<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C.  20549

                                    FORM 10-Q/A

                 Quarterly Report under Section 13 or 15 (d) of
                       The Securities Exchange Act of 1934

For Quarter Ended:                                Commission File Number
 October 9, 1996                                         0-14370

                                  BUFFETS, INC.
             (Exact name of registrant as specified in its charter)

       Minnesota                                      41-1462294
(State of incorporation)                (I.R.S. Employer Identification No.)

                   10260 Viking Drive, Eden Prairie, MN  55344
                    (Address of principal executive offices)

                                 (612) 942-9760
                         (Registrant's telephone number)

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 common stock, as of the latest practicable date.

        Class                 Outstanding as of November 20,1996
        -----                 ----------- -- -- -------- -------
Common Stock, $.01 par value            45,086,243 shares

<PAGE>

                         BUFFETS, INC. AND SUBSIDIARIES




                                      INDEX


                                                                      Page No.
                                                                      --------

 PART I.  FINANCIAL INFORMATION

 Item 1.  Consolidated Financial Statements:

          Consolidated Balance Sheets-
          January 3, 1996 and October 9, 1996  . . . . . . . . .         3

          Consolidated Statements of Earnings-
          Forty Weeks ended October 4, 1995
          and October 9, 1996 and Twelve Weeks
          ended October 4, 1995 and
          October 9, 1996  . . . . . . . . . . . . . . . . . . .         4

          Consolidated Statements of Cash Flows-
          Forty Weeks ended October 4, 1995
          and October 9, 1996  . . . . . . . . . . . . . . . . .         5

          Notes to Consolidated Financial
          Statements . . . . . . . . . . . . . . . . . . . . . .         6

 Item 2.  Management's Discussion and Analysis of
          Financial Condition and Results of
          Operations . . . . . . . . . . . . . . . . . . . . . .         7

 PART II. OTHER INFORMATION  . . . . . . . . . . . . . . . . . .         10

                                        2
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. CONSOLIDATED FINANCIAL STATEMENTS

                         BUFFETS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                  JANUARY 3,     OCTOBER 9,
                                     ASSETS                          1996           1996
                                                                   --------       --------
                                                                       (IN THOUSANDS)
<S>                                                               <C>            <C>
CURRENT ASSETS:
  Cash and cash equivalents. . . . . . . . . . . . . . . . .      $  14,530      $  27,217
  Short-term investments . . . . . . . . . . . . . . . . . .         27,828
  Receivable from landlords. . . . . . . . . . . . . . . . .          3,212          2,154
  Inventory. . . . . . . . . . . . . . . . . . . . . . . . .          4,138          3,990
  Notes receivable . . . . . . . . . . . . . . . . . . . . .             11
  Prepaid rents. . . . . . . . . . . . . . . . . . . . . . .          1,950          1,654
  Other current assets . . . . . . . . . . . . . . . . . . .          2,849          1,962
  Refundable income taxes. . . . . . . . . . . . . . . . . .          1,829
  Deferred income taxes. . . . . . . . . . . . . . . . . . .          6,592         11,145
                                                                   --------       --------
    TOTAL CURRENT ASSETS . . . . . . . . . . . . . . . . . .         62,939         48,122
                                                                   --------       --------
PROPERTY AND EQUIPMENT:
  Land . . . . . . . . . . . . . . . . . . . . . . . . . . .         13,661         15,687
  Building . . . . . . . . . . . . . . . . . . . . . . . . .         27,414         49,279
  Equipment. . . . . . . . . . . . . . . . . . . . . . . . .        216,452        227,699
  Leasehold improvements . . . . . . . . . . . . . . . . . .        170,794        148,242
                                                                   --------       --------
                                                                    428,321        440,907
  Less accumulated depreciation and amortization . . . . . .         99,748        130,980
                                                                   --------       --------
                                                                    328,573        309,927
GOODWILL, net of accumulated amortization of $1,274 and
  $1,534, respectively . . . . . . . . . . . . . . . . . . .          5,365          6,055
OTHER ASSETS . . . . . . . . . . . . . . . . . . . . . . . .          2,875          2,263
                                                                   --------       --------
                                                                   $399,752       $366,367
                                                                   --------       --------
                                                                   --------       --------
                            LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable . . . . . . . . . . . . . . . . . . . . .      $  36,732      $  27,171
  Accrued payroll and related benefits . . . . . . . . . . .         14,961         15,475
  Accrued rents. . . . . . . . . . . . . . . . . . . . . . .         11,985         18,052
  Accrued sales taxes. . . . . . . . . . . . . . . . . . . .          3,609          4,595
  Accrued insurance. . . . . . . . . . . . . . . . . . . . .          4,363          4,785
  Accrued store closing costs. . . . . . . . . . . . . . . .          1,631          7,777
  Other accrued expenses . . . . . . . . . . . . . . . . . .          3,035          1,550
  Income taxes . . . . . . . . . . . . . . . . . . . . . . .                           620
  Current portion of capital leases. . . . . . . . . . . . .          2,012          2,160
  Short-term debt. . . . . . . . . . . . . . . . . . . . . .          2,000
                                                                   --------       --------
  TOTAL CURRENT LIABILITIES. . . . . . . . . . . . . . . . .         80,328         82,185

