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, 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 June 30, 2002
            -----                                   ----------------------------
Common Stock, without par value                           2,927,293 shares
<PAGE>
                                     PART I

ITEM 1. FINANCIAL STATEMENTS

                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                  December 31,      June 30,
                                                                      2001            2002
                                                                  ------------    ------------
                                                                                  (Unaudited)
<S>                                                               <C>             <C>
                                     ASSETS
  Cash and cash equivalents                                       $  3,548,058    $  2,815,129
  Notes receivable, net                                             30,365,225      32,082,514
  Resort property held for Vacation Ownership Interest sales        20,270,872      23,698,556
  Resort property under development                                  5,116,227         902,477
  Land held for sale                                                   830,686         793,100
  Deferred assets                                                      131,794         109,261
  Property and equipment, net                                        6,189,082       7,224,040
  Other assets                                                       7,672,891       8,984,699
                                                                  ------------    ------------

      TOTAL ASSETS                                                $ 74,124,835    $ 76,609,776
                                                                  ============    ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
  Accounts payable                                                $  1,488,456    $  1,231,785
  Accrued and other liabilities                                      2,354,911       3,385,813
  Income taxes payable                                                 689,923         141,506
  Due to affiliates                                                     24,022              --
  Notes payable                                                     40,619,303      40,903,119
  Notes payable to affiliates                                        1,000,000              --
  Deferred income taxes                                              2,163,207       3,477,580
                                                                  ------------    ------------

      Total liabilities                                             48,339,822      49,139,803
                                                                  ------------    ------------

Shareholders' Equity
  Preferred stock, $10 par value; 10,000,000 shares authorized;
    284,816 and 241,933 shares issued and outstanding;
    liquidation preference of $2,878,920 and $2,419,330              1,117,025         997,510
  Common stock, no par value; 30,000,000 shares authorized;
    4,132,702 and 4,225,988 shares issued                           18,405,576      19,007,188
  Treasury stock, at cost, 1,200,700 and 1,298,695 shares,
    respectively                                                    (3,688,083)     (4,410,288)
  Additional paid in capital                                           269,869         270,699
  Retained earnings                                                  9,680,626      11,604,864
                                                                  ------------    ------------

      Total shareholders' equity                                    25,785,013      27,469,973
                                                                  ------------    ------------

      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                  $ 74,124,835    $ 76,609,776
                                                                  ============    ============
</TABLE>

            See notes to condensed consolidated financial statements

                                       2
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                   Three months ended June 30,      Six months ended June 30,
                                                   ----------------------------    ----------------------------
                                                       2001            2002            2001            2002
                                                   ------------    ------------    ------------    ------------
<S>                                                <C>             <C>             <C>             <C>
REVENUES:
  Sales of Vacation Ownership Interests            $  7,978,808    $  9,706,137    $ 14,499,032    $ 16,890,982
  Resort operating revenue                            4,627,334       4,523,454       8,674,558       8,153,170
  Interest income                                       551,077       1,831,437       1,242,599       2,856,166
                                                   ------------    ------------    ------------    ------------

      Total revenues                                 13,157,219      16,061,028      24,416,189      27,900,318
                                                   ------------    ------------    ------------    ------------

COST OF SALES AND OPERATING EXPENSES:
  Cost of Vacation Ownership Interests sold           1,358,800       1,409,789       2,467,446       2,457,850
  Cost of resort operations                           3,846,927       3,653,890       7,095,357       7,019,260
  Sales and marketing                                 4,369,893       5,847,783       8,451,761      10,431,772
  General and administrative                          1,174,123       1,874,177       2,221,762       2,972,854
  Provision for doubtful accounts                       349,947         427,368         636,142         742,131
  Depreciation and amortization                         202,407         271,647         300,461         494,484
                                                   ------------    ------------    ------------    ------------

