SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


For The Quarter Ended September 30, 1999        Commission File Number 001-13855
                      ------------------                               ---------


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



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

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


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


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


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

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

              Class                            Outstanding at September 30, 1999
-------------------------------                ---------------------------------
Common Stock, without par value                         4,001,073 shares
<PAGE>
                                     PART I

ITEM 1. FINANCIAL STATEMENTS

                    ILX RESORTS INCORPORATED AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                         December 31,    September 30,
                                                             1998             1999
                                                         ------------    -------------
                                                                           (Unaudited)
<S>                                                      <C>              <C>
ASSETS
  Cash and cash equivalents                              $  3,196,710     $  2,217,723
  Notes receivable, net                                    19,559,396       22,670,956
  Resort property held for Vacation Ownership
  Interest sales                                           20,834,225       21,378,311
  Resort property under development                           485,933          625,622
  Land held for sale                                        1,593,885        1,602,492
  Deferred assets                                             262,877          263,428
  Property and equipment, net                               4,006,991        4,753,834
  Deferred income taxes                                       268,771               --
  Other assets                                              1,788,470        3,027,821
                                                         ------------     ------------
TOTAL ASSETS                                             $ 51,997,258     $ 56,540,187
                                                         ============     ============

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
  Accounts payable                                       $  1,186,088     $    769,298
  Accrued and other liabilities                             2,048,599        2,999,611
  Deferred income tax liability                                    --          165,213
  Notes payable                                            22,107,444       25,568,911
  Notes payable to affiliates                                 894,078        1,200,000
                                                         ------------     ------------
    Total liabilities                                      26,236,209       30,303,033
                                                         ------------     ------------
MINORITY INTERESTS                                             (3,271)          17,901
                                                         ------------     ------------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
  Preferred stock, $10 par value; 10,000,000 shares
    authorized; 380,468 and 305,978 shares issued and
    outstanding; liquidation preference of $3,804,680
    and $3,059,780                                          1,384,891        1,179,299


  Common stock, no par value; 30,000,000 shares
    authorized; 4,332,533 and 4,447,213 shares issued      19,818,183       20,118,701

  Treasury stock, at cost, 339,640 and 446,140 shares      (1,273,843)      (1,487,618)
  Additional paid in capital                                  279,450          279,450
  Unearned ESOP contribution                                       --         (400,000)
  Retained earnings                                         5,555,639        6,129,421
                                                         ------------     ------------
    Total shareholders' equity                             25,764,320       26,219,253
                                                         ------------     ------------
      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY         $ 51,997,258     $ 56,540,187
                                                         ============     ============
</TABLE>

                 See notes to consolidated financial statements

                                        2
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                              Three months ended              Nine months ended
                                                 September 30,                  September 30,
                                          ---------------------------    ----------------------------
                                             1998            1999            1998            1999
                                          -----------    ------------    ------------    ------------
<S>                                       <C>            <C>             <C>             <C>
TIMESHARE REVENUES:
  Sales of Vacation Ownership
    Interests                             $ 5,633,797    $  6,642,223    $ 16,881,611    $ 17,962,302
  Resort operating revenue                  3,342,697       3,475,879       8,929,975       9,696,624
  Interest income                             610,098         886,967       1,543,771       2,535,677
                                          -----------    ------------    ------------    ------------
    Total timeshare revenues                9,586,592      11,005,069      27,355,357      30,194,603
                                          -----------    ------------    ------------    ------------

COST OF SALES AND OPERATING EXPENSES:
  Cost of Vacation Ownership
    Interests sold                            739,509         923,577       2,347,826       2,538,162
  Cost of resort operations                 3,157,149       3,315,927       8,705,876       9,174,224
  Sales and marketing                       4,169,458       4,284,034      10,989,279      11,423,893
  General and administrative                  842,848       1,036,372       2,120,528       3,068,514
  Provision for doubtful accounts             168,586         250,129         498,768         577,428
  Depreciation and amortization                99,706         122,848         284,216         348,424
                                          -----------    ------------    ------------    ------------
    Total cost of sales and operating
      expenses                              9,177,256       9,932,887      24,946,493      27,130,645
                                          -----------    ------------    ------------    ------------

Timeshare operating income                    409,336       1,072,182       2,408,864       3,063,958
Income from land and other, net                 4,435           8,429          21,975          64,826
                                          -----------    ------------    ------------    ------------