LONG-TERM DEBT . . . . . . . . . . . . . . . . . . . . . . .         55,500         41,500
LONG-TERM PORTION OF CAPITAL LEASES. . . . . . . . . . . . .          7,143          5,504
DEFERRED INCOME. . . . . . . . . . . . . . . . . . . . . . .            598            342
DEFERRED INCOME TAXES. . . . . . . . . . . . . . . . . . . .         13,749          3,057

STOCKHOLDERS' EQUITY:
  Preferred stock, $.01 par value; 5,000 shares
    authorized; none issued and outstanding
  Common stock, $.01 par value; 60,000 shares
    authorized; issued and outstanding 44,833 and
    45,073 shares, respectively. . . . . . . . . . . . . . .            448            451
  Additional paid-in capital . . . . . . . . . . . . . . . .        114,774        116,058
  Retained earnings. . . . . . . . . . . . . . . . . . . . .        127,212        117,270
                                                                   --------       --------
     TOTAL STOCKHOLDERS' EQUITY. . . . . . . . . . . . . . .        242,434        233,779
                                                                   --------       --------
                                                                   $399,752       $366,367
                                                                   --------       --------
                                                                   --------       --------
</TABLE>
                 See Notes to Consolidated Financial Statements.
                                        3
<PAGE>

                         BUFFETS, INC. AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (UNAUDITED)


<TABLE>
<CAPTION>

                                              FORTY WEEKS ENDED            TWELVE WEEKS ENDED
                                         ---------------------------  ----------------------------
                                         OCTOBER 4,      OCTOBER 9,   OCTOBER 4,       OCTOBER 9,
                                            1995            1996         1995             1996
                                         ----------      ----------   ----------       ----------

                                                 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<S>                                       <C>            <C>            <C>            <C>
RESTAURANT SALES . . . . . . . . . . .    $497,154       $580,663       $162,860       $180,909
RESTAURANT COSTS:
   Food costs. . . . . . . . . . . . .     175,808        202,064         57,485         63,334
   Labor costs . . . . . . . . . . . .     139,485        166,257         44,844         51,801
   Direct and occupancy costs. . . . .     110,339        137,001         36,440         44,028
                                          --------       --------       --------       --------
   Total restaurant costs. . . . . . .     425,632        505,322        138,769        159,163
                                          --------       --------       --------       --------

RESTAURANT PROFITS . . . . . . . . . .      71,522         75,341         24,091         21,746

SELLING, GENERAL AND
   ADMINISTRATIVE EXPENSES . . . . . .      31,158         36,070         10,872         11,663
MERGER AND OTHER RELATED COSTS . . . .                      6,584                         6,584
DUPLICATE SITE CLOSING COSTS . . . . .                     10,702                        10,702
IMPAIRMENT OF ASSETS . . . . . . . . .                     27,739                        27,739
OTHER SITE CLOSING COSTS . . . . . . .                      4,547                         4,547
                                          --------       --------       --------       --------
                                            40,364        (10,301)        13,219        (39,489)


OTHER INCOME (EXPENSE) NET . . . . . .         637           (941)           196           (427)
                                          --------       --------       --------       --------
EARNINGS (LOSS) BEFORE INCOME
  TAX (EXPENSE) BENEFIT. . . . . . . .      41,001        (11,242)        13,415        (39,916)

INCOME TAX (EXPENSE) BENEFIT . . . . .     (15,492)         1,300         (5,064)        12,470
                                          --------       --------       --------       --------

NET EARNINGS (LOSS). . . . . . . . . .    $ 25,509        ($9,942)      $  8,351       ($27,446)
                                          --------       --------       --------       --------
                                          --------       --------       --------       --------

NET EARNINGS (LOSS) PER COMMON
   AND COMMON EQUIVALENT SHARE . . . .        $.56          ($.22)          $.18          ($.60)
                                          --------       --------       --------       --------
                                          --------       --------       --------       --------

WEIGHTED AVERAGE COMMON AND
 COMMON EQUIVALENT SHARES
 OUTSTANDING . . . . . . . . . . . . .      45,279         45,490         45,439         45,073
</TABLE>


                 See Notes to Consolidated Financial Statements.