      Total cost of sales and operating expenses     11,302,097      13,484,654      21,172,929      24,118,351
                                                   ------------    ------------    ------------    ------------

Operating income                                      1,855,122       2,576,374       3,243,260       3,781,967

Income from land and other, net                          38,764         (54,622)         35,497         471,751
                                                   ------------    ------------    ------------    ------------

Total operating income                                1,893,886       2,521,752       3,278,757       4,253,718

Interest expense                                       (638,745)       (481,585)     (1,382,229)       (967,786)
                                                   ------------    ------------    ------------    ------------

Income before income taxes                            1,255,141       2,040,167       1,896,528       3,285,932

Income tax expense                                     (491,646)       (816,066)       (751,524)     (1,314,373)
                                                   ------------    ------------    ------------    ------------

NET INCOME                                         $    763,495    $  1,224,101    $  1,145,004    $  1,971,559
                                                   ============    ============    ============    ============

NET INCOME PER SHARE
  Basic                                            $       0.23    $       0.41    $       0.34    $       0.66
                                                   ============    ============    ============    ============
  Diluted                                          $       0.22    $       0.40    $       0.33    $       0.64
                                                   ============    ============    ============    ============
</TABLE>

            See notes to condensed consolidated financial statements

                                       3
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                  Six months ended June 30,
                                                                 ----------------------------
                                                                     2001            2002
                                                                 ------------    ------------
<S>                                                              <C>             <C>
Cash flows from operating activities:
  Net income                                                     $  1,145,004    $  1,971,559
  Adjustments to reconcile net income to net cash provided by
    operating activities:
    Loss (gain) on sale of property and equipment                      12,499        (571,634)
    Loss on assumption of Sedona Worldwide Incorporated assets
      and liabilities                                                      --          48,887
    Income tax expense                                                751,524       1,314,373
    Provision for doubtful accounts                                   636,142         742,131
    Depreciation and amortization                                     300,461         494,484
    Amortization of guarantee fees                                     18,743          22,533
    Contribution of common stock to ESOP Plan                          41,904              --
    Common stock issued to employees for services                       4,210         403,697
    Change in assets and liabilities:
      Decrease (increase) in resort property held for Vacation
        Ownership Interest sales                                      421,478      (3,427,684)
      (Increase) decrease in resort property under development       (240,801)      4,213,750
      (Increase) decrease in land held for sale                       (11,578)         37,586
      Decrease (increase) in other assets                              11,748      (1,390,478)
      Decrease in accounts payable                                   (152,560)       (256,671)
      Increase in accrued and other liabilities                       611,612         946,725
      Decrease in income taxes payable                                     --        (548,417)
      Decrease in due to affiliates                                        --         (24,022)
                                                                 ------------    ------------
Net cash provided by operating activities                           3,550,386       3,976,819
                                                                 ------------    ------------
Cash flows from investing activities:
  Increase in notes receivable, net                                (2,837,794)     (2,459,420)
  Cash acquired from Sedona Worldwide Incorporated                         --          30,457
  Purchases of plant and equipment, net                              (499,883)     (2,368,650)
                                                                 ------------    ------------
Net cash used in investing activities                              (3,337,677)     (4,797,613)
                                                                 ------------    ------------
Cash flows from financing activities:
  Proceeds from notes payable                                       9,040,109      11,140,322
  Principal payments on notes payable                              (9,030,815)    (10,062,161)
  Principal payments on notes payable to affiliates                        --        (300,000)
  Preferred stock dividends                                           (47,448)        (47,321)
  Redemption of preferred stock                                          (105)           (770)
  Exercise of options by ESOP Plan                                         --          80,000
  Acquisition of treasury stock and other                            (634,452)       (722,205)
                                                                 ------------    ------------
Net cash (used in) provided by financing activities                  (672,711)         87,865
                                                                 ------------    ------------
DECREASE IN CASH AND CASH EQUIVALENTS                                (460,002)       (732,929)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                    2,518,122       3,548,058
                                                                 ------------    ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                       $  2,058,120    $  2,815,129
                                                                 ============    ============
</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 Regulation 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 six-month period ended June
30, 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 June 30,   Six Months ended June 30,
                         ---------------------------   -------------------------
                             2001          2002           2001          2002
                          ----------    ----------     ----------    ----------
Interest paid             $  651,375    $  472,257     $1,361,375    $  973,254
Income taxes paid                 --       332,266             --       880,683
Interest capitalized              --        85,093             --       174,961

