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 The Quarter Ended September 30, 2000        Commission File Number 001-13855
                      ------------------                               ---------


                            ILX RESORTS INCORPORATED
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


           ARIZONA                                      86-0564171
-------------------------------             ------------------------------------
(State or other jurisdiction of             (IRS Employer Identification Number)
 incorporation or organization)


          2111 East Highland Avenue, Suite 210, Phoenix, Arizona 85016
          ------------------------------------------------------------
                    (Address of principal executive offices)

         Registrant's telephone number, including area code 602-957-2777
                                                            ------------

              ----------------------------------------------------
              Former name, former address, and former fiscal year,
                          if changed since last report.

Indicate by check mark whether the registrant (1) has filed all 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. Yes [X] No [ ]

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

           Class                               Outstanding at September 30, 2000
-------------------------------                ---------------------------------
Common Stock, without par value                         3,598,180 shares
<PAGE>
                                     PART I

ITEM I. FINANCIAL STATEMENTS

                    ILX RESORTS INCORPORATED AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                         December 31,        September 30,
                                                                            1999                 2000
                                                                        ------------         ------------
                                                                                             (Unaudited)
<S>                                                                     <C>                  <C>
                                     ASSETS
Cash and cash equivalents                                               $  2,971,365         $  3,000,830
Notes receivable, net                                                     23,145,383           25,683,827
Resort property held for Vacation Ownership Interest sales                21,742,875           19,793,228
Resort property under development                                            346,786            1,806,444
Land held for sale                                                         1,596,759            1,596,650
Deferred assets                                                              227,933              146,185
Property and equipment, net                                                4,212,470            4,331,877
Other assets                                                               3,144,951            2,323,551
                                                                        ------------         ------------

    TOTAL ASSETS                                                        $ 57,388,522         $ 58,682,592
                                                                        ============         ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
 Accounts payable                                                       $    923,016         $  1,163,779
 Accrued and other liabilities                                             2,679,107            3,074,380
 Due to affiliates                                                            26,282                   --
 Notes payable                                                            27,020,947           26,131,959
 Notes payable to affiliates                                               1,100,000            1,100,000
 Deferred income taxes                                                       376,223            1,338,723
                                                                        ------------         ------------

    Total liabilities                                                     32,125,575           32,808,841
                                                                        ------------         ------------

MINORITY INTERESTS                                                            23,778                   --
                                                                        ------------         ------------
SHAREHOLDERS' EQUITY
 Preferred stock, $10 par value;  10,000,000 shares authorized;
  305,978 and 293,089 shares issued and outstanding; liquidation
  preference of $3,059,780 and $2,930,890                                  1,179,298            1,142,805
 Common stock, no par value; 30,000,000 shares authorized;
  3,921,173 and 4,089,680 shares issued                                   18,069,840           18,314,015
 Treasury stock, at cost, 0 and 491,500 shares                                    --             (994,283)
 Additional paid in capital                                                  279,450              225,742
 Guaranteed ESOP Obligation                                                 (500,000)            (250,000)
 Retained earnings                                                         6,210,581            7,435,472
                                                                        ------------         ------------

    Total shareholders' equity                                            25,239,169           25,873,751
                                                                        ------------         ------------

       TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                       $ 57,388,522         $ 58,682,592
                                                                        ============         ============
</TABLE>

            See notes to condensed consolidated financial statements

                                       2
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                   Three months ended September 30,    Nine months ended September 30,
                                                   --------------------------------    -------------------------------
                                                       1999                2000            1999               2000
                                                   ------------        ------------    ------------       ------------
<S>                                                <C>                 <C>             <C>                <C>
TIMESHARE REVENUES:
  Sales of Vacation Ownership Interests            $  6,642,223        $  6,652,826    $ 17,962,302       $ 19,246,386
  Resort operating revenue                            3,475,879           3,402,251       9,696,624         10,085,331
  Interest income                                       886,967             764,072       2,535,677          2,505,880
                                                   ------------        ------------    ------------       ------------

      Total timeshare revenues                       11,005,069          10,819,149      30,194,603         31,837,597
                                                   ------------        ------------    ------------       ------------
COST OF SALES AND OPERATING EXPENSES:
  Cost of Vacation Ownership Interests sold             923,577             963,072       2,538,162          2,692,906
  Cost of resort operations                           3,315,927           3,284,223       9,174,224          9,463,401
  Sales and marketing                                 4,284,034           3,674,672      11,423,893         10,816,196
  General and administrative                          1,036,372           1,124,466       3,068,514          3,356,674
  Provision for doubtful accounts                       250,129             295,359         577,428            812,115
  Depreciation and amortization                         122,848             164,292         348,424            443,433
                                                   ------------        ------------    ------------       ------------
      Total cost of sales and operating expenses      9,932,887           9,506,084      27,130,645         27,584,725
                                                   ------------        ------------    ------------       ------------

Timeshare operating income                            1,072,182           1,313,065       3,063,958          4,252,872

Income from land and other, net                           8,429              (2,232)         64,826              3,150
                                                   ------------        ------------    ------------       ------------

Total operating income                                1,080,611           1,310,833       3,128,784          4,256,022

Interest expense                                        697,407             671,366       2,067,782          2,059,729
                                                   ------------        ------------    ------------       ------------
Income before income taxes and minority interests       383,204             639,467       1,061,002          2,196,293

Income tax expense                                      150,000             256,618         418,000            853,364
                                                   ------------        ------------    ------------       ------------

Income before minority interests                        233,204             382,849         643,002          1,342,929

Minority interests                                        8,928                  --          21,172             70,422
                                                   ------------        ------------    ------------       ------------

NET INCOME                                         $    224,276        $    382,849    $    621,830       $  1,272,507
                                                   ============        ============    ============       ============
NET INCOME PER SHARE
 Basic                                             $       0.05        $       0.10    $       0.15       $       0.33
                                                   ============        ============    ============       ============
 Diluted                                           $       0.05        $       0.10    $       0.14       $       0.32
                                                   ============        ============    ============       ============
</TABLE>