Total operating income                        413,771       1,080,611       2,430,839       3,128,784
Interest expense                              515,111         697,407       1,422,244       2,067,782
                                          -----------    ------------    ------------    ------------
Income before income taxes and minority
  interests                                  (101,340)        383,204       1,008,595       1,061,002
Income tax (expense) benefit                   41,000        (150,000)       (404,000)       (418,000)
                                          -----------    ------------    ------------    ------------

Income before minority interests              (60,340)        233,204         604,595         643,002
                                          -----------    ------------    ------------    ------------

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

Net income                                $   (60,340)   $    224,276    $    604,595    $    621,830
                                          ===========    ============    ============    ============
Net income per share
     Basic                                $     (0.02)   $       0.05    $       0.15    $       0.15
                                          ===========    ============    ============    ============

     Diluted                              $     (0.02)   $       0.05    $       0.15    $       0.14
                                          ===========    ============    ============    ============
</TABLE>

                 See notes to consolidated financial statements

                                        3
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                                                          Nine months ended
                                                            September 30,
                                                     ---------------------------
                                                         1998           1999
                                                     ------------   ------------
Cash flows from operating activities:
  Net income                                         $   604,595    $   621,830
  Adjustments to reconcile net income to net
    cash provided by (used in) operating
    activities:
    Undistributed minority interest                           --         21,172
    Deferred income taxes                                398,750        433,984
    Provision for doubtful accounts                      498,768        577,428
    Depreciation and amortization                        284,216        348,424
    Amortization of guarantee fees                        39,075          5,300
    Change in assets and liabilities:
      Increase in resort property held for Vacation
        Ownership Interest sales                      (3,419,011)      (544,086)
      Increase in resort property under development           --       (139,689)
      Increase in land held for sale                     (35,511)        (8,607)
      Increase in other assets                          (114,830)    (1,240,851)
      Decrease in accounts payable                    (1,090,112)      (416,790)
      (Decrease) increase in accrued and
        other liabilities                               (331,032)     1,045,938
                                                     -----------    -----------

Net cash (used in) provided by operating activities   (3,165,092)       704,053
                                                     -----------    -----------

Cash flows from investing activities:
  Notes receivable, net                               (3,547,438)    (3,688,988)
  Increase in deferred assets                            (14,114)        (5,851)
  Purchases of plant and equipment, net               (1,044,690)    (1,093,767)
                                                     -----------    -----------

Net cash used in investing activities                 (4,606,242)    (4,788,606)
                                                     -----------    -----------

Cash flows from financing activities:
  Proceeds from notes payable                          9,716,404     15,165,666
  Principal payments on notes payable                (12,092,189)   (11,204,199)
  Principal payments on notes payable to
    affiliates                                          (387,143)      (194,078)
  Net proceeds from issuance of common stock           9,394,289             --
  Preferred stock dividend payments                      (47,996)       (48,048)
  Acquisition of treasury stock                         (387,869)      (213,775)
  Unearned ESOP contribution                                  --       (400,000)
                                                     -----------    -----------

Net cash provided by financing activities              6,195,496      3,105,566
                                                     -----------    -----------

Decrease in cash and cash equivalents                 (1,575,838)      (978,987)

Cash and cash equivalents at beginning of period       3,226,038      3,196,710
                                                     -----------    -----------

Cash and cash equivalents at end of period           $ 1,650,200    $ 2,217,723
                                                     ===========    ===========

                 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 nine-month period ended September 30, 1999 are not necessarily indicative of
the results  that may be expected for the year ending  December  31,  1999.  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,  Florida, Indiana
and Mexico.  The Company's  operations  also include  marketing of skin and hair
care products, which are 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 nine
months or less. The following  summarizes  interest paid,  income taxes paid and
capitalized interest.

                             Three Months Ended       Nine Months Ended
                                September 30,           September 30,
                            --------------------   -----------------------
                              1998       1999         1998         1999
                            --------   ---------   ----------   ----------
     Interest paid          $356,000   $ 651,000   $1,498,000   $1,983,000
     Income taxes paid      $  2,000   $      --   $    5,000   $       --
     Capitalized interest   $ 34,000   $      --   $  357,000   $       --

Accounting Matters

         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.  SFAS 130 was  adopted by the Company in
1998. There were no items of other comprehensive income, as that term is defined
in SFAS 130, in the nine months ended September 30, 1998 or September 30, 1999.

