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 June 30, 2000             Commission File Number 001-13855
                      -------------                                    ---------


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


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


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

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

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.  Yes [X]  No [ ]

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

            Class                                   Outstanding at June 30, 2000
-------------------------------                     ----------------------------
Common Stock, without par value                           3,970,498 shares
<PAGE>
                                     PART I

ITEM 1. FINANCIAL STATEMENTS

                    ILX RESORTS INCORPORATED AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


                                                      December 31,    June 30,
                                                         1999           2000
                                                     -----------    -----------
                         ASSETS                                     (Unaudited)

Cash and cash equivalents                            $ 2,971,365    $ 2,807,570
Notes receivable, net                                 23,145,383     24,540,731
Resort property held for Vacation Ownership
 Interest sales                                       21,742,875     20,684,633
Resort property under development                        346,786        803,932
Land held for sale                                     1,596,759      1,602,597
Deferred assets                                          227,933        146,385
Property and equipment, net                            4,212,470      4,307,126
Other assets                                           3,144,951      1,997,641
                                                     -----------    -----------

    TOTAL ASSETS                                     $57,388,522    $56,890,615
                                                     ===========    ===========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
  Accounts payable                                   $   923,016    $ 1,145,017
  Accrued and other liabilities                        2,679,107      2,692,447
  Due to affiliates                                       26,282             --
  Notes payable                                       27,020,947     25,164,422
  Notes payable to affiliates                          1,100,000      1,100,000
  Income taxes payable                                   376,223      1,082,104
                                                     -----------    -----------

    Total liabilities                                 32,125,575     31,183,990
                                                     -----------    -----------

MINORITY INTERESTS                                        23,778             --
                                                     -----------    -----------
SHAREHOLDERS' EQUITY
  Preferred stock, $10 par value; 10,000,000 shares
   authorized; 305,978 and 293,635 shares issued and
   outstanding; liquidation preference of $3,059,780
   and $2,936,350                                      1,179,298      1,144,312
  Common stock, no par value; 30,000,000 shares
   authorized; 3,921,173 and 3,970,498 shares issued  18,069,840     18,148,852
  Treasury stock, at cost, 0 and 305,600 shares,
   respectively                                               --       (614,894)
  Additional paid in capital                             279,450        225,742
  Guaranteed ESOP Obligation                            (500,000)      (250,000)
  Retained earnings                                    6,210,581      7,052,613
                                                     -----------    -----------

    Total shareholders' equity                        25,239,169     25,706,625
                                                     -----------    -----------

       TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY    $57,388,522    $56,890,615
                                                     ===========    ===========

                 See notes to consolidated financial statements

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

<TABLE>
<CAPTION>
                                             Three months ended June 30,    Six months ended June 30,
                                             --------------------------     -------------------------
                                                1999            2000            1999          2000
                                             -----------    -----------     -----------   -----------
<S>                                          <C>           <C>             <C>           <C>
TIMESHARE REVENUES:
  Sales of Vacation Ownership Interests      $ 6,168,570    $ 6,646,704     $11,320,079   $12,593,560
  Resort operating revenue                     3,357,742      3,558,870       6,220,745     6,683,080
  Interest income                                884,577        801,853       1,648,710     1,741,808
                                             -----------    -----------     -----------   -----------

      Total timeshare revenues                10,410,889     11,007,427      19,189,534    21,018,448
                                             -----------    -----------     -----------   -----------
COST OF SALES AND OPERATING EXPENSES:
  Cost of Vacation Ownership Interests sold      921,111        913,443       1,614,585     1,729,834
  Cost of resort operations                    3,045,256      3,183,597       5,858,297     6,179,178
  Sales and marketing                          3,730,893      3,561,039       7,139,859     7,141,524
  General and administrative                   1,101,582      1,150,576       2,032,142     2,232,208
  Provision for doubtful accounts                176,453        293,275         327,299       516,756
  Depreciation and amortization                  112,874        142,606         225,576       279,141
                                             -----------    -----------     -----------   -----------
      Total cost of sales and operating
        expenses                               9,088,169      9,244,536      17,197,758    18,078,641
                                             -----------    -----------     -----------   -----------