                                       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 June 30     Six Months Ended June 30
                                           --------------------------    --------------------------
                                              2001           2002           2001           2002
                                           -----------    -----------    -----------    -----------
<S>                                        <C>            <C>            <C>            <C>
Net income                                 $   763,495    $ 1,224,101    $ 1,145,004    $ 1,971,559
Less: Series A preferred stock dividends       (11,969)       (11,830)       (23,938)       (23,660)
                                           -----------    -----------    -----------    -----------
Net income available to common
  stockholders - basic                     $   751,526    $ 1,212,271    $ 1,121,066    $ 1,947,899
                                           ===========    ===========    ===========    ===========
Weighted average shares of common
  stock outstanding - basic                  3,280,072      2,932,535      3,337,501      2,933,689
                                           ===========    ===========    ===========    ===========
Basic net income per share                 $      0.23    $      0.41    $      0.34    $      0.66
                                           ===========    ===========    ===========    ===========
</TABLE>

                          DILUTED NET INCOME PER SHARE

<TABLE>
<CAPTION>
                                           Three Months Ended June 30     Six Months Ended June 30
                                           --------------------------    --------------------------
                                              2001           2002           2001           2002
                                           -----------    -----------    -----------    -----------
<S>                                        <C>            <C>            <C>            <C>
Net income                                 $   763,495    $ 1,224,101    $ 1,145,004    $ 1,971,559
Less: Series A preferred stock dividends       (11,969)       (11,830)       (23,938)       (23,660)
                                           -----------    -----------    -----------    -----------
Net income available to common
  stockholders - diluted                   $   751,526    $ 1,212,271    $ 1,121,066    $ 1,947,899
                                           ===========    ===========    ===========    ===========
Weighted average shares of common
  stock outstanding                          3,280,072      2,932,535      3,337,501      2,933,689
Add: Convertible preferred stock (Series
     B and C) dilutive effect                   80,141         71,796         80,420         75,078
     Stock options dilutive effect                  --         44,895             --         44,993
                                           -----------    -----------    -----------    -----------
Weighted average shares of common
  stock outstanding - dilutive               3,360,213      3,049,226      3,417,921      3,053,760
                                           ===========    ===========    ===========    ===========
Diluted net income per share               $      0.22    $      0.40    $      0.33    $      0.64
                                           ===========    ===========    ===========    ===========
</TABLE>

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

NOTE 3. SHAREHOLDERS' EQUITY

     During the six months ended June 30, 2002, the Company issued 300 shares of
restricted  common  stock,  valued at $1,035 and 58,745  shares of common stock,
valued at $402,662,  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 six months ended June 30, 2002 and
2001, the Company recorded the exchange of 42,723 and 3,639 Series C Convertible

                                       6
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

shares for 14,241 and 1,213  common  shares,  respectively.  Also during the six
months ended June 30, 2002,  the Company  purchased  97,995 shares of its common
stock for $722,205.

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.

     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 May 2002, the Company  annexed the Bell Rock Inn into Premiere  Vacation
Club  and  consequently  transferred  $4,975,203  to  resort  property  held for
Vacation Ownership Interest sales from resort property under development.