                                       5
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

     In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosure  about  Segments of an Enterprise  and Related  Information"  ("SFAS
131"),  which was 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 is effective for the Company in 2001.  The effective  date was extended by
the issuance of SFAS No. 137,  "Deferral of the Effective Date of FASB Statement
No. 133".  SFAS No. 133 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.   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            Nine Months Ended
                                                  September 30,                September 30,
                                           --------------------------    --------------------------
                                              1998           1999           1998           1999
                                           -----------    -----------    -----------    -----------
<S>                                        <C>            <C>            <C>            <C>
Net income                                 $   (60,340)   $   224,276    $   604,595    $   621,830
Less: Series A preferred stock dividends       (12,000)       (11,969)       (36,000)       (35,907)
Series C convertible preferred stock
  cumulation share dividends                    (4,938)            --        (21,775)            --
                                           -----------    -----------    -----------    -----------

Net income available to common
  stockholders - basic                     $   (77,278)   $   212,307    $   546,820    $   585,923
                                           ===========    ===========    ===========    ===========
Weighted average shares of common stock
    outstanding - basic                      4,165,440      3,991,846      3,612,701      4,003,651
                                           ===========    ===========    ===========    ===========

Basic net income per share                 $     (0.02)   $      0.05    $      0.15    $      0.15
                                           ===========    ===========    ===========    ===========
</TABLE>

                                       6
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

                          DILUTED NET INCOME PER SHARE

<TABLE>
<CAPTION>
                                         Three Months Ended            Nine Months Ended
                                            September 30,                 September 30,
                                     --------------------------    --------------------------
                                        1998           1999           1998           1999
                                     -----------    -----------    -----------    -----------
<S>                                  <C>            <C>            <C>            <C>
Net income                           $   (60,340)   $   224,276    $   604,595    $   621,830
Less: Series A preferred stock
  dividends                              (12,000)       (11,969)       (36,000)       (35,907)
                                     -----------    -----------    -----------    -----------
Net income available to common
  stockholders - diluted             $   (72,340)   $   212,307    $   568,595    $   585,923
                                     ===========    ===========    ===========    ===========

Weighted average shares of common
  stock outstanding                    4,165,440      3,991,846      3,612,701      4,003,651
Add: Convertible preferred stock
  (Series B and C) dilutive effect       110,541         85,711        110,541        102,083
                                     -----------    -----------    -----------    -----------
Weighted average shares of common
  stock outstanding - dilutive         4,275,981      4,077,557      3,723,242      4,105,734
                                     ===========    ===========    ===========    ===========

Diluted net income per share         $     (0.02)   $      0.05    $      0.15    $      0.14
                                     ===========    ===========    ===========    ===========
</TABLE>

     Stock  options and warrants to purchase  163,200  shares of common stock at
prices  ranging  from $3.25 per share to $8.125 per share  were  outstanding  at
September  30,  1999 but were not  included  in the  computation  of diluted net
income per share because the options' and warrants' exercise prices were greater
than the average market price of common shares.  These options expire at various
dates between 1999 and 2004.

     Series C Convertible  Preferred Stock dividends are not required,  nor were
they declared, subsequent to November 1, 1998.

NOTE 3. SHAREHOLDERS' EQUITY

     During the nine months ended  September 30, 1999, the Company issued 89,850
shares of restricted common stock,  valued at $94,926,  to employees in exchange
for services provided.

     During the nine months  ended  September  30, 1999,  the Company  purchased
106,500 shares of its common stock for $213,775.

     For the nine months  ended  September  30, 1999,  the Company  recorded the
exchange  of 74,490  shares of Series C  Convertible  shares for  24,830  common
shares.

NOTE 4. EMPLOYEE STOCK OWNERSHIP PLAN

     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 which aligns
their  interests  with  those  of the  Company.  During  the nine  months  ended
September 30, 1999,  the Company  declared and funded in cash  contributions  of
$250,000 to the ESOP and in addition  paid  interest  and fees of $13,579 on its
behalf as further described below.