                                        4

<PAGE>
                         BUFFETS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                       FORTY WEEKS ENDED
                                                                  --------------------------
                                                                  OCTOBER 4,      OCTOBER 9,
                                                                     1995            1996
                                                                  ----------      ----------
                                                                        (IN THOUSANDS)
<S>                                                                 <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net earnings (loss). . . . . . . . . . . . . . . . . . . .        $25,509      $  (9,942)
  Adjustments to reconcile net earnings (loss)
    to net cash provided by operating activities:
      Depreciation and amortization. . . . . . . . . . . . .         24,535         31,508
      Impairment of assets and site closing costs. . . . . .                        42,988
      Tax benefit from early disposition of common stock . .            199            186
      Deferred income. . . . . . . . . . . . . . . . . . . .                          (256)
      Deferred income taxes. . . . . . . . . . . . . . . . .           (343)       (15,245)
      Changes in assets and liabilities:
        Inventory. . . . . . . . . . . . . . . . . . . . . .           (581)           148
        Other current assets . . . . . . . . . . . . . . . .          1,678          1,194
        Refundable income taxes. . . . . . . . . . . . . . .                         1,829
        Other assets . . . . . . . . . . . . . . . . . . . .            196            242
        Accounts payable . . . . . . . . . . . . . . . . . .         (3,734)        (9,561)
        Accrued payroll and related benefits . . . . . . . .            955            514
        Other accrued expenses . . . . . . . . . . . . . . .          7,077          7,483
        Income taxes currently payable . . . . . . . . . . .          1,570            620
                                                                   --------       --------
          Total adjustments. . . . . . . . . . . . . . . . .         31,552         61,650
                                                                   --------       --------
          Net cash provided by operating activities. . . . .         57,061         51,708

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of investments. . . . . . . . . . . . . . . . . .         (8,140)      (125,251)
  Proceeds from sale of investments. . . . . . . . . . . . .         15,588        153,079
  Purchase of minority interest in HTB I . . . . . . . . . .                          (950)
  Capital expenditures, net of retirements
    and net receipts from landlords. . . . . . . . . . . . .        (76,815)       (51,469)
  Cash receipts from landlords . . . . . . . . . . . . . . .          4,983          1,960
                                                                   --------       --------
          Net cash used in investing activities. . . . . . .        (64,384)       (22,631)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from exercise of employee's stock options . . . .          1,655          1,101
  Payments of long-term debt . . . . . . . . . . . . . . . .         (2,000)       (14,000)
  Net borrowings (payments) on short-term debt . . . . . . .          3,654         (2,000)
  Proceeds from borrowings on capital leases . . . . . . . .         10,002
  Payments on capital leases . . . . . . . . . . . . . . . .         (1,162)        (1,491)
                                                                   --------       --------

          Net cash provided by (used in) financing
          activities . . . . . . . . . . . . . . . . . . . .         12,149        (16,390)
                                                                   --------       --------

NET INCREASE IN CASH AND CASH EQUIVALENTS. . . . . . . . . .          4,826         12,687

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR . . . . . . .          6,907         14,530
                                                                   --------       --------

CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . . . . . . .        $11,733        $27,217
                                                                   --------       --------
                                                                   --------       --------

Supplemental disclosures of cash flow information:

Cash paid during the period for:
  Interest (Net of capitalized interest of $264 and
   $252 in 1995 and 1996, respectively). . . . . . . . . . .         $  805      $  2,300
  Income taxes . . . . . . . . . . . . . . . . . . . . . . .         12,792        11,212
</TABLE>

                 See Notes to Consolidated Financial Statements.