Timeshare operating income                     1,322,720      1,762,891       1,991,776     2,939,807
Income from land and other, net                   37,505          2,922          56,397         5,382
                                             -----------    -----------     -----------   -----------

Total operating income                         1,360,225      1,765,813       2,048,173     2,945,189
Interest expense                                 698,094        699,360       1,370,375     1,388,363
                                             -----------    -----------     -----------   -----------
Income before income taxes and minority
  interests                                      662,131      1,066,453         677,798     1,556,826
Income tax expense                               264,000        426,746         268,000       596,746
                                             -----------    -----------     -----------   -----------

Income before minority interests                 398,131        639,707         409,798       960,080
Minority interests                                 5,454          6,145          12,244        70,422
                                             -----------    -----------     -----------   -----------

NET INCOME                                   $   392,677    $   633,562     $   397,554   $   889,658
                                             ===========    ===========     ===========   ===========
NET INCOME PER SHARE
     Basic                                   $      0.10    $      0.17     $      0.09   $      0.23
                                             ===========    ===========     ===========   ===========
     Diluted                                 $      0.09    $      0.16     $      0.09   $      0.22
                                             ===========    ===========     ===========   ===========
</TABLE>
                 See notes to consolidated financial statements

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


                                                     Six months ended June 30,
                                                   --------------- ------------
                                                       1999             2000
                                                   ------------     -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                        $    397,554     $   889,658
 Adjustments to reconcile net income to net cash
  provided by (used in) operating activities:
  Undistributed minority interest                        12,244         (23,778)
  Deferred income taxes                                 283,984              --
  Provision for doubtful accounts                       327,299         516,756
  Depreciation and amortization                         225,576         279,141
  Amortization of guarantee fees                          4,200          (1,150)
  Change in assets and liabilities:
   Decrease (increase) in resort property held
     for Vacation Ownership Interest sales              (93,793)      1,058,242
   Increase in resort property under development       (139,689)       (457,146)
   Increase in land held for sale                        (8,607)         (5,838)
   Decrease (increase) in other assets                 (956,472)      1,355,448
   Increase (decrease) in accounts payable             (421,222)        222,001
   Increase in accrued and other liabilities            521,934          44,765
   Decrease in due to affiliates                             --         (26,282)
   Increase in income taxes payable                          --         705,881
                                                   ------------     -----------
Net cash provided by operating activities               153,008       4,557,698

CASH FLOWS FROM INVESTING ACTIVITIES:
 Notes receivable, net                               (2,657,654)     (1,912,104)
 Decrease (increase) in deferred assets                 (30,572)         82,698
 Purchases of plant and equipment, net                 (850,968)       (372,797)
                                                   ------------     -----------
Net cash used in investing activities                (3,539,194)     (2,202,203)
                                                   ------------     -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from notes payable                         10,963,477       5,392,362
 Principal payments on notes payable                 (8,952,022)     (7,248,887)
 Preferred stock dividend payments                      (47,876)        (47,626)
 Acquisition of treasury stock and other               (213,775)       (614,894)
 Redemption of preferred stock                               --            (245)
                                                   ------------     -----------
Net cash (used in) provided by financing
 activities                                           1,749,804      (2,519,290)
                                                   ------------     -----------
DECREASE IN CASH AND CASH EQUIVALENTS                (1,636,382)       (163,795)
                                                   ------------     -----------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD      3,196,710       2,971,365
                                                   ------------     -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD         $  1,560,328     $ 2,807,570
                                                   ============     ===========

                 See notes to consolidated financial statements

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


NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION AND BUSINESS ACTIVITIES

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

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

REVENUE RECOGNITION

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

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        Six Months Ended
                                   June 30,                  June 30,
                            ---------------------   -------------------------
                               1999        2000        1999          2000
                            ---------   ---------   -----------   -----------
     Interest paid           $703,000    $687,411   $1,332,000    $1,393,411
     Income taxes paid       $     --    $     --   $       --    $       --
     Capitalized interest    $     --    $     --   $       --    $       --