                                       7
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

     In  August  1999,  the  ESOP  entered  into an  agreement  with  Litchfield
Financial  Corporation for a $500,000 line of credit, which is guaranteed by the
Company.  The Company paid $10,000 in loan fees and interest of $3,579 on behalf
of the ESOP pursuant to this debt  agreement  and as of September 30, 1999,  the
ESOP had borrowed $400,000 against this line of credit.

     During the nine months ended September 30, 1999, the ESOP purchased 304,400
shares of the  Company's  common stock in the open market and, at September  30,
1999,  held these 304,400  shares and $33,616 in cash.  The debt is reflected on
the books of the Company.

NOTE 5. RELATED PARTY TRANSACTIONS

     In July 1999,  the Company  entered into an agreement  with an affiliate to
purchase  sixty  vacation  ownership  interests  for the price of $500,000.  The
vacation ownership interests consist of four ILX Premiere Vacation Club Platinum
memberships,  fifty ILX Premiere  Vacation Club Gold memberships and six Varsity
Clubs of America - South Bend Chapter Alumni House (3 bedroom) extended football
weekend  memberships.  The Company  issued a  promissory  note for the  purchase
price,  which bears  interest  at 8%. The note is recorded as a Note  payable to
affiliates on the face of the balance  sheet.  The  agreement  also modified the
terms of a previously  existing  Note payable to the  affiliate and extended the
maturity date for a period of four years.

NOTE 6. SUBSEQUENT EVENTS

     In October  1999,  the Company  agreed to provide up to $200,000 of working
capital financing to Sedona Worldwide  Incorporated ("SWI") through December 31,
2000.  SWI is currently  consolidated  as part of the Company and is included in
the Company's financial statements.  This agreement was executed in anticipation
of the Company making a distribution  of all of the shares of SWI's common stock
that  the  Company  holds to the  Company's  shareholders  on a pro rata  basis,
effectively  spinning  off SWI. All amounts  borrowed by SWI will bear  interest
equal to the prime rate plus 3% per annum with  interest  payable  monthly.  The
entire unpaid principal will be due on December 31, 2000.

                                       8
<PAGE>
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  (including  vacation  ownership
intervals  at the  Roundhouse  Resort in  Pinetop),  one in  Indiana  and one in
Colorado,  and has an additional property in San Carlos,  Mexico that it markets
through its ILX Premiere Vacation Club.

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

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

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

RESULTS OF OPERATIONS

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

<TABLE>
<CAPTION>
                                                Three Months Ended        Nine Months Ended
                                                   September 30,            September 30,
                                                -------------------     ----------------------
                                                 1998        1999         1998         1999
                                                -------    --------     ---------    ---------
<S>                                             <C>        <C>          <C>          <C>
As a percentage of total timeshare revenues:
  Sales of Vacation Ownership Interests            58.8%      60.4%        61.7%        59.5%
  Resort operating revenue                         34.8%      31.6%        32.7%        32.1%
  Interest income                                   6.4%       8.0%         5.6%         8.4%
                                                  -----      -----        -----        -----
  Total timeshare revenues                        100.0%     100.0%       100.0%       100.0%
                                                  =====      =====        =====        =====


As a percentage of sales of Vacation
  Ownership Interests:

  Cost of Vacation Ownership Interests sold        13.1%      13.9%        13.9%        14.1%
  Sales and marketing                              74.0%      64.5%        65.1%        63.6%
  Provision for doubtful accounts                   3.0%       3.8%         3.0%         3.2%
  Contribution margin percentage from sale of
      Vacation Ownership Interests (1)              9.9%      17.8%        18.0%        19.1%

As a percentage of resort operating revenue:
  Cost of resort operations                        94.4%      95.4%        97.5%        94.6%

As a percentage of total timeshare revenues:
  General and administrative                        8.8%       9.4%         7.8%        10.2%
  Depreciation and amortization                     1.0%       1.1%         1.0%         1.2%
  Timeshare operating income                        4.3%       9.7%         8.8%        10.1%

Selected operating data:
  Vacation Ownership Interests sold (2) (3)         352        437        1,114        1,182
  Average sales price per Vacation Ownership
    Interest sold (excluding revenues from
    Upgrades) (2)                               $13,387    $13,960    $  13,018    $  13,693
  Average sales price per Vacation Ownership
    Interest sold (including revenues from
    Upgrades) (2)                               $16,005    $15,050    $  15,161    $  15,040
</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 143 annual and 418 biennial for the
     three months ended  September  30, 1998 and 184 annual and 506 biennial for
     the three  months  ended  September  30,  1999,  and 503  annual  and 1,221
     biennial  for the nine months ended  September  30, 1998 and 537 annual and
     1,289 biennial for the nine months ended September 30, 1999.