                                        5
<PAGE>

                         BUFFETS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   In the opinion of Management, the accompanying unaudited consolidated
     financial statements contain all adjustments (consisting only of normal
     recurring adjustments) necessary to present fairly the financial position
     of Buffets, Inc. and subsidiaries as of October 9, 1996 and the results of
     operations for the twelve weeks ended October 4, 1995 and October 9, 1996
     and the results of operations and cash flows for the forty weeks ended
     October 4, 1995 and October 9, 1996.

     The Company's balance sheets as of January 3, 1996, and October 9, 1996, 
     and the statement of operations for the twelve weeks ended October 9, 
     1996, have been restated. The restatement had no effect on stockholders' 
     equity as of October 9, 1996, or previously reported net loss for the 
     forty weeks ended October 9, 1996.  The Company's balance sheets have been 
     restated to classify deferred rents in a manner consistent with future 
     presentations and properly reflect the allocation of deferred taxes 
     between the current deferred income tax asset and the noncurrent deferred
     income tax liability. The Company's statement of operations for the twelve
     weeks ended October 9, 1996, has been restated to properly record the 
     intraperiod income tax (expense) benefit for the first three quarters 
     of 1996.

2.   On September 20, 1996, the Company completed the acquisition of HomeTown
     Buffet, Inc. ("HomeTown").  The acquisition was accounted for as a pooling
     of interests.  Accordingly, the historical unaudited consolidated financial
     statements for all periods have been restated to include the operations of
     HomeTown.  In connection with the acquisition, the Company issued
     approximately 13,733,700 shares of its common stock and issued options
     covering, in the aggregate, approximately 1,967,200 shares of its common
     stock in substitution for previously outstanding HomeTown stock options.
     In addition, the Company guaranteed the obligations of HomeTown under
     HomeTown's outstanding 7% Subordinated Convertible Notes, and Company
     common stock will be issued upon any conversion thereof.  Approximately
     $41.5 million in principal amount of the Notes are currently outstanding.

     In connection with the acquisition, the Company incurred approximately
     $17,286,000 of merger and merger-related costs, including $6,584,000 for
     investment banking, accounting, legal and other merger costs and
     $10,702,000 for the closure of five duplicate restaurants and HomeTown's
     San Diego headquarters.

3.   During the twelve weeks ended October 9, 1996, the Company also recorded
     certain charges, including $4,547,000 relating to the closure of three non-
     performing restaurants and $27,739,000 relating to the application of
     Statement of Financial Accounting Standards No. 121,  "Accounting for the
     Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
     of."

4.   These statements should be read in conjunction with the Notes to
     Consolidated Financial Statements contained in the Company's and HomeTown
     Buffets, Inc.'s Annual Report on Form 10-K for the fiscal year ended
     January 3, 1996 and with Management's Discussion and Analysis of Financial
     Condition and Results of Operations appearing on pages 7 thru 9 of this
     quarterly report.


                                        6

<PAGE>

Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS.

The Company operates on a fifty-two or fifty-three week fiscal year, which ends
on the Wednesday nearest December 31. The Company's first quarter consists of
sixteen weeks; all other quarters include only twelve weeks.  When a fifty-three
week year occurs, the Company's fourth quarter consists of thirteen weeks.

The Company completed the acquisition of HomeTown Buffet, Inc., on September 20,
1996.  The acquisition of HomeTown was accounted for as a pooling of interests.
Accordingly, all historical financial information for Buffets, Inc. and
subsidiaries have been restated to include the operations of HomeTown as though
the two entities have always been combined.

RESULTS OF OPERATIONS

TWELVE WEEKS ENDED OCTOBER 9, 1996

RESTAURANT SALES.  Restaurant sales of $180.9 million during the third quarter
of 1996 represented a 11.0% increase over sales of $162.9 million for the
comparable period of 1995, primarily due to sales generated by new restaurants.
Seven new restaurants opened in the third quarter of 1996, bringing the total
number of Company-owned restaurants to 341 at the end of the quarter.  Average
weekly sales per restaurant for the third quarter of 1996 decreased 4.7% to
$44,730 from $46,948 in the comparable period of 1995.  Comparable restaurant
sales for the quarter were down 6.8% from the comparable 1995 period.  The
Company's price increases have been in line with inflation.

