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UNITED STATESSECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549 FORM 10-Q     X QUARTERLY REPORT PURSUANT TO SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FORTHEQUARTERLY PERIOD ENDED JULY 1, 2000             OR         TRANSITION REPORT PURSUANT TOSECTION 13 OR 15(d) OF THE    SECURITIES EXCHANGE ACT OF 1934 
Commission file number 0-17955  
SEARS DC CORP.(Exact name of registrant as specifiedin its charter)
        Delaware(State of Incorporation)36-3533346(I.R.S. Employer Identification No.)  3711 Kennett Pike, Greenville,Delaware(Address of principal executive offices)19807(Zip Code)Registrant's telephone number,including area code: 302/434-3100    
Registrant [1] has filed all reportsrequired to be filed by Section 13 or 15(d) of the Securities ExchangeAct of 1934 during the preceding 12 months and [2] has been subject tosuch filing requirements for the past 90 days.Yes X No Asof June 30, 2000, the Registrant had 1,000 shares of common stock, parvalue $1.00 per share, outstanding, all of which were held by Sears, Roebuckand Co.Registrantmeets the conditions set forth in General Instruction H(1) (a) and (b)of Form 10-Q and is therefore filing this form with a reduced disclosureformat.

**SEARS DC CORP.****INDEX TO QUARTERLY REPORT ON FORM 10-Q****13 AND 26 WEEKS ENDED JULY 1, 2000**
      **PartI - Financial Information****Page**Item1. Financial StatementsStatementsof Income (unaudited) -13 and 26 Weeks Ended July 1, 2000and July 3, 19991Statementsof Financial Position -July 1, 2000 (unaudited), July 3,1999 (unaudited),and January 1, 20002Statementsof Cash Flows (unaudited) -26 Weeks Ended July 1, 2000 and July3, 19993Notesto Financial Statements (unaudited)4Item2.Management'sDiscussion and Analysis ofFinancial Condition and Results ofOperations5**Part II - OtherInformation**Item6.Exhibitsand Reports on Form 8-K6       -1-**PART I. FINANCIAL INFORMATION****ITEM I. FINANCIAL STATEMENTS****SEARS DC CORP.****STATEMENTS OF INCOME****(Unaudited)**
 13 Weeks Ended26 Weeks Ended July 1, July 3, July 1, July 3,*(thousands,except ratios)*2000 1999 2000 1999 RevenuesEarnings onnotes of Sears$4,809 $5,359 $9,618 $12,465                Expenses               Interestand related expenses4,774 5,320 9,547  12,378Operating expenses11 13 23 25        Total expenses4,785 5,333 9,570 12,403        Income beforeincome taxes24 26  48 62         Income taxes9  9 17  22        Net income$15 $17 $31 $40    Ratio of earningsto fixed charges1.005 1.005 1.005 1.005        See notesto financial statements.         
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**SEARS DC CORP.****STATEMENTS OF FINANCIAL POSITION**
      (Unaudited) July 1,July 3,January 1,*(thousands,except share data)*200019992000AssetsCashand cash equivalents$- $57 $-Notesof Sears224,071223,921 223,993Interestreceivable and other assets361485420Totalassets$224,432$224,463$224,413LiabilitiesMedium-termnotes$213,025$213,025$213,025Interestpayable and other liabilities6,0506,1436,062Totalliabilities219,075219,168219,087Stockholder'sEquityCommonstock, par value $1.00 per share, 1,000 Sharesauthorized and outstanding1 1 1Capitalin excess of par value 77 7Retainedincome 5,3495,2875,318Totalstockholder's equity5,3575,2955,326Totalliabilities and stockholder's equity$224,432$224,463$224,413Seenotes to financial statements.
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**SEARS DC CORP.****STATEMENTS OF CASH FLOWS****(Unaudited)**
26 Weeks Ended July 1, July 3,*(thousands)*2000 1999    CASHFLOWS FROM OPERATING ACTIVITIES:Netincome$31$40Adjustmentsto reconcile net income to net cashprovided by (used in) operating activities:   Net changein interest receivable and other assets    andinterest payable and other liabilities47(2,598)Net cash providedby (used in) operating activities78 (2,558)    CASH FLOWSFROM INVESTING ACTIVITIES:   (Increase)decrease in notes of Sears(78)122,037Net cash providedby (used in) investing activities(78) 122,037    CASH FLOWSFROM FINANCING ACTIVITIES:       Repaymentsof medium-term notes-  (119,480) Net cash usedin financing activities-  (119,480)     Net increasein cash and cashequivalents- (1)    Cash and cashequivalents at beginning of period- 58    Cash and cashequivalents at end of period$                             - $                     57      See notes tofinancial statements.   
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**SEARS DC CORP.****NOTES TO FINANCIAL STATEMENTS****(Unaudited)**