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

COMPARISON OF THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998
TO THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999

     Sales of Vacation  Ownership  Interests  increased  17.9% or  $1,008,426 to
$6,642,223 for the three months ended  September 30, 1999,  from  $5,633,797 for
the same period in 1998 and increased 6.4% or $1,080,691 to $17,962,302  for the
nine months ended  September  30, 1999 from  $16,881,611  for the same period in
1998. The increase in the third quarter largely reflects both an increase in the
number of tours and an improved closing rate (sales as a percentage of tours) at
the Sedona sales office. The average sales price per Vacation Ownership Interest
sold  (excluding  revenues from Upgrades)  increased 4.3% or $573 to $13,960 for
the three months ended  September 30, 1999,  from $13,387 for the same period in
1998  and  increased  5.2%  or  $675  to  $13,693  for  the  nine  months  ended
September  30, 1999 from $13,018 for the same period in 1998  reflecting  higher
per unit sales prices for sales of ILX Premiere Vacation Club Vacation Ownership
Interests  than for single resort  Vacation  Ownership  Interests.  ILX Premiere
Vacation Club was first introduced in June 1998.

     The number of Vacation Ownership Interests sold increased 24.1% from 352 in
the three months ended September 30, 1998 to 437 for the same period in 1999 and
increased  6.1% from 1,114 in the nine months ended  September 30, 1998 to 1,182
for the same  period in 1999 due to the  increase in the number of tours and the
improved  closing rate at the Sedona sales office.  Sales of Vacation  Ownership
Interests in the three and nine months ended September 30, 1999 included 506 and
1,289 biennial  Vacation  Ownership  Interests  (counted as 253 and 644.5 annual
Vacation  Ownership  Interests)  compared  to 418 and  1,221  biennial  Vacation
Ownership  Interests  (counted  as  209  and  610.5  annual  Vacation  Ownership
Interests) in the same periods in 1998, respectively.

     Upgrade revenue,  included in Vacation Ownership Interest sales,  decreased
48.3% to $476,124 for the three months ended  September  30, 1999 from  $921,722
for the same  period  in 1998 and  decreased  33.3% to  $1,592,429  for the nine
months ended  September  30, 1999 from  $2,385,830  for the same period in 1998,
because 1998 sales reflected the introduction of ILX Premiere Vacation Club late
in the second  quarter of 1998. The Company made special offers to introduce the
program to its existing owners, which generated  significant upgrade activity in
the 1998 third quarter and nine-month  period sales. The average sales price per
Vacation Ownership Interest sold (including  Upgrades) decreased 6.0% or $955 to
$15,050 for the three months ended  September 30, 1999 from $16,005 for the same
period in 1998 and  decreased  0.8% or $121 to $15,040 for the nine months ended
September  30,  1999 from  $15,161  for the same  period in 1998.  The  decrease
reflects the impact of decreasing  Upgrade revenue as a part of overall Vacation
Ownership Interest sales.

     Resort operating  revenues increased 4.0% or $133,182 to $3,475,879 for the
three months ended  September 30, 1999,  from  $3,342,697 for the same period in
1998 and  increased  8.6% or $766,649 to  $9,696,624  for the nine months  ended
September  30, 1999 from  $8,929,975  for the same period in 1998.  The increase
reflects the opening of Varsity  Clubs of America - Tucson  Chapter in the third
quarter of 1998. Cost of resort  operations as a percentage of resort  operating
revenue  increased to 95.4% from 94.4% for the three months ended  September 30,
1999 from the same period in 1998,  reflecting  start-up costs of the restaurant
at the Roundhouse  Resort.  Cost of resort  operations as a percentage of resort
operating  revenue  decreased  to 94.6%  from  97.5% for the nine  months  ended
September  30, 1999 from the same period in 1998 due  primarily to 1998 expenses
including  initial operating costs of Varsity Clubs of America - Tucson Chapter,
which did not open to revenue paying guests until July 1998.

