SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

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


For The Quarter Ended March 31, 2000            Commission File Number 001-13855

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


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

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

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

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                 Yes [X] No [ ]

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

            Class                                  Outstanding at March 31, 2000
-------------------------------                    -----------------------------
Common Stock, without par value                           3,783,573 shares
<PAGE>
                                     PART I

ITEM 1. FINANCIAL STATEMENTS

                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                                                  December 31,       March 31,
                                                      1999             2000
                                                  ------------     ------------
                                                                    (Unaudited)
                                     ASSETS
Cash and cash equivalents                         $  2,971,365     $  2,845,105
Notes receivable, net                               23,145,383       23,619,339
Resort property held for Vacation
  Ownership Interest sales                          21,742,875       21,310,275
Resort property under development                      346,786          405,952
Land held for sale                                   1,596,759        1,602,597
Deferred assets                                        227,933          172,781
Property and equipment, net                          4,212,470        4,348,289
Other assets                                         3,144,951        2,312,385
                                                  ------------     ------------

  TOTAL ASSETS                                    $ 57,388,522     $ 56,616,723
                                                  ============     ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
  Accounts payable                                $    923,016     $    654,702
  Accrued and other liabilities                      2,679,107        2,908,711
  Due to affiliates                                     26,282               --
  Notes payable                                     27,020,947       25,929,838
  Notes payable to affiliates                        1,100,000        1,100,000
  Income taxes payable                                 376,223          655,709
                                                  ------------     ------------

    Total liabilities                               32,125,575       31,248,960
                                                  ------------     ------------

MINORITY INTERESTS                                      23,778           88,055
                                                  ------------     ------------
SHAREHOLDERS' EQUITY

  Preferred stock, $10 par value; 10,000,000
    shares authorized; and 305,978 shares
    issued and outstanding; liquidation
    preference of $3,059,780                         1,179,298        1,179,298
  Common stock, no par value; 30,000,000
    shares authorized; 3,921,173 and
    3,956,773 shares issued                         18,069,840       18,099,515
  Treasury stock, at cost, 0 and 173,200
    shares, respectively                                    --         (341,757)
  Additional paid in capital                           279,450          250,975
  Guaranteed ESOP Obligation                          (500,000)        (375,000)
  Retained earnings                                  6,210,581        6,466,677
                                                  ------------     ------------

    Total shareholders' equity                      25,239,169       25,279,708
                                                  ------------     ------------

    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY    $ 57,388,522     $ 56,616,723
                                                  ============     ============

                 See notes to consolidated financial statements

                                       2
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                                   Three months ended March 31,
                                                   ----------------------------
                                                      1999             2000
                                                   -----------     ------------
Timeshare revenues:
  Sales of Vacation Ownership Interests            $ 5,151,509     $  5,946,856
  Resort operating revenue                           2,863,003        3,124,210
  Interest income                                      764,133          939,955
                                                   -----------     ------------

      Total timeshare revenues                       8,778,645       10,011,021
                                                   -----------     ------------

Cost of sales and operating expenses:
  Cost of Vacation Ownership Interests sold            693,474          816,391
  Cost of resort operations                          2,813,041        2,995,581
  Sales and marketing                                3,408,966        3,580,485
  General and administrative                           930,560        1,081,632
  Provision for doubtful accounts                      150,846          223,481
  Depreciation and amortization                        112,702          136,535
                                                   -----------     ------------
      Total cost of sales and
        operating expenses                           8,109,589        8,834,105
                                                   -----------     ------------

Timeshare operating income                             669,056        1,176,916

Income from land and other, net                         18,892            2,460
                                                   -----------     ------------

Total operating income                                 687,948        1,179,376

Interest expense                                      (672,281)        (689,003)
                                                   -----------     ------------
Income before income taxes and
  minority interests                                    15,667          490,373

Income tax expense                                      (4,000)        (170,000)
                                                   -----------     ------------

Income before minority interests                        11,667          320,373

Minority interests                                      (6,790)         (64,277)
                                                   -----------     ------------

Net income                                         $     4,877     $    256,096
                                                   ===========     ============
Net income per share

     Basic                                         $      0.00     $       0.06
                                                   ===========     ============

     Diluted                                       $      0.00     $       0.06
                                                   ===========     ============

