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 March 31, 2003            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 March 31, 2003
-------------------------------                    -----------------------------
Common Stock, without par value                           2,918,945 shares
<PAGE>
                                     PART I

ITEM 1. FINANCIAL STATEMENTS

                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                          December 31,      March 31,
                                                                              2002            2003
                                                                          ------------    ------------
                                                                                   (Unaudited)
<S>                                                                       <C>             <C>
                                     ASSETS
     Cash and cash equivalents                                            $  2,399,175    $  2,477,907
     Notes receivable, net                                                  34,019,271      35,340,326
     Resort property held for Vacation Ownership Interest sales             24,150,438      23,131,590
     Resort property under development                                         263,127         284,536
     Land held for sale                                                        811,590         811,590
     Deferred assets                                                            84,606          69,207
     Property and equipment, net                                             9,008,973       9,456,493
     Other assets                                                            9,683,608      10,583,142
                                                                          ------------    ------------

         TOTAL ASSETS                                                     $ 80,420,788    $ 82,154,791
                                                                          ============    ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
     Accounts payable                                                     $  1,760,570    $  1,295,461
     Accrued and other liabilities                                           2,737,844       5,194,033
     Income taxes payable                                                      178,071              --
     Notes payable                                                          44,729,013      44,282,980
     Deferred income taxes                                                   3,268,284       3,579,206
                                                                          ------------    ------------

         Total liabilities                                                  52,673,782      54,351,680
                                                                          ------------    ------------
SHAREHOLDERS' EQUITY
     Preferred stock, $10 par value; 10,000,000 shares authorized;
       177,591 and 176,145 shares issued and outstanding;
       liquidation preference of $1,775,910 and $1,761,450                     916,726         912,735
     Common stock, no par value; 30,000,000 shares authorized;
       4,346,387 and 4,360,107 shares issued                                19,497,334      19,589,191
     Treasury stock, at cost, 1,414,795 and 1,441,162 shares,
       respectively                                                         (5,268,277)     (5,487,064)
     Additional paid in capital                                                 66,050          63,960
     Guaranteed ESOP obligation                                               (181,500)       (136,125)
     Retained earnings                                                      12,716,673      12,860,414
                                                                          ------------    ------------

         Total shareholders' equity                                         27,747,006      27,803,111
                                                                          ------------    ------------

         TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                       $ 80,420,788    $ 82,154,791
                                                                          ============    ============
</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 March 31,
                                                           ----------------------------
                                                               2002            2003
                                                           ------------    ------------
<S>                                                        <C>             <C>
REVENUES:
     Sales of Vacation Ownership Interests                 $  7,184,845    $  9,478,189
     Resort operating revenue                                 3,629,716       3,971,511
     Interest income                                          1,024,729       1,304,334
                                                           ------------    ------------

         Total revenues                                      11,839,290      14,754,034
                                                           ------------    ------------
COST OF SALES AND OPERATING EXPENSES:
     Cost of Vacation Ownership Interests sold                1,048,061       1,272,384
     Cost of resort operations                                3,365,370       3,705,744
     Sales and marketing                                      4,583,989       6,473,696
     General and administrative                               1,098,677       1,405,454
     Provision for doubtful accounts                            314,763         414,013
     Depreciation and amortization                              222,837         416,108
                                                           ------------    ------------

         Total cost of sales and operating expenses          10,633,697      13,687,399
                                                           ------------    ------------

Operating income                                              1,205,593       1,066,635

Income from land and other, net (Related Party)                 526,373         311,568
                                                           ------------    ------------

Total operating income                                        1,731,966       1,378,203

Interest expense                                               (486,201)       (525,787)
Equity in loss of related party investment                           --         (48,952)
                                                           ------------    ------------

Income before income taxes                                    1,245,765         803,464

Income tax expense                                             (498,307)       (318,509)
                                                           ------------    ------------

NET INCOME                                                 $    747,458    $    484,955
                                                           ============    ============