RESTAURANT COSTS.  As a percentage of restaurant sales, total restaurant costs
increased to 88.0% for the third quarter of 1996 from 85.2% for the third
quarter of 1995.  Food costs as a percentage of restaurant sales decreased
slightly to 35.0% from 35.3%.  Labor costs increased to 28.6% in 1996 from 27.5%
in 1995 primarily due to increased wages for management and hourly employees.
Direct and occupancy costs increased to 24.4% from 22.4% in the prior year,
primarily due to increases in various restaurant costs and lower average
restaurant sales volume.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling, general and
administrative expenses as a percentage of restaurant sales decreased to 6.4% in
the third quarter of 1996 from 6.7% in the third quarter of 1995.  Such expenses
in absolute terms increased to $11.7 million for the third quarter of 1996 from
$10.9 million for the comparable quarter of 1995.  Advertising costs as a
percentage of restaurant sales for the period decreased to 1.3% in 1996 from
2.1% in 1995.

MERGER COSTS, DUPLICATE SITE CLOSING COSTS AND IMPAIRMENT OF ASSETS.  Merger
costs were $17,286,000, of which $6,584,000 was for investment banking,
accounting, legal and other merger costs and $10,702,000 was for the closure of
five duplicate restaurants and HomeTown's San Diego headquarters.  Non-merger
charges included $4,547,000 relating to the closure of three non-performing
restaurants and $27,739,000 relating to the application of Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-
Lived Assets and for Long-Lived Assets to be Disposed of."  The Company
determined that an impairment write down was necessary for these locations 
because of a significant drop in


                                        7

<PAGE>

average weekly sales and corresponding trend of increasing operating losses at
these locations during the first 40 weeks of fiscal 1996 (a period that includes
the fiscal third quarter, which traditionally has been a strong quarter for
sales).  The SFAS No. 121 impairment was determined based upon 38 specific
restaurant locations which had incurred operating or cash flow losses.  It was
computed using estimated fair value of the assets and the associated future cash
flows of the specific location.  HomeTown Buffet represented 27% of the
impairment.  Depreciation of the impaired assets and losses from eight 
restaurants amounted to $3,777,000 through the third quarter of fiscal year 
1996 ($2,342,000 or $.05 per share after taxes).

INCOME TAX (EXPENSE) BENEFIT.  Income taxes reflect a tax benefit of $12.5 
million, or 31.2% of the loss before income tax benefit for the twelve weeks 
ended in 1996. The Company's effective tax rate for 1996 was lower than the 
statutory rate primarily due to certain merger related costs which are not 
deductible for tax purposes. The Company's effective income tax rate was 
37.7% for the third quarter of 1995. This rate is higher then the statutory 
rate primarily due to state income taxes.

FORTY WEEKS ENDED OCTOBER 9, 1996.

RESTAURANT SALES.  For the first forty weeks in 1996, restaurant sales increased
16.8% to $580.7 million from $497.2 million in 1995, primarily due to the
addition of new restaurants.  The Company opened 31 restaurants in the first
forty weeks of 1996 as compared to 33 in the first forty weeks of 1995.  The
average weekly sales per restaurant decreased 2.1% to $44,275 from $45,206 in
1995.  Comparable restaurant sales were down 3.4%. The Company's price increases
have been in line with inflation.

RESTAURANT COSTS.  Restaurant costs for the first forty weeks in 1996 increased
to $505.3 million from $425.6 million in 1995.  As a percentage of sales,
restaurant costs increased to 87.0% in 1996 from 85.6% in 1995.  Food costs
decreased to 34.8% from 35.4% due primarily to decreases in the costs of fruits,
vegetables, and seafood; labor costs increased to 28.6% from 28.0% due to
increased wages for management and hourly employees; and direct and occupancy
costs increased to 23.6% from 22.2% in 1996 and 1995 primarily due to utility,
repair and maintenance and other costs and lower average restaurant sales
volume.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  For the first forty weeks of
1996, selling, general and administrative expenses increased to $36.1 million
from $31.2 million in 1995.  As a percentage of sales, selling, general and
administrative expenses decreased slightly to 6.2% in 1996 from 6.3% in 1995.
Advertising expenses as a percentage of sales was 1.2% in 1996 compared to 1.0%
in 1995.  The Company expects advertising expenses for the current year as a
percentage of sales to be approximately 1.0%.

INCOME TAX (EXPENSE) BENEFIT.  Income taxes reflect a tax benefit of $1.3 
million or 11.6% of the loss before income tax benefit for the forty weeks in 
1996 compared to 37.8% in the comparable forty weeks of 1995.  The Company's 
effective tax rate for 1996 was lower than the statutory rate primarily due 
to certain merger related costs which are not deductible for tax purposes.  
The Company's effective tax rate for 1995 was more than the statutory rate 
primarily due to state income taxes.