ACCOUNTING MATTERS

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

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


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

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

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

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

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 June 30,   Six Months Ended June 30,
                                    --------------------------    --------------------------
                                        1999          2000            1999          2000
                                    -----------    -----------    -----------    -----------
<S>                                 <C>            <C>            <C>            <C>
Net income                          $   392,677    $   633,562    $   397,554    $   889,658
Less: Series A preferred
 stock dividends                        (11,969)       (11,969)       (23,938)       (23,938)
Net income available to common
 stockholders - basic               $   380,708    $   621,593    $   373,616    $   865,720
                                    ===========    ===========    ===========    ===========
Weighted average shares of common
 stock outstanding - basic            3,991,089      3,726,730      4,009,652      3,809,234
                                    ===========    ===========    ===========    ===========
Basic net income per share          $      0.10    $      0.17    $      0.09    $      0.23
                                    ===========    ===========    ===========    ===========
</TABLE>
                                       6
<PAGE>
                          DILUTED NET INCOME PER SHARE
<TABLE>
<CAPTION>
                                    Three Months Ended June 30,   Six Months Ended June 30,
                                    --------------------------    --------------------------
                                        1999           2000           1999           2000
                                    -----------    -----------    -----------    -----------
<S>                                 <C>            <C>            <C>            <C>
Net income                          $   392,677    $   633,562    $   397,554    $   889,658
Less: Series A preferred stock
  dividends                             (11,969)       (11,969)       (23,938)       (23,938)
                                    -----------    -----------    -----------    -----------
Net income available to common
  stockholders - diluted            $   380,708    $   621,593    $   373,616    $   865,720
                                    ===========    ===========    ===========    ===========
Weighted average shares of common
  stock outstanding                   3,991,089      3,726,730      4,009,652      3,809,324
Add: Convertible preferred stock
  (Series B and C) dilutive effect      110,268         85,711        110,404         83,730
                                    -----------    -----------    -----------    -----------
Weighted average shares of common
  stock outstanding - dilutive        4,101,357      3,812,441      4,120,056      3,892,964
                                    ===========    ===========    ===========    ===========
Diluted net income per share        $      0.09    $      0.16    $      0.09    $      0.22
                                    ===========    ===========    ===========    ===========
</TABLE>

         Stock  options to  purchase  145,700  shares of common  stock at prices
ranging  from $3.25 per share to $8.125 per share were  outstanding  at June 30,
2000 but were not  included in the  computation  of diluted net income per share
because the options'  exercise prices were greater than the average market price
of common shares. These options expire at various dates between 2000 and 2004.

NOTE 3. SHAREHOLDERS' EQUITY

         During the six months ended June 30, 2000,  the Company  issued  37,600
shares of restricted common stock,  valued at $31,425,  to employees in exchange
for  services  provided.  These  restricted  shares  of common  stock  issued to
employees are exempt from registration  under Section 4(2) of the Securities Act
of 1933.  Also during the six months ended June 30, 2000, the Company  purchased
305,600 shares of its common stock for $614,894.

