UNITED STATES
SECURITIES AND EXCHANGE COMMISSION  
Washington, D.C. 20549

FORM 10-Q X QUARTERLY REPORT PURSUANTTO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934 FOR THEQUARTERLY PERIOD ENDED September29, 2001             OR         TRANSITION REPORT PURSUANTTO SECTION 13 OR 15(d) OF THE    SECURITIES EXCHANGEACT OF 1934FOR THE TRANSITION PERIODFROM _________ TO _________ 
Commission file number 0-17955
**SEARS DC CORP.**(Exact Name of Registrantas Specified in Its Charter)
  Delaware(State of Incorporation)36-3533346( I.R.S. Employer IdentificationNo.)  3711 Kennett Pike, Greenville,Delaware(Address of Principal ExecutiveOffices)19807(Zip Code)  Registrant's telephonenumber, including area code: 302/434-3100
Registrant (1) has filedall reports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months, and (2) has been subjectto such filing requirements for the past 90 days. YESXNo  
As of September 29, 2001,the Registrant had 1,000 shares of common stock, par value $1.00 per share,outstanding, all of which were held by Sears, Roebuck and Co.
Registrant meets the conditionsset forth in General Instruction H(1) (a) and (b) of Form 10-Q and is thereforefiling this form with a reduced disclosure format.
  
**SEARS DC CORP.****INDEX TO QUARTERLYREPORT ON FORM 10-Q****13 AND 39 WEEKS ENDEDSEPTEMBER 29, 2001**
  **PartI - Financial Information****Page** Item1.FinancialStatements   Statementsof Income (unaudited) -    13and 39 Weeks Ended September 29, 2001 and September 30, 20001      Statementsof Financial Position -    September29, 2001 (unaudited), September 30, 2000 (unaudited), and December 30,2000 2   Statementsof Cash Flows (unaudited) -    39Weeks Ended September 29, 2001 and September 30, 20003      Notesto Financial Statements (unaudited)4    Item2.Management'sDiscussion and Analysis of5  FinancialCondition and Results of Operations **PartII - Other Information** Item1.LegalProceedings   None.      Item6.Exhibitsand Reports on Form 8-K6   
**PART I. FINANCIAL INFORMATION****ITEM I. FINANCIALSTATEMENTS****SEARS DC CORP.****STATEMENTS OF INCOME****(Unaudited)**
13 Weeks Ended39 Weeks Ended*(thousands,except ratios)*Sept. 29,Sept. 30,Sept. 29,Sept. 30,2001200020012000RevenuesEarningson notes of Sears$4,723 $4,804 $14,359 $14,422 ExpensesInterestand related expenses4,694 4,774 14,271 14,321 Operatingexpenses661729Totalexpenses4,700 4,780 14,288 14,350 Incomebefore income taxes23 24 71 72 Incometaxes882525NetIncome$15$16$46$47Ratioof earnings to fixed charges1.005 1.005 1.005 1.005 Seenotes to financial statements.  
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**SEARS DC CORP.****STATEMENTS OF FINANCIALPOSITION**
   (Unaudited)   *(thousands,except share data)*Sept. 29,Sept. 30,Dec. 30, 2001 2000 2000AssetsNotesof Sears$220,158 $228,875 $224,166 Interestreceivable and other assets202331299Totalassets$220,360 $229,206 $ 224,465 LiabilitiesMedium-termnotes$204,525 $213,025 $213,025 Interestpayable and other liabilities10,40110,8086,052Totalliabilities214,926 223,833 219,077 Stockholder'sEquityCommonstock par value $1.00 per share, 1,000 shares authorized and outstanding1 1 1 Capitalin excess of par value 7 7 7 Retainedincome 5,4265,3655,380Totalstockholder's equity5,4345,3735,388Totalliabilities and stockholder's equity$220,360$229,206$224,465Seeaccompanying notes.  