     In July 2001,  the  Company  acquired  a 50-year  leasehold  interest  in a
44-acre parcel located proximate to the Las Vegas Airport,  University of Nevada
- Las Vegas  ("UNLV")  and the  "Strip"  in Las  Vegas,  Nevada.  The $5 million
purchase price for the leasehold  interest consisted of a $100,000 earnest money
deposit made in August 2000 and a $4.9 million promissory note from a subsidiary
of the  Company to an  unrelated  third party ("the  Note").  In June 2002,  the
Company purchased the Note for $3.325 million.  Both the $4.9 million receivable
and the Note are  eliminated  in  consolidation.  The discount of  $1,575,000 is
included in notes  payable and will be  amortized to income over the term of the
Note.  The Company  borrowed  $3.8  million in June 2002, a portion of which was
used to purchase the Note and the Note is collateral for the borrowing. The $3.8
million  promissory  note bears  interest  at prime  plus  1.0%,  with a minimum
interest rate of 7%, and is payable in equal  monthly  payments of principal and
interest over a five-year term ending June 2007.

     In June 2002, the Company  acquired land and two buildings  adjacent to Los
Abrigados for $444,000 cash. In August 2002, the Company borrowed $337,500 which
is secured  by the  property,  bears  interest  at a fixed rate of 7.5%,  and is
payable in monthly  payments of $1,406.25  principal plus accrued interest until
July 2007 when the unpaid balance is due in full.

                                       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"). One of the resorts in
Arizona  is not at this time  registered  with the  Arizona  Department  of Real
Estate nor is being marketed for sale as Vacation  Ownership  Interests,  and is
operated  under a  long-term  lease  arrangement.  The  Company  also owns 1,014
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 June 30,   Six Months Ended June 30,
                                                           ---------------------------   -------------------------
                                                               2001          2002           2001          2002
                                                             ---------     ---------      ---------     ---------
<S>                                                          <C>           <C>            <C>           <C>
As a percentage of total revenues:
  Sales of Vacation Ownership Interests                           60.6%         60.4%          59.4%         60.6%
  Resort operating revenue                                        35.2%         28.2%          35.5%         29.2%
  Interest income                                                  4.2%         11.4%           5.1%         10.2%
                                                             ---------     ---------      ---------     ---------
  Total revenues                                                 100.0%        100.0%         100.0%        100.0%
                                                             =========     =========      =========     =========
As a percentage of sales of Vacation Ownership Interests:
  Cost of Vacation Ownership Interests sold                       17.0%         14.5%          17.0%         14.6%
  Sales and marketing                                             54.8%         60.2%          58.3%         61.8%
  Provision for doubtful accounts                                  4.4%          4.4%           4.4%          4.4%
  Contribution margin percentage from sale of Vacation
    Ownership Interests (1)                                       23.8%         20.8%          20.3%         19.3%

As a percentage of resort operating revenue:
  Cost of resort operations                                       83.1%         80.8%          81.8%         86.1%

As a percentage of total revenues:
  General and administrative                                       8.9%         11.7%           9.1%         10.7%
  Depreciation and amortization                                    1.5%          1.7%           1.2%          1.8%
  Operating income                                                14.1%         16.0%          13.3%         13.6%

Selected operating data:
  Vacation Ownership Interests sold (2) (3)                        502           558            912           978
  Average sales price per Vacation  Ownership Interest
    sold (excluding revenues from Upgrades) (2)              $  14,263     $  14,515      $  14,202     $  14,383
  Average sales price per Vacation  Ownership Interest
    sold (including revenues from Upgrades) (2)              $  15,607     $  17,140      $  15,611     $  17,012
</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 766 and 832  biennial  and  annual  Vacation
     Ownership  Interests  for the three  months  ended June 30,  2001 and 2002,
     respectively,  and 1,411 and 1,462 biennial and annual  vacation  ownership
     interests  for the six  months  ended  June 30,  2001  and  June 30,  2002,
     respectively.