NET INCOME PER SHARE

     Basic                                                 $       0.25    $       0.16
                                                           ============    ============

     Diluted                                               $       0.24    $       0.16
                                                           ============    ============

DIVIDENDS PER SHARE                                        $         --    $       0.10
                                                           ============    ============

</TABLE>

            See notes to condensed consolidated financial statements

                                       3
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                          Three Months Ended March 31,
                                                                          ----------------------------
                                                                               2002           2003
                                                                           -----------    -----------
<S>                                                                        <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                               $   747,458    $   484,955
  Adjustments to reconcile net income to net cash provided by
     operating activities:
     Gain on sale of property and equipment                                   (585,441)            --
     Undistributed losses of equity investment in a related party                   --         48,952
     Loss on assumption of Sedona Worldwide Incorporated assets and
        liabilities                                                             48,887             --
     Income tax expense                                                        498,307        318,509
     Provision for doubtful accounts                                           314,763        414,013
     Depreciation and amortization                                             222,837        416,108
     Amortization of guarantee fees                                              9,932         15,399
     Common stock issued to employees for services                             220,077         15,546
     Change in assets and liabilities:
        Decrease in resort property held for Vacation Ownership
            Interest sales                                                     594,965      1,018,848
        Increase in resort property under development                         (250,381)       (21,409)
        Decrease in land held for sale                                          39,584             --
        Increase in other assets                                              (464,125)      (828,719)
        Increase (decrease) in accounts payable                                 35,835       (465,109)
        Increase in accrued and other liabilities                            1,978,925      2,207,580
        Decrease in income taxes payable                                      (548,417)      (185,658)
        Decrease in due to affiliates                                          (24,022)            --
                                                                           -----------    -----------

Net cash provided by operating activities                                    2,839,184      3,439,015
                                                                           -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:

  Increase in notes receivable, net                                         (1,297,344)    (1,735,068)
  Purchases of plant and equipment, net                                     (1,060,055)      (738,395)
  Cash acquired from Sedona Worldwide Incorporated                              30,457             --
                                                                           -----------    -----------

Net cash used in investing activities                                       (2,326,942)    (2,473,463)
                                                                           -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from notes payable                                                3,810,652      4,059,867
  Principal payments on notes payable                                       (4,806,292)    (4,750,900)
  Principal payments on notes payable to affiliates                           (300,000)            --
  Proceeds from exercise of stock options                                           --         23,000
  Acquisition of treasury stock and other                                     (439,818)      (218,787)
                                                                           -----------    -----------

Net cash used in financing activities                                       (1,735,458)      (886,820)
                                                                           -----------    -----------

(DECREASE) INCREASE in cash and cash equivalents                            (1,223,216)        78,732

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                             3,548,058      2,399,175
                                                                           -----------    -----------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                 $ 2,324,842    $ 2,477,907
                                                                           ===========    ===========
</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 accounting principles generally accepted in the
United States of America 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  accounting  principles
generally  accepted  in the United  States of  America  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  three-month
period ended March 31, 2003 are not  necessarily  indicative of the results that
may be  expected  for the  year  ending  December  31,  2003.  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, Nevada
and Mexico.

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 March 31,
                                      ----------------------------
                                          2002           2003
                                       ---------       ---------
     Interest paid                     $ 500,997       $ 527,697
     Income taxes paid                 $ 548,417       $ 191,597
     Interest capitalized              $  89,868       $  48,119


                                       5
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

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 March 31
                                                                   ---------------------------
                                                                        2002           2003
                                                                    -----------    -----------
<S>                                                                 <C>            <C>
Net income                                                          $   747,458    $   484,955
Less: Series A preferred stock dividends                                (11,862)       (11,830)
                                                                    -----------    -----------

Net income available to common stockholders - basic                 $   735,596    $   473,125
                                                                    ===========    ===========

Weighted average shares of common stock outstanding - basic           2,934,855      2,935,442
                                                                    ===========    ===========

