United States
                      Securities and Exchange Commission
                            Washington, D.C. 20549


                                  FORM 10-Q


   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
           Act of 1934 For the Quarterly Period ended September 30, 2001

                        Commission File Number 333-34323


                   HYDROCHEM INDUSTRIAL SERVICES, INC. (*)
            (Exact name of registrant as specified in its charter)


                      Delaware                          75-2503906
          (State or other jurisdiction of            (I.R.S. Employer
           incorporation or organization)           Identification Number)

                 900 Georgia Avenue
                  Deer Park, Texas                          77536
          (Address of principal executive offices)        (Zip Code)

                                 (713) 393-5600
              (Registrant's telephone number, including area code)


     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


     The  number  of  shares of Common  Stock of  the  Registrant outstanding on
     November 1,  2001 was 100 shares.  The  Registrant's  Common  Stock  is not
     registered under the  Securities Act of 1933, as amended, or the Securities
     Exchange Act of 1934, as amended.

     ---------------------------------------------------------------------------

     * HydroChem  International,  Inc., a wholly-owned  subsidiary  of HydroChem
       Industrial Services, Inc.,  is a Co-Registrant.  It is incorporated under
       the laws of the State of Delaware.  Its  I.R.S.  Employer  Identification
       Number  is 75-2512100.
<PAGE>



                                TABLE OF CONTENTS
<TABLE>
<CAPTION>


<S>                                                                                                           <C>
Part I.  Financial Information

         Item 1.  Financial Statements

                  Consolidated Balance Sheets as of December 31, 2000 and
                      September 30, 2001 (unaudited).....................................................      3

                  Consolidated Statements of Operations for each of the three and nine
                      month periods ended September 30, 2000 and 2001 (unaudited)........................      4

                  Consolidated Statement of Stockholder's Equity for the nine
                      month period ended September 30, 2001 (unaudited)..................................      5

                  Consolidated Statements of Cash Flows for each of the nine
                      month periods ended September 30, 2000 and 2001 (unaudited)........................      6

                  Notes to Consolidated Financial Statements (unaudited).................................      7

         Item 2.  Management's Discussion and Analysis of Financial Condition
                      and Results of Operations..........................................................     13

         Item 3.  Quantitative and Qualitative Disclosures About Market Risk  ...........................     17

Part II.      Other Information

         Item 1.  Legal Proceedings......................................................................     18

         Item 5.  Other Information......................................................................     18

         Item 6.  Exhibits and Reports on Form 8-K.......................................................     18

Signatures...............................................................................................     22

Exhibit Index............................................................................................     23
</TABLE>




                                       2
<PAGE>


                       HYDROCHEM INDUSTRIAL SERVICES, INC.
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)


<TABLE>
<CAPTION>
                                                                     December 31,    September 30,
                                                                         2000            2001
                                                                         ----            ----
                                     ASSETS
     <S>                                                              <C>          <C>
     Current assets:
         Cash and cash equivalents ................................   $   6,380    $     506
         Receivables, less allowance of $723 and $765, respectively      39,781       40,953
         Inventories ..............................................       4,467        4,187
         Prepaid expenses and other current assets ................       2,224        2,818
         Income taxes receivable ..................................         328        1,027
         Deferred income taxes ....................................       1,536        1,213
                                                                      ---------    ---------
              Total current assets ................................      54,716       50,704

     Property and equipment, at cost ..............................     100,419      103,706
         Accumulated depreciation .................................     (53,721)     (60,357)
                                                                      ---------    ---------
                                                                         46,698       43,349

     Intangible assets, net .......................................      96,931       93,626
                                                                      ---------    ---------

              Total assets ........................................   $ 198,345    $ 187,679
                                                                      =========    =========

                      LIABILITIES AND STOCKHOLDER'S EQUITY
     Current liabilities:
         Accounts payable .........................................   $   9,455    $   9,518
         Accrued liabilities ......................................      15,595       11,481
         Current portion of long-term debt (Note 3) ...............       7,858        6,863
                                                                      ---------    ---------
              Total current liabilities ...........................      32,908       27,862

     Long-term debt (Note 3) ......................................     140,350      136,786
     Deferred income taxes ........................................       8,365        7,603
     Commitments and contingencies (Note 6)

     Stockholder's equity:
         Common stock, $.01 par value:
              1,000 shares authorized, 100 shares outstanding .....           1            1
         Additional paid-in capital ...............................      16,558       16,558
         Accumulated other comprehensive loss .....................          --         (315)
         Retained earnings ........................................         163         (816)
                                                                      ---------    ---------
         Total stockholder's equity ...............................      16,722       15,428
                                                                      ---------    ---------

              Total liabilities and stockholder's equity ..........   $ 198,345    $ 187,679
                                                                      =========    =========
</TABLE>



                             See accompanying notes.