            See notes to condensed consolidated financial statements

                                       3
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                 Nine months ended September 30,
                                                                --------------------------------
                                                                    1999                2000
                                                                ------------        ------------
<S>                                                             <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                    $    621,830        $  1,272,507
  Adjustments to reconcile net income to net cash
   provided by operating activities:
   Undistributed minority interest                                    21,172             (23,778)
   Deferred income taxes                                             433,984             962,500
   Provision for doubtful accounts                                   577,428             812,115
   Depreciation and amortization                                     348,424             443,433
   Amortization of guarantee fees                                      5,300               1,350
   Contribution of common stock to ESOP Plan                              --             146,094
   Common stock issued to employees for services                      94,926              48,988
   Change in assets and liabilities:
    Decrease (increase) in resort property held for Vacation
     Ownership Interest sales                                       (544,086)          1,949,647
    Increase in resort property under development                   (139,689)         (1,459,658)
    Decrease (increase) in land held for sale                         (8,607)                109
    Decrease (increase) in other assets                           (1,240,851)            803,257
    Increase (decrease) in accounts payable                         (416,790)            240,763
    Increase in accrued and other liabilities                        951,012             604,411
    Decrease in due to affiliates                                         --             (26,282)
                                                                ------------        ------------
Net cash provided by operating activities                            704,053           5,775,456

CASH FLOWS FROM INVESTING ACTIVITIES:
  Notes receivable, net                                           (3,688,988)         (3,350,559)
  Decrease (increase) in deferred assets                              (5,851)             80,398
  Purchases of plant and equipment, net                           (1,093,767)           (544,697)
                                                                ------------        ------------
Net cash used in investing activities                             (4,788,606)         (3,814,858)
                                                                ------------        ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from notes payable                                     15,165,666          10,310,410
  Principal payments on notes payable                            (11,204,199)        (11,199,398)
  Principal payments on notes payable to affiliates                 (194,078)                 --
  Preferred stock dividend payments                                  (48,048)            (47,616)
  Acquisition of treasury stock and other                           (213,775)           (994,284)
  Redemption of preferred stock                                           --                (245)
  Unearned ESOP contribution                                        (400,000)                 --
                                                                ------------        ------------
Net cash (used in) provided by financing activities                3,105,566          (1,931,133)
                                                                ------------        ------------

DECREASE IN CASH AND CASH EQUIVALENTS                               (978,987)             29,465
                                                                ------------        ------------

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                   3,196,710           2,971,365
                                                                ------------        ------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                      $  2,217,723        $  3,000,830
                                                                ============        ============
</TABLE>

            See notes to condensed consolidated financial statements

                                       4
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION AND BUSINESS ACTIVITIES

     The condensed consolidated financial statements include the accounts of ILX
Resorts  Incorporated,  formerly  ILX  Incorporated,  and its  wholly  owned and
majority-owned   subsidiaries   ("ILX"  or  the   "Company").   All  significant
intercompany transactions and balances have been eliminated in consolidation.

     The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally  accepted  accounting  principles for
interim  financial  information and the instructions to Form 10-Q and Rule 10-01
of Registration S-X. Accordingly, they do not include all of the information and
notes  required  by  generally  accepted  accounting   principles  for  complete
financial  statements.  In  the  opinion  of  management,  all  adjustments  and
reclassifications  considered  necessary for a fair and comparable  presentation
have been included and are of a normal recurring  nature.  Operating results for
the nine-month period ended September 30, 2000 are not necessarily indicative of
the results  that may be expected for the year ending  December  31,  2000.  The
accompanying  financial  statements  should  be read  in  conjunction  with  the
Company's most recent audited financial statements.

     The  Company's   significant   business   activities  include   developing,
operating,  marketing and financing  ownership  interests  ("Vacation  Ownership
Interests")  in resort  properties  located in  Arizona,  Colorado,  Indiana and
Mexico.  Until  December  31,  1999,  the  Company's  operations  also  included
marketing  of skin and hair  care  products  through  its  then  majority  owned
subsidiary  Sedona  Worldwide   Incorporated  ("SWI").  This  activity  was  not
considered significant to resort operations.

REVENUE RECOGNITION

     Revenue  from  sales of  Vacation  Ownership  Interests  is  recognized  in
accordance with Statement of Financial  Accounting  Standard No. 66,  Accounting
for Sales of Real Estate ("SFAS 66"). No sales are recognized until such time as
a minimum of 10% of the purchase  price has been received in cash, the statutory
rescission period has expired,  the buyer is committed to continued  payments of
the  remaining  purchase  price and the Company has been  released of all future
obligations  for the  Vacation  Ownership  Interest.  Resort  operating  revenue
represents  daily room rentals and revenues from food and other resort services.
Such  revenues  are  recorded  as the  rooms  are  rented  or the  services  are
performed.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

     Cash equivalents are liquid  investments with an original maturity of three
months or less. The following  summarizes  interest paid,  income taxes paid and
capitalized interest.

                                 Three Months Ended        Nine Months Ended
                                    September 30,             September 30,
                                --------------------    ------------------------
                                  1999        2000         1999          2000
                                --------    --------    ----------    ----------
Interest paid                   $651,000    $710,000    $1,983,000    $2,016,000
Income taxes paid               $     --    $     --    $       --    $       --
Capitalized interest            $     --    $     --    $       --    $       --

ACCOUNTING MATTERS

     In February 1997, the Financial  Accounting Standards Board issued SFAS No.
129, "Disclosure of Information about Capital Structure" ("SFAS 129"), which was
effective for financial  statements  for periods  ending after December 15, 1997
and establishes  standards for disclosing  information about an entity's capital
structure.  The  Company  adopted  SFAS 129 in 1997.  There were no  significant

                                       5
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                   (UNAUDITED)

effects on the Company's  disclosures about its capital structure,  as that term
is defined in SFAS 129, in the nine months ended September 30, 1999 or 2000.