COMPARISON  OF THE THREE AND SIX MONTHS ENDED JUNE 30, 2001 TO THE THREE AND SIX
MONTHS ENDED JUNE 30, 2002

     Sales of Vacation  Ownership  Interests  increased  21.6% or  $1,727,329 to
$9,706,137  for the three months ended June 30, 2002,  from  $7,978,808  for the
same period in 2001 and increased 16.5% or $2,391,950 to $16,890,982 for the six
months  ended June 30, 2002 from  $14,499,032  for the same period in 2001.  The
increases  reflect  primarily sales from the Las Vegas sales office which opened
in mid January 2002 and greater sales to existing owners, net of decreased sales

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

from the Sedona sales office due to reduced tour flow and  decreased  sales from
the Kohl's  Ranch sales  office due to lower  efficiency  (revenue per tour) and
closing rates.  The decrease in tours to the Sedona sales office  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 increased.

     The average sales price per Vacation  Ownership  Interest  sold  (excluding
revenues from Upgrades)  increased 1.8% or $252 in 2002 to $14,515 for the three
months  ended  June  30,  2002  from  $14,263  for the same  period  in 2001 and
increased  1.3% or $181 to $14,383  for the six months  ended June 30, 2002 from
$14,202 for the same period in 2001. The number of Vacation Ownership  Interests
sold increased 11.2% from 502 in the three months ended June 30, 2001 to 558 for
the same period in 2002 and increased 7.2% from 912 in the six months ended June
30,  2001 to 978 for the same period in 2002 due to the opening of the Las Vegas
office,  net of reduced  sales in the Sedona and Kohl's  Ranch sales  offices as
described above, as well as the closure of the Phoenix sales office in May 2001.
The three and six  months  ended June 30,  2002  included  548 and 968  biennial
Vacation  Ownership  Interests (counted as 274 and 484 annual Vacation Ownership
Interests)  compared  to 528  and  998  biennial  Vacation  Ownership  Interests
(counted as 264 and 499 annual Vacation Ownership Interests) in the same periods
in 2001, respectively.

     Upgrade revenue,  included in Vacation Ownership Interest sales,  increased
117.0% to $1,464,797  for the three months ended June 30, 2002 from $674,921 for
the same period in 2001 and increased  100.0% to  $2,571,337  for the six months
ended June 30, 2002 from $1,285,115 for the same period in 2001.  Upgrades often
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. Upgrade revenue has increased due to expanded
marketing  efforts to  existing  owners.  The average  sales price per  Vacation
Ownership Interest sold (including Upgrades) increased 9.8% or $1,533 to $17,140
for the three months ended June 30, 2002 from $15,607 in 2001 and increased 9.0%
or $1,401 to $17,012 for the six months ended June 30, 2002 from $15,611 for the
same period in 2001.

     Resort operating  revenue  decreased 2.2% and 6.0% or $103,880 and $521,388
to $4,523,454  and  $8,153,170 for the three and six months ended June 30, 2002,
respectively, reflecting a decrease in business and tourist travel by non-owners
in the first six months of 2002, as well as timing  differences  in revenue from
vacation  interval owners in the first quarter.  Cost of resort  operations as a
percentage of resort  operating  revenue  decreased  from 83.1% to 80.8% for the
second quarter ended June 30, 2002 and increased from 81.8% to 86.1% for the six
months ended June 30, 2002.  The  improvement in cost as a percentage of revenue
in the second quarter reflects increased operating efficiencies. The increase in
cost as a percentage of revenue year to date reflects  greater  revenue in first
quarter 2001, including non-recurring benefits, with the first quarter 2002 cost
as a percentage of revenue comparable to prior periods.

     Interest income  increased  232.3% to $1,831,437 for the three months ended
June 30, 2002 from $551,077 for the same period in 2001 and increased  129.9% to
$2,856,166  for the six months ended June 30, 2002 from  $1,242,599 for the same
period in 2001,  reflecting 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 and six months ended
June 30,  2001 to 14.5% and 14.6% for the three and six  months  ended  June 30,
2002,  respectively,  reflecting favorable costs for the acquisition of vacation
ownership  interests  in the  Carriage  House  and the  Bell  Rock  Inn,  net of
improvements made to resort properties.