Basic net income per share                                          $      0.25    $      0.16
                                                                    ===========    ===========
</TABLE>

                          DILUTED NET INCOME PER SHARE

<TABLE>
<CAPTION>
                                                                   Three Months Ended March 31
                                                                   ---------------------------
                                                                        2002           2003
                                                                    -----------    -----------
<S>                                                                 <C>            <C>
Net income                                                          $   747,458    $   484,955
Less: Series A preferred stock dividends                                (11,862)       (11,830)
                                                                    -----------    -----------

Net income available to common stockholders - diluted               $   735,596    $   473,125
                                                                    ===========    ===========

Weighted average shares of common stock outstanding                   2,934,855      2,935,442

Add: Convertible preferred stock (Series B and C) dilutive effect        78,397         39,083
       Stock options dilutive effect                                     55,171          8,088
                                                                    -----------    -----------

Weighted average shares of common stock outstanding - dilutive        3,068,423      2,982,613
                                                                    ===========    ===========

Diluted net income per share                                        $      0.24    $      0.16
                                                                    ===========    ===========
</TABLE>

     Stock  options  to  purchase  30,700  shares of common  stock at a price of
$8.125 per share were outstanding for the three months ended March 31, 2002, 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 in 2004.

                                       6
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 3. SHAREHOLDERS' EQUITY

     During the three months ended March 31, 2003, the Company issued 100 shares
of  restricted  common  stock,  valued at $386 and 1,895 shares of common stock,
valued at  $15,160,  to an  employee  and a  professional  service  provider  in
exchange for services  provided.  The shares of common stock issued to employees
are exempt from  registration  under Section 4(2) of the Securities Act of 1933.
For the three months ended March 31, 2003, the Company  recorded the exchange of
1,446 Series C Convertible  shares for 482 common shares.  Also during the three
months ended March 31, 2003, the Company  purchased  26,367 shares of its common
stock for $218,787.

     During the three  months  ended March 31,  2003,  the Company  issued 6,243
shares of common stock as a Cumulation  Share  dividend on prior  conversions of
Series C  Convertible  Preferred  Stock to common  stock.  Series C  Convertible
shareholders received one share of common stock for every ten shares of Series C
Convertible Preferred Stock converted.

     During the three months  ended March 31, 2003,  the Company made an advance
to the ESOP of  $45,375,  which was used to repay a portion of the note  payable
guaranteed  by the  Company  and  reduced the  Guaranteed  ESOP  obligation.  In
accordance  with SOP 93-6,  Employer's  Accounting for Employee Stock  Ownership
Plans,  the  difference of $2,090 between the fair market value of the leveraged
shares at the time of the debt  repayment  and the  actual  cost when the shares
were purchased in 2002, was charged to Paid in Capital.

     In December  2002,  the Company  announced an annual cash dividend of $0.40
per  common  share to be paid in equal  quarterly  installments,  payable on the
tenth  business day of the calendar  month  following  the end of each  calendar
quarter,  to common  shareholders  of record as of the last day of each calendar
quarter in 2003.  The first  installment  of  $291,894  has been  recorded  as a
reduction in retained  earnings and an accrued  liability at March 31, 2003.  In
March  2003,  the  Company  adopted  the  ILX  Resorts   Incorporated   Dividend
Reinvestment Plan ("DRIP").  Under the terms of the DRIP, shareholders may elect
to reinvest dividends in shares of the Company's common stock, with no brokerage
or other fees to the shareholder.

     In January  2003,  5,000  options to purchase  5,000 shares of common stock
priced at $4.60 per share were exercised.