                                       3
<PAGE>


                       HYDROCHEM INDUSTRIAL SERVICES, INC.
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (in thousands)

<TABLE>
<CAPTION>

                                              Three months ended      Nine months ended
                                                 September 30,          September 30,
                                                   --------                --------
                                                2000      2001         2000      2001
                                                ----      ----         ----      ----
<S>                                          <C>        <C>         <C>        <C>
Revenue ...................................  $ 52,049   $ 52,017    $159,687   $168,566
Cost of revenue ...........................    32,733     34,469      98,170    107,737
                                             --------   --------    --------   --------
      Gross profit ........................    19,316     17,548      61,517     60,829

Selling, general and administrative expense    12,293     13,097      37,351     39,718
Depreciation ..............................     3,016      2,717       8,831      8,137
Amortization of intangibles ...............       999        995       2,995      2,986
                                             --------   --------    --------   --------
      Operating income ....................     3,008        739      12,340      9,988

Other (income) expense:
      Interest expense, net ...............     4,018      3,726      12,051     11,549
      Other (income) expense, net .........       (98)      (128)         63       (108)
                                             --------   --------    --------   --------

Income (loss) before taxes ................      (912)    (2,859)        226     (1,453)

      Income tax benefit ..................        --     (1,459)         --       (474)
                                             --------   --------    --------   --------

Net income (loss) .........................  $   (912)  $ (1,400)   $    226   $   (979)
                                             ========   ========    ========   ========
</TABLE>





















                             See accompanying notes.

                                       4


<PAGE>


                       HYDROCHEM INDUSTRIAL SERVICES, INC.
                                AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
                                 (in thousands)



<TABLE>
<CAPTION>

                                                                    Accumulated
                                                    Additional         Other
                                          Common     Paid-in       Comprehensive   Retained
                                          Stock      Capital           Loss        Earnings      Total
                                          -----      -------           ----        --------      -----

<S>                                    <C>           <C>           <C>             <C>         <C>
Balance at December 31, 2000 .......   $      1      $ 16,558      $     -         $  163      $ 16,722

    Other comprehensive loss .......          -             -         (315)             -          (315)
    Net income .....................          -             -            -           (979)         (979)
                                       --------      --------      -------         ------      --------
    Total other comprehensive income                                                             (1,294)
                                                                                               --------

Balance at September 30, 2001 ......   $      1      $ 16,558      $  (315)        $ (816)     $ 15,428
                                       ========      ========      =======         ======      ========
</TABLE>




















                             See accompanying notes.

                                       5
<PAGE>


                       HYDROCHEM INDUSTRIAL SERVICES, INC.
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                Nine months ended
                                                                                   September 30,
                                                                              2000             2001
                                                                           ---------         --------
<S>                                                                         <C>             <C>
Operating activities:
     Net income........................................................     $   226         $  (979)
     Adjustments to reconcile net income (loss)
         to net cash provided by operating activities:
         Depreciation..................................................       8,831           8,137
         Amortization..................................................       2,995           2,986
         Amortization of deferred financing costs......................         544             599
         Deferred income tax benefit...................................           -            (439)
         Loss (gain)on sale of property and equipment..................         122            (110)
     Changes in operating assets and liabilities:
         Receivables, net..............................................      (5,242)         (1,172)
         Inventories...................................................         228             280
         Prepaid expenses and other current assets.....................        (887)           (594)
         Income taxes receivable.......................................           -            (699)
         Accounts payable..............................................         472              63
         Accrued liabilities...........................................      (3,965)         (4,429)
                                                                            -------         -------
              Net cash provided by operating activities................       3,324           3,643
                                                                            -------         -------

Investing activities:
     Expenditures for property and equipment...........................      (3,592)         (5,228)
     Proceeds from sale of property and equipment......................         477             550
     Acquisitions, net of cash.........................................        (964)              -
                                                                            -------         -------
              Net cash used in investing activities....................      (4,079)         (4,678)
                                                                            -------         -------

Financing activities:
     Repayments of long-term debt, net.................................        (626)         (4,559)
     Debt financing costs..............................................        (334)           (280)
                                                                            -------         -------
              Net cash used by financing activities....................        (960)         (4,839)
                                                                            -------         -------

Net decrease in cash...................................................      (1,715)         (5,874)
Cash at beginning of period............................................       4,140           6,380
                                                                            -------         -------

Cash at end of period..................................................     $ 2,425         $   506
                                                                            =======         =======
</TABLE>





                             See accompanying notes.



                                       6
<PAGE>

                     HYDROCHEM INDUSTRIAL SERVICES, INC.
                               AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              September 30, 2001



1.  Organization, Formation and Basis of Presentation

       The consolidated  financial statements include the accounts of HydroChem
    Industrial    Services,    Inc.    ("HydroChem")   and   its   wholly-owned
    subsidiaries.  (HydroChem and its  subsidiaries  are hereinafter  sometimes
    referred  to  either   separately  or   collectively   as  the  "Company.")
    HydroChem  is  a  wholly-owned   subsidiary  of  HydroChem  Holding,   Inc.
    ("Holding").

       The Company is engaged in the business of providing  industrial cleaning
    services to a wide range of processing industries,  including petrochemical
    plants,  oil refineries,  electric  utilities,  pulp and paper mills, steel
    mills, and aluminum plants.  Services  provided include  high-pressure  and
    ultra-high  pressure water  cleaning  (hydroblasting),  chemical  cleaning,
    industrial   vacuuming,   tank   cleaning,   mechanical   services,   waste
    minimization,  commissioning and other specialized  services.  The majority
    of these services involve  recurring  maintenance to improve or sustain the
    operating  efficiencies  and extend the useful  lives of process  equipment
    and facilities.