     In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income" ("SFAS 130"), which was effective for financial
statements  for  periods  beginning  after  December  15,  1997 and  establishes
standards for reporting and display of  comprehensive  income and its components
(revenues,  expenses,  gains  and  losses)  in a  full  set  of  general-purpose
financial statements.  The Company adopted SFAS 130 in 1998. There were no items
of other comprehensive  income, as that term is defined in SFAS 130, in the nine
months ended September 30, 1999 or 2000.

     In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosure  about  Segments of an Enterprise  and Related  Information"  ("SFAS
131"), which is effective for fiscal years beginning after December 15, 1997 and
establishes  standards  for the way  that  public  business  enterprises  report
information about operating segments in annual financial statements and requires
that those enterprises  report selected  information about operating segments in
interim financial reports issued to shareholders.  It also establishes standards
for related disclosures about products and services, geographic areas, and major
customers.  The Company has a single segment in the timeshare  resort  industry.
Revenue from products and services are reflected on the income  statement  under
Sales of Vacation Ownership Interests and Resort Operating Revenue.

     In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting  for Derivative  Instruments and Hedging  Activities"  ("SFAS 133"),
which  requires  that an entity  recognize all  derivatives  as either assets or
liabilities  in the balance sheet and measure those  instruments  at fair value.
The standard also provides  specific  guidance for  accounting  for  derivatives
designated  as hedging  instruments.  In June  1999,  the  Financial  Accounting
Standards Board issued SFAS No. 137, "Accounting for Derivative  Instruments and
Hedging Activities - Deferral of the Effective Date of Statement No. 133" ("SFAS
No.  137"),  which  delayed the  effective  date of SFAS No. 133 for the Company
until 2001. The Company is currently  evaluating  what impact this standard will
have on its financial statements.

RECLASSIFICATIONS

     The financial statements for December 31, 1999 have been reclassified to be
consistent with the current period financial statement presentation.

NOTE 2. NET INCOME PER SHARE

     In  accordance  with SFAS No. 128,  "Earnings  Per  Share,"  the  following
presents the computation of basic and diluted net income per share:

                           BASIC NET INCOME PER SHARE
<TABLE>
<CAPTION>
                                               Three Months Ended             Nine Months Ended
                                                  September 30,                 September 30,
                                            -------------------------     -------------------------
                                               1999           2000           1999           2000
                                            ----------     ----------     ----------     ----------
<S>                                        <C>             <C>             <C>             <C>
Net income                                  $  224,276     $  382,849     $  621,830     $1,272,507
Less: Series A preferred stock dividends       (11,969)       (11,969)       (35,907)       (35,907)
                                            ----------     ----------     ----------     ----------
Net income available to common
 stockholders - basic                       $  212,307     $  370,880     $  585,923     $1,236,600
                                            ==========     ==========     ==========     ==========
Weighted average shares of common stock
 outstanding - basic                         3,991,846      3,632,076      4,003,651      3,749,751
                                            ==========     ==========     ==========     ==========
Basic net income per share                  $     0.05     $     0.10     $     0.15     $     0.33
                                            ==========     ==========     ==========     ==========
</TABLE>
                                       6
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                   (UNAUDITED)

                          DILUTED NET INCOME PER SHARE
<TABLE>
<CAPTION>
                                                Three Months Ended            Nine Months Ended
                                                   September 30,                September 30,
                                            -------------------------     -------------------------
                                               1999           2000           1999           2000
                                            ----------     ----------     ----------     ----------
<S>                                        <C>             <C>             <C>             <C>
Net income                                  $  224,276     $  382,849     $  621,830     $1,272,507
Less: Series A preferred stock dividends       (11,969)       (11,969)       (35,907)       (35,907)
                                            ----------     ----------     ----------     ----------
Net income available to common
 stockholders - diluted                     $  212,307     $  370,880     $  585,923     $1,236,600
                                            ==========     ==========     ==========     ==========
Weighted average shares of common
 stock outstanding                           3,991,846      3,632,076      4,003,651      3,749,751
Add: Convertible preferred stock
 (Series B and C) dilutive effect               85,711         81,578        102,083         83,008
                                            ----------     ----------     ----------     ----------
Weighted average shares of common stock
 outstanding - dilutive                      4,077,557      3,713,654      4,105,734      3,832,759
                                            ==========     ==========     ==========     ==========
Diluted net income per share                $     0.05     $     0.10     $     0.14     $     0.32
                                            ==========     ==========     ==========     ==========
</TABLE>

     Stock options to purchase  135,700 shares of common stock at prices ranging
from $3.25 per share to $8.125 per share were  outstanding at September 30, 2000
but were not included in the computation of diluted net income per share because
the  options'  exercise  prices were  greater  than the average  market price of
common shares. These options expire at various dates between 2002 and 2004.

NOTE 3. SHAREHOLDERS' EQUITY

     During the nine months ended  September 30, 2000, the Company issued 56,600
shares of restricted common stock,  valued at $48,988,  to employees in exchange
for  services  provided.  These  restricted  shares  of common  stock  issued to
employees are exempt from registration  under Section 4(2) of the Securities Act
of 1933.  Also during the nine months  ended  September  30,  2000,  the Company
purchased 491,500 shares of its common stock for $994,283.

     During the nine months ended  September 30, 2000,  the Company  contributed
$250,000 to its ESOP and such funds were used by the ESOP to repay debt incurred
in 1999 to acquire  common stock (see "Uses of Cash").  In  accordance  with SOP
93-6,  Employer's  Accounting  for Employee Stock Option Plan, the difference of
$40,862 between the fair market value of the leveraged shares at the time of the
debt  repayment in 2000 and their actual cost when the shares were  purchased in
1999, was charged to Paid in Capital.  During the quarter  ending  September 30,
2000 the Company  issued to the ESOP 100,000  shares of restricted  common stock
valued at $146,093.