NOTE 4. RELATED PARTY TRANSACTIONS

     During the first quarter of 2003,  the Company's  wholly owned  subsidiary,
Genesis  Investment Group, Inc.  ("Genesis"),  recorded the sale of 252 Vacation
Ownership Interests to Premiere Vacation Club, an Arizona nonprofit  corporation
("PVC").  PVC purchased the intervals at $2,415 per interval,  the same price at
which it has historically  acquired  intervals in arms-length  negotiations with
unaffiliated  third  parties.  PVC is  owned  by  the  holders  of its  vacation
ownership  interests,  including the Company. A gain of $274,825 was recorded on
the sales.  At March 31, 2003 deeds of trust for 210 of the  Vacation  Ownership
Interests secure outstanding indebtedness from PVC to Genesis of $501,644.

     During the first  quarter  2003,  the Company  advanced  $272,168 to Greens
Worldwide  Incorporated  ("GWW") for construction and operations costs. GWW is a
publicly  traded  company in which the Company holds a 36.4% equity  interest at
March 31, 2003.

NOTE 5. OTHER

     In March 2003 the Company  renegotiated  the terms of two notes payable.  A
10% note with an outstanding principal balance of $100,000 maturing in June 2003
and a 12% note  with an  outstanding  principal  balance  of  $453,000  maturing
through 2004 were consolidated in a new note for $2,000,000.  The new note bears
interest at 10%, with  principal  and interest in the amount of $20,000  payable
monthly through March 2008.

                                       7
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 6. SUBSEQUENT EVENTS

     In April 2003, the Company entered into a guaranty  agreement with GWW. The
Company has agreed to guarantee an  equipment  lease  entered into by GWW in the
amount of  $350,542.  The Company  will  receive a fee equal to 2% of the amount
guaranteed.

     In April 2003,  the Company  amended one of its revolving  lines of credit.
The new terms  include  amending the line to  $1,000,000  from  $1,500,000,  and
changing the maturity to December 31, 2003 from April 30, 2003.

                                       8
<PAGE>
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                             RESULTS OF OPERATIONS


ITEM 2. 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,"
"EXPECTS,"   "MAY,"   "SHOULD"  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  ("ILX" or the  "Company")  is one of the leading
developers,  marketers and operators of timeshare  resorts in the western United
States and Mexico. The Company's principal  operations consist of (i) acquiring,
developing and operating timeshare resorts,  marketed by the Company as vacation
ownership resorts,  (ii) marketing and selling vacation  ownership  interests in
the timeshare  resorts,  which  typically  have  entitled the buyers  thereof to
ownership of a fully-furnished unit for a one-week period on either an annual or
an alternate year (i.e., biennial) basis ("Vacation Ownership  Interests"),  and
(iii)  providing  purchase money  financing to the buyers of Vacation  Ownership
Interests at its resorts.  In addition,  the Company receives  revenues from the
rental of its  unused or unsold  inventory  of units at its  vacation  ownership
resorts,  and from  the  sale of food,  beverages  and  other  services  at such
resorts.  The Company's  current portfolio of resorts consists of six resorts in
Arizona,  one in Indiana, one in Colorado,  one in San Carlos,  Mexico, and land
adjacent to an existing  resort for which the Company holds  development  rights
(the Roundhouse Resort) (collectively, the "ILX Resorts"). One of the resorts in
Arizona  is not at this time  registered  with the  Arizona  Department  of Real
Estate nor is being marketed for sale as Vacation  Ownership  Interests,  and is
operated  under a  long-term  lease  arrangement.  The  Company  also owns 1,447
Vacation Ownership  Interests in a resort in Las Vegas,  Nevada,  1,147 of which
have been annexed into Premiere Vacation Club.

     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.

