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**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 MARCH 31, 2001  OR   ̈                 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE                                        SECURITIES EXCHANGE ACT OF 1934                      FOR THE TRANSITION PERIOD FROM __________ TO __________ Commission file number 0-17955 SEARS DC CORP. (Exact Name of Registrant as Specifiedin Its Charter) Delaware (State of Incorporation)36-3533346( I.R.S. Employer IdentificationNo.) 3711 Kennett Pike,(Address of Principal ExecutiveOffices) Greenville, Delaware19807(Zip Code) Registrant's telephone number,including area code: 302/434-3100  Registrant(1) has filed all reports required to be filed by Section 13 or 15(d) ofthe Securities Exchange Act of 1934 during the preceding 12 months, and(2) has been subject to such filing requirements for the past 90 days.Yes X . No . As of March31, 2001, the Registrant had 1,000 shares of common stock, par value $1.00per share, outstanding, all of which were held by Sears, Roebuck and 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. 
  
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**SEARS DC CORP.****INDEX TO QUARTERLY REPORT ONFORM 10-Q****13 WEEKS ENDED MARCH 31, 2001**
  **PartI -****Financial Information****Page**     Item1.FinancialStatements       Statementsof Income (unaudited) -    13Weeks Ended March 31, 2001 and April 1, 20001      Statementsof Financial Position -    March 31, 2001(unaudited), April 1, 2000 (unaudited),    and December30, 20002      Statementsof Cash Flows (unaudited) -    13 Weeks EndedMarch 31, 2001 and April 1, 20003      Notes to FinancialStatements (unaudited)4         Item 2.Management'sDiscussion and Analysis of   Financial Conditionand Results of Operations5        **PartII - ****Other Information**  Item 6.Exhibits andReports on Form 8-K6       
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**PART I. FINANCIAL INFORMATION****ITEM I. FINANCIAL STATEMENTS****SEARS DC CORP.****STATEMENTS OF INCOME****(Unaudited)**
 13 Weeks Ended March 31, April 1,*(thousands,except ratios)*2001 2000  RevenuesEarnings onnotes of Sears$          4,831 $   4,809        Expenses   Interestand related expenses4,8014,773Operating expenses6 12      Total expenses4,807 4,785    Income beforeincome taxes24 24     Income taxes8  8      Net income$              16 $      16      Ratio of earningsto fixed charges1.005 1.005    Seenotes to financial statements.     
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**SEARS DC CORP.****STATEMENTS OF FINANCIAL POSITION**
  (Unaudited)March 31,April 1,Dec. 30,*(thousands,except share data)*200120002000AssetsNotesof Sears$            228,998$ 228,802$        224,166Interestreceivable and other assets267391299Totalassets$           229,265$ 229,193$        224,465LiabilitiesMedium-termnotes$           213,025$213,025$ 213,025Interestpayable and other liabilities10,83610,8266,052Totalliabilities223,861223,851219,077Stockholder'sEquityCommonstock par value $1.00 per share,1,000shares authorized and outstanding111Capitalin excess of par value 777Retainedincome 5,3965,3345,380Totalstockholder's equity5,4045,3425,388Totalliabilities and stockholder's equity$            229,265$ 229,193$       224,465 Seenotes to financial statements.      
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**SEARS DC CORP.****STATEMENTS OF CASH FLOWS****(Unaudited)**
13 Weeks Ended March 31, April 1,*(thousands)*2001 2000      CASHFLOWS FROM OPERATING ACTIVITIES:Netincome$                   16 $          16Adjustmentsto reconcile net income to net cashprovided by operating activities:   Net changein interest receivable and other assets    andinterest payable and other liabilities4,816 4,793 Net cash providedby operating activities4,832 4,809      CASH FLOWSFROM INVESTING ACTIVITIES:   Increasein notes of Sears(4,832)(4,809)Net cash usedin investing activities(4,832) (4,809)      CASH FLOWSFROM FINANCING ACTIVITIES-  -     Net increasein cash and cash equivalents- -    Cash and cashequivalents at beginning of period-  -       Cash and cashequivalents at end of period$                    -  $            -       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"), awholly-owned subsidiary of Sears, Roebuck and Co. ("Sears"), was formedto borrow in domestic and foreign debt markets and lend the proceeds ofsuch borrowings to Sears and certain direct and indirect subsidiaries ofSears in exchange for their unsecured notes. The only current outstandingdebts of SDC are two series of medium-term notes. SDC does not plan toissue additional debt.