                                        8

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     The Company currently has a unsecured revolving line of credit  of up to
$50 million.  The Company is required to pay a quarterly commitment fee equal to
1/4 of 1% per annum of the unused balance.  On July 1, 1999, providing no
default or event of default has occurred and is continuing, the line of credit
is convertible, at the Company's option, to a three-year term loan, maturing on
July 1, 2002.  As of October 9, 1996, the Company had no borrowings outstanding
under this credit line.

     The Company continues to require substantial amounts of capital to fund its
growth.  The Company currently expects to open approximately 43 to 45 new
restaurants during 1996, with 31 already opened at October 9, 1996.  Seven new
restaurants opened during the quarter and 21 other units were under construction
at quarter end, with approximately 12 to 14 restaurants expected to open during
the fourth quarter.

     The Company expects to spend an aggregate of approximately $18 to $20
million during the remainder of 1996 on its restaurants being opened in 1996,
depending on the level of contributions obtained from landlords for leasehold
improvements and the amount of land purchased for freestanding buildings.  The
Company anticipates that, as it further pursues the development of freestanding
locations, the cost per location and related cash requirements will increase
substantially over prior years and these costs will not be offset by landlord
contributions that typically have been associated with strip mall locations.
The capital expenditure required for a freestanding location can be over 100%
greater than for a mall location. The Company estimates that less than 10% of
1996 new locations will be purchased freestanding units built and owned by the
Company.  The Company estimates that approximately 25% of 1996 locations will be
freestanding leased units.  Sources of capital for restaurant development
projects are anticipated to be funds provided by operations, credit received
from trade suppliers, landlord contributions to leasehold improvements and
current bank financing.  The Company believes that these sources will be
adequate to finance operations and the additional restaurants included in the
Company's restaurant development plans for at least through fiscal 1997.
However, in order to remain prepared for further significant growth in future
years, the Company will continue to evaluate its financing needs and seek
additional funding if appropriate.

FORWARD-LOOKING INFORMATION

     This quarterly report contains forward-looking statements, including
statements regarding advertising costs, the number of restaurants expected to be
opened during the remainder of 1996 and the availability of capital resources
necessary to meet requirements through at least fiscal 1997.  In addition to the
factors discussed herein, other factors that could cause actual results to
differ materially include adverse weather conditions, the success of the
Company's advertising program, changes in food supply costs and general economic
conditions.  In addition, the ability of the Company to open new restaurants
depends on a number of factors, including its ability to find suitable locations
and negotiate acceptable leases and land purchases, its ability to attract and
retain qualified restaurant managers and the availability of capital.


                                        9

<PAGE>

PART II.  OTHER INFORMATION

     Item 1.   Legal Proceedings

                    IN RE BUFFETS, INC. SECURITIES LITIGATION, United States
               District Court for the District of Minnesota, Master No. 3-94-
               1447, is a consolidation of four separate lawsuits involving
               Buffets.  The first lawsuit was commenced by ZSA Asset Allocation
               Fund and ZSA Equity Fund on or about November 7, 1994.  Three
               other substantially similar actions were filed shortly thereafter
               by alleged shareholders Marc Kushner, Trustee for Service Lamp
               Corp. Profit Sharing Plan, Jerrine Fernandes, and John J.
               Nuttall.  By Pretrial Order No. 1, entered in early January 1995,
               the District Court ordered that the four lawsuits be consolidated
               into the single pending action and that plaintiffs serve and file
               a Consolidated Amended Class Action Complaint (the "Complaint"),
               which was served on or about January 31, 1995.  The Court ordered
               the dismissal of the Complaint upon motion by the defendants, but
               granted plaintiffs leave to replead.  Plaintiffs filed their
               Second Amended, Consolidated Class Action Complaint (the "Second
               Complaint") on December 11, 1995.  Defendants moved to dismiss
               the Second Complaint.  On September 11, 1996, Judge Michael J.
               Davis, of the District Court dismissed the Second Complaint
               without prejudice, with leave to plaintiffs to replead within 60
               days after September 11, 1996.  On Friday, November 8, 1996,
               plaintiffs filed their Third Amended, Consolidated Class Action
               Complaint (the "Third Complaint").