NOTE 4. OTHER

     In August 2000, the Company entered into a definitive  agreement to acquire
a  leasehold  interest  in a 44-acre  parcel in Las Vegas,  Nevada near the "Las
Vegas Strip" and the University of Nevada - Las Vegas. If acquired,  the Company
intends  to  develop  the  property  into  a  mixed  use  development  including
construction  of a Varsity Clubs of America,  operation of a vacation  ownership
sales  office,  as well as  subletting  portions  of the parcel for  traditional
hotel, restaurant, golf and other ancillary uses. Earnest money in the amount of
$100,000 was deposited with an escrow agent at the signing of the agreement. The
Company has a six-month  period in which to secure  financing,  extend the lease
term,  receive  government  approvals,  complete  its due  diligence  and make a
determination whether to proceed with the acquisition.

                                       7
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                   (UNAUDITED)

     In  September  2000,  the Company  entered  into an  agreement  to lease an
existing motel in Sedona, Arizona, commencing October 1, 2000 and terminating on
December 31, 2010. The lease contains a provision in which the lease term may be
automatically  extended for consecutive one-year periods after December 31, 2010
up  to  December  31,  2038 if  the lease  has  not  been  terminated  prior  to
December 31, 2010. The  lessor is required to remodel and refurbish the existing
project,  previously  known as the Canyon  Portal  Motel,  as well as  construct
additional  units at the complex.  The Company has renamed the property "The Los
Abrigados Lodge." The property will be used for hotel accommodations,  including
accommodations for customers invited to attend a vacation ownership presentation
at the Sedona sales office.  In conjunction  with the lease,  the Company loaned
$100,000 to the lessor for improvements to be made to the property.  The loan is
recorded as a note  receivable on the balance  sheet and bears  interest at 1.5%
over the prime rate.

                                       8
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

ITEM II. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

     THE FOLLOWING  DISCUSSION OF THE COMPANY'S  FINANCIAL CONDITION AND RESULTS
OF OPERATIONS  INCLUDES CERTAIN  FORWARD-LOOKING  STATEMENTS.  WHEN USED IN THIS
FORM 10-Q,  THE WORDS  "ESTIMATE,"  "PROJECTION,"  "INTEND,"  "ANTICIPATES"  AND
SIMILAR TERMS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS THAT RELATE TO
THE COMPANY'S  FUTURE  PERFORMANCE.  SUCH  STATEMENTS ARE SUBJECT TO SUBSTANTIAL
UNCERTAINTY.   READERS  ARE  CAUTIONED  NOT  TO  PLACE  UNDUE  RELIANCE  ON  THE
FORWARD-LOOKING STATEMENTS SET FORTH BELOW. THE COMPANY UNDERTAKES NO OBLIGATION
TO PUBLICLY  UPDATE OR REVISE ANY OF THE  FORWARD-LOOKING  STATEMENTS  CONTAINED
HEREIN.

OVERVIEW

     ILX Resorts Incorporated was formed in 1986 to enter the Vacation Ownership
Interest  business.  The Company  generates  revenue primarily from the sale and
financing of Vacation  Ownership  Interests.  The Company also generates revenue
from the rental of its unused or unsold  inventory  of units at the ILX  resorts
and from the sale of food,  beverages  or other  services at such  resorts.  The
Company  currently  owns four  resorts in  Arizona,  one in  Indiana  and one in
Colorado,  and has  material  interests  in resorts in Pinetop,  Arizona and San
Carlos, Mexico.

     The  Company  recognizes  revenue  from  the  sale  of  Vacation  Ownership
Interests  at such  time as a  minimum  of 10% of the  purchase  price  has been
received in cash,  the  statutory  rescission  period has expired,  the buyer is
committed  to  continued  payments  of the  remaining  purchase  price  and  the
Company's  future  obligations  for the Vacation  Ownership  Interests have been
released.  Resort operating revenues are recorded as the rooms are rented or the
services are performed.

     Costs associated with the acquisition and development of Vacation Ownership
Interests,  including carrying costs such as interest and taxes, are capitalized
and amortized to cost of sales as the respective revenue is recognized.

RESULTS OF OPERATIONS

     The  following  table  sets forth  certain  operating  information  for the
Company:

<TABLE>
<CAPTION>
                                                            Three Months Ended    Nine Months Ended
                                                              September 30,         September 30,
                                                             ---------------       ---------------
                                                              1999      2000        1999      2000
                                                             -----     -----       -----     -----
<S>                                                          <C>       <C>         <C>       <C>
As a percentage of total timeshare revenues:
Sales of Vacation Ownership Interests                         60.4%     61.5%       59.5%     60.5%
Resort operating revenue                                      31.6%     31.4%       32.1%     31.7%
Interest income                                                8.0%      7.1%        8.4%      7.8%
                                                             -----     -----       -----     -----
Total timeshare revenues                                     100.0%    100.0%      100.0%    100.0%
                                                             =====     =====       =====     =====
As a percentage of sales of Vacation Ownership Interests:
Cost of Vacation Ownership Interests sold                     13.9%     14.5%       14.1%     14.0%
Sales and marketing                                           64.5%     55.2%       63.6%     56.2%
Provision for doubtful accounts                                3.8%      4.4%        3.2%      4.2%
Contribution margin percentage from sale of Vacation
 Ownership Interests (1)                                      17.8%     25.9%       19.1%     25.6%
As a percentage of resort operating revenue:
Cost of resort operations                                     95.4%     96.5%       94.6%     93.8%
</TABLE>
                                       9
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                         Three Months Ended         Nine Months Ended
                                                            September 30,             September 30,
                                                         -------------------       -------------------
                                                           1999        2000         1999         2000
                                                         -------     -------       -------     -------
<S>                                                    <C>          <C>           <C>           <C>
As a percentage of total timeshare revenues:
General and administrative                                   9.4%       10.4%         10.2%       10.5%
Depreciation and amortization                                1.1%        1.5%          1.2%        1.4%
Timeshare operating income                                   9.7%       12.1%         10.1%       13.4%
Selected operating data:
Vacation Ownership Interests sold (2) (3)                    437         423         1,182       1,223
Average sales price per Vacation Ownership Interest
 sold (excluding revenues from Upgrades) (2)             $13,960     $13,993       $13,693     $13,924
Average sales price per Vacation Ownership Interest
 sold (including revenues from Upgrades) (2)             $15,050     $15,748       $15,040     $15,427

</TABLE>
----------
(1)  Defined as: the sum of Vacation  Ownership  Interest sales less the cost of
     Vacation Ownership  Interests sold less sales and marketing expenses less a
     provision  for doubtful  accounts,  divided by sales of Vacation  Ownership
     Interests.
(2)  Reflects all Vacation Ownership Interests on an annual basis.
(3)  Vacation Ownership Interests consist of 184 annual and 506 biennial for the
     three months ended  September  30, 1999 and 190 annual and 466 biennial for
     the three  months  ended  September  30,  2000,  and 537  annual  and 1,289
     biennial  for the nine months ended  September  30, 1999 and 526 annual and
     1,394 biennial for the nine months ended September 30, 2000.