                                       9
<PAGE>
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                       RESULTS OF OPERATIONS (CONTINUED)

RESULTS OF OPERATIONS

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

<TABLE>
<CAPTION>
                                                               Three Months Ended March 31,
                                                               ----------------------------
                                                                    2002         2003
                                                                 ---------    ---------
<S>                                                              <C>          <C>
As a percentage of total revenues:
     Sales of Vacation Ownership Interests                            60.7%        64.3%
     Resort operating revenue                                         30.7%        26.9%
     Interest income                                                   8.6%         8.8%
                                                                 ---------    ---------
     Total revenues                                                  100.0%       100.0%
                                                                 =========    =========
As a percentage of sales of Vacation Ownership Interests:
     Cost of Vacation Ownership Interests sold                        14.6%        13.4%
     Sales and marketing                                              63.8%        68.3%
     Provision for doubtful accounts                                   4.4%         4.4%
     Contribution margin percentage from sale of Vacation
       Ownership Interests (1)                                        17.2%        13.9%

As a percentage of resort operating revenue:
     Cost of resort operations                                        92.7%        93.3%

As a percentage of total revenues:
     General and administrative                                        9.3%         9.5%
     Depreciation and amortization                                     1.9%         2.8%
     Operating income                                                 10.2%         7.2%

Selected operating data:
     Vacation Ownership Interests sold (2) (3)                         420          506
     Average sales price per Vacation  Ownership Interest
       sold (excluding revenues from Upgrades) (2)               $  14,207    $  14,907
     Average sales price per Vacation  Ownership Interest
       sold (including revenues from Upgrades) (2)               $  16,842    $  18,043
</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)  Consists  of an  aggregate  of 630 and 772  biennial  and  annual  Vacation
     Ownership  Interests  for the three  months  ended March 31, 2002 and 2003,
     respectively.

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

COMPARISON  OF THE THREE  MONTHS  ENDED MARCH 31, 2002 TO THE THREE MONTHS ENDED
MARCH 31, 2003

     Sales of Vacation  Ownership  Interests  increased  31.9% or  $2,293,344 to
$9,478,189  for the three months ended March 31, 2003,  from  $7,184,845 for the
same period in 2002. The increase  reflects  primarily  sales from the Las Vegas
sales  office which opened in mid January  2002,  and greater  sales to existing
owners.

     The average sales price per Vacation  Ownership  Interest  sold  (excluding
revenues from Upgrades)  increased 4.9% or $700 in 2003 to $14,907 for the three
months ended March 31, 2003 from $14,207 for the same period in 2002. The number
of  Vacation  Ownership  Interests  sold  increased  20.5% from 420 in the three
months  ended  March  31,  2002 to 506 for the  same  period  in 2003 due to the
opening of the Las Vegas sales  office,  as  described  above.  The three months
ended March 31, 2003 included 533 biennial Vacation Ownership Interests (counted
as 266.5 annual Vacation Ownership  Interests) compared to 420 biennial Vacation
Ownership Interests (counted as 210 annual Vacation Ownership  Interests) in the
same period in 2002.

     Upgrade revenue,  included in Vacation Ownership Interest sales,  increased
43.2% to  $1,584,962  for the three months ended March 31, 2003 from  $1,106,540
for the same  period in 2002,  reflecting  expansion  of  marketing  efforts  to
existing  owners.  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  7.1% or $1,201 to $18,043 for the three months ended March
31, 2003 from $16,842 in 2002.

     Resort operating  revenue  increased 9.4% or $341,795 to $3,971,511 for the
three months ended March 31, 2003,  reflecting  increased  revenue from vacation
interval  owners,  including  increased  rates, and revenue from the Joey Bistro
restaurant  at the  Carriage  House in Las Vegas which  opened in late  November
2002.  Cost of resort  operations  as a percentage of resort  operating  revenue
increased from 92.7% in 2002 to 93.3% in 2003. The increase reflects startup and
initial operating losses at Joey Bistro in Las Vegas.

     Interest  income  increased  27.3% to $1,304,334 for the three months ended
March 31,  2003 from  $1,024,729  for the same  period  in 2002  reflecting  the
increase in interest bearing notes  receivable  between years as well as greater
sales of Customer Notes in 2003,  for which the Company  recognizes the interest
premium upon sale of the note.

     Cost of  Vacation  Ownership  Interests  sold as a  percentage  of Vacation
Ownership  Interest sales  decreased from 14.6% for the three months ended March
31,  2002 to 13.4%  for the  three  months  ended  March  31,  2003,  reflecting
favorable  costs for the  acquisition  of vacation  ownership  interests  in the
Carriage  House  and the Bell  Rock  Inn,  net of  improvements  made to  resort
properties.