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

                                       7
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES


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

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

OVERVIEW

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

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

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

RESULTS OF OPERATIONS

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

<TABLE>
<CAPTION>
                                                Three Months Ended       Six Months Ended
                                                     June 30,                June 30,
                                                ------------------      ------------------
                                                 1999        2000        1999        2000
                                                ------      ------      ------      ------
<S>                                              <C>         <C>         <C>         <C>
As a percentage of total timeshare revenues:
 Sales of Vacation Ownership Interests            59.3%       60.4%       59.0%       59.9%
 Resort operating revenue                         32.3%       32.3%       32.4%       31.8%
 Interest income                                   8.4%        7.3%        8.6%        8.3%
                                                ------      ------      ------      ------
 Total timeshare revenues                        100.0%      100.0%      100.0%      100.0%
                                                ======      ======      ======      ======
As a percentage of sales of Vacation
  Ownership Interests:
 Cost of Vacation Ownership Interests sold        14.9%       13.7%       14.3%       13.7%
 Sales and marketing                              60.5%       53.6%       63.1%       56.7%
 Provision for doubtful accounts                   2.9%        4.4%        2.9%        4.1%
 Contribution margin percentage from sale
   of Vacation Ownership Interests (1)            21.7%       28.3%       19.7%       25.5%
As a percentage of resort operating revenue:
 Cost of resort operations                        90.7%       89.5%       94.2%       92.5%
As a percentage of total timeshare revenues:
 General and administrative                       10.6%       10.5%       10.6%       10.6%
 Depreciation and amortization                     1.1%        1.3%        1.2%        1.3%
 Timeshare operating income                       12.7%       16.0%       10.4%       14.0%
</TABLE>
                                       8
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS
                                   (CONTINUED)
<TABLE>
<CAPTION>
                                               Three Months Ended       Six Months Ended
                                                    June 30,                June 30,
                                               ------------------      -------------------
                                                 1999        2000        1999        2000
                                               -------     -------     -------     -------
<S>                                            <C>         <C>         <C>         <C>
Selected operating data:
Vacation Ownership Interests sold (2) (3)          413         429         745         800
Average sales price per Vacation Ownership
  Interest sold (excluding revenues from
  Upgrades) (2)                                $13,513     $13,937     $13,536     $13,887
Average sales price per Vacation Ownership
  Interest sold (including revenues from
  Upgrades) (2)                                $14,647     $15,116     $15,035     $15,257
</TABLE>

----------
(1)  Defined as: the sum of Vacation  Ownership  Interest sales less the cost of
     Vacation Ownership  Interests sold less sales and marketing expenses less a
     provision  for doubtful  accounts,  divided by sales of Vacation  Ownership
     Interests.
(2)  Reflects all Vacation Ownership Interests on an annual basis.
(3)  Vacation Ownership Interests consist of 192 annual and 441 biennial for the
     three  months  ended June 30, 1999 and 183 annual and 492  biennial for the
     three months  ended June 30, 2000,  and 353 annual and 783 biennial for the
     six months  ended June 30, 1999 and 336 annual and 928 biennial for the six
     months ended June 30, 2000.

COMPARISON OF THE THREE AND SIX MONTHS ENDED JUNE 30, 1999 TO THE THREE AND SIX
MONTHS ENDED JUNE 30, 2000

         Sales of Vacation  Ownership  Interests  increased  7.8% or $478,134 to
$6,646,704  for the three months ended June 30, 2000,  from  $6,168,570  for the
same period in 1999 and increased 11.2% or $1,273,481 to $12,593,560 for the six
months  ended June 30, 2000 from  $11,320,079  for the same period in 1999.  The
increases  largely reflect  increased sales from the Sedona sales office and the
addition  of the  Phoenix  sales  office,  net of  decreases  in sales  from the
VCA-South Bend and VCA-Tucson sales offices. The increased sales from the Sedona
sales  office  are a result  of both an  increase  in the  number  of tours  and
improved  closing rates (sales as a percentage  of tours).  The lower sales from
the VCA-South  Bend sales office  reflect the reduction  from a full scale sales
office to a small  sales  staff that both  generates  its own tours and sells to
such  prospects  for a  percentage  of sales.  The  decrease  in sales  from the
VCA-Tucson  sales office is due to a decrease in tour flow,  in part as a result
of reducing  the  operation  from seven days to five days a week to gain certain
operating efficiencies.  The average sales price per Vacation Ownership Interest
sold  (excluding  revenues  from  Upgrades)  increased  3.1%  or $424 in 2000 to
$13,937  for the three  months  ended June 30,  2000 from  $13,513  for the same
period in 1999 and  increased  2.6% or $351 to $13,887 for the six months  ended
June 30, 2000 from  $13,536 for the same  period in 1999,  reflecting  a greater
percentage of sales of biennial  interests,  which are sold for greater than one
half of the price of an annual interest.

         The number of Vacation Ownership Interests sold increased 3.9% from 413
in the three  months  ended June 30, 1999 to 429 for the same period in 2000 due
to a higher closing rate at the Sedona sales office, and increased 7.4% from 745
in the six months  ended June 30, 1999 to 800 for the same period in 2000 due to
both greater tour flow and a higher closing rate at the Sedona sales office, the
addition of the Phoenix  sales office,  net of reduced  sales in the  VCA--South
Bend and  VCA--Tucson  sales  offices  as  described  above.  Sales of  Vacation
Ownership Interests in the three and six months ended June 30, 2000 included 492
and 928 biennial  Vacation  Ownership  Interests  (counted as 246 and 464 annual
Vacation  Ownership  Interests)  compared  to  441  and  803  biennial  Vacation
Ownership  Interests  (counted  as 205.5 and  401.5  annual  Vacation  Ownership
Interests) in the same periods in 1999, respectively.