COMPARISON  OF THE THREE AND NINE MONTHS ENDED  SEPTEMBER  30, 1999 TO THE THREE
AND NINE MONTHS ENDED SEPTEMBER 30, 2000

     Sales of Vacation  Ownership  Interests of $6,652,826  for the three months
ended  September 30, 2000 were  comparable  to sales of $6,642,223  for the same
period in 1999 and  increased  7.1% or $1,284,084  to  $19,246,386  for the nine
months ended  September 30, 2000 from  $17,962,302  for the same period in 1999.
The year-to-date  increases  largely reflect greater sales from the Sedona sales
office and the addition of the Phoenix sales  office,  net of decreases in sales
from the VCA-South Bend and VCA-Tucson  sales offices.  The increased sales from
the Sedona  sales office are a result of both an increase in the number of tours
and the office's  average sales price.  The lower sales  from the VCA-South Bend
sales  office  reflect the  reduction  from a full scale sales office to a small
sales staff that both  generates its own tours and sells to such prospects for a
percentage of sales. The decrease in sales from  the VCA-Tucson  sales office is
due to a decrease in tour flow,  in part as a result of reducing  the  operation
from seven days to five days a week to gain certain operating efficiencies.  The
average sales price per Vacation  Ownership  Interest sold  (excluding  revenues
from  Upgrades)  of $13,993 for the three months  ended  September  30, 2000 was
comparable to $13,960 for the same period in 1999 and increased  1.7% or $231 to
$13,924 for the nine months ended  September  30, 2000 from $13,693 for the same
period in 1999,  reflecting  in part a greater  percentage  of sales of biennial
interests,  which are sold for  greater  than one half of the price of an annual
interest.

     The number of Vacation Ownership  Interests sold decreased 3.2% from 437 in
the three months ended September 30, 1999 to 423 for the same period in 2000 due
to reduced sales  operations at  VCA-South  Bend and  VCA-Tucson,  and increased
3.5% from 1,182 in the nine  months  ended  September  30, 1999 to 1,223 for the
same period in 2000,  due to both  greater  tour flow to the Sedona sales office
and the  addition  of the  Phoenix  sales  office,  net of reduced  sales in the

                                       10
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS
                                   (CONTINUED)


VCA-South  Bend  and  VCA-Tucson  sales  offices as  described  above.  Sales of
Vacation  Ownership  Interests in the three and nine months ended  September 30,
2000 included 466 and 1,394 biennial Vacation  Ownership  Interests  (counted as
233 and 697  annual  Vacation  Ownership  Interests)  compared  to 506 and 1,289
biennial Vacation Ownership  Interests (counted as 253 and 644.5 annual Vacation
Ownership Interests) in the same periods in 1999, respectively.

     Upgrade revenue,  included in Vacation Ownership Interest sales,  increased
55.9% to $742,048 for the three months ended  September  30, 2000 from  $476,124
for the same  period  in 1999 and  increased  15.5% to  $1,838,546  for the nine
months ended  September  30, 2000 from  $1,592,429  for the same period in 1999.
Upgrades  generally  do not involve the sale of  additional  Vacation  Ownership
Interests  (merely their exchange) and,  therefore,  such Upgrades  increase the
average  sales price per Vacation  Ownership  Interest  sold.  The average sales
price per Vacation Ownership Interest sold (including  Upgrades)  increased 4.6%
or $698 to $15,748 for the three months ended September 30, 2000 from $15,050 in
1999 as a result of the  substantial  increase in Upgrade revenue for the period
and  increased  2.6% or $387 to $15,427 for the nine months ended  September 30,
2000 from $15,040 for the same period in 1999,  as a result of both the increase
in Upgrade revenue and the greater  percentage of biennial sales, which sell for
more than one half the price of an annual interest.

     Resort operating  revenues  decreased 2.1% or $73,628 to $3,402,251 for the
three  months  ended  September  30,  2000 and  increased  4.0% or  $388,707  to
$10,085,331  for the nine months ended  September 30, 2000. The changes  reflect
net increased  occupancy and average receipts,  including the growth of business
at VCA-Tucson,  which opened in  the third quarter of 1998,  offset by increased
occupancy by vacation  ownership  members  whose nightly rate is less than hotel
guest  rates.  Cost of resort  operations  as a percentage  of resort  operating
revenues was  comparable  between years at 96.5% and 93.8% in the three and nine
months ended September 30, 2000,  respectively,  compared to 95.4% and 94.6% for
the same periods in 1999, respectively.

     Interest  income  decreased  13.9% to $764,072  for the three  months ended
September 30, 2000 from $886,967 for the same period in 1999 and decreased  1.2%
to $2,505,880 for the nine months ended  September 30, 2000 from  $2,535,677 for
the same period in 1999,  reflecting  greater early payoffs of Customer Notes in
2000.

     Cost of  Vacation  Ownership  Interests  sold as a  percentage  of Vacation
Ownership  Interest  sales  increased  from  13.9%  for the three  months  ended
September 30, 1999 to 14.5% for the same period in 2000, reflecting fluctuations
in product  mix for the  quarters,  and were  comparable  between the nine month
periods ended September 30, 1999 and 2000 at 14.1% and 14.0%, respectively.