     Interest  income  increased  45.4% to $886,967  for the three  months ended
September 30, 1999 from $610,098 for the same period in 1998 and increased 64.3%
to $2,535,677 for the nine months ended  September 30, 1999 from  $1,543,771 for
the same period in 1998 as a result of the increase in customer  notes  retained
by the Company consistent with its strategy to retain and borrow against, rather
than sell, the majority of its customer notes.

     Cost of  Vacation  Ownership  Interests  sold as a  percentage  of Vacation
Ownership  Interest  sales  increased  from  13.1%  for the three  months  ended
September 30, 1998 to 13.9% for the same period in 1999 and increased from 13.9%
for the nine  months  ended  September  30, 1998 to 14.1% for the same period in

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

1999. The 1999 increase  reflects the greater upgrade revenue in 1998, for which
there is no  associated  product  cost,  and  variances  in product  mix between
periods.

     Sales  and  marketing  as a  percentage  of  sales  of  Vacation  Ownership
Interests decreased to 64.5% for the three-month period ended September 30, 1999
from  74.0%  for the  same  period  in 1998,  and  decreased  to  63.6%  for the
nine-month  period  ended  September  30, 1999 from 65.1% for the same period in
1998,  reflecting  the impact of sales and  marketing  changes made in the first
quarter of 1999.  These changes have  resulted in a greater  number of tours and
increased  closing  rates at the Sedona sales  office.  In  addition,  marketing
efforts to the South Bend sales office, which had not been cost effective,  were
substantially reduced in the third quarter.

     The provision for doubtful  accounts as a percentage of Vacation  Ownership
Interest  sales  increased  to 3.8%  and 3.2% of  sales  of  Vacation  Ownership
Interests in the three- and nine-month periods ended September 30, 1999 compared
to 3.0%  for the  three-  and  nine-month  periods  ended  September  30,  1998,
reflecting  the  Company's  decision  to  increase  the  provision  on new sales
effective in the third quarter of 1999.

     General and  administrative  expenses  increased to 9.4% and 10.2% of total
timeshare revenues in the three- and nine-month periods ended September 30, 1999
compared to 8.8% and 7.8% for the same periods in 1998,  to  $1,036,372  for the
three months ended  September 30, 1999 from $842,848 for the same period in 1998
and to $3,068,514 for the nine months ended  September 30, 1999 from  $2,120,528
for the same period in 1998.  The increases in 1999 reflect  recognition of ESOP
contributions,  increased professional fees, including fees to reissue the audit
reports of previous years,  and costs related to development and  implementation
of centralized reservations, owner services and reporting systems to support ILX
Premiere  Vacation Club and to provide for expected future growth.  In addition,
1998 general and  administrative  expense was reduced by  successful  appeals of
property tax assessments and the reduction of unused legal reserves.

     The 35.4%  increase in interest  expense from $515,111 for the three months
ended  September  30,  1998 to  $697,407  for the same  period in 1999 and 45.4%
increase  in  interest  expense  from  $1,422,244  for  the  nine  months  ended
September 30, 1998 to $2,067,782 for the same period in 1999,  reflect increased
borrowings  against customer notes receivable as the Company retains and borrows
against more of such notes,  net of decreases in interest rates and fluctuations
in the balances of borrowings outstanding.

LIQUIDITY AND CAPITAL RESOURCES

SOURCES OF CASH

     The Company  generates cash  primarily from the sale of Vacation  Ownership
Interests (including Upgrades),  the financing of customer notes from such sales
and resort operations. During the nine months ended September 30, 1998 and 1999,
cash  (used   in)/provided   by  operations  was   $(3,165,092)   and  $704,053,
respectively. The negative cash flow in 1998 was due primarily to an increase in
resort property held for Vacation  Ownership  Interest sales, which includes the
construction of Varsity Clubs of America - Tucson Chapter, which was financed in
large part through a construction loan and lease financing.  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.

     Cash  provided by financing  activities  of  $3,105,566  for the first nine
months in 1999 was lower  than the  $6,195,496  of 1998  because  1999  reflects
greater  borrowings  against retained  customer notes receivable (as the Company
follows its post follow-on offering strategy of retaining and borrowing against,
rather than selling,  a greater portion of its customer notes), and because 1998
reflects the proceeds,  net of offering costs, of the follow-on  offering of 1.6
million shares of common stock.