                 See notes to consolidated financial statements

                                       3
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                                                    Three months ended March 31,
                                                    ---------------------------
                                                       1999             2000
                                                    -----------     -----------
Cash flows from operating activities:
  Net income                                        $     4,877     $   256,096
  Adjustments to reconcile net income to net
    cash provided by (used in) operating
    activities:
    Undistributed minority interest                       6,790          64,277
    Deferred income taxes                                 4,000              --
    Provision for doubtful accounts                     150,846         223,481
    Depreciation and amortization                       112,702         136,535
    Amortization of guarantee fees                        2,900             700
    Change in assets and liabilities:
      Decrease in resort property held for
        Vacation Ownership Interest sales               712,547         432,600
      Increase in resort property under
        development                                    (139,689)        (59,166)
      Increase in land held for sale                     (8,607)         (5,838)
      Decrease (increase) in other assets              (517,823)        928,591
      Decrease in accounts payable                     (248,709)       (268,314)
      Increase in accrued and other liabilities         235,406         259,279
      Decrease in due to affiliates                          --         (26,282)
      Increase in income taxes payable                       --         279,486
                                                    -----------     -----------

Net cash provided by operating activities               315,240       2,221,445
                                                    -----------     -----------
Cash flows from investing activities:
    Notes receivable, net                            (1,436,622)       (697,437)
    Decrease (increase) in deferred assets               (6,746)         54,452
    Purchases of plant and equipment, net              (497,453)       (271,854)

Net cash used in investing activities                (1,940,821)       (914,839)
                                                    -----------     -----------
Cash flows from financing activities:
    Proceeds from notes payable                       7,352,450       2,563,387
    Principal payments on notes payable              (4,805,922)     (3,654,496)
    Acquisition of treasury stock and other             (53,975)       (341,757)
                                                    -----------     -----------
Net cash (used in) provided by financing
  activities                                          2,492,553      (1,432,866)
                                                    -----------     -----------
(Decrease) Increase in cash and cash
  equivalents                                           866,972        (126,260)

Cash and cash equivalents at beginning
  of period                                           3,196,710       2,971,365
                                                    -----------     -----------

Cash and cash equivalents at end of period          $ 4,063,682     $ 2,845,105
                                                    ===========     ===========

                 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 three-month  period ended March 31, 2000 are not  necessarily  indicative of
the results  that may be expected for the year ending  December  31,  2000.  The
accompanying  financial  statements  should  be read  in  conjunction  with  the
Company's most recent audited financial statements.

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

REVENUE RECOGNITION

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

     Cash equivalents are liquid  investments with an original maturity of three
months or less. The following  summarizes  interest paid,  income taxes paid and
capitalized interest.

                                       Three Months Ended March 31,
                                       ----------------------------
                                         1999                2000
                                       --------            --------
Interest paid                          $629,000            $706,000
Income taxes paid                            --                  --
Capitalized interest                         --                  --

ACCOUNTING MATTERS

     In February 1997, the Financial  Accounting Standards Board issued SFAS No.
129, "Disclosure of Information about Capital Structure" ("SFAS 129"), which was
effective for financial  statements  for periods  ending after December 15, 1997
and establishes  standards for disclosing  information about an entity's capital
structure.  The  Company  adopted  SFAS 129 in 1997.  There were no  significant
effects on the Company's  disclosures about its capital structure,  as that term
is defined in SFAS 129, in the three months ended March 31, 1999 or 2000.

                                       5
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

     In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income" ("SFAS 130"), which was effective for financial
statements  for  periods  beginning  after  December  15,  1997 and  establishes
standards for reporting and display of  comprehensive  income and its components
(revenues,  expenses,  gains  and  losses)  in a  full  set  of  general-purpose
financial statements.  The Company adopted SFAS 130 in 1998. There were no items
of other comprehensive income, as that term is defined in SFAS 130, in the three
months ended March 31, 1999 or 2000.