     Sales  and  marketing  as a  percentage  of  sales  of  Vacation  Ownership
Interests  decreased to 55.2% for the three months ended September 30, 2000 from
64.5%  for the  same  period  in 1999 and to 56.2%  for the  nine  months  ended
September  30,  2000 from 63.6% for the same  period in 1999.  The  improvements
reflect  changes in sales and marketing  approaches  that commenced in the first
quarter of 1999, and are continuing, including generation of a greater number of
tours and increased closing rates at the Sedona sales office,  reduction of less
efficient tour  generation  methods to the  VCA-South  Bend sales  office in the
third  quarter of 1999 and to the Kohl's Ranch sales office in the first quarter
of 2000.

     The provision for doubtful  accounts as a percentage of Vacation  Ownership
Interest  sales  increased  to 4.4%  and 4.2% of  sales  of  Vacation  Ownership
Interests in the three and nine month periods ended September 30, 2000 from 3.8%
and 3.2% for the same periods in 1999,  respectively,  reflecting  the Company's
decision to increase  the  provision  on new sales  effective  both in the third
quarter of 1999 and the second quarter of 2000.

                                       11
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS
                                   (CONTINUED)


     General and  administrative  expenses  increased  8.5% to $1,124,466 in the
three months ended  September  30, 2000 from  $1,036,372  for the same period in
1999 and 9.4% to  $3,356,674  in the nine months ended  September  30, 2000 from
$3,068,514  for the same  period in 1999.  General and  administrative  expenses
increased  to 10.4% as a  percentage  of total  timeshare  revenues in the three
months  ended  September  30,  2000 from 9.4% for the same period in 1999 due to
increased  legal fees  related to the Las Vegas and  Sedona  purchases  and from
increases in property taxes. General and administrative  expenses are comparable
between  periods as a percentage  of total  timeshare  revenues at 10.5% for the
nine months ended September 30, 2000, and 10.2% for the same period in 1999.

     Interest  expense was  comparable  between the three and nine month periods
ended  September 30, 2000 and 1999 at $671,366 and  $2,059,729  in 2000,  and at
$697,407 and $2,067,782 in 1999, respectively.

LIQUIDITY AND CAPITAL RESOURCES

SOURCES OF CASH

     The Company  generates cash  primarily from the sale of Vacation  Ownership
Interests (including Upgrades),  the financing of customer notes from such sales
and resort operations. During the nine months ended September 30, 1999 and 2000,
cash  provided by  operations  was $704,053 and  $5,775,456,  respectively.  The
increase is due to increased income and resultant  deferred income taxes as well
as  decreased  other  assets and resort  property  held for  Vacation  Ownership
Interest sales.  The decrease in other assets is related to advances made to the
Sedona Vacation Club Homeowners'  Association for renovations as of December 31,
1999,  which were  reimbursed  in the first  quarter  of 2000,  and to timing of
collections  of  homeowners'  dues.  The  decrease in resort  property  held for
Vacation  Ownership  Interest sales  reflects  primarily the annexation of weeks
from the Sea of Cortez  Beach Club to ILX  Premiere  Vacation  Club in the first
half of 1999.  Because  the  Company  uses  significant  amounts  of cash in the
development and marketing of Vacation Ownership Interests, but collects the cash
on the customer notes receivable over a long period of time,  borrowing  against
and/or selling receivables is a necessary part of its normal operations.

     For regular federal income tax purposes,  the Company reports substantially
all of its non-factored  financed  Vacation  Ownership  Interest sales under the
installment method.  Under the installment method, the Company recognizes income
on sales of  Vacation  Ownership  Interests  only when cash is  received  by the
Company in the form of a down payment, as installment  payments or from proceeds
from the sale of the  customer  note.  The  deferral  of  income  tax  liability
conserves cash resources on a current basis.  Interest may be imposed,  however,
on the amount of tax  attributable  to the  installment  payments for the period
beginning on the date of sale and ending on the date the related tax is paid. If
the Company is otherwise not subject to tax in a particular year, no interest is
imposed  because  the  interest is based on the amount of tax paid in that year.
The condensed  consolidated  financial  statements do not contain an accrual for
any interest  expense that would be paid on the  deferred  taxes  related to the
installment method, as the interest expense is not estimable.

     At December 31, 1999, the Company,  excluding its Genesis  subsidiary,  had
NOL  carryforwards of approximately  $8.0 million,  which expire in 2001 through
2012.  At  December  31,  1999,   Genesis  had  federal  NOL   carryforwards  of
approximately  $2.1  million,  which are limited as to usage  because they arise
from built in losses of an acquired company.  In addition,  such losses can only
be  utilized  through  the  earnings  of Genesis and are limited to a maximum of
$189,000 per year. To the extent the entire  $189,000 is not utilized in a given
year, the difference may be carried forward to future years.  Any unused Genesis
NOLs will expire in 2008.

                                       12
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS
                                   (CONTINUED)


     In addition,  Section 382 of the Internal  Revenue Code imposes  additional
limitations on the utilization of NOLs by a corporation  following various types
of ownership  changes,  which result in more than a 50% change in ownership of a
corporation within a three-year period.  Such changes may result from new common
stock issuances by the Company or changes  occurring as a result of filings with
the  Securities  and Exchange  Commission of Schedules 13D and 13G by holders of
more  than  5% of  the  common  stock,  whether  involving  the  acquisition  or
disposition of common stock. If such a subsequent change occurs, the limitations
of Section 382 would apply and may limit or deny the future  utilization  of the
NOL by the  Company,  which  could  result  in the  Company  paying  substantial
additional federal and state taxes.

