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, 2002            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, 2002
Common Stock, without par value                          2,907,481 shares
<PAGE>
                                     PART I

ITEM 1. FINANCIAL STATEMENTS

                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                  December 31,      March 31,
                                                                      2001            2002
                                                                  ------------    ------------
                                                                                   (Unaudited)
<S>                                                               <C>             <C>
                                     ASSETS
  Cash and cash equivalents                                       $  3,548,058    $  2,324,842
  Notes receivable, net                                             30,365,225      31,347,806
  Resort property held for Vacation Ownership Interest sales        20,270,872      19,675,907
  Resort property under development                                  5,116,227       5,366,608
  Land held for sale                                                   830,686         791,102
  Deferred assets                                                      131,794         121,862
  Property and equipment, net                                        6,189,082       6,141,724
  Other assets                                                       7,672,891       8,117,521
                                                                  ------------    ------------

      TOTAL ASSETS                                                $ 74,124,835    $ 73,887,372
                                                                  ============    ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
  Accounts payable                                                $  1,488,456    $  1,524,291
  Accrued and other liabilities                                      2,354,911       4,418,013
  Income taxes payable                                                 689,923         141,506
  Due to affiliates                                                     24,022              --
  Notes payable                                                     40,619,303      38,829,318
  Notes payable to affiliates                                        1,000,000              --
  Deferred income taxes                                              2,163,207       2,661,514
                                                                  ------------    ------------

      Total liabilities                                             48,339,822      47,574,642
                                                                  ------------    ------------

SHAREHOLDERS' EQUITY
  Preferred stock, $10 par value; 10,000,000 shares authorized;
    284,816 and 279,905 shares issued and outstanding;
    liquidation preference of $2,848,160 and $2,799,050              1,117,025       1,103,471
  Common stock, no par value; 30,000,000 shares authorized;
    4,132,702 and 4,166,381 shares issued                           18,405,576      18,639,207
  Treasury stock, at cost, 1,200,700 and 1,258,900 shares,
    respectively                                                    (3,688,083)     (4,127,901)
  Additional paid in capital                                           269,869         269,869
  Retained earnings                                                  9,680,626      10,428,084
                                                                  ------------    ------------

      Total shareholders' equity                                    25,785,013      26,312,730
                                                                  ------------    ------------

      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                  $ 74,124,835    $ 73,887,372
                                                                  ============    ============
</TABLE>

            See notes to condensed consolidated financial statements

                                        2
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                                   Three months ended March 31,
                                                   ----------------------------
                                                       2001            2002
                                                   ------------    ------------
TIMESHARE REVENUES:
  Sales of Vacation Ownership Interests            $  6,520,224    $  7,184,845
  Resort operating revenue                            4,047,224       3,629,716
  Interest income                                       691,522       1,024,729
                                                   ------------    ------------

      Total timeshare revenues                       11,258,970      11,839,290
                                                   ------------    ------------

COST OF SALES AND OPERATING EXPENSES:
  Cost of Vacation Ownership Interests sold           1,108,646       1,048,061
  Cost of resort operations                           3,248,430       3,365,370
  Sales and marketing                                 4,081,868       4,583,989
  General and administrative                          1,047,639       1,098,677
  Provision for doubtful accounts                       286,195         314,763
  Depreciation and amortization                          98,054         222,837
                                                   ------------    ------------

      Total cost of sales and operating expenses      9,870,832      10,633,697
                                                   ------------    ------------

Timeshare operating income                            1,388,138       1,205,593

Income (expense) from land and other, net                (3,267)        526,373
                                                   ------------    ------------

Total operating income                                1,384,871       1,731,966

Interest expense                                       (743,484)       (486,201)
                                                   ------------    ------------

Income before income taxes                              641,387       1,245,765

Income tax expense                                     (259,878)       (498,307)
                                                   ------------    ------------

NET INCOME                                         $    381,509    $    747,458
                                                   ============    ============
NET INCOME PER SHARE

     Basic                                         $       0.11    $       0.25
                                                   ============    ============

     Diluted                                       $       0.11    $       0.24
                                                   ============    ============