                    The Third Complaint is against Buffets and several of its
               officers and directors.  In the Third Complaint, plaintiffs seek
               to represent a putative class consisting of all persons and
               entities (excluding defendants and certain others) who purchased
               shares of the Buffets Common Stock during the period commencing
               October 26, 1993 and ending October 25, 1994 (the "Class
               Period").  The Third Complaint alleges that the defendants made
               misrepresentations and omissions of material fact during the
               Class Period with respect to Buffets operations and restaurant
               development activities, as a result of which the price of the
               Buffets stock allegedly was artificially inflated during the
               Class Period.  The Third Complaint further alleges that certain
               defendants made sales of Buffets Common Stock during the Class
               Period while in possession of material undisclosed information
               about the Company's operations and restaurant development
               activities.  The Third Complaint alleges that the defendants'
               conduct violated the Securities Exchange Act of 1934 and seeks
               compensatory damages in an unspecified amount, prejudgment
               interest, and an award of attorneys' fees, costs and expenses.

                    Management of the Company believes that the action is
               without merit and intends to defend it vigorously.  Although the
               outcome of this proceeding cannot be predicted with certainty,
               the Company's


                                       10

<PAGE>

               management believes that while the outcome may have a material
               effect on earnings in a particular period, the outcome should not
               have a material effect on the financial condition of the Company.

                    On August 9, 1996, HTB Restaurants, Inc. ("HTB
               Restaurants"), a franchisee of HomeTown, along with its parent
               entities, Summit Family Restaurants, Inc. and CKE Restaurants,
               Inc. (the "Plaintiffs"), filed suit against the Company and
               HomeTown in United States District Court for the District of
               Utah, Central Division.  The suit alleges, among other things,
               that the Company and HomeTown have illegally conspired to
               restrict competition and to prevent the Plaintiffs from
               developing additional HomeTown Buffet restaurants under the
               Multiple Unit Agreement between HomeTown and HTB Restaurants (the
               "Multiple Unit Agreement").  The continued viability of the
               Multiple Unit Agreement, which provides HTB Restaurants with
               exclusive HomeTown Buffet restaurant development rights in the
               states of Arizona, Colorado, Idaho, Montana, Nevada, New Mexico,
               Utah and Wyoming, is the subject of pending arbitration between
               HomeTown and HTB Restaurants (see below).  The suit includes
               claims against the Company and HomeTown for violations of both
               federal and state antitrust laws, claims for unfair business
               practices, and claims for tortious interference with contract and
               economic relations.  The suit also alleges claims against
               HomeTown for breach of contract and breach of the covenant of
               good faith and fair dealing.  Plaintiffs seek up to $160 million 
               in damages and sought to enjoin the merger between the Company 
               and HomeTown.  On September 19, 1996, Judge Dee V. Benson, of the
               United States District Court, denied Plaintiffs' motion for
               preliminary injunctive relief.  The Company and HomeTown intend
               to vigorously defend the lawsuit.

                    HomeTown previously has given HTB Restaurants notice that it
               has breached its obligation to develop restaurants under the
               Multiple Unit Agreement and, therefore, HTB Restaurants'
               exclusive development rights thereunder have terminated.  HTB
               Restaurants and its parent company, Summit Family Restaurants,
               Inc., have commenced an arbitration proceeding against HomeTown
               before the American Arbitration Association.  The Statement of
               Claim alleges that termination of the Multiple Unit Agreement is
               wrongful or improper and requests that HomeTown be precluded from
               terminating HTB Restaurants' exclusive rights under the Multiple
               Unit Agreement. HTB Restaurants and Summit Family Restaurants
               have requested from the arbitrator the following alternative
               forms of relief: (i) an order voiding all existing franchise
               agreements between HomeTown and HTB Restaurants; (ii) an order
               permitting termination of the Multiple Unit Agreement but
               requiring the payment by HomeTown of $20 million in damages; or
               (iii) an order enjoining termination of the Multiple Unit
               Agreement, enjoining any construction of any HomeTown Buffet or
               Old Country Buffet restaurant in the exclusive territory and
               requiring the Company to divest itself of any current


                                       11

<PAGE>

               Old Country Buffet restaurants operating in the territory.  The
               Company and HomeTown believe that the termination of the Multiple
               Unit Agreement was proper and, in any event, much of the relief
               requested is inappropriate because it involves contracts and
               parties not part of the arbitration proceeding.  The hearing
               before the arbitrator is scheduled to take place on November 25-
               27, 1996, in Salt Lake City, Utah.

