods
as fluctuations in market prices of its common stock may greatly impact reported
compensation expenses on a periodic basis.

      On September  19,  2000,  the Board of  Directors  declared the  Company's
quarterly  cash  dividend  of $.125 per share,  payable  October  13,  2000,  to
stockholders of record on September 29, 2000.

      From time to time the Company utilizes derivative financial instruments in
the form of commodity  futures  contracts to manage  market risks and reduce its
exposure in the price of meat resulting  from  fluctuations  in the market.  The
Company uses live beef cattle futures  contracts in an attempt to accomplish its
objective.  Realized and unrealized changes in the fair values of the derivative
instruments  are  recognized in income in the period in which the change occurs.
Realized and unrealized gains and losses for the period were not significant. As
of  September 5, 2000,  the  Company's  exposure  for open  positions in futures
contracts was not significant.



Forward looking statements

      This report contains certain 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. Stockholders are cautioned that all
forward-looking  statements  involve risks and  uncertainty,  including  without
limitation,  the ability of the Company to open new restaurants,  general market
conditions,  competition  and pricing and other risks set forth in the Company's
Annual Report on Form 10-K for the fiscal year ended December 28, 1999. Although
the Company believes the assumptions  underlying the forward-looking  statements
contained herein are reasonable, any of the assumptions could be inaccurate, and
therefore,  there  can  be no  assurance  that  the  forward-looking  statements
contained in the report will prove to be accurate.


Item 3.        Quantitative and Qualitative Disclosures About Market Risk

               The Company's  exposure to market risk was not significant during
the thirty-six weeks ended September 5, 2000.

Item 6.        Exhibits and Reports on Form 8-K
               Exhibits:
               Exhibit 27.............................Financial Data Schedule

               Reports on Form 8-K:
               None


                                      -14-

<PAGE>

Lone Star Steakhouse & Saloon, Inc.


                                   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.

                                            Lone Star Steakhouse & Saloon, Inc.
                                            (Registrant)

      Date October 20, 2000                 /s/ Randall H. Pierce
                                            ---------------------
                                            Randall H. Pierce
                                            Chief Financial Officer



                                      -15-