     Sales  and  marketing  as a  percentage  of  sales  of  Vacation  Ownership
Interests  increased  to 68.3% for the three  months  ended  March 31, 2003 from
63.8% for the same period in 2002, reflecting the greater scale of the Las Vegas
sales center in 2003.  The Las Vegas sales center opened in the first quarter of
2002 and the  Company  continues  to adjust and  refine the sales and  marketing
methods of this new operation.  The office has generated substantially increased
tours and  sales  between  years.  However,  sales  are at a  greater  sales and
marketing cost as a percentage of sales than the Company's  established offices.
In addition,  closing  rates at the Sedona sales office have  decreased  between
years.

     The provision for doubtful  accounts as a percentage of Vacation  Ownership
Interest sales was consistent at 4.4% of sales of Vacation  Ownership  Interests
for both the three month periods ended March 31, 2002 and 2003.

     General and administrative  expenses increased to 9.5% of total revenue for
the three months ended March 31, 2003 from 9.3% for the same period in 2002. The
increase  reflects  increased   professional   fees,   including  fees  for  the
enhancement of the Company's core timeshare operating system.

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


     Income from land and other,  net for the three  months ended March 31, 2003
includes a gain of $274,825 on bulk sales of Vacation Ownership  Interests owned
by the Company's  subsidiary  Genesis. In the first quarter of 2002, income from
land and other, net includes a gain of $586,111 on the sale and leaseback of the
Sedona  Station  (the Sedona  sales  office)  offset by a loss of $48,887 on the
assumption of the assets and liabilities of Sedona Worldwide Incorporated.

     The 8.1%  increase in interest  expense to  $525,787  for the three  months
ended March 31, 2003 from  $486,201  for the same  period in 2002  reflects  the
combined net effect of greater  borrowings in 2003 and lower  interest  rates on
the Company's variable rate notes.

LIQUIDITY AND CAPITAL RESOURCES

SOURCES OF CASH

     The Company  generates cash  primarily from the sale of Vacation  Ownership
Interests (including  Upgrades),  from the financing of Customer Notes from such
sales and from resort  operations.  During the three months ended March 31, 2002
and  2003,   cash  provided  by  operations  was   $2,839,184  and   $3,439,015,
respectively.  The increase in cash provided by operations reflects the non-cash
gain on sale of property and equipment  included in 2002 net income,  a decrease
in resort property held for Vacation  Ownership  Interest sales due to increased
sales and fewer additions in 2003 and a decrease in income taxes payable, net of
an  increase in other  assets.  The  increase in other  assets is a result of an
increase in the escrow balance required by the guaranty  commitment for the Bell
Rock Inn.

     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 an  installment  payment,  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  since 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, 2002, the Company,  excluding its Genesis  subsidiary,  had
NOL  carryforwards of approximately  $1.3 million,  which expire in 2017 through
2020.  At  December  31,  2002,   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.

     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.

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

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 three
months  ended  March  31,  2002  and  2003  was   $2,326,942   and   $2,473,463,
respectively.  The increase  includes  greater  notes  receivable as a result of
increased  sales generated by the Las Vegas sales office in the first quarter of
2003.  Customer notes  generated from this office are retained and  hypothecated
against, not sold.

     Net cash used in financing  activities  in the three months ended March 31,
2002 and 2003 was $1,735,458 and $886,820,  respectively.  The decrease reflects
lower  repayments  on notes  payable,  as well as a decrease in  treasury  stock
purchases in 2003.

     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.

     Customer  defaults  have a  significant  impact  on cash  available  to the
Company from financing  Customer  Notes  receivable 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 the three months ended March
31, 2003,  the Company made an advance to the ESOP of $45,375  which was used to
repay a portion of a note payable  secured by common stock of the Company  owned
by the ESOP and guaranteed by the Company.