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

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

NOTE 2. NET INCOME PER SHARE

     In  accordance  with SFAS No. 128,  "Earnings  Per  Share,"  the  following
presents the computation of basic and diluted net income per share:

                           BASIC NET INCOME PER SHARE

                                                  Three Months Ended March 31,
                                                 ------------------------------
                                                    1999               2000
                                                 ----------         -----------
Net income                                       $     4,877        $   256,096
Less: Series A preferred
  stock dividends                                    (11,969)           (11,969)
Net income available to common
  stockholders - basic                           $    (7,092)       $   244,127
                                                 ===========        ===========
Weighted average shares of common
  stock outstanding - basic                        4,028,421          3,884,086
                                                 ===========        ===========
Basic net income per share                       $      0.00        $      0.06
                                                 ===========        ===========

                                       6
<PAGE>
                          DILUTED NET INCOME PER SHARE

                                                   Three Months Ended March 31,
                                                  -----------------------------
                                                      1999              2000
                                                  -----------       -----------
Net income                                        $     4,877       $   256,096
Less: Series A preferred
  stock dividends                                     (11,969)          (11,969)
                                                  -----------       -----------
Net income available to
  common stockholders - diluted                   $    (7,092)      $   244,127
                                                  ===========       ===========
Weighted average shares of commo
  stock outstanding                                 4,028,421         3,884,086
Add: Convertible preferred stock
  (Series B and C) dilutive effect                    110,541            85,711
                                                  -----------       -----------
Weighted average shares of common
  stock outstanding - diluted                       4,138,962         3,969,797
                                                  ===========       ===========
Diluted net income per share                      $      0.00       $      0.06
                                                  ===========       ===========

     Stock options to purchase  145,700 shares of common stock at prices ranging
from $3.25 per share to $8.125 per share were  outstanding at March 31, 2000 but
were not included in the computation of diluted net income per share because the
options'  exercise  prices were greater than the average  market price of common
shares. These options expire at various dates between 2000 and 2004.

NOTE 3. SHAREHOLDERS' EQUITY

     During the first  quarter of 2000,  the  Company  issued  35,600  shares of
restricted  common  stock,  valued at $29,675,  to  employees  in  exchange  for
services  provided.  These restricted shares of common stock issued to employees
are exempt from  registration  under Section 4(2) of the Securities Act of 1933.
Also during the first quarter of 2000, the Company  purchased  173,200 shares of
its common stock for $341,757.

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

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

OVERVIEW

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

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

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

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

RESULTS OF OPERATIONS

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

                                                    Three Months Ended March 31,
                                                    ----------------------------
                                                        1999            2000
                                                      ---------      ---------
As a percentage of total timeshare revenues:
  Sales of Vacation Ownership Interests                    58.7%          59.4%
  Resort operating revenue                                 32.6%          31.2%
  Interest income                                           8.7%           9.4%
                                                      ---------      ---------
  Total timeshare revenues                                100.0%         100.0%
                                                      =========      =========
As a percentage of sales of Vacation
  Ownership Interests:
  Cost of Vacation Ownership Interests sold                13.5%          13.7%
  Sales and marketing                                      66.2%          60.2%
  Provision for doubtful accounts                           2.9%           3.8%
  Contribution margin percentage from sale
   of Vacation Ownership Interests (1)                     17.4%          22.3%

As a percentage of resort operating revenue:
  Cost of resort operations                                98.3%          95.9%

As a percentage of total timeshare revenues:
  General and administrative                               10.6%          10.8%
  Depreciation and amortization                             1.3%           1.4%
  Timeshare operating income                                7.6%          11.8%

Selected operating data:
  Vacation Ownership Interests sold (2) (3)                 332            371
  Average sales price per Vacation Ownership
    Interest sold (excluding revenues from
    Upgrades) (2)                                     $  13,563      $  13,828
  Average sales price per Vacation Ownership
    Interest sold (including revenues from
    Upgrades) (2)                                     $  15,517      $  15,421

----------
(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 503 and 589  biennial  and  annual  Vacation
     Ownership  Interests  for the three  months  ended March 31, 1999 and 2000,
     respectively.

COMPARISON  OF THE THREE  MONTHS  ENDED MARCH 31, 1999 TO THE THREE MONTHS ENDED
MARCH 31, 2000

     Sales of Vacation Ownership  Interests  increased 15.4% or $795,347 in 2000
to $5,946,856  from  $5,151,509 in 1999 reflecting an increase in sales from the
Sedona  sales  office,  net of decreases  in sales from the  VCA-South  Bend and
VCA-Tucson sales offices.  The increase in sales from the Sedona sales office is
a result of both an increase in the number of tours and an improved closing rate
(sales as a percentage of tours).  The decrease in sales from the VCA-South Bend
sales office  reflects the  reduction  from a full scale sales office to a small
sales staff that both  generates its own tours and sells to such prospects for a
percentage of sales.  The decrease in sales from the VCA-Tucson  sales office is

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

due to a decrease  in tour flow in part as a result of  reducing  the  operation
from seven days to five days a week to gain certain operating efficiencies.  The
average sales price per Vacation  Ownership  Interest sold  (excluding  revenues
from  Upgrades)  increased 2.0% or $265 in 2000 to $13,828 from $13,563 in 1999,
reflecting  the higher per unit sales prices  achieved for sales of ILX Premiere
Vacation Club Vacation Ownership Interests.