         Upgrade  revenue,   included  in  Vacation  Ownership  Interest  sales,
decreased  26.7% to  $505,634  for the three  months  ended  June 30,  2000 from
$689,812 for the same period in 1999 and decreased  1.8% to  $1,096,499  for the
six months  ended June 30,  2000 from  $1,116,305  for the same  period in 1999.

                                       9
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS
                                   (CONTINUED)

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 3.2%
or $469 to $15,116 for the three months ended June 30, 2000 from $14,647 in 1999
and  increased  1.5% or $222 to $15,257  for the six months  ended June 30, 2000
from $15,035 for the same period in 1999, as a result of the greater  percentage
of  biennial  sales,  which  sell for more  than one half the price of an annual
interest, net of lower Upgrades.

         Resort  operating  revenues  increased  6.0% and 7.4% or  $201,128  and
$462,335  to  $3,558,870  and  $6,683,080  for the  three and six  months  ended
June 30, 2000,  respectively,  reflecting  net  increased  occupancy and average
receipts,  including the growth of business at  VCA-Tucson,  which opened in the
third quarter of 1998.  Cost of resort  operations  improved to 89.5% from 90.7%
and to  92.5%  from  94.2%  for the  second  quarter  and six  months  of  2000,
respectively, as a result of net increases in operating efficiencies,  including
VCA-Tucson.

         Interest  income  decreased 9.4% to $801,853 for the three months ended
June 30, 2000 from  $884,577 for the same period in 1999 and  increased  5.6% to
$1,741,808  for the six months ended June 30, 2000 from  $1,648,710 for the same
period in 1999. The decrease in the quarter is caused by an increased  number of
early payoffs of Customer Notes.  The  year-to-date  increase is a result of the
increased Customer Notes retained by the Company and increases in interest rates
charged by the Company on its Customer  Notes,  consistent  with its strategy to
retain and borrow  against,  rather than sell, a greater portion of its Customer
Notes.  The Company has sought to increase the  percentage of Customer  Notes it
retains  (hypothecates)  and borrows  against,  rather than sells, and earns the
interest spread between the customer rate and the lower Company borrowing rate.

         Cost of Vacation  Ownership  Interests sold as a percentage of Vacation
Ownership  Interest  sales  decreased  from  14.9%  for the three  months  ended
June 30,  1999 to 13.7% for the same  period in 2000 and from  14.3% for the six
months ended June 30, 1999 to 13.7% for the same period in 2000,  reflecting the
increase in average sales price in 2000.

         Sales and  marketing  as a  percentage  of sales of Vacation  Ownership
Interests decreased to 53.6% for the three months ended June 30, 2000 from 60.5%
for the same period in 1999 and to 56.7% for the six months  ended June 30, 2000
from 63.1% for the same  period in 1999.  The  improvements  reflect  changes in
sales and marketing  approaches that commenced in the first quarter of 1999, and
are continuing,  including generation of a greater number of tours and increased
closing  rates at the Sedona  sales  office,  reduction of less  efficient  tour
generation  methods to the VCA--South  Bend sales office in the third quarter of
1999 and to the Kohl's Ranch sales office in the first quarter of 2000.

         The  provision  for  doubtful  accounts  as a  percentage  of  Vacation
Ownership  Interest  sales  increased  to 4.4% and  4.1% of  sales  of  Vacation
Ownership  Interests  in the three and six month  periods  ended June 30,  2000,
respectively,  from 2.9% for the same periods in 1999,  reflecting the Company's
decision to increase  the  provision  on new sales  effective  both in the third
quarter of 1999 and the second quarter of 2000.