     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

     At  March  31,  2003,  the  Company  has  an  agreement  with  a  financial
institution  for a commitment  of $30 million,  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.  If a customer  pays off a note prior to
maturity of the note, the financial institution may recover from the Company the
unearned  interest  premium,  if any. At March 31, 2003,  $27.1  million of such
commitment was available to the Company.

     The Company also has a financing commitment aggregating $30 million whereby
the Company may borrow against notes  receivable  pledged as  collateral.  These
borrowings bear interest at a rate of prime plus 1.5%. The $30 million borrowing
period  expires  in 2003  and the  maturity  is in  2008.  At  March  31,  2003,
approximately $11.6 million is available under this commitment.

     At March 31, 2002 and 2003, the Company had approximately $10.9 million and
$13.3 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 March 2003 the Company  renegotiated  the terms of two notes payable.  A
10% note with an outstanding principal balance of $100,000 maturing in June 2003
and a 12% note  with an  outstanding  principal  balance  of  $453,000  maturing
through 2004 were consolidated in a new note for $2,000,000.  The new note bears
interest at 10%, with  principal  and interest in the amount of $20,000  payable
monthly through March 2008.

     In the first three months of 2003, the Company  purchased  26,367  treasury
shares for a cost of $218,787.

                                       13
<PAGE>
         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.  While the Company  believes it  maintains
excellent relationships with its lenders and will seek renewal or replacement of
existing lines upon their maturity,  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 has been  negotiating  with  additional  lenders to  supplement  its
existing credit facilities.

     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 twelve months.

CONTRACTUAL CASH OBLIGATIONS AND COMMERCIAL COMMITMENTS

     The  following  table  presents  our  contractual   cash   obligations  and
commercial  commitments  as of March 31, 2003.  The Company also sells  consumer
notes  with  recourse.   The  Company  has  no  other  significant   contractual
obligations or commercial  commitments either on or off balance sheet as of this
date.

<TABLE>
<CAPTION>
                                                       PAYMENTS DUE BY PERIOD
CONTRACTUAL CASH                 -------------------------------------------------------------------
OBLIGATIONS                         TOTAL       < 1 YEAR      1-3 YEARS     4-5 YEARS     > 5 YEARS
                                 -----------   -----------   -----------   -----------   -----------
<S>                              <C>           <C>           <C>           <C>           <C>
LONG-TERM DEBT                   $44,235,000   $ 7,664,000   $13,613,000   $14,682,000   $ 8,276,000
CAPITAL LEASE OBLIGATIONS             48,000        36,000        12,000            --            --
OPERATING LEASES                  18,928,000     1,990,000     3,067,000     2,165,000    11,706,000
                                 -----------   -----------   -----------   -----------   -----------
TOTAL                            $63,211,000   $ 9,690,000   $16,692,000   $16,847,000   $19,982,000
                                 ===========   ===========   ===========   ===========   ===========
</TABLE>

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 three  months  ended  March 31,  2003.
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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     None

ITEM 4. CONTROLS AND PROCEDURES

     Within 90 days prior to the filing of this quarterly report,  the Company's
Chief Executive  Officer and its Chief Financial Officer evaluated the Company's
disclosure controls and procedures as required pursuant to Rule 13a-14 under the
Securities and Exchange Act of 1934, as amended.  Based on this evaluation,  the
Chief  Executive  Officer and the Chief Financial  Officer  determined that such
controls and  procedures are  effective.  There were no  significant  changes in
internal controls that could  significantly  affect the disclosure  controls and
procedures since the date of the evaluation.