       The accompanying  unaudited  consolidated financial statements presented
    herein  have  been  prepared  in  accordance  with  accounting   principles
    generally  accepted in the United States for interim financial  information
    and the rules and  regulations of the  Securities and Exchange  Commission.
    Accordingly,  they do not include all of the  information  and  disclosures
    required by accounting  principles  generally accepted in the United States
    for complete  financial  statements.  Certain  information  and disclosures
    normally  included in  financial  statements  prepared in  accordance  with
    accounting  principles  generally  accepted in the United  States have been
    condensed  or  omitted.  In the  opinion of  management,  the  accompanying
    unaudited interim financial statements include all adjustments,  consisting
    of only normal  recurring  accruals,  necessary for a fair  presentation of
    the results of the  interim  periods.  Operating  results for the three and
    nine month  interim  periods ended  September 30, 2001 are not  necessarily
    indicative  of the  results  that  may be  expected  for  the  year  ending
    December  31,  2001.  These  unaudited  consolidated  financial  statements
    should  be read in  conjunction  with the  Company's  audited  consolidated
    financial  statements  included in the Company's Annual Report on Form 10-K
    for the year ended December 31, 2000.

2.  Adoption of New Accounting Principle

       On  January  1,  2001,  the  Company  adopted   Statement  of  Financial
    Accounting  Standards  (SFAS)  133,  as  amended  by SFAS 138,  "Accounting
    Derivative  Instruments  and Hedging  Activities".  SFAS 133 requires  that
    all  derivatives  be recorded on the  consolidated  balance  sheet at their
    fair value.  Changes in the fair value of  derivatives  are  recorded  each
    period in earnings or other  comprehensive  income (loss)  depending on the
    type of hedging  instrument  and the  effectiveness  of those  hedges.  All
    derivatives  are  adjusted to their fair  market  values at the end of each
    quarter.  Unrealized  net  gains  and  losses  for  cash  flow  hedges  are
    recorded in other comprehensive income (loss).

       The Company  entered into an interest rate swap to fix the interest rate
    on a variable rate term loan.  This  derivative,  which was designated as a
    cash  flow  hedge  at the  time of  adoption  of SFAS  133,  qualifies  for
    evaluation  using the short cut method for assessing  effectiveness  and is
    considered  highly  effective  as defined by SFAS 133.  In accordance  with
    the  transition  provisions of SFAS 133, the Company  recorded a cumulative
    loss  adjustment to other  comprehensive  loss of $39,000,  after taxes, to
    recognize  the fair value of this  derivative  at  January 1, 200l.  During
    the nine months ended  September 30, 2001,  unrealized net losses  totaling
    $315,000,   after  taxes,  were  recorded  in  other   comprehensive  loss,
    including the $39,000  cumulative  effect adjustment as of January 1, 2001.
    Subsequent to September 30, 2001, and in connection  with debt  refinancing
    activities, this interest rate swap was terminated.   (See Note 7.)
                                       7
<PAGE>

       In June 2001, the Financial  Accounting  Standards Board issued SFAS No.
    141,  "Business  Combinations",  and  SFAS No.  142,  "Goodwill  and  Other
    Intangible  Assets",  effective for fiscal years  beginning  after December
    15, 2001.  Under the new rules,  goodwill  will no longer be amortized  but
    will  be  subject  to  annual  impairment  tests  in  accordance  with  the
    statements.  Other  intangible  assets will  continue to be amortized  over
    their useful lives.

       The Company  will apply the new rules on  accounting  for  goodwill  and
    other   intangible   assets   beginning  in  the  first  quarter  of  2002.
    Application  of  the  non-amortization   provisions  of  the  statement  is
    expected to result in an  increase in net income of $2.6  million per year.
    During 2002, the Company will perform the first of the required  impairment
    tests of goodwill and indefinite lived  intangible  assets as of January 1,
    2002.  The  Company has not yet  determined  what the effect of these tests
    will be on the earnings and financial position of the Company.

3.  Long-term Debt

       Long-term  debt at December 31, 2000 and September 30, 2001 consisted of
    the following (in thousands):
<TABLE>
<CAPTION>

                                                             2000      2001
                                                             ----      ----
      <S>                                                 <C>        <C>
      Senior Subordinated Notes.......................    $110,000   $110,000
      Term Loan.......................................      29,000     24,578
      Mortgage Loan...................................       7,208      7,071
      Revolver........................................           -         -
      Seller Notes....................................       2,000      2,000
                                                             -----      -----
         Total long-term debt.........................     148,208    143,649
         Less current portion of long-term debt.......      (7,858)    (6,863)
                                                            ------     ------
                                                          $140,350   $136,786
                                                          ========   ========
</TABLE>

       On October 25, 2001, the Company entered into a new Financing  Agreement
    which replaced the Term Loan, the Revolver and  the  Mortgage  Loan.   (See
    Note 7.)

4.  Income Taxes

       The  Company  files  a  consolidated   tax  return  with  Holding.   The
    Company's  effective  income tax rate for the interim periods  presented is
    based on management's  estimate of the Company's effective tax rate for the
    applicable  year and  differs  from the federal  statutory  income tax rate
    primarily   due   to   nondeductible   permanent   differences,   including
    nondeductible goodwill amortization,  state income taxes and changes in the
    valuation allowance for deferred tax assets.