     Sales  and  marketing  as a  percentage  of  sales  of  Vacation  Ownership
Interests increased to 60.2% for the three months ended June 30, 2002 from 54.8%
for the same period in 2001 and to 61.8% for the six months  ended June 30, 2002
from 58.3% for the same period in 2001, reflecting the start-up of the Las Vegas
sales  office  which opened in January  2002.  Excluding  the Las Vegas start up
operation,  sales and marketing as a percentage  of sales of Vacation  Ownership
Interests  decreased  from prior year in both the first and second  quarters  of
2002.

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

     The provision for doubtful  accounts as a percentage of Vacation  Ownership
Interest sales was consistent at 4.4% of sales of Vacation  Ownership  Interests
in the three and six month periods ended June 30, 2001 and 2002.

     General and  administrative  expenses increased to 11.7% and 10.7% of total
timeshare  revenue for the second  quarter and six months  ended June 30,  2002,
from 8.9% and 9.1% for the same periods in 2001.  The increase for the three and
six month  periods  reflect  increased  professional  fees,  including  fees for
development of an enhanced website and expenses for Premiere Park in Las Vegas.

     Income  from land and  other,  net for the six months  ended June 30,  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 24.6% and 30.0% decreases in interest  expense to $481,585 and $967,786
for the three and six months ended June 30, 2002 from  $638,745  and  $1,382,229
for the same  periods in 2001,  respectively,  reflect a decrease in  borrowings
against  Customer Notes  receivable,  interest rate  reductions 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 six months ended June 30, 2001 and
2002, cash provided by operations was $3,550,386 and  $3,976,819,  respectively.
The increase in cash  provided by operations  reflects  increased net income and
related  income tax expense and the  combined  effect of common  stock issued to
employees in lieu of cash  compensation,  a net decrease in resort property held
for Vacation Ownership Interest sales, after  consideration of the annexation of
the Bell Rock Inn,  from higher sales of Vacation  Ownership  Interests,  net of
cash paid for 2001 income taxes and an increase in other assets. The increase in
other assets is the result of estimated tax payments made for 2002,  maintenance
fee payments  made to the Carriage  House for 2002 which will be amortized  over
the entire year,  and loan fees paid for the $3.8  million note payable  entered
into in June 2002.

     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

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

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 during the six
months ended June 30, 2001 and 2002 was $3,337,677 and $4,797,613, respectively.
The  increase  reflects  construction  activities  in Las Vegas,  including  the
renovation  of a portion of the  existing  building  into a sales center and the
addition of a model suite and sales lounge.

     Net cash used in  financing  activities  for the six months  ended June 30,
2001 was  $672,711  compared to net cash  provided by  financing  activities  of
$87,865 for the six months  ended June 30,  2002.  Cash  provided  by  financing
activities  in 2002  includes  the  borrowing  of $2.0  million to  finance  the
construction of 21 new units in Pinetop, Arizona, and greater principal payments
on notes payable.

     The Company  requires  funds to finance the  acquisitions  of property  for
future resort  development and to further develop the existing resorts,  as well
as to make capital improvements and support current operations.

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

     On April 9, 1999  (effective  January 1, 1999),  the Company formed the ILX
Resorts  Incorporated  Employee Stock Ownership Plan and Trust (the "ESOP"). The
intent of the ESOP is to provide a retirement  program for employees that aligns
their  interests with those of the Company.  During the second quarter 2002, the
Company  contributed $80,000 to the ESOP and the ESOP used the funds to exercise
options for 20,000 shares of the Company's common stock at $4.00 per share.

     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 June 30, 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 June 30, 2002,  $17.5  million of the $40 million
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 June 30, 2002,  approximately  $12.6 million is
available under this commitment.