            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,
                                                                     ----------------------------
                                                                         2001           2002
                                                                      -----------    -----------
<S>                                                                   <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                          $   381,509    $   747,458
  Adjustments to reconcile net income to net cash provided by
     operating activities:
     Gain on sale of property and equipment                                    --       (585,441)
     Loss on assumption of Sedona Worldwide Incorporated assets and
       liabilities                                                             --         48,887
     Income tax expense                                                   259,878        498,307
     Provision for doubtful accounts                                      286,195        314,763
     Depreciation and amortization                                         98,054        222,837
     Amortization of guarantee fees                                           150          9,932
     Contribution of common stock to ESOP Plan                             18,104             --
     Common stock issued to employees for services                          4,000        220,077
     Change in assets and liabilities:
       Decrease in resort property held for Vacation Ownership
         Interest sales                                                   621,301        594,965
       Increase in resort property under development                      (98,317)      (250,381)
       Decrease in land held for sale                                          --         39,584
       Increase in other assets                                          (121,597)      (464,125)
       (Decrease) increase in accounts payable                           (267,732)        35,835
       Increase in accrued and other liabilities                          994,215      1,978,925
       Decrease in income taxes payable                                        --       (548,417)
       Increase (decrease) in due to affiliates                            23,500        (24,022)
                                                                      -----------    -----------

Net cash provided by operating activities                               2,199,260      2,839,184
                                                                      -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Increase in notes receivable, net                                    (1,573,812)    (1,297,344)
  Purchases of plant and equipment, net                                  (340,004)    (1,060,055)
  Cash acquired from Sedona Worldwide Incorporated                             --         30,457
                                                                      -----------    -----------

Net cash used in investing activities                                  (1,913,816)    (2,326,942)
                                                                      -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from notes payable                                           4,253,336      3,810,652
  Principal payments on notes payable                                  (4,199,562)    (4,806,292)
  Principal payments on notes payable to affiliates                            --       (300,000)
  Acquisition of treasury stock and other                                (293,109)      (439,818)
                                                                      -----------    -----------

Net cash used in financing activities                                    (239,335)    (1,735,458)
                                                                      -----------    -----------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                           46,109     (1,223,216)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                        2,518,122      3,548,058
                                                                      -----------    -----------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                            $ 2,564,231    $ 2,324,842
                                                                      ===========    ===========
</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, 2002 are not  necessarily  indicative of the results that
may be  expected  for the  year  ending  December  31,  2002.  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,
                                                ----------------------------
                                                   2001              2002
                                                 --------          --------
     Interest paid                               $710,431          $500,997
     Income taxes paid                                 --          $548,417
     Interest capitalized                              --          $ 89,868

                                       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
                                                                      ----------------------------
                                                                         2001             2002
                                                                      -----------      -----------
<S>                                                                   <C>              <C>
Net income                                                            $   381,509      $   747,458
Less: Series A preferred stock dividends                                  (11,969)         (11,862)
                                                                      -----------      -----------

Net income available to common stockholders - basic                   $   369,540      $   735,596
                                                                      ===========      ===========

Weighted average shares of common stock outstanding - basic             3,395,543        2,934,855
                                                                      ===========      ===========

Basic net income per share                                            $      0.11      $      0.25
                                                                      ===========      ===========
</TABLE>

                          DILUTED NET INCOME PER SHARE

<TABLE>
<CAPTION>
                                                                      Three Months Ended March 31
                                                                      ----------------------------
                                                                         2001             2002
                                                                      -----------      -----------
<S>                                                                   <C>              <C>
Net income                                                            $   381,509      $   747,458
Less: Series A preferred stock dividends                                  (11,969)         (11,862)
                                                                      -----------      -----------

Net income available to common stockholders - diluted                 $   369,540      $   735,596
                                                                      ===========      ===========

Weighted average shares of common stock outstanding                     3,395,543        2,934,855

Add: Convertible preferred stock (Series B and C) dilutive effect          80,752           78,397

       Stock options dilutive effect                                           --           55,171
                                                                      -----------      -----------

Weighted average shares of common stock outstanding - dilutive          3,476,295        3,068,423
                                                                      ===========      ===========

Diluted net income per share                                          $      0.11      $      0.24
                                                                      ===========      ===========
</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 between 2002 and 2006.