5.  Guarantor Financial Information

       Condensed    consolidating    financial    information   for   guarantor
    subsidiaries,   including   HydroChem   International,   Inc.,  (Int'l)  as
    consolidated with HydroChem, is as follows (in thousands):


                                       8
<PAGE>

                      CONDENSED CONSOLIDATING BALANCE SHEET
<TABLE>
<CAPTION>
                                                                  As of December 31, 2000
                                                                  -----------------------
                                                                 Guarantor                             Total
                                               HydroChem       Subsidiaries        Eliminations     Consolidated
                                               ---------       ------------        ------------     ------------
                                                              Int'l    Other
                                                              -----    -----
<S>                                            <C>           <C>       <C>         <C>                <C>
Assets
  Receivables, less allowance of $723 ..       $ 36,611      $2,958    $ 212       $    --            $ 39,781
  Other current assets .................         12,645       1,724      566            --              14,935
                                                 ------       -----      ---                            ------
   Total current assets.................         49,256       4,682      778            --              54,716

  Property and equipment, at cost.......         99,785         480      154            --             100,419
  Accumulated depreciation..............        (53,287)       (358)     (76)           --             (53,721)
  Intangible assets, net................         96,864          67       --            --              96,931
  Investments...........................          1,102          --       --        (1,102)                 --
                                                  -----                             ------
   Total assets.........................       $193,720      $4,871    $ 856       $(1,102)           $198,345
                                               ========      ======    =====       =======            ========

Liabilities and Equity
  Current liabilities...................         32,033         801       74            --              32,908

  Long-term debt........................        140,350          --       --            --             140,350
  Deferred income taxes.................          8,365          --       --            --               8,365
  Stockholder's equity..................         12,972       4,070      782        (1,102)             16,722
                                                 ------       -----      ---        ------              ------
   Total liabilities and equity.........       $193,720      $4,871    $ 856       $(1,102)           $198,345
                                               ========      ======    =====       =======            ========
</TABLE>

<TABLE>
<CAPTION>
                                                                  As of September 30, 2001
                                                                  -----------------------
                                                                 Guarantor                             Total
                                               HydroChem       Subsidiaries        Eliminations     Consolidated
                                               ---------       ------------        ------------     ------------
                                                              Int'l    Other
                                                              -----    -----
<S>                                            <C>           <C>       <C>         <C>                <C>
Assets
  Receivables, less allowance of $765 ..       $ 40,457      $  491    $   5       $    --            $ 40,953
  Other current assets .................          5,856       3,113      782            --               9,751
                                                 ------       -----      ---                            ------
   Total current assets.................         46,313       3,604      787            --              50,704

  Property and equipment, at cost.......        103,076         483      147            --             103,706
  Accumulated depreciation..............        (59,899)       (373)     (85)           --             (60,357)
  Intangible assets, net................         93,559          67       --            --              93,626
  Investments...........................          1,102          --       --        (1,102)                 --
                                                  -----                             ------
   Total assets.........................       $184,151      $3,781    $ 849       $(1,102)           $187,679
                                               ========      ======    =====       =======            ========

Liabilities and Equity
  Current liabilities...................         27,651         172       39            --              27,862

  Long-term debt........................        136,786          --       --            --             136,786
  Deferred income taxes.................          7,603          --       --            --               7,603
  Stockholder's equity..................         12,111       3,609      810        (1,102)             15,428
                                                 ------       -----      ---        ------              ------
   Total liabilities and equity.........       $184,151      $3,781    $ 849       $(1,102)           $187,679
                                               ========      ======    =====       =======            ========
</TABLE>


                                       9
<PAGE>

                       CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
                                                            Three months ended September 30, 2000
                                                            -------------------------------------
                                                                 Guarantor                             Total
                                               HydroChem       Subsidiaries        Eliminations     Consolidated
                                               ---------       ------------        ------------     ------------
                                                              Int'l    Other
                                                              -----    -----
<S>                                            <C>           <C>       <C>         <C>                <C>
Revenue.................................       $44,999       $1,731    $5,319      $    -             $52,049
Gross profit............................         7,342          632     1,342           -              19,316
Net income (loss).......................        (1,772)         289       571           -                (912)
</TABLE>


<TABLE>
<CAPTION>
                                                            Three months ended September 30, 2001
                                                            -------------------------------------
                                                                 Guarantor                             Total
                                               HydroChem       Subsidiaries        Eliminations     Consolidated
                                               ---------       ------------        ------------     ------------
                                                              Int'l    Other
                                                              -----    -----
<S>                                            <C>           <C>       <C>         <C>                <C>
Revenue.................................       $51,326       $  490    $  201      $    -             $52,017
Gross profit............................        17,505          (41)       84           -              17,548
Net income (loss).......................        (1,244)        (175)       19           -              (1.400)
</TABLE>


<TABLE>
<CAPTION>
                                                            Nine months ended September 30, 2000
                                                            -------------------------------------
                                                                 Guarantor                             Total
                                               HydroChem       Subsidiaries        Eliminations     Consolidated
                                               ---------       ------------        ------------     ------------
                                                              Int'l    Other
                                                              -----    -----
<S>                                            <C>           <C>       <C>         <C>                <C>
Revenue.................................       $140,608      $4,747    $14,332     $    -             $159,687
Gross profit............................         55,740       1,847      3,930          -               61,517
Net income (loss).......................         (1,487)        969        744          -                  226
</TABLE>