         General and administrative expenses increased 4.4% to $1,150,576 in the
three months ended June 30, 2000 from $1,101,582 for the same period in 1999 and
9.8% to $2,232,208 in the six months ended June 30, 2000 from $2,032,142 for the
same period in 1999. General and administrative  expenses remained consistent at
10.5% and 10.6% as a percentage of total timeshare revenues in the three and six
months ended June 30, 2000, respectively, compared to 10.6% for the same periods
in 1999.

         The 0.2%  and 1.3%  increases  in  interest  expense  to  $699,360  and
$1,388,363  for the three and six months  ended June 30, 2000 from  $698,094 and
$1,370,375  for the same periods in 1999,  respectively,  reflect an increase in
borrowings  against customer notes receivable as the Company retains and borrows
against more of its  consumer  paper and an increase in interest  rates,  net of
fluctuations in the balances of borrowings outstanding.

                                       10
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS
                                   (CONTINUED)

LIQUIDITY AND CAPITAL RESOURCES

SOURCES OF CASH

         The  Company  generates  cash  primarily  from  the  sale  of  Vacation
Ownership Interests (including  Upgrades),  the financing of customer notes from
such sales and resort operations.  During the six months ended June 30, 1999 and
2000, cash provided by operations was $153,008 and $4,557,698, respectively. The
increase is due to increased  income and resultant  income taxes payable as well
as  decreased  other  assets and resort  property  held for  Vacation  Ownership
Interest sales.  The decrease in other assets is related to advances made to the
Sedona Vacation Club Homeowners'  Association for renovations as of December 31,
1999,  which were  reimbursed  in the first  quarter  of 2000,  and to timing of
collections  of  homeowners'  dues.  The  decrease in resort  property  held for
Vacation  Ownership  Interest  sales  reflects the increase in sales of Vacation
Ownership  Interests in 2000 and the  annexation of weeks from the Sea of Cortez
Beach Club to ILX Premiere Vacation Club in the first half of 1999.  Because the
Company uses  significant  amounts of cash in the  development  and marketing of
Vacation  Ownership  Interests,  but  collects  the cash on the  customer  notes
receivable  over a  long  period  of  time,  borrowing  against  and/or  selling
receivables is a necessary part of its normal operations.

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

         At December 31, 1999,  the Company,  excluding its Genesis  subsidiary,
had NOL  carryforwards  of  approximately  $9.8  million,  which  expire in 2001
through 2012.  At December 31, 1999,  Genesis had federal NOL  carryforwards  of
approximately  $1.4  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.

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
six  months  ended  June  30,  1999  and 2000  was  $3,539,194  and  $2,202,203,
respectively. The decrease is due mainly to a reduction in the increase of notes
receivable from prior year end to the end of the respective first quarters.  The
Company  began  hypothecating  rather  than  selling a greater  portion of notes
receivable in the first quarter of 1999. The Company  continued this strategy in
2000;  therefore,  there was a larger increase in the notes  receivable  balance
from  December  31, 1998 to June 30,  1999,  as compared  to the  increase  from

                                       11
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS
                                   (CONTINUED)

December  31, 1999 to June 30,  2000.  Also  contributing  to the  decrease is a
reduction in the purchase of equipment.

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

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

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

         During  1999,  the ESOP  purchased  a total of  375,300  shares  of the
Company's common stock in the open market, including 257,400 with borrowed funds
and, at June 30, 2000,  held the 375,300  shares and $2,646 in cash.  The shares
purchased with borrowed funds had not been allocated to participant  accounts as
of June 30, 2000 and are collateral for the borrowing.  The fair market value of
the unallocated shares at June 30, 2000 was approximately $609,435.

         The leveraged and unallocated shares will be released at the end of the
current  Plan year  (December  31,  2000) based on the amount of  principal  and
interest  payments  made during the year.  During the six months  ended June 30,
2000, the Company paid and recognized as an expense contributions of $18,906 for
interest and $250,000 for principal.

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

CREDIT FACILITIES AND CAPITAL

         The Company has an  agreement  with a financial  institution  for a $40
million  financing  commitment  under which the Company may sell  certain of its
Customer  Notes.  The  agreement  provides for sales on a recourse  basis with a
percentage  of the  amount  sold  held  back  by the  financial  institution  as
additional  collateral.  Customer  Notes may be sold at discounts or premiums to
the principal  amount in order to yield the consumer  market rate, as defined by
the financial  institution.  At June 30, 2000,  $27.9 million of the $40 million
commitment was available to the Company.