**Notes to Financial Statements***(thousands)*
Sears DC Corp. ("SDC"), a wholly-ownedsubsidiary of Sears, Roebuck and Co. ("Sears"), was formed to borrow indomestic and foreign debt markets and lend the proceeds of such borrowingsto Sears and certain direct and indirect subsidiaries of Sears in exchangefor their unsecured notes. SDC raised funds through the sale of its medium-termnotes and direct placement of commercial paper with corporate and institutionalinvestors. The only current outstanding debts of SDC are two series ofmedium-term notes. SDC does not plan to issue additional debt.
Under an agreement between SDC andSears, the interest rate paid by Sears on its unsecured notes is designedto produce earnings sufficient to cover SDC's fixed charges at least 1.005times. Required payments of principal and interest to SDC under the Searsborrowing agreement are intended to be sufficient to allow SDC to maketimely payments of principal and interest to the holders of its securities.
Certain information and footnote disclosuresnormally included in financial statements prepared in accordance with generallyaccepted accounting principles have been condensed or omitted. The significantaccounting policies used in the presentation of these financial statementsare consistent with the summary of significant accounting policies setforth in SDC's Annual Report on Form 10-K for the fiscal year ended January1, 2000, and these financial statements should be read in conjunction withthe financial statements and notes found therein. The interim financialstatements reflect all adjustments (consisting only of normal recurringaccruals) which are, in the opinion of management, necessary for a fairstatement of the results for the interim periods presented. The resultsof operations for the interim periods should not be considered indicativeof the results to be expected for the full year.
The medium-term notes are not redeemableexcept for notes having a stated maturity at the time of issue of morethan seven years which may be redeemed under certain circumstances, primarilyin the event of a significant decline in Discover Card receivables of Searsformer subsidiary, Dean Witter, which is now a part of Morgan Stanley DeanWitter & Co. Selected details of SDC's borrowings are shown below.     July 1, 2000 July 3, 19998.52% to 9.26%medium-term notes due through 2012$213,025
$213,025

At July 1, 2000, medium-term note maturitiesfor the remainder of 2000, the next four years, and thereafter are as follows:   2000$-2001135,500200224,72520039,0002004-Thereafter43,800$213,025
         
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**ITEM 2. MANAGEMENT'S DISCUSSIONAND ANALYSIS****OF FINANCIAL CONDITION AND RESULTSOF OPERATIONS**
**SEARS DC CORP.**
**13 AND 26 WEEKS ENDED JULY 1,2000 AND JULY 3, 1999**
*(thousands)*
Financial Condition:
SDC has invested funds in the promissorynotes of Sears, which pay interest sufficient to cover SDC's fixed chargesat least 1.005 times, and in highly liquid short-term investments.
The $213,025 in outstanding medium-termnotes as of July 1, 2000 are not redeemable prior to their stated maturityexcept for notes having a stated maturity at the time of issue of morethan seven years which may be redeemed under certain circumstances, primarilyin the event of a significant decline in Discover Card receivables of Searsformer subsidiary, Dean Witter, which is now a part of Morgan Stanley DeanWitter & Co.  
Results of Operations:
Revenues decreased 10.3% from $5,359to $4,809 and 22.8% from $12,465 to $9,618 for the 13 and 26 weeks endedJuly 3, 1999, and July 1, 2000, respectively. The decrease is a resultof the reduction in the average amount of notes of Sears outstanding during2000 compared to 1999. The decrease in the average amount of medium-termnotes outstanding led to interest and related expenses decreasing 10.3%from $5,320 to $4,774 and 22.9% from $12,378 to $9,547 for the 13 and 26weeks ended July 3, 1999, and July 1, 2000 respectively. Earnings coveredfixed charges 1.005 times for the 13 and 26 weeks ended July 3, 1999 andJuly 1, 2000 respectively.  
Cautionary Statement Regarding Forward-LookingInformation:
Certain statements made in this Reporton Form 10-Q are forward-looking and are made in reliance on the safe harborprovisions of the Private Securities Litigation Reform Act of 1995. Assuch they involve risks and uncertainties that could cause actual resultsto differ materially. These statements are based on a number of assumptionsabout a variety of factors, including the ability of Sears to perform underthe agreements described herein and general economic conditions (such asinterest rates). While SDC believes that these assumptions are reasonable,SDC cautions that it is impossible to predict the impact of certain factsthat could cause actual results to differ from expected results.  
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**PART II. OTHER INFORMATION**  Item 6.Exhibitsand Reports on Form 8-K.     (a)Exhibits.        AnExhibit Index has been filed as part of this Report on Page E-1.    (b)Reportson Form 8-K.  None                          
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SIGNATUREPursuant to the requirements of theSecurities Exchange Act of 1934, the Registrant has duly caused this reportto be signed on its behalf by the undersigned thereunto duly authorized.  Sears DC Corp.  (Registrant)      August 11,2000By:/s/ROBERTJ. PHELAN  Robert J. PhelanVice President and Controller  (PrincipalAccounting Officerand Authorized Officer of Registrant)                 
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**EXHIBIT INDEX****SEARS DC CORP.****13 AND 26 WEEKS ENDED JULY 1,2000**
     **Exhibit No.**3.1 Certificateof Incorporation of Discover Credit Corp. dated January 9, 1987 (Incorporatedby reference to Exhibit 3(a) to Form 10 of the Registrant ("Form 10")*).3.2 Amendment toCertificate of Incorporation of Discover Credit Corp. dated April 9, 1987(Incorporated by reference to Exhibit 3(b) to Form 10*).3.3 Certificateof Amendment of Certificate of Incorporation dated May 21, 1993 to changethe name of Discover Credit Corp. to Sears DC Corp. (Incorporated by referenceto Exhibit 3(c) to Form 10-K of the Registrant for the fiscal year endedDecember 28, 1996*).3.4 By-laws ofSears DC Corp. as amended to February 6, 1996 (Incorporated by referenceto Exhibit 3(c) to Form 10-K of the Registrant for the fiscal year endedDecember 30, 1995*).4 Registranthereby agrees to furnish the Securities and Exchange Commission, upon request,with the instruments defining the rights of holders of long-term debt ofthe Registrant with respect to which the total amount of securities authorizeddoes not exceed 10% of the total assets of the Registrant.27 Financial DataSchedule***Sec File No. 0-17955**Filed herewith

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