<TABLE>
<CAPTION>
                                                            Nine months ended September 30, 2001
                                                            -------------------------------------
                                                                 Guarantor                             Total
                                               HydroChem       Subsidiaries        Eliminations     Consolidated
                                               ---------       ------------        ------------     ------------
                                                              Int'l    Other
                                                              -----    -----
<S>                                            <C>           <C>       <C>         <C>                <C>
Revenue.................................       $164,433      $3,527    $  606      $    -             $168,566
Gross profit............................         59,662         922       245           -               60,829
Net income (loss).......................           (547)       (461)       29           -                 (979)
</TABLE>


                                       10
<PAGE>

                       CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
                                                            Nine months ended September 30, 2000
                                                            -------------------------------------
                                                                 Guarantor                             Total
                                               HydroChem       Subsidiaries        Eliminations     Consolidated
                                               ---------       ------------        ------------     ------------
                                                              Int'l    Other
                                                              -----    -----
<S>                                            <C>           <C>       <C>         <C>                <C>
Net cash provided by
  operating activities..................       $ 1,937       $135      $ 1,252     $    -             $ 3,324

Capital expenditures....................        (3,067)       (79)        (446)         -              (3,592)
Other investing activities..............          (487)         -            -          -                (487)
                                                  ----                                                   ----
Net cash used in investing
  activities............................        (3,554)       (79)        (446)         -              (4,079)

Repayments of long-term debt, net.......          (626)         -            -          -                (626)
Other financing activities..............          (334)         -            -          -                (334)
                                                  ----                                                   ----
Net cash used in financing
  activities............................          (960)         -            -          -                (960)
                                                  ----                                                   ----

Net increase (decrease) in cash.........       $(2,577)      $ 56      $   806     $    -             $(1,715)
                                               =======       ====      =======     =====              =======
</TABLE>



<TABLE>
<CAPTION>
                                                            Nine months ended September 30, 2001
                                                            -------------------------------------
                                                                 Guarantor                             Total
                                               HydroChem       Subsidiaries        Eliminations     Consolidated
                                               ---------       ------------        ------------     ------------
                                                              Int'l    Other
                                                              -----    -----
<S>                                            <C>           <C>       <C>         <C>                <C>
Net cash provided by (used in)
  operating activities..................       $ 3,661       $(18)     $ -         $ -                $ 3,643

Capital expenditures....................        (5,185)       (43)       -           -                 (5,228)
Other investing activities..............           550          -        -           -                    550
                                                   ---                                                    ---
Net cash used in investing
  activities............................        (4,635)       (43)       -           -                 (4,678)

Repayments of long-term debt, net.......        (4,559)         -        -           -                 (4,559)
Other financing activities..............          (280)         -        -           -                   (280)
                                                  ----                                                   ----
Net cash used in financing
  activities............................        (4,839)         -        -           -                 (4,839)
                                                ------                                                 ------

Net decrease in cash....................       $(5,813)      $(61)     $ -         $ -                $(5,874)
                                               =======       ====      ==          ==                 =======
</TABLE>

                                       11

<PAGE>

6.  Commitments and Contingencies

       The Company is a  defendant  in various  lawsuits  arising in the normal
    course of business and certain other lawsuits.  Substantially  all of these
    suits are being defended by the Company's  insurance  carriers.  Management
    believes  that any  material  contingent  liability  associated  with  this
    litigation will not exceed the limits of applicable  insurance  policies or
    other  indemnities.  While the results of  litigation  cannot be  predicted
    with certainty,  management  believes adequate  provision has been made for
    all  of  the  foregoing  claims  and  the  final  outcome  of  any  pending
    litigation  will  not  have a  material  adverse  effect  on the  Company's
    consolidated financial position or results of operations.

7.  Subsequent Event

       On October 25, 2001,  HydroChem entered into a financing  agreement with
    The CIT  Group/Business  Credit,  Inc. that provided for the refinancing of
    certain  existing  debt.  The new  credit  facility  in the amount of $62.5
    million  consists of (i) a revolving line of credit (the "New Revolver") up
    to $32.5 million,  subject to borrowing base limitations,  (ii) a term loan
    in the amount of $24.3 million (the  "Machinery  and  Equipment  Loan") and
    (iii) a term loan in the amount of $5.8 million  (the "Real Estate  Loan").
    The  Machinery  and  Equipment  Loan  and  the  Real  Estate  Loan  require
    quarterly   principal   payments  beginning  January  2002.  The  financing
    agreement  expires on October  26,  2006,  requires  the  Company to meet a
    fixed  charge  coverage  ratio  and  certain  customary  covenants,  and is
    secured by all  current and future  assets of the  Company.  HydroChem,  at
    its discretion,  can pay interest using a Base Rate or Eurodollar ("LIBOR")
    basis,  plus  applicable  margins.  Base rate  margins  range from 0.50% to
    1.00%  and  LIBOR-based  margins  range  from  2.75%  to  3.25%.   Interest
    payments are required monthly.

       Proceeds  from  this new  financing  agreement  were  used to repay  the
    Company's  previous  Term Loan,  Revolver and Mortgage  Loan.  Accordingly,
    current  debt is  reflective  of this new  financing  agreement.  The early
    extinguishment  of  that  debt  will  result  in an  extraordinary  loss of
    approximately  $1.4 million (net of a related tax benefit of $839,000) that
    will be included in the Company's  fourth quarter  operating  results.  The
    extraordinary  loss will consist of the  write-off of  associated  deferred
    financing costs and the cost for  terminating a related  interest rate swap
    agreement.