                                       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, 2002, the Company issued 300 shares
of restricted common stock,  valued at $1,035 and 31,742 shares of common stock,
valued at $219,042,  to employees 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, 2002,
the Company recorded the exchange of 4,911 Series C Convertible shares for 1,637
common  shares.  Also during the three months ended March 31, 2002,  the Company
purchased 58,200 shares of its common stock for $439,818.

NOTE 4. OTHER

     In December  2000,  the Company  acquired  for  $1,010,000  cash the Sedona
Station  adjacent to Los  Abrigados to be the site of a new Sedona sales center.
In March 2001, the Company borrowed $808,000,  which was secured by the property
and bore interest at a fixed rate of 8.625%. In March 2002, the Company sold the
property  for  $1,650,000  and is  leasing  the  space  back  under a nine  year
agreement.  The loan secured by the  property,  which had a balance of $794,345,
was assumed by the  purchaser  and a note payable to  affiliates of $700,000 was
relieved as part of the transaction.  The Company recorded a gain of $586,111 on
the sale.

NOTE 5. SUBSEQUENT EVENT

     In  April  2002,   the  Company   borrowed  $2.0  million  to  finance  the
construction  of 21 new units on land owned by the Company in Pinetop,  Arizona.
The  promissory  note  payable  bears  interest at prime plus 1.5%.  The debt is
payable in equal monthly installments of principal and interest over a five year
term ending May 2007.

                                       7
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

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,"
"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"). Two of the resorts in
Arizona  are not at this time  registered  with the Arizona  Department  of Real
Estate nor are being marketed for sale as Vacation Ownership Interests,  and one
of the two resorts is operated under a long-term lease arrangement.  The Company
also owns 927 Vacation Ownership Interests in a resort in Las Vegas, Nevada, 600
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.

                                       8
<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,
                                                            ----------------------------
                                                                2001           2002
                                                              ---------      ---------
<S>                                                           <C>            <C>
As a percentage of total timeshare revenues:
  Sales of Vacation Ownership Interests                            57.9%          60.7%
  Resort operating revenue                                         35.9%          30.7%
  Interest income                                                   6.2%           8.6%
                                                              ---------      ---------
  Total timeshare revenues                                        100.0%         100.0%
                                                              =========      =========

As a percentage of sales of Vacation Ownership Interests:
  Cost of Vacation Ownership Interests sold                        17.0%          14.6%
  Sales and marketing                                              62.6%          63.8%
  Provision for doubtful accounts                                   4.4%           4.4%
  Contribution margin percentage from sale of Vacation
    Ownership Interests (1)                                        16.0%          17.2%

As a percentage of resort operating revenue:
  Cost of resort operations                                        80.3%          92.7%

As a percentage of total timeshare revenues:
  General and administrative                                        9.3%           9.3%
  Depreciation and amortization                                     0.9%           1.9%
  Timeshare operating income                                       12.3%          10.2%

Selected operating data:
  Vacation Ownership Interests sold (2)(3)                          410            420
  Average sales price per Vacation Ownership Interest
    sold (excluding revenues from Upgrades) (2)               $  14,128      $  14,207
  Average sales price per Vacation  Ownership Interest
    sold (including revenues from Upgrades) (2)               $  15,616      $  16,842
</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 645 and 630  biennial  and  annual  Vacation
     Ownership  Interests  for the three  months  ended March 31, 2001 and 2002,
     respectively.

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

COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 2001 TO THE THREE MONTHS ENDED
MARCH 31, 2002

     Sales of  Vacation  Ownership  Interests  increased  10.2% or  $664,621  to
$7,184,845  for the three months ended March 31, 2002,  from  $6,520,224 for the
same period in 2001. The increase  reflects  primarily  sales from the Las Vegas
sales  office which opened in mid January  2002,  and greater  sales to existing
owners,  net of decreased sales from the Sedona sales office due to reduced tour
flow,  and the closure of the Phoenix sales office in May 2001.  The decrease in
tours to the Sedona  office in the first  quarter of 2002  reflects fewer  tours
generated  from  outside  vendors  and the  reduction  of certain  telemarketing
programs.  While total  revenue  decreased  to this sales  office as a result of
fewer tours, the efficiency (revenue per tour) increased.