     The number of Vacation Ownership Interests sold increased 11.7% from 332 in
1999 to 371 in 2000 largely due to greater  tour flow and a higher  closing rate
at the Sedona  sales  office.  Sales of  Vacation  Ownership  Interests  in 2000
included  436  biennial  Vacation  Ownership  Interests  (counted  as 218 annual
Vacation  Ownership  Interests)  compared  to 342  biennial  Vacation  Ownership
Interests (counted as 171 annual Vacation Ownership Interests) in 1999.

     Upgrade revenue,  included in Vacation Ownership Interest sales,  decreased
8.9% from  $648,442  in 1999 to  $590,865  in 2000.  Upgrades  generally  do not
involve  the sale of  additional  Vacation  Ownership  Interests  (merely  their
exchange)  and,  therefore,  such Upgrades  increase the average sales price per
Vacation Ownership Interest sold. The average sales price per Vacation Ownership
Interest sold (including  Upgrades) decreased from $15,517 in 1999 to $15,421 in
2000 as a result of the reduced  Upgrade  revenue,  offset in part by  increased
sales of ILX Premiere Vacation Club Ownership  Interests,  which sell for higher
prices than Vacation Ownership Interests in individual ILX resorts.

     Resort operating  revenues increased 9.1% or $261,207 in 2000 to $3,124,210
from  $2,863,003  in  1999,  reflecting  net  increased  occupancy  and  average
receipts,  including the growth of business at  VCA-Tucson,  which opened in the
third quarter of 1998. Cost of resort operations  improved from 98.3% in 1999 to
95.9% in 2000 as a result of net increases in operating efficiencies,  including
VCA-Tucson.

     The 23.0% increase in interest  income from $764,133 in 1999 to $939,955 in
2000 is a result of the  increased  Customer  Notes  retained by the Company and
increases  in  interest  rates  charged by the  Company on its  Customer  Notes,
consistent with its strategy to retain and borrow  against,  rather than sell, a
greater  portion of its Customer  Notes.  The Company has sought to increase the
percentage  of Customer  Notes it retains  (hypothecates)  and borrows  against,
rather than sells,  thereby  benefiting  from the  interest  spread  between the
customer rate and the lower Company borrowing rate.

     Cost of  Vacation  Ownership  Interests  sold as a  percentage  of Vacation
Ownership  Interest sales increased slightly from 13.5% in 1999 to 13.7% in 2000
due to product mix in ILX Premiere Vacation Club.

     Sales  and  marketing  as a  percentage  of  sales  of  Vacation  Ownership
Interests decreased to 60.2% in 2000 from 66.2% in 1999 reflecting the impact of
sales and marketing changes made in the first quarter of 1999, which resulted in
a greater  number of tours  and  increased  closing  rates at the  Sedona  sales
office, net of high costs of marketing to the VCA-South Bend sales office in the
first half of 1999.  Those  marketing  efforts  that were not cost  effective in
generating tours to the South Bend sales office were eliminated beginning in the
third quarter of 1999, and the sales operation correspondingly reduced.

     The provision for doubtful  accounts as a percentage of Vacation  Ownership
Interest  sales  increased to 3.8% of sales of Vacation  Ownership  Interests in
2000,  compared to 2.9% in 1999,  reflecting the Company's  decision to increase
the provision on new sales effective in the third quarter of 1999.

     General and  administrative  expenses increased 16.2% to $1,081,632 in 2000
from $930,560 in 1999. General and administrative expenses increased slightly to
10.8% as a percentage of total  timeshare  revenues in 2000 compared to 10.6% in
1999.  The  increase  reflects  recognition  in 2000 of ESOP  contributions  and
increased  property tax recognition on VCA-South Bend and  VCA-Tucson.  The ESOP
Plan was adopted in the second quarter of 1999.