                                       12
<PAGE>
                     HYDROCHEM INDUSTRIAL SERVICES, INC.
                               AND SUBSIDIARIES

                     MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Statement Regarding Forward-Looking Information

    Management's Discussion  and Analysis of Financial  Condition and Results of
Operations  and  other  items in this  Quarterly  Report  on Form  10-Q  contain
forward-looking  statements  and  information  that are  based  on  management's
beliefs,  as well as assumptions  made by, and information  currently  available
to,   management.   When   used  in  this   document,   the   words   "believe",
"anticipate",  "estimate",  "expect",  "intend",  and  similar  expressions  are
intended to identify  forward-looking  statements.  Although management believes
that  the  expectations  reflected  in  these  forward-looking   statements  are
reasonable,  it can give no  assurance  that  these  expectations  will prove to
have  been   correct.   These   statements   are   subject  to  certain   risks,
uncertainties   and   assumptions.   Should  one  or  more  of  these  risks  or
uncertainties  materialize,  or should  underlying  assumptions prove incorrect,
actual  results  may  vary  materially  from  those  anticipated.   The  Company
undertakes   no   obligation   to  release   publicly  any  revisions  to  these
forward-looking  statements that may be made to reflect events or  circumstances
after the date hereof or to reflect the occurrence of unanticipated events.

    For supplemental  information, it is suggested that "Management's Discussion
and  Analysis  of  Financial  Condition  and Results of  Operations"  be read in
conjunction  with the  corresponding  sections  included in the Company's Annual
Report on Form 10-K for the year ended  December  31,  2000.  The Form 10-K also
includes the Company's  Consolidated  Financial Statements and the Notes thereto
for certain prior  periods,  as well as other  relevant  financial and operating
information.

Results of Operations

   T he  following  table sets  forth, for the  periods  indicated,  information
derived from the Company's consolidated  statements of operations,  expressed as
a  percentage  of  revenue.  There  can  be no  assurance  that  the  trends  in
operating results will continue in the future.
<TABLE>
<CAPTION>
                                                      Three months ended              Nine months ended
                                                         September 30,                   September 30,
                                                         -------------                   -------------
                                                       2000           2001            2000        2001
                                                       ----           ----            ----        ----
    <S>                                               <C>            <C>             <C>          <C>
    Revenue..................................         100.0%         100.0%          100.0%       100.0%
    Cost of revenue..........................          62.9           66.3            61.5         63.9
                                                       ----           ----            ----         ----
          Gross profit.......................          37.1           33.7            38.5         36.1
    SG&A expense.............................          23.6           25.2            23.4         23.6
    Depreciation.............................           5.8            5.2             5.5          4.8
    Amortization of intangibles..............           1.9            1.9             1.9          1.8
                                                        ---            ---             ---          ---
          Operating income...................           5.8            1.4             7.7          5.9
    Other (income) expense:
          Interest expense, net..............           7.7            7.2             7.5          6.9
          Other (income) expense, net........          (0.1)          (0.3)           (0.1)        (0.1)
                                                       ----           ----            ----         ----
    Income (loss) before taxes...............          (1.8)          (5.5)            0.1         (0.9)
          Income tax benefit.................             -           (2.8)              -         (0.3)
                                                       ----           ----            ----         ----
    Net income (loss)........................          (1.8)%         (2.7)%           0.1%        (0.6)%
                                                       ====           ====             ===         ====

    EBITDA (1)...............................          13.5%           8.6%           15.1%        12.5%
                                                       ====           ====             ===         ====
</TABLE>
----------
(1)    EBITDA for any relevant period  presented  above  represents gross profit
less  selling,   general  and  administrative  expense.  EBITDA  should  not  be
construed as a substitute  for  operating  income,  as an indicator of liquidity
or as a  substitute  for net cash  provided by operating  activities,  which are
determined in accordance with accounting  principles  generally  accepted in the
United  States.  EBITDA  is  included  because  management  believes  it to be a
useful tool for  analyzing  operating  performance,  leverage,  liquidity  and a
company's  ability to service  debt.  The  Company's  calculation  of EBITDA may
not be comparable to similar  entitled  items  reported by other  companies,  as
such companies may not define EBITDA as the Company defines it.
                                       13
<PAGE>


Three Months Ended September 30, 2001 Compared to Three Months Ended
September 30, 2000
--------------------------------------------------------------------------------
    Revenue.  Revenue was relatively  unchanged at $52.0 million for the three
months  ended   September  30,  2001  and  2000.  An  increase  in  industrial
vacuuming  revenue of $1.8  million,  or 16.7%,  from  $10.8  million to $12.6
million,  and a slight increase in tank cleaning  revenue of $78,000,  or 1.6%
from $5.0 million to $5.1  million,  was offset by decreases in  hydroblasting
revenue of $755,000,  or 3.5%,  from $21.4 million to $20.6 million,  chemical
cleaning  revenue of $663,000,  or 5.6% from $11.9  million to $11.3  million,
and in revenue from other  services of $501,000,  or 16.6%,  from $3.0 million
to $2.5 million.  The increase in industrial  vacuuming  revenue resulted from
additional  vacuum  trucks  placed in service by the Company in 2000 and 2001.
The decrease in hydroblasting  revenue resulted principally from a decrease in
turnaround  activity.  Chemical  cleaning  and  revenue  from  other  services
decreased primarily due to fewer projects.