Under an agreement betweenSDC and Sears, the interest rate paid by Sears on its unsecured notes isdesigned to produce earnings sufficient to cover SDC's fixed charges atleast 1.005 times. Required payments of principal and interest to SDC underthe Sears borrowing agreement are intended to be sufficient to allow SDCto make timely payments of principal and interest to the holders of itssecurities.
Certain information and footnotedisclosures normally included in financial statements prepared in accordancewith generally accepted accounting principles have been condensed or omitted.The significant accounting policies used in the presentation of these financialstatements are consistent with the summary of significant accounting policiesset forth in SDC's Annual Report on Form 10-K for the fiscal year endedDecember 30, 2000, and these financial statements should be read in conjunctionwith the 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 aregenerally not redeemable except 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.Selected details of SDC's borrowings are shown below.    Mar.31,2001 April 1,2000   8.52% to 9.26%medium-term notes due through 2012 $          213,025 $      213,025   
At March 31, 2001, medium-term notematurities for the next five years, and thereafter are as follows: 2001$135,500200224,725 20039,000 2004- 2005- Thereafter43,800 $213,025          
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**ITEM 2. MANAGEMENT'S DISCUSSIONAND ANALYSIS****OF FINANCIAL CONDITION AND RESULTSOF OPERATIONS****SEARS DC CORP.****13 WEEKS ENDED MARCH 31, 2001AND APRIL 1, 2000**
*(thousands)*
Financial Condition:
SDC invests funds in promissory notesof Sears, which pay interest sufficient to cover SDC's fixed charges atleast 1.005 times, and in highly liquid short-term investments.
The $213,025 in outstanding medium-termnotes as of March 31, 2001 are generally not redeemable prior to theirstated maturity except under certain circumstances, primarily in the eventof a significant decline in Discover Card receivables of Sears former subsidiary,Dean Witter, which is now a part of Morgan Stanley.  
Results of Operations:
Revenues for the 13 weeks ended April1, 2000 and March 31, 2001 were relatively flat, increasing 0.5% from $4,809to $4,831, respectively. Interest and related expenses for the 13 weeksended April 1, 2000 and March 31, 2001 were relatively flat, increasing0.6% from $4,773 to $4,801, respectively.
Earnings covered fixed charges 1.005times for the 13 weeks ended April 1, 2000 and March 31, 2001.  
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**  Item6.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      
-7-SIGNATUREPursuant to the requirements of the SecuritiesExchange Act of 1934, the Registrant has duly caused this report to besigned on its behalf by the undersigned thereunto duly authorized.  Sears DC Corp.
(Registrant)   May 11, 2000By:/s/MICHAELJ. CLEARYMichael J. ClearyVice President and Controller  (AuthorizedOfficer and PrincipalAccounting Officer of Registrant)     
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**EXHIBIT INDEX****SEARS DC CORP.****13 WEEKS ENDED MARCH 31, 2001**
  Exhibit No.   3.1Certificateof Incorporation of Discover Credit Corp. dated January 9, 1987 (Incorporatedby reference to Exhibit 3(a) to Form 10 of the Registrant ("Form 10")*).  3.2Amendment toCertificate of Incorporation of Discover Credit Corp. dated April 9, 1987(Incorporated by reference to Exhibit 3(b) to Form 10*).  3.3Certificateof 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*).  3.4By-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._____________________*Sec File No. 0-17955

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