                                       14
<PAGE>
                                     PART II

ITEM 1. LEGAL PROCEEDINGS

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

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

     None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None

ITEM 5. OTHER INFORMATION

     None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (i)  Exhibits

          EXHIBIT NO.  DESCRIPTION
          -----------  -----------
             99.1      CERTIFICATION PURSUANT TO 18 U.S.C.ss.1350, AS ADOPTED
                       PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     (ii) Reports on Form 8-K

          None

                                       15
<PAGE>
                                   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/ Margaret M. Eardley
                       ---------------------------------
                               Margaret M. Eardley
               Executive Vice President & Chief Financial Officer


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

Date: As of May 8, 2003

                                       16
<PAGE>
                       FORM OF CERTIFICATION FOR FORM 10-Q

                                 CERTIFICATIONS

I,  Joseph P.  Martori,  Chairman,  and Chief  Executive  Officer of ILX Resorts
Incorporated (the "Company") certify that:

     1.   I have  reviewed  this  quarterly  report on Form 10-Q of ILX  Resorts
          Incorporated;

     2.   Based on my  knowledge,  this  quarterly  report  does not contain any
          untrue  statement of a material  fact or omit to state a material fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this quarterly report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this quarterly report,  fairly present in all
          material respects the financial  condition,  results of operations and
          cash flows of the registrant as of, and for, the periods  presented in
          this quarterly report;

     4.   The registrant's  other certifying  officers and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange  Act Rules  13a-14 and 15d-14) for the  registrant
          and have:

          a)   designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               quarterly report is being prepared;

          b)   evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and  procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          c)   presented  in this  quarterly  report our  conclusions  about the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent  evaluation,  to the registrant's  auditors and the
          audit  committee  of  registrant's  board  of  directors  (or  persons
          performing the equivalent functions):

          a)   all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the registrant's
               ability to record,  process,  summarize and report financial data
               and have  identified for the  registrant's  auditors any material
               weaknesses in internal controls; and

          b)   any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal controls; and

     6.   The  registrant's  other  certifying  officers and I have indicated in
          this  quarterly  report  whether  there  were  significant  changes in
          internal controls or in other factors that could significantly  affect
          internal   controls   subsequent  to  the  date  of  our  most  recent
          evaluation,   including   any   corrective   actions  with  regard  to
          significant deficiencies and material weaknesses.

Date: May 8, 2003

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

                                       17
<PAGE>
                       FORM OF CERTIFICATION FOR FORM 10-Q

                                 CERTIFICATIONS

I, Margaret M. Eardley,  Executive Vice President and Chief Financial Officer of
ILX Resorts Incorporated (the "Company") certify that:

     1.   I have  reviewed  this  quarterly  report on Form 10-Q of ILX  Resorts
          Incorporated;

     2.   Based on my  knowledge,  this  quarterly  report  does not contain any
          untrue  statement of a material  fact or omit to state a material fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this quarterly report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this quarterly report,  fairly present in all
          material respects the financial  condition,  results of operations and
          cash flows of the registrant as of, and for, the periods  presented in
          this quarterly report;

     4.   The registrant's  other certifying  officers and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange  Act Rules  13a-14 and 15d-14) for the  registrant
          and have:

          a)   designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               quarterly report is being prepared;

          b)   evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and  procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          c)   presented  in this  quarterly  report our  conclusions  about the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent  evaluation,  to the registrant's  auditors and the
          audit  committee  of  registrant's  board  of  directors  (or  persons
          performing the equivalent functions):

          a)   all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the registrant's
               ability to record,  process,  summarize and report financial data
               and have  identified for the  registrant's  auditors any material
               weaknesses in internal controls; and

          b)   any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal controls; and

     6.   The  registrant's  other  certifying  officers and I have indicated in
          this  quarterly  report  whether  there  were  significant  changes in
          internal controls or in other factors that could significantly  affect
          internal   controls   subsequent  to  the  date  of  our  most  recent
          evaluation,   including   any   corrective   actions  with  regard  to
          significant deficiencies and material weaknesses.

Date: May 8, 2003

                                        /s/ Margaret M. Eardley
                                        ----------------------------------------
                                        Margaret M. Eardley
                                        Executive Vice President and
                                        Chief Financial Officer

                                       18