         The Company also has financing  commitments  aggregating  $43.5 million
whereby the Company may borrow against notes  receivable  pledged as collateral.
These  borrowings  bear  interest at a rate of prime plus 1.5% ($40  million) to
prime plus 3% ($3.5  million).  The $3.5  million  and $40  million  commitments

                                       12
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS
                                   (CONTINUED)

expire in 2001 and 2002,  respectively.  At June 30, 2000,  approximately  $25.6
million is available under these commitments.

         At June 30, 1999 and 2000, the Company had approximately  $16.7 million
and $18.6 million,  respectively,  in  outstanding  notes  receivable  sold on a
recourse basis.  Portions of the notes  receivable are secured by deeds of trust
on Los Abrigados Resort & Spa, VCA-South Bend and VCA-Tucson.

         In  December  1999,  the  Company  completed  the  spin-off  of its 80%
ownership  interest in SWI to the  shareholders of ILX. In conjunction  with the
spin-off,  the  Company  agreed to provide  up to  $200,000  of working  capital
financing to SWI through  November 30,  2000.  All amounts  borrowed by SWI will
bear  interest at the prime rate plus 3%, with  interest  payable  monthly.  The
entire  unpaid  principal  will be due on December 31,  2000.  At June 30, 2000,
there had been no funds advanced under this agreement.

         In February  2000,  the Company  borrowed  $600,000  for the purpose of
using the funds to purchase  treasury stock. The note is  collateralized by cash
or stock,  bears  interest at 12% and is due through  2002. As of June 30, 2000,
the Company  purchased  247,000 shares of stock at a cost of $513,137 with funds
provided by this note.  The remaining  $86,049 is classified as restricted  cash
and is included in "Other Assets" on the balance sheet.

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

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

SEASONALITY

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

INFLATION

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

                                       13
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                                     PART II

ITEM 1. LEGAL PROCEEDINGS

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

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

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

         In June 2000,  the Company  brought suit in The  Superior  Court of the
State  of  Arizona  against  Ronald  R.  Rostan,  a  former  employee,   seeking
compensation and punitive damages for breach of contract,  negligence, breach of
fiduciary  duties,  embezzlement,  conversion,  fraud,  deceit,  concealment and
non-disclosure. This litigation is in the discovery stage.

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

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

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

         None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

         None

                                       14
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                                     PART II
                                   (CONTINUED)

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

         On June 21, 2000, the Company held its Annual Meeting of  Shareholders.
At this Annual  Meeting  the  shareholders  were asked to vote on the  following
proposal:

         To elect seven (7)  directors to serve until the next annual meeting of
         shareholders  of  the  Company,  or  until  their  successors  are duly
         elected and qualified.

         The voting results were as follows:

         Nominees recommended in the Proxy Statement:

                                                    Votes Against
                                      Votes For      or Withheld       Non-votes
                                      ---------      -----------       ---------

         Steven R. Chanen              3,310,198           0            141,635
         Joseph P. Martori             3,364,330           0             87,503
         Joseph P. Martori, II         3,363,970           0             87,863
         Patrick J. McGroder III       3,362,961           0             88,872
         James W. Myers                3,310,210           0            141,623
         Nancy J. Stone                3,366,210           0             85,623
         Edward S. Zielinski           3,365,170           0             86,663

         As a result of the vote, the following seven directors will serve until
the next annual meeting or until his or her successor is elected and qualified:

         Steven R. Chanen      Joseph P. Martori           Joseph P. Martori, II
         James W. Myers        Patrick J. McGroder III     Nancy J. Stone
         Edward S. Zielinski

ITEM 5. OTHER INFORMATION

         None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

         (i) Exhibits

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

                 27          Financial Data Schedule (filed herewith)

         (ii) Reports on Form 8-K

              None

                                       15
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                                   SIGNATURES

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


                            ILX RESORTS INCORPORATED
                                  (Registrant)


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


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


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


Date: As of August 7, 2000

                                       16