     The average sales price per Vacation  Ownership  Interest  sold  (excluding
revenues from  Upgrades)  increased 0.6% or $79 in 2002 to $14,207 for the three
months ended March 31, 2002 from $14,128 for the same period in 2001. The number
of Vacation Ownership Interests sold increased 2.4% from 410 in the three months
ended  March 31,  2001 to 420 for the same  period in 2002 due to the opening of
the Las Vegas sales office,  net of reduced sales in the Sedona sales office and
closure of the Phoenix  sales  office in 2001,  as  described  above.  The three
months ended March 31, 2002 included 420 biennial Vacation  Ownership  Interests
(counted as 210 annual Vacation  Ownership  Interests)  compared to 470 biennial
Vacation   Ownership   Interests  (counted  as  235  annual  Vacation  Ownership
Interests) in the same period in 2001.

     Upgrade revenue,  included in Vacation Ownership Interest sales,  increased
81.3% to $1,106,540  for the three months ended March 31, 2002 from $610,194 for
the same  period  in 2001,  reflecting  continuation  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  7.9% or $1,226 to $16,842 for the three months ended March
31, 2002 from $15,616 in 2001.

     Resort operating  revenue decreased 10.3% or $417,508 to $3,629,716 for the
three months ended March 31, 2002, reflecting timing differences in revenue from
vacation  interval owners and reduced  business and tourist travel by non-owners
in 2002. The  difference in cost of resort  operations as a percentage of resort
operating revenue from 80.3% in 2001 to 92.7% in 2002 reflect greater revenue in
2001,  including  non-recurring  benefits,  with  2002 cost as a  percentage  of
revenue being comparable to prior periods.

     Interest  income  increased  48.2% to $1,024,729 for the three months ended
March 31, 2002 from $691,522 for the same period in 2001 reflecting the increase
in interest bearing notes receivable between years as well as an increase in the
percentage of Customer Notes sold in 2002, 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 17.0% for the three months ended March
31,  2001 to 14.6%  for the  three  months  ended  March  31,  2002,  reflecting
favorable  cost for the  acquisition  of  vacation  ownership  interests  in the
Carriage House and the Bell Rock Inn, and variations in product mix and pricing,
net of improvements made to resort properties.

     Sales  and  marketing  as a  percentage  of  sales  of  Vacation  Ownership
Interests  increased  to 63.8% for the three  months  ended  March 31, 2002 from
62.6% for the same  period in 2001,  reflecting  the  start-up  of the Las Vegas
sales center in January 2002.

     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, 2001 and 2002.

     General  and  administrative  expenses  were  comparable  at 9.3% of  total
timeshare  revenues  for both the three month  periods  ended March 31, 2002 and
2001.

                                       10
<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, 2002
includes a gain of $586,111 on the sale in March 2002 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  as of January 2, 2002. The
Sedona Station was sold for $1,650,000 and the Company is leasing the space back
under a nine year agreement.

     The 34.6%  decrease in interest  expense to $486,201  for the three  months
ended March 31, 2002 from  $743,484  for the same  period in 2001  reflects  the
combined net effect of greater  borrowings in 2002 with lower  interest rates on
the  Company's  variable  rate  notes,  and  capitalized   interest  related  to
construction in Las Vegas and Arizona in 2002.

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, 2001
and  2002,   cash  provided  by  operations  was   $2,199,260  and   $2,839,184,
respectively.  The increase in cash provided by operations reflects the combined
effect of an  increase  in  accrued  and  other  liabilities  reflecting  timing
differences between years in drawing funds from the homeowners  associations for
operating  activities,  common  stock  issued  to  employees  in  lieu  of  cash
compensation,  net of an increase in other assets.  The increase in other assets
is a result of  maintenance  fee payments  made to the  Carriage  House for 2002
which will be  amortized  over the  entire  year,  as well as  prepaid  rent and
deposits for marketing locations in Las Vegas.

