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

                                    FORM 8-K

                                 CURRENT REPORT
                       Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934

        Date of Report (Date of Earliest Event Reported): April 30, 2002

                                    KFX INC.
             (Exact name of Registrant as specified in its charter)

            Delaware                      0-23634               84-1079971
(State or other jurisdiction of   Commission File Number       IRS Employer
 incorporation or organization)                            Identification Number

           3300 East 1st Avenue, Suite 290 Denver,
                        Colorado, USA                         80206
          (Address of principal executive offices)          (Zip Code)

                                 (303) 293-2992
                         (Registrant's telephone number,
                              including area code)

                                 not applicable
          (Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS

As described in the KFx Inc. ("KFx") press release dated April 30, 2002, KFx
received $6 million through a private placement of common stock and warrants,
completed on April 30, 2002, from the same investment group that made a $5
million investment in KFx common stock on March 28, 2002. This private placement
was made pursuant to an Addendum to the Common Stock and Warrant Purchase
Agreement ("Addendum") dated April 30, 2002, which applied the terms of the
Common Stock and Warrant Purchase Agreement ("Purchase Agreement") dated March
28, 2002 to the most recent investment transaction. Pursuant to the Addendum, a
portion of the proceeds of this investment was used to satisfy the entire
outstanding obligation to repurchase the Pegasus preferred stock for
approximately $3.8 million. In addition, $450,000 of the proceeds shall also be
used to fund the development of the K-Fuel demonstration plant and the remaining
proceeds are to be used for general corporate purposes. In addition, the
Addendum allows, at the option of the investors and anytime prior to July 31,
2002, on the same terms, the investors to have the right to purchase up to an
additional $4 million of common stock and to receive an equivalent amount of
warrants on a pro rata basis.

The terms of the private placement included the sale of 2.4 million shares of
common stock at $2.50 per share and warrants to purchase 2.7 million shares of
common stock at a purchase price of $2.75 per common share, subject to
adjustment. Pursuant to the Amended and Restated Investors' Rights Agreement,
KFx agreed with the investors to file a registration statement with the
Securities and Exchange Commission to register all of the common stock and
warrants issued as part of this and the March 28, 2002 financing by May 7, 2002.
If KFx does not file this registration statement by May 7, 2002, then KFx must
issue to each investor an additional warrant to acquire the number of shares of
common stock equal to 10% of the number of shares of common stock issuable on
exercise of the warrants originally issued to each investor. Thereafter, KFx
must continue to issue additional warrants at the end of each subsequent 30-day
period if the registration statement remains unfiled. These new warrants will
have the same terms and conditions as the original warrants issued to the
investors. In the event that a registration statement has not been declared
effective by June 21, 2002, the Company shall issue additional warrants to
purchase shares of common stock equal to 10 percent of the warrants currently
held by the investor for each 30-day period for which the registration statement
has not been declared effective.

All of the shares issued as part of this financing are subject to an Amended and
Restated Put Agreement ("Amended Put Agreement"), which amends and restates the
entire Put and Call Option Agreement ("Original Put Agreement") executed in
conjunction with the original investment on March 28, 2002. The Amended Put
Option terminates and cancels KFx's right to call the shares, which was granted
under the Original Put Agreement. The Amended Put Agreement requires KFx to
repurchase these shares at a price of $2.50 per share (subject to adjustment for
subsequent dilutive offerings) plus 9% simple interest per year if exercised by
the investors. The put option becomes effective either on July 31, 2002 or upon
the redemption or conversion of all of KFx's 6% convertible debentures issued
under their indenture dated as of July 25, 1997, between KFx and First Bank
National Association, doing business as Colorado National Bank, as trustee.
Management believes the terms of the put option, if exercised, provide
sufficient time to secure the necessary funding through sales of assets or
securities in an orderly manner. If two-thirds or more of the investors exercise
their put option and KFx is unable to secure the necessary funding to satisfy
these exercised put options within the time provided by the Amended Put
Agreement, then KFx must transfer its interests in all the shares of common
stock and preferred stock of Pegasus to the investors. The put option expires at
11:59 p.m., California time, on December 23, 2002. Until the put option expires,
the Company is precluded from issuing, selling, transferring or pledging any of
its interest in Pegasus and Pegasus is precluded from transferring any rights
with respect to its equity and assets without approval of at least two-thirds of
the investors.

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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

(c)  Exhibits.

Number   Description
------   -----------

 10.1    Addendum to the Common Stock and Warrant Purchase Agreement between
         KFx Inc. and the Investors dated April 30, 2002.

 99.1    Press Release, dated April 30, 2002 (regarding a private equity
         placement in KFx and the use of proceeds to repurchase the outstanding
         Series C Preferred Shares of Pegasus Technologies, Inc.).

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SIGNATURE

     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.

Date:    May 7, 2002          KFx Inc.
                              (Registrant)


                              By:
                              /s/ Patrick S. Flaherty
                              --------------------------------------------------
                              Patrick S. Flaherty
                              Vice President-Finance and Chief Financial Officer

                                       4
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                                  EXHIBIT INDEX

Number   Description
------   -----------

 10.1    Addendum to the Common Stock and Warrant Purchase Agreement between
         KFx Inc. and the Investors dated April 30, 2002.

 99.1    Press Release, dated April 30, 2002 (regarding a private equity
         placement in KFx and the use of proceeds to repurchase the outstanding
         Series C Preferred Shares of Pegasus Technologies, Inc.).

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