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**SEARS DC CORP.****STATEMENTS OF CASH FLOWS****(Unaudited)**
39 Weeks Ended*(thousands)*Sept. 29,Sept. 30,20012000       CASHFLOWS FROM OPERATING ACTIVITIES:      Netincome$46 $47 Adjustmentsto reconcile net income to net cash provided by operating activities:Netchange in interest receivable and other assets and interestpayable and other liabilities 4,446  4,835 Netcash provided by operating activities 4,492  4,882 CASHFLOWS FROM INVESTING ACTIVITIES:      (Increase)decrease in notes of Sears 4,008  (4,882) Netcash provided by (used in) investing activities 4,008  (4,882) CASHFLOWS FROM FINANCING ACTIVITIES:      Repaymentof Medium-term notes(8,500)--Netcash used in financing activities (8,500)  --        Netincrease in cash and cashequivalents --   --         Cashand cash equivalents at beginning of period --  --        Cashand cash equivalents at end of period --  --               Seeaccompanying notes.       
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**SEARS DC CORP.****NOTES TO FINANCIALSTATEMENTS****(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 prior to their stated maturity except under certaincircumstances, primarily in the event of a significant decline in DiscoverCard receivables of Sears former subsidiary, Dean Witter, which is nowa part of Morgan Stanley. Selected details of SDC's borrowings are shownbelow.   Sept, 29,2001 Sept. 30,2000     8.52% to 9.26%medium-term notes due through 2012 $ 204,525 $ 213,025 
At September 29, 2001, medium-termnote maturities for the next five years, and thereafter are as follows: 2001$127,000 200224,725 20039,000 2004-- 2005-- Thereafter43,800$204,525 
-4-  **ITEM 2. MANAGEMENT'SDISCUSSION AND ANALYSIS****OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS****SEARS DC CORP.****13 AND 39 WEEKS ENDEDSEPTEMBER 29, 2001 AND SEPTEMBER 30, 2000**
***(thousands)***
Financial Condition:
SDC invests funds in 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 $204,525 in outstandingmedium-term notes as of September 29, 2001 are generally not redeemableprior to their stated maturity 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.The company repaid $110 million of maturing medium-term notes on October1, 2001.
Results of Operations:
Revenues decreased 1.69%from $4,804 to $4,723 and decreased 0.44% from $14,422 to $14,359 for the13 and 39 weeks ended September 29, 2001 and September 30, 2000 respectively.Interest and related expenses decreased 1.68% from $4,774 to $4,694 anddecreased 0.35% from $14,321 to $14,271 for the 13 and 39 weeks ended September29, 2001 and September 30, 2000 respectively. The decline in interest expensewas due to lower outstanding debt.
Earnings covered fixed charges1.005 times for the 13 and 39 weeks ended September 29, 2001 and September30, 2000.
Cautionary Statement RegardingForward-Looking Information:
Certain statements made inthis Report on Form 10-Q are forward-looking and are made in reliance onthe safe harbor provisions of the Private Securities Litigation ReformAct of 1995. As such they involve risks and uncertainties that could causeactual results to differ materially. These statements are based on a numberof assumptions about a variety of factors, including the ability of Searsto perform under the agreements described herein and general economic conditions(such as interest rates). While SDC believes that these assumptions arereasonable, SDC cautions that it is impossible to predict the impact ofcertain facts that 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
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      SIGNATUREPursuant to the requirementsof the Securities Exchange Act of 1934, the Registrant has duly causedthis report to be signed on its behalf by the undersigned thereunto dulyauthorized.  SearsDC Corp.(Registrant) November 7 , 2001By:/s/MichaelJ. ClearyMichael J. ClearyVice President and Controller(Authorized Officer andPrincipal Accounting Officer of Registrant)  
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**EXHIBIT INDEX****SEARS DC CORP.****13 AND 39 WEEKS ENDEDSEPTEMBER 29, 2001**
ExhibitNo. 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")*).  3.2Amendmentto Certificate 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-lawsof Sears 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*).  4Registranthereby 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   E-1