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

     The 2.5% increase in interest  expense from $672,281 in 1999 to $689,003 in
2000 reflects an increase in borrowings against customer notes receivable as the
Company  retains and borrows  against more of its consumer paper and an increase
in  interest   rates,   net  of  fluctuations  in  the  balances  of  borrowings
outstanding.

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 three  months ended March 31, 1999 and 2000,
cash  provided by  operations  was $315,240 and  $2,221,445,  respectively.  The
increase is due to increased  income and resultant  income taxes payable as well
as decreased  other assets.  The decrease in other assets is related to advances
made to  Sedona  Vacation  Club  Homeowners' Association  for  renovations as of
December 31, 1999,  which were  reimbursed  in the first  quarter of 2000 and to
timing of collections of homeowners' dues.  Because the Company uses significant
amounts  of  cash  in  the  development  and  marketing  of  Vacation  Ownership
Interests,  but collects the cash on the customer notes  receivable  over a long
period of time, borrowing against and/or selling receivables is a necessary part
of its normal operations.

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

     At December 31, 1999, the Company,  excluding its Genesis  subsidiary,  had
NOL  carryforwards of approximately  $9.8 million,  which expire in 2001 through
2012.  At  December  31,  1999,   Genesis  had  federal  NOL   carryforwards  of
approximately  $1.4  million,  which are limited as to usage  because they arise
from built in losses of an acquired company.  In addition,  such losses can only
be  utilized  through  the  earnings  of Genesis and are limited to a maximum of
$189,000 per year. To the extent the entire  $189,000 is not utilized in a given
year, the difference may be carried forward to future years.  Any unused Genesis
NOLs will expire in 2008.

     In addition,  Section 382 of the Internal  Revenue Code imposes  additional
limitations on the utilization of NOLs by a corporation  following various types
of ownership  changes,  which result in more than a 50% change in ownership of a
corporation within a three-year period.  Such changes may result from new Common
Stock issuances by the Company or changes  occurring as a result of filings with
the  Securities  and Exchange  Commission of Schedules 13D and 13G by holders of
more  than  5% of  the  Common  Stock,  whether  involving  the  acquisition  or
disposition of Common Stock. If such a subsequent change occurs, the limitations
of Section 382 would apply and may limit or deny the future  utilization  of the
NOL by the  Company,  which  could  result  in the  Company  paying  substantial
additional federal and state taxes.

USES OF CASH

     Investing activities typically reflect a net use of cash because of capital
additions  and loans to  customers in  connection  with the  Company's  Vacation
Ownership  Interest  sales.  Net cash used in investing  activities in the three
months ended March 31, 1999 and 2000 was $1,940,821 and $914,839,  respectively.
The  decrease is due to a reduction  in the  increase of notes  receivable  from
prior year end to the end of the respective  first  quarters.  The Company began
hypothecating rather than selling a greater portion of notes receivable in first
quarter 1999. The Company continued this strategy in 2000; therefore,  there was
a larger  increase in the notes  receivable  balance  from  December 31, 1998 to
March 31, 1999,  as compared to the increase from December 31, 1999 to March 31,
2000.

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

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

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

     On April 9, 1999  (effective  January 1, 1999),  the Company formed the ILX
Resorts  Incorporated  Employee Stock Ownership Plan and Trust (the "ESOP"). The
intent of the ESOP is to provide a retirement  program for employees that aligns
their  interests with those of the Company.  During 1999, the Company  declared,
and funded in cash,  contributions  of $250,000 to the ESOP. In August 1999, the
ESOP entered into an  agreement  with  Litchfield  Financial  Corporation  for a
$500,000 line of credit,  which is secured by the Company's stock purchased with
the funds and guaranteed by the Company.  The Company paid a total of $43,047 in
fees in 1999 on behalf of the ESOP related to the line of credit,  consisting of
$10,000 in loan  fees,  $16,231 in legal fees and  interest  of  $16,816.  As of
December 31,  1999,  the ESOP had  borrowed  the full  $500,000 on the line.  In
January 2000, the Company contributed  $125,000 to the ESOP, which the ESOP used
to repay principal on the line,  reducing the borrowing to $375,000 at March 31,
2000.