    Gross  profit.  Gross profit decreased  $1.8  million,  or 9.2%,  to $17.5
million in 2001 from $19.3  million in the prior year period.  Cost of revenue
increased  $1.7 million,  or 5.3%, to $34.4 million in 2001 from $32.7 million
in the prior year period.  Gross profit margin  decreased from 37.1% to 33.7%,
primarily  due to  increases  in  compensation,  operating  supplies  and site
services expense.

    SG&A expense.  SG&A expense increased  $804,000, or 6.5%, to $13.1 million
in 2001 from $12.3 million in the prior year period.  This increase  primarily
resulted from an increase in  compensation,  other  employee-related  expenses
and bad debt  expense.  SG&A expense as a percentage  of revenue  increased to
25.2% in 2001 from 23.6% in the prior year period.

    EBITDA.  Decreased gross profit and an increase in SG&A  expense  resulted
in a decline  in EBITDA of $2.6  million,  or 36.6%,  to $4.4  million in 2001
from $7.0  million in the prior  year  period.  As a  percentage  of  revenue,
EBITDA decreased to 8.6% in 2001 from 13.5% in the prior year period.

    Depreciation.  Depreciation expense decreased  $299,000,  or 9.9%, to $2.7
million in 2001 from  $3.0 million in the prior year  period.  The decrease in
depreciation  expense principally  resulted from certain assets becoming fully
depreciated.  As a percentage of revenue,  depreciation  expense  decreased to
5.2% in 2001 from 5.8% in the prior year period.

    Amortization.   Amortization  expense  was  relatively  unchanged  with  a
decrease of $4,000,  or 0.4%,  to $995,000 in 2001 from  $999,000 in the prior
year  period.  Amortization  expense  as  a  percentage  of  revenue  remained
unchanged at 1.9%.

    Operating  income.  Decreased  gross  profit and  increased  SG&A  expense,
partially offset by reduced  depreciation  expense,  resulted in a decrease in
operating  income of $2.3  million,  or 75.4%,  to  $739,000 in 2001 from $3.0
million  in the prior year  period.  As a  percentage  of  revenue,  operating
income decreased to 1.4% in 2001 from 5.8% in the prior year period.

    Interest expense, net.  Interest expense, net decreased $292,000, or 7.3%,
to  $3.7  million  in  2001  from  $4.0  million  in the  prior  year  period.
Decreased interest expense,  net resulted from a reduction of outstanding debt
from the prior year period and lower  interest  rates on  floating  rate debt.
Interest  expense,  net as a percentage  of revenue  decreased to 7.2% in 2001
from 7.7% in the prior year period.

    Income  (loss)  before  taxes.  For  the  reasons   described  above,  the
Company's income before taxes decreased $1.9 million to a loss of $2.9 million
in 2001 from a loss of $912,000 in the prior year period.  As a  percentage of
revenue,  the loss before taxes was 5.5% in 2001 compared to 1.8% in the prior
year period.

    Income tax  provision.  The effective  income tax rate  increased  in 2001
primarily  as a result of changes in the  valuation  of deferred tax assets in
2001 as compared to 2000.  Additionally,  the higher effective income tax rate
is  principally   due  to  certain   nondeductible   operating   expenses  and
nondeductible goodwill amortization.

                                       14
<PAGE>

    Net income (loss).  For the reasons  described  above,  the  Company's net
income decreased  $488,000 resulting in a net loss of $1.4 million in 2001, as
compared  to a net loss of $912,000  in the prior year  period.  The net loss,
as a  percentage  of revenue,  was 2.7% in 2001  compared to 1.8% in the prior
year period.


Nine Months Ended  September 30, 2001 Compared to Nine Months Ended
September 30, 2000
--------------------------------------------------------------------------------
    Revenue.  Revenue increased  $8.9 million,  or 5.6%, to $168.6 million for
the nine months  ended  September  30,  2001 from $159.7  million in the prior
year period.  The increase  resulted from an increase in industrial  vacuuming
revenue of $6.4 million,  or 20.3%,  from $31.9 million to $38.3 million,  and
an  increase  in  hydroblasting  revenue of $5.9  million,  or 9.5% from $62.2
million  to  $68.1  million.  These  increases  were  partially  offset  by  a
decrease  in tank  cleaning  revenue  of $1.4  million  or 10.3%,  from  $13.8
million to $12.4  million,  a decrease  in chemical  cleaning  revenue of $1.4
million,  or 3.4%,  from $41.3  million  to $39.9  million  and a decrease  in
revenue from other services of $688,000,  or 6.5%,  from $10.6 million to $9.9
million.  The increase in  hydroblasting  revenue  resulted  principally  from
increased  turnaround  activity  in the first half of 2001.  The  increase  in
industrial  vacuuming revenue resulted from additional vacuum trucks placed in
service by the  Company in 2000 and 2001.  Tank  cleaning,  chemical  cleaning
and revenue from other services decreased primarily due to fewer projects.

    Gross profit.  Gross profit decreased $688,000,  or 1.1%, to $60.8 million
in 2001  from  $61.5  million  in the  prior  year  period.  Cost  of  revenue
increased $9.6 million,  or 9.7%, to $107.8 million in 2001 from $98.2 million
in the prior year period.  Gross profit margin  decreased from 38.5% to 36.1%,
primarily  due to  increases  in  compensation,  operating  supplies  and site
services expense.