     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, 2001, the Company,  excluding its Genesis  subsidiary,  had
NOL  carryforwards of approximately  $5.2 million,  which expire in 2002 through
2020.  At  December  31,  2001,   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.

                                       11
<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,  2001  and  2002  was   $1,913,816   and   $2,326,942,
respectively.  The increase is a result of the  construction  activities  in Las
Vegas,  including the  renovation  of a portion of the existing  building into a
sales center,  as well as the  construction  of eight new units at Los Abrigados
Resort & Spa.

     Net cash used in financing  activities  in the three months ended March 31,
2001 and 2002 was $239,335 and $1,735,458,  respectively.  The increase reflects
greater  repayments  on  borrowings  to  finance  Customer  Notes  as well as an
increase in treasury stock purchases in 2002.

     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.

     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,  2002,  the  Company  has  an  agreement  with  a  financial
institution  for a commitment  of $40 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, 2002,  $21.0  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
commitment  expires in 2002. At March 31, 2002,  approximately  $12.6 million is
available under this commitment.

     At March 31, 2001 and 2002, the Company had approximately $16.9 million and
$10.9 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 the first three months of 2002, the Company  purchased  58,200  treasury
shares for a cost of $439,818.

     In December  2000,  the Company  acquired  for  $1,010,000  cash the Sedona
Station adjacent to Los Abrigados to be the site of its new Sedona sales center.
In March 2001, the Company borrowed $808,000,  which was secured by the property
and bore interest at a fixed rate of 8.625%. In March 2002, the Company sold the
property  for  $1,650,000  and is  leasing  the  space  back  under a nine  year
agreement.  The loan secured by the  property,  which had a balance of $794,345,
was assumed by the  purchaser  and a note payable to  affiliates of $700,000 was
relieved as part of the transaction.  The Company recorded a gain of $586,111 on
the sale.

     In the three  months  ended,  March 31,  2002,  the Company  purchased  117
Vacation   Ownership   Interests  in  the  Carriage   House  in  Las  Vegas  for
approximately  $161,000 which it intends to annex into Premiere Vacation Club in
the future.

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

     In October 2001, the Company  amended an outstanding  construction  loan to
secure an  additional  $5.2 million in  construction  financing  for current and
planned projects.

     In  April  2002,   the  Company   borrowed  $2.0  million  to  finance  the
construction  of 21 new units on land owned by the Company in Pinetop,  Arizona.
The  promissory  note  payable  bears  interest at prime plus 1.5%.  The debt is
payable in equal  monthly  payments of principal  and interest  over a five year
term ending May 2007.

     In December 1999,  the Company  completed the spin-off of its 80% ownership
interest  in  Sedona  Worldwide  Incorporated  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, 2001 at an interest rate
of prime plus 3%, with interest payable monthly, and a maturity date of December
31, 2001. Pursuant to the agreement, the Company had advanced SWI $108,000 as of
December 31, 2001. On January 2, 2002,  the Company  entered into a General Bill
of Sale,  Assignment  and  Assumption  Agreement  with SWI  whereby  the Company
assumed all of the assets and liabilities of SWI.

     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, 2002.  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               $38,668,000    $ 7,382,000    $11,979,000    $ 8,853,000    $10,454,000
CAPITAL LEASE OBLIGATIONS        162,000        115,000         47,000             --             --
OPERATING LEASES              16,161,000      1,523,000      2,701,000      2,203,000      9,734,000
                             -----------    -----------    -----------    -----------    -----------
TOTAL                        $54,991,000    $ 9,020,000    $14,727,000    $11,056,000    $20,188,000
                             ===========    ===========    ===========    ===========    ===========
</TABLE>

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

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,  2002.
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.

                                       14
<PAGE>
                                     PART II

ITEM I. LEGAL PROCEEDINGS

     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

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 Edward John Martori,  dated March 25,
                         2002

             10.2        SEDONA  STATION LEASE between ILX Resorts  Incorporated
                         and Edward John Martori, dated March 25, 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, 2002

                                       16