     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

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

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, 1998, the Company,  excluding its Genesis  subsidiary,  had
NOL  carryforwards of approximately  $4.3 million,  which expire in 2001 through
2012.  At  December  31,  1998,   Genesis  had  federal  NOL   carryforwards  of
approximately  $1.7  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 nine-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 for the nine
months  ended  September  30,  1998  and  1999 was  $4,606,242  and  $4,788,606,
respectively.

     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.  The Company
intends to build twelve  additional  cabins at Kohl's Ranch  commencing in 2000,
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 which aligns
their  interests  with  those  of the  Company.  During  the nine  months  ended
September 30, 1999,  the Company  declared and funded in cash  contributions  of
$250,000 to the ESOP and in addition  paid  interest  and fees of $13,579 on its
behalf as further described below.

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

     In  August  1999,  the  ESOP  entered  into an  agreement  with  Litchfield
Financial  Corporation for a $500,000 line of credit, which is guaranteed by the
Company.  The Company paid $10,000 in loan fees and interest of $3,579 on behalf
of the ESOP pursuant to this debt  agreement  and as of September 30, 1999,  the
ESOP had borrowed $400,000 against this line of credit.

     During the nine months ended September 30, 1999, the ESOP purchased 304,400
shares of the  Company's  common stock in the open market and, at September  30,
1999,  held these 304,400  shares and $33,616 in cash.  The debt is reflected on
the books of the Company.

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

CREDIT FACILITIES AND CAPITAL

     The Company has an agreement with a financial institution for a $40 million
financing  commitment  under which the Company may sell  certain of its customer
notes. The agreement provides for sales on a recourse basis with a percentage of
the amount sold held back by the financial institution as additional collateral.
Customer  notes may be sold at discounts or premiums to the principal  amount in
order  to  yield  the  consumer   market  rate,  as  defined  by  the  financial
institution.  At September  30,  1999,  approximately  $35.1  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) and
prime plus 3% ($3.5  million).  The $3.5  million  and $40  million  commitments
expire in 2001 and 2002,  respectively.  At September  30,  1999,  approximately
$29.6 million is available under these commitments.

     In July 1999,  the Company  entered into an agreement  with an affiliate to
purchase  sixty  vacation  ownership  interests  for the price of $500,000.  The
vacation ownership interests consist of four ILX Premiere Vacation Club Platinum
memberships,  fifty ILX Premiere  Vacation Club Gold memberships and six Varsity
Clubs of America - South Bend Chapter Alumni House (3 bedroom) extended football
weekend  memberships.  The Company  issued a  promissory  note for the  purchase
price,  which bears  interest  at 8%. The note is recorded as a Note  payable to
affiliates on the face of the balance  sheet.  The  agreement  also modified the
terms of a previously  existing  Note payable to the  affiliate and extended the
maturity date for a period of four years.

     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.

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

YEAR 2000 ISSUES

     The  inability  of  computers,   software  and  other  equipment  utilizing
microprocessors  to  recognize  and properly  process  data fields  containing a
2-digit year is commonly  referred to as the Year 2000 Compliance  issue. As the
year 2000 approaches,  such systems may be unable to accurately  process certain
date-based information.

     The Company  believes it has identified all significant  applications  that
will require modifications to ensure Year 2000 Compliance. Internal and external
resources are  currently  being used to test Year 2000  Compliance  and make any
additional   modifications   where  required.   The   identification  of  needed
modifications and upgrades of all significant internal applications was complete
at December 31, 1998.

     In  addition,  the Company is  communicating  with others with whom it does
significant  business to determine their Year 2000 Compliance  readiness and the
extent  to which  the  Company  is  vulnerable  to any  third  party  Year  2000
Compliance issues.  However, there can be no guarantee that the systems of other
companies on which the Company's systems rely will be timely converted,  or that
a failure to convert by another  company,  or a conversion  that is incompatible
with the  Company's  systems,  would not have a material  adverse  effect on the
Company.

     The total cost to the Company of these Year 2000 Compliance  activities has
not been and is not  anticipated  to be  material to its  financial  position or
results  of  operations  in any given  year.  Since the  Company  commenced  its
assessment  of its Year 2000  Compliance  during  early  1998,  it has  expended
approximately  $75,000 and estimates  additional  future costs of  approximately
$15,000,  consisting primarily of software purchases and associated training and
consulting services. In addition,  certain employees of the Company have devoted
their time to assessing and implementing the Company's Year 2000 Compliance, the
costs of which have not been  separately  allocated by the Company.  These costs
and the date on which the Company  plans to complete the Year 2000  modification
and testing  processes  are based on  management's  best  estimates,  which were
derived utilizing numerous  assumptions of future events including the continued
availability of certain  resources and other factors.  However,  there can be no
guarantee that these  estimates will be achieved and actual results could differ
from those plans.