     During 1999,  the ESOP purchased a total of 375,300 shares of the Company's
common stock in the open market,  including  257,400 with borrowed funds and, at
March 31, 2000, held the 375,300 shares and $2,610 in cash. The shares purchased
with borrowed funds had not been  allocated to participant  accounts as of March
31, 2000 and are  collateral  for the  borrowing.  The fair market  value of the
unallocated shares at March 31, 2000 was approximately $482,625.

     The  leveraged  and  unallocated  shares will be released at the end of the
current  Plan year  (December  31,  2000) based on the amount of  principal  and
interest payments made during the year. During the quarter ended March 31, 2000,
the  Company  paid and  recognized  as an expense  contributions  of $10,213 for
interest and $125,000 for principal.

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

CREDIT FACILITIES AND CAPITAL

     The Company has an agreement with a financial institution for a $40 million
financing  commitment  under which the Company may sell  certain of its Customer
Notes. The agreement provides for sales on a recourse basis with a percentage of
the amount sold held back by the financial institution as additional collateral.
Customer  Notes may be sold at discounts or premiums to the principal  amount in
order  to  yield  the  consumer   market  rate,  as  defined  by  the  financial
institution.  At March 31, 2000, $30.7 million of the $40 million commitment was
available to the Company.

     The  Company  also has  financing  commitments  aggregating  $43.5  million
whereby the Company may borrow against notes  receivable  pledged as collateral.
These  borrowings  bear  interest at a rate of prime plus 1.5% ($40  million) to
prime plus 3% ($3.5  million).  The $3.5  million  and $40  million  commitments
expire in 2001 and 2002,  respectively.  At March 31, 2000,  approximately $27.6
million is available under these commitments.

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

     At March 31, 1999 and 2000, the Company had approximately $19.1 million and
$18.8 million,  respectively, in outstanding notes receivable sold on a recourse
basis.  Portions  of the notes  receivable  are secured by deeds of trust on Los
Abrigados Resort & Spa, VCA-South Bend and VCA-Tucson.

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

     In February  2000, the Company  borrowed  $600,000 for the purpose of using
the funds to purchase  treasury  stock.  The note is  collateralized  by cash or
stock,  bears interest at 12% and is due through 2002. As of March 31, 2000, the
Company  purchased  114,600  shares of stock at a cost of  $240,000  with  funds
provided by this note. The remaining  $360,000 is classified as restricted  cash
and is included in "Other Assets" on the balance sheet.

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

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

SEASONALITY

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

INFLATION

     Inflation  and  changing  prices  have  not had a  material  impact  on the
Company's revenues,  operating income and net income during any of the Company's
three  most  recent  fiscal  years or the three  months  ended  March 31,  2000.
However,  to the extent  inflationary trends affect short-term interest rates, a
portion of the Company's debt service costs may be affected as well as the rates
the Company charges on its customer notes.

                                       12
<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 VCA-Tucson.  In May 1999, the dispute was
settled for an amount of $1.3 million.  Such cost is included in resort property
held for sale at December 31, 1999 and March 31, 2000.

     A dispute had arisen  between  Bowne of Phoenix,  Inc.  ("Bowne"),  and the
Company  regarding  amounts  owing for printing  related to the  Company's  1998
follow-on public offering.  Bowne and the Company reached agreement on a payment
of $110,000 for such services,  which Bowne subsequently sought to change. Bowne
filed suit in the Superior  Court of Arizona  seeking  total payment of $154,720
plus interest and attorneys' fees. At March 31, 2000,  approximately  $46,000 of
the  $110,000  has been paid to Bowne on account  and the  remaining  amount was
fully accrued on the books of the Company.  On September 15, 1999,  the Superior
Court granted the Company's  motion for summary judgment on the issue of whether
the parties had entered into a binding settlement  agreement.  In February 2000,
the Superior Court also granted the Company's  request for $32,904 in attorneys'
fees plus taxable costs.

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

     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

     None

ITEM V. OTHER INFORMATION

     None

ITEM VI. EXHIBITS AND REPORTS ON FORM 8-K

     (i)  Exhibits

          Exhibit No.       Description
          -----------       -----------
              27            Financial Data Schedule (filed herewith)

     (ii) Reports on Form 8-K

          None

                                       13
<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/ Stephen W. Morgan
                      -------------------------------------
                              Senior Vice President
                              Corporate Controller


Date: As of May 11, 2000

                                       14