     Item 2.   Changes in Securities

               None

     Item 3.   Defaults upon Senior Securities

               None

     Item 4.   Submission of Matters to a Vote of Security Holders

                    A Special Meeting of Shareholders of the Company was held on
               September 19, 1996.  At the meeting, the shareholders of the
               Company approved the issuance of shares of Company Common Stock
               in accordance with the terms of the Agreement and Plan of Merger,
               dated June 3, 1996, among the Company, HomeTown Buffet, Inc. and
               Country Delaware, Inc., by the following votes:

                         FOR         AGAINST       ABSTAIN        NONVOTES
                         ---         -------       -------        --------
                     24,574,615        97,616        62,660            0

     Item 5.   Other Information

               None

     Item 6.   Exhibits and reports on Form 8-K

          a)   Exhibits

               10.1) Amendment No. 1 dated as of September 20, 1996 to Second
               Amended and Restated Credit Agreement by and between the Company
               and First Bank National Association (1)

               10.2) Indenture dated as of November 27, 1995 related to 7%
               Convertible Subordinated Notes of HomeTown Buffet, due December
               1, 2002 (2)

               10.3) First Supplemental Indenture dated as of September 20, 1996
               among the Company, HomeTown and Wells Fargo Bank, N.A. (3)

               10.4) Employment Agreement dated September 20, 1996, between the
               Company and Kerry A. Kramp


               10.5) Multiple Unit Agreement dated October 9, 1991 between HTB
               Restaurants, Inc. and HomeTown, and amendments thereto. (4)

               10.6) Promissory Note issued by Kerry A. Kramp to Registrant and
               Pledge Agreement between Kerry A. Kramp to HomeTown, each dated
               August 23, 1993. (5)


                                       12

<PAGE>

               10.7) Promissory Note issued by Thomas F. Hubbard to HomeTown and
               Pledge Agreement between Thomas F. Hubbard and HomeTown, each
               dated November 9, 1993. (5)

               10.8) Promissory Note dated April 13, 1995 issued by Kerry A.
               Kramp. (6)

               27)   Financial Data Schedule


          b)   The Company filed a Report on Form 8-K dated September 16, 1996
               (regarding an Item 5 disclosure) relating to the Company's Press
               Release dated September 16, 1996.

               The Company filed a Report on Form 8-K dated September 20, 1996
               (regarding an Item 2 disclosure) relating to the acquisition of
               HomeTown Buffet, Inc.

------------------------------
(1)  Incorporated by reference to Exhibit 4.5 to the Company's Registration
     Statement on Form 8-A, dated November 8, 1996.
(2)  Incorporated by reference to Exhibit 4.6 to the Company's Registration
     Statement on Form 8-A, dated November 8, 1996.
(3)  Incorporated by reference to Exhibit 4.7 to the Company's Registration
     Statement of Form 8-A, dated November 8, 1996.
(4)  Incorporated by reference from Exhibits to HomeTown's Registration
     Statement on Form S-1, as amended, effective September 22, 1993 (Commission
     Registration No. 33-67326). Confidential treatment for a portion of this
     agreement has been granted to HomeTown by the Commission.
(5)  Incorporated by reference from Exhibits to HomeTown's Registration
     Statement on Form S-1, as amended, effective March 23, 1994 (Commission
     Registration No. 33-75810).
(6)  Incorporated by reference from Exhibits to HomeTown's Annual Report on Form
     10-K for the period ended January 3, 1996 filed with the Commission on
     March 29, 1996.


                                       13

<PAGE>

                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                   BUFFETS, INC.
                                   (Registrant)


March 28, 1997

                                   /s/ Roe H. Hatlen
                                   ------------------------------
                                   Roe H. Hatlen
                                   Chairman of the Board,
                                   Chief Executive Officer
                                   (Principal Executive Officer)



                                   /s/ Clark C. Grant
                                   ------------------------------
                                   Clark C. Grant
                                   Executive Vice President of
                                   Finance and Administration
                                   and Treasurer
                                   (Principal Financial
                                   Officer)


                                       14

<PAGE>

                                    EXHIBIT INDEX


       Exhibits                                               Page
       --------                                               ----

10.4) Employment Agreement dated
      September 20, 1996, between the
      Company and Kerry A. Kramp . . . . . . . . . . . Filed Electronically

27    Financial Data Schedule  . . . . . . . . . . . . Filed Electronically