     The Company has developed a  contingency  plan in the event that any of its
systems  or  the  systems  of any  third  party  with  which  it has a  material
relationship  are not Year 2000  Compliant.  In the event  that the  Company  is
vulnerable to any such Year 2000 Compliance issue, the worst case scenario could
include any or all of the following:

1.   Inability to timely collect payments on customer notes;
2.   Inability to timely or properly bill customers for resort charges;
3.   Reduction in effectiveness of generating tours to sales offices;
4.   Inability  to purchase  goods  (including  food,  beverages  and  operating
     supplies)  from  existing  sources,  thereby  forcing  the  Company  to use
     alternative vendors at potentially less favorable pricing;
5.   Inability to process payroll and/or perform other  accounting  functions on
     an efficient basis; and
6.   Suspension of some or all operations.

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
nine most recent  fiscal  years or the nine months  ended  September  30,  1999.
However,  to the extent  inflationary trends affect short-term interest rates, a
portion of the Company's debt service costs may be affected as well as the rates
the Company charges on its customer notes.

                                       15
<PAGE>
                                     PART II

ITEM I. LEGAL PROCEEDINGS

     A dispute had arisen between the general contractor,  Summit Builders,  and
the Company's wholly owned subsidiary, VCA Tucson Incorporated,  with respect to
amounts owed for the  construction of Varsity Clubs of America - Tucson Chapter.
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 September 30, 1999.

     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.  Approximately  $46,000 of the $110,000 had
been paid to Bowne on account and the  remaining  amount is fully accrued on the
books of the Company.  On September  15, 1999,  the Superior  Court  granted the
Company's  motion for summary  judgement on the issue of whether the parties had
entered into a binding settlement agreement.

     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 its preliminary stage.

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

ITEM II. CHANGES IN SECURITIES AND USE OF PROCEEDS

     None

ITEM III. DEFAULTS UPON SENIOR SECURITIES

     None

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

     On July 26, 1999, 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                 2,776,599         74,097          322,030
     Joseph A. Leonetti               2,576,147         74,097          322,030
     Joseph P. Martori                4,576,613         74,097          322,030
     Patrick J. McGroder III          2,776,613         74,097          322,030
     James W. Myers                   2,776,613         74,097          322,030
     Nancy J. Stone                   3,029,061         74,097          322,030
     Edward S. Zielinski              2,776,520         74,097          322,030

                                       16
<PAGE>
     Shareholder nominee proposed at the Annual Meeting:

     Joseph P. Martori, II              4,000,000

     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
     Patrick J. McGroder III      James W. Myers           Nancy J. Stone
     Edward S. Zielinski

ITEM V. OTHER INFORMATION

     None

ITEM VI. EXHIBITS AND REPORTS ON FORM 8-K

     (i) Exhibits

         Exhibit No.         Description
         -----------         -----------
            10-1             Credit   Agreement   between   Patrick  J.
                             McGroder,  III, Nancy J. Stone,  and James
                             W.  Myers,  Trustees  for the ILX  Resorts
                             Incorporated Employee Stock Ownership Plan
                             and   Trust   and   Litchfield   Financial
                             Corporation dated as of August 12, 1999

            10-2             AGREEMENT  TO MODIFY  Amended and Restated
                             Promissory  Note ($909,078) by ILX Resorts
                             Incorporated  to Edward J.  Martori  dated
                             January  1,  1996 and the sale by  Martori
                             Enterprises  Incorporated  to ILX  Resorts
                             Incorporated and/or its nominee of certain
                             vacation   ownership   interests   in  ILX
                             Premiere  Vacation Club and VCA South Bend
                             Incorporated

             27              Financial Data Schedule (filed herewith)

     (ii) Reports on Form 8-K

          None

                                       17
<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/ Stephen W. Morgan
                                               ---------------------------------
                                                    Stephen W. Morgan
                                                    Chief Financial Officer

Date:  As of November 10, 1999