USES OF CASH

     Investing activities typically reflect a net use of cash because of capital
additions  and loans to  customers in  connection  with the  Company's  Vacation
Ownership  Interest  sales.  Net cash used in investing  activities  in the nine
months  ended  September  30,  1999  and  2000 was  $4,788,606  and  $3,814,858,
respectively. The decrease is due to greater purchases of plant and equipment in
1999,  including  investments  related to the centralization of reservations and
owner  services  operations,  and due to a  reduction  in the  increase of notes
receivable  from  prior  year  end to the end of the  respective  quarters.  The
Company  began  hypothecating  rather  than  selling a greater  portion of notes
receivable in the first quarter of 1999. The Company  continued this strategy in
2000;  therefore,  there was a larger increase in the notes  receivable  balance
from  December 31, 1998 to September  30, 1999, as compared to the increase from
December 31, 1999 to September 30, 2000.

     The Company  requires  funds to finance the  acquisitions  of property  for
future resort  development and to further develop the existing resorts,  as well
as to make capital improvements and support current operations. During 2000, the
Company  advanced  funds  toward  the  cost of  construction  of the San  Carlos
Vacation  Ownership  Interests.  The Company  funded such advances with proceeds
from a financing  commitment  established for this purpose. In 2000, the Company
is building  twelve  additional  cabins at Kohl's  Ranch,  for which a financing
commitment equal to the construction cost is in place.

     Customer  defaults  have a  significant  impact  on cash  available  to the
Company from financing  customer notes  receivables in that notes which are more
than 60 to 90 days past due are not  eligible as  collateral.  As a result,  the
Company in effect  must  repay  borrowings  against  such notes or buy back such
notes if they were sold with recourse.

     On April 9, 1999  (effective  January 1, 1999),  the Company formed the ILX
Resorts  Incorporated  Employee Stock Ownership Plan and Trust (the "ESOP"). The
intent of the ESOP is to provide a retirement  program for employees that aligns
their  interests with those of the Company.  During 1999, the Company  declared,
and funded in cash,  contributions  of $250,000 to the ESOP. In August 1999, the
ESOP entered into an  agreement  with  Litchfield  Financial  Corporation  for a
$500,000 line of credit,  which is secured by the Company's stock purchased with
the funds and guaranteed by the Company.  The Company paid a total of $43,047 in
fees in 1999 on behalf of the ESOP related to the line of credit,  consisting of
$10,000 in loan  fees,  $16,231 in legal fees and  interest  of  $16,816.  As of
December 31, 1999,  the ESOP had borrowed the full $500,000 on the line. In both
January and April 2000, the Company contributed  $125,000 to the ESOP, which the
ESOP used to repay principal on the line,  reducing the borrowing to $250,000 at
September 30, 2000.

                                       13
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS
                                   (CONTINUED)


     During 1999,  the ESOP purchased a total of 375,300 shares of the Company's
common stock in the open market,  including  257,400 with borrowed funds and, at
September  30,  2000,  held the  375,300  shares and $2,682 in cash.  The shares
purchased with borrowed funds had not been allocated to participant  accounts as
of September  30, 2000 and are  collateral  for the  borrowing.  The fair market
value  of the  unallocated  shares  at  September  30,  2000  was  approximately
$418,275.  During the quarter ending September 30, 2000 the Company  contributed
100,000 of new shares to the ESOP valued at $146,093.

     The  leveraged  and  unallocated  shares will be released at the end of the
current  Plan year  (December  31,  2000) based on the amount of  principal  and
interest  payments  made  during  the   year.   During  the  nine  months  ended
September 30, 2000, the Company paid and recognized as an expense  contributions
of $26,467 for interest and $250,000 for principal.

     The ESOP may  purchase  additional  shares  for future  year  contributions
through  loans made  directly to the ESOP and  guaranteed  by the Company.  Such
borrowings are not expected to exceed $1,000,000.

CREDIT FACILITIES AND CAPITAL

     The Company has an agreement with a financial institution for a $40 million
financing  commitment  under which the Company may sell  certain of its Customer
Notes. The agreement provides for sales on a recourse basis with a percentage of
the amount sold held back by the financial institution as additional collateral.
Customer  Notes may be sold at discounts or premiums to the principal  amount in
order  to  yield  the  consumer   market  rate,  as  defined  by  the  financial
institution.  At September 30, 2000, $25.7 million of the $40 million commitment
was available to the Company.

     The  Company  also has  financing  commitments  aggregating  $43.5  million
whereby the Company may borrow against notes  receivable  pledged as collateral.
These  borrowings  bear  interest at a rate of prime plus 1.5% ($40  million) to
prime plus 3% ($3.5  million).  The $3.5  million  and $40  million  commitments
expire in 2001 and 2002,  respectively.  At September  30,  2000,  approximately
$23.1 million is available under these commitments.

     At September 30, 1999 and 2000, the Company had approximately $18.8 million
and $18.6 million,  respectively,  in  outstanding  notes  receivable  sold on a
recourse basis.  Portions of the notes  receivable are secured by deeds of trust
on Los Abrigados Resort & Spa, VCA-South Bend and VCA-Tucson.

     In December 1999,  the Company  completed the spin-off of its 80% ownership
interest in SWI to the  shareholders  of ILX. In conjunction  with the spin-off,
the Company agreed to provide up to $200,000 of working capital financing to SWI
through November 30, 2000. All amounts borrowed by SWI will bear interest at the
prime rate plus 3%, with interest payable  monthly.  The entire unpaid principal
will be due on December  31,  2000.  At  September  30,  2000,  $35,000 had been
advanced under this agreement.

     In February  2000, the Company  borrowed  $600,000 for the purpose of using
the funds to purchase Company treasury stock. The note is collateralized by cash
or stock,  bears  interest at 12% and is due through  2002.  As of September 30,
2000,  the Company had purchased  288,000  shares of stock at a cost of $593,800
with funds provided by this note. The remaining  $6,200 are fees associated with
the loan.  In the first nine months of 2000 the Company had purchased a total of
491,500  treasury  shares,  inclusive  of the  288,000  shares.  The Company may
purchase   additional   treasury  shares  from  time  to  time  in  open  market
transactions depending on price, availability,  market conditions, cash flow and
other  factors.  At September  30, 2000,  Board  approval  exists to  repurchase
approximately 300,000 more shares if conditions so warrant.