     At June 30, 2001 and 2002, the Company had approximately  $14.1 million and
$12.2 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.

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

     In the first six months of 2002,  the  Company  purchased  97,995  treasury
shares for a cost of $722,205.

     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 six months ended June 30, 2002,  the Company  purchased 272 Vacation
Ownership  Interests  in the  Carriage  House  in Las  Vegas  for  approximately
$297,000 which it intends to annex into Premiere Vacation Club in the future.

     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 June 2002,  the Company  borrowed $3.8 million and utilized a portion of
the  proceeds to purchase  for $3.325  million a $4.9  million note payable by a
subsidiary to a third party.  The  promissory  note bears interest at prime plus
1.0% with a minimum  interest  rate of 7%. The debt is payable in equal  monthly
payments of principal and interest over a five-year term ending June 2007.

     In June 2002, the Company  acquired land and two buildings  adjacent to Los
Abrigados for $444,000 cash. In August 2002, the Company borrowed $337,500 which
is secured  by the  property,  bears  interest  at a fixed rate of 7.5%,  and is
payable in monthly  payments of $1,406.25  principal plus accrued interest until
July 2007 when the unpaid balance is due in full.

     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.

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

CONTRACTUAL CASH OBLIGATIONS AND COMMERCIAL COMMITMENTS

     The  following  table  presents  our  contractual   cash   obligations  and
commercial  commitments  as of June 30, 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              $39,216,000   $ 5,949,000   $12,272,000   $12,613,000   $ 8,382,000
CAPITAL LEASE OBLIGATIONS       112,000        74,000        38,000            --            --
OPERATING LEASES             17,175,000     1,545,000     2,710,000     2,149,000    10,771,000
                            -----------   -----------   -----------   -----------   -----------
TOTAL                       $56,503,000   $ 7,568,000   $15,020,000   $14,762,000   $19,153,000
                            ===========   ===========   ===========   ===========   ===========
</TABLE>

SEASONALITY

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

INFLATION

     Inflation  and  changing  prices  have  not had a  material  impact  on the
Company's revenues,  operating income and net income during any of the Company's
three most recent  fiscal years or the six months ended June 30, 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

     On  Thursday,  June  20,  2002,  the  Company  held it  Annual  Meeting  of
Shareholders.  At this  meeting,  the  Shareholders  were  asked  to vote on the
following proposal:

     To elect eight (8)  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 For   Votes Against   Votes Withheld
                                 ---------   -------------   --------------
     Steven R. Chanen            2,596,647         0             21,742
     Joseph P. Martori           2,600,018         0             15,371
     Joseph P. Martori, II       2,600,154         0             15,235
     Patrick J. McGroder III     2,607,395         0              7,994
     James W. Myers              2,598,821         0             16,568
     Nancy J. Stone              2,599,982         0             15,407
     Steven A. White             2,611,885         0              3,504
     Edward S. Zielinski         2,600,142         0             15,247

     As a result of the vote, the following eight 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,  Steven  A.  White  and  Edward S.
Zielinski.

                                       15
<PAGE>
ITEM V. OTHER INFORMATION

     None

ITEM VI. EXHIBITS AND REPORTS ON FORM 8-K

     (i)  Exhibits

          Exhibit No.  Description
          -----------  -----------
             10.1      LOAN PURCHASE AND SALE AGREEMENT
                       between ILX Resorts Incorporated and
                       Las Vegas Golf Center, L.L.C. dated June 23, 2002
             10.2      Allonge dated June 23, 2002,
                       executed on behalf of Las Vegas
                       Golf Center, L.L.C., to the order of
                       ILX Resorts Incorporated
             99.1      CERTIFICATION PURSUANT TO 18 U.S.C.ss.1350, AS ADOPTED
                       PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

                                       16
<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 August 12, 2002

                                       17