                                       14
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS
                                   (CONTINUED)


     In the future,  the Company may  negotiate  additional  credit  facilities,
issue corporate debt, issue equity securities,  or any combination of the above.
Any debt incurred or issued by the Company may be secured or unsecured, may bear
interest  at fixed or  variable  rates of  interest,  and may be subject to such
terms as management  deems prudent.  There is no assurance that the Company will
be able to secure  additional  corporate  debt or  equity  at or beyond  current
levels or that the Company will be able to maintain its current level of debt.

     The Company  believes  available  borrowing  capacity,  together  with cash
generated from operations,  will be sufficient to meet the Company's  liquidity,
operating and capital requirements for at least the next 12 months.

SEASONALITY

     The  Company's  revenues  are  moderately  seasonal  with the volume of ILX
owners,  hotel  guests and Vacation  Ownership  Interest  exchange  participants
typically  greatest  in the second and third  fiscal  quarters.  As the  Company
expands into new markets and geographic locations it may experience increased or
additional  seasonality dynamics which may cause the Company's operating results
to fluctuate.

INFLATION

     Inflation  and  changing  prices  have  not had a  material  impact  on the
Company's revenues,  operating income and net income during any of the Company's
three most recent  fiscal  years or the nine months  ended  September  30, 2000.
However,  to the extent  inflationary trends affect short-term interest rates, a
portion of the Company's debt service costs may be affected as well as the rates
the Company charges on its customer notes.

                                       15
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES
                                     PART II


ITEM I. LEGAL PROCEEDINGS

     A dispute had arisen between the general contractor,  Summit Builders,  and
the Company's wholly owned subsidiary,  VCA-Tucson Incorporated, with respect to
amounts owed for the  construction  of VCA-Tucson.  In May 1999, the dispute was
settled for an amount of $1.3 million.  Such cost is included in resort property
held for sale at December 31, 1999 and September 30, 2000.

     A dispute had arisen  between  Bowne of Phoenix,  Inc.  ("Bowne"),  and the
Company  regarding  amounts  owing for printing  related to the  Company's  1998
follow-on public offering.  Bowne and the Company reached agreement on a payment
of $110,000 for such services,  which Bowne subsequently sought to change. Bowne
filed suit in the Superior  Court of Arizona  seeking  total payment of $154,720
plus interest and attorneys' fees. At September 30, 2000,  approximately $46,000
of the $110,000 has been paid to Bowne on account and the  remaining  amount was
fully accrued on the books of the Company.  On September 15, 1999,  the Superior
Court granted the Company's  motion for summary judgment on the issue of whether
the parties had entered into a binding settlement  agreement.  In February 2000,
the Superior Court also granted the Company's  request for $32,904 in attorneys'
fees plus  taxable  costs.  Bowne has filed an appeal with the Arizona  Court of
Appeals.

     In June 1999,  the Company  brought suit in The Superior Court of the State
of Arizona  against  Deloitte & Touche LLP  seeking  compensatory  and  punitive
damages for breach of contract,  breach of fiduciary duty and  negligence.  This
litigation is in the discovery stage.

     In June 2000,  the Company  brought suit in The Superior Court of the State
of Arizona against a former employee  seeking  compensation and punitive damages
for breach of contract,  negligence,  breach of fiduciary duties,  embezzlement,
conversion, fraud, deceit, concealment and non-disclosure.  In October 2000, the
Company agreed to the defendant's offer of settlement.

     In June 2000,  the Company  entered into a settlement  agreement and mutual
release of certain claims with Dean Phelan  ("Phelan"),  a former employee,  and
minority  interest  shareholder  in the Company's  subsidiary  Timeshare  Resale
Brokers,  Inc.  ("TRBI").  The agreement  dismisses  litigation  that had arisen
between the parties,  grants the Company a judgment for $190,000  against Phelan
that the Company will not exercise  unless  Phelan  breaches the  agreement  and
awards to the Company Phelan's minority interest in TRBI.

     Other litigation has arisen in the normal course of the Company's business,
none of which is deemed to be material.

ITEM II. CHANGES IN SECURITIES AND USE OF PROCEEDS

     None

ITEM III. DEFAULTS UPON SENIOR SECURITIES

     None

                                       16
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES
                                     PART II
                                   (CONTINUED)


ITEM IV. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None

ITEM V. OTHER INFORMATION

     None

ITEM VI. EXHIBITS AND REPORTS ON FORM 8-K

     (i)  Exhibits

          Exhibit No.                  Description
          -----------                  -----------

             10.1     PURCHASE  AND SALE  AGREEMENT  between ILX Resorts
                      Incorporated  and Las Vegas Golf Center, LLC, dated
                      August 16, 2000

             10.2     LEASE OF CANYON PORTAL, L.L.C. between Canyon Portal,
                      L.L.C. and ILX Resorts Incorporated, commencing
                      October 1, 2000 and dated September 26, 2000

             10.3     PROMISSORY NOTE ($100,000) by Canyon Portal, L.L.C. to
                      ILX Resorts Incorporated, dated September 26, 2000

             27       Financial Data Schedule (filed herewith)

     (ii) Reports on Form 8-K

          None

                                       17
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                                   SIGNATURES

     Pursuant to the  requirements  of the  Securities  Exchange Act of 1934, as
amended,  the Registrant has duly caused its quarterly report on Form 10-Q to be
signed on its behalf by the undersigned thereunto duly authorized.


                            ILX RESORTS INCORPORATED
                                  (Registrant)



                              /s/ Joseph P. Martori
                              ---------------------
                                Joseph P. Martori
                             Chief Executive Officer



                               /s/ Nancy J. Stone
                               ------------------
                                 Nancy J. Stone
                                    President



                              /s/ Michael E. Miller
                              ---------------------
                                Michael E. Miller
                            Executive Vice President
                             Chief Financial Officer



                            /s/ Taryn L. Chmielewski
                            ------------------------
                              Taryn L. Chmielewski
                              Corporate Controller


Date: As of November 6, 2000

                                       18