    SG&A  expense.  SG&A expense increased  $2.4  million,  or 6.3%,  to $39.7
million in 2001 from $37.3  million in the prior  year  period.  The  increase
primarily  resulted from an increase in compensation,  other  employee-related
expenses  and bad debt  expense.  SG&A  expense  as a  percentage  of  revenue
increased to 23.6% in 2001 from 23.4% in the prior year period.

    EBITDA.  Decreased gross profit and an increase in SG&A  expense  resulted
in a decline in EBITDA of $3.1  million,  or 12.6%,  to $21.1  million in 2001
from $24.2  million in the prior year  period.  As a  percentage  of  revenue,
EBITDA decreased to 12.5% in 2001 from 15.1% in the prior year period.

    Depreciation.  Depreciation expense decreased  $694,000,  or 7.9%, to $8.1
million in 2001 from $8.8  million in the prior year  period.  The decrease in
depreciation  expense principally  resulted from certain assets becoming fully
depreciated.  As a percentage of revenue,  depreciation  expense  decreased to
4.8% in 2001 from 5.5% in the prior year period.

    Amortization.  Amortization  expense  was  relatively  unchanged  at  $3.0
million in the current  and prior year  period  with a decrease of $9,000,  or
0.3%.  Amortization  expense as a percentage  of revenue  decreased to 1.8% in
2001 from 1.9% in the prior year period.

    Operating  income.  Decreased  gross profit and  increased  SG&A  expense,
partially offset by reduced  depreciation  expense,  resulted in a decrease in
operating  income of $2.3  million,  or 19.1%,  to $10.0  million in 2001 from
$12.3  million  in  the  prior  year  period.  As  a  percentage  of  revenue,
operating income decreased to 5.9% in 2001 from 7.7% in the prior year period.

    Interest expense, net.  Interest expense, net decreased $502,000, or 4.2%,
to $11.5  million  in 2001  from  $12.0  million  in the  prior  year  period.
Decreased interest expense,  net resulted from a reduction of outstanding debt
from the prior year period and lower  interest  rates on  floating  rate debt.
Interest  expense,  net as a percentage  of revenue  decreased to 6.9% in 2001
from 7.5% in the prior year period.

    Income  (loss)  before  taxes.  For  the  reasons   described  above,  the
Company's  income  before  taxes  decreased  $1.7  million  to a loss  of $1.5
million  in 2001  from  income of  $226,000  in the prior  year  period.  As a
percentage  of  revenue,  the loss before  taxes was 0.9% in 2001  compared to
income of 0.1% in the prior year period.

                                       15
<PAGE>

    Income tax  provision.  The effective  income tax rate  increased  in 2001
primarily  as a result of changes in the  valuation  of deferred tax assets in
2001 as compared to 2000.  Additionally,  the higher effective income tax rate
is  principally   due  to  certain   nondeductible   operating   expenses  and
nondeductible goodwill amortization.

    Net income (loss).  For the reasons  described  above,  the  Company's net
income  decreased  $1.2 million  resulting  in a loss of $979,000 in 2001,  as
compared to income of $226,000 in the prior year  period.  The net loss,  as a
percentage of revenue,  was 0.6% in 2001 compared to net income of 0.1% in the
prior year period.

Liquidity and Capital Resources

    The Company  historically  has financed  its  operations  through net cash
provided by operating  activities,  existing cash balances,  available  credit
facilities  and capital  contributions  from  Holding.  On October  26,  2001,
HydroChem   entered  into  a  financing   agreement   that  provided  for  the
refinancing of certain existing  debt.  The new credit  facility in the amount
of  $62.5  million  consists  of (i) a  revolving  line of  credit  (the  "New
Revolver") up to $32.5 million, subject to borrowing base limitations,  (ii) a
term loan in the amount of $24.3 million (the "Machinery and Equipment  Loan")
and  (iii) a term  loan  in the  amount  of $5.8  million  (the  "Real  Estate
Loan").  As of October  26,  2001,  the Company had  available  borrowings  of
$30.7 million under the New Revolver.  (See Note 7.)

    As of September  30, 2001, $24.6  million was  outstanding  under the Term
Loan and $1.5  million  had been  drawn  in the  form of  standby  letters  of
credit,  principally  issued in  connection  with the  Company's  property and
casualty  insurance  program.  There was no funded debt outstanding  under the
Revolver at September 30, 2001.

    For the nine months ended September 30, 2001, the Company used net cash of
$1.1 million for  operating and investing  activities  that  consisted of $3.6
million  provided by operating  activities  and $4.7 million used in investing
activities.  For the nine months ended  September  30,  2000,  $755,000 of net
cash was used in operating and  investing  activities  that  consisted of $3.3
million  provided by operating  activities  and $4.1 million used in investing
activities.  Expenditures  for  property  and  equipment  for the nine  months
ended  September  30,  2001 and  2000  were  $5.2  million  and $3.6  million,
respectively.  These expenditures were principally for operating equipment.

    Management believes that cash and cash  equivalents at September 30, 2001,
net cash expected to be provided by operating  activities and  borrowings,  if
necessary,  under the New Revolver  will be  sufficient  to meet the Company's
cash  requirements  for operations and expenditures for property and equipment
for the next twelve months and the foreseeable  future  thereafter.  From time
to time, the Company reviews acquisition  opportunities as they arise, and may
require  additional  financing if it decides to make additional  acquisitions.
There can be no assurance,  however,  that any such acquisition  opportunities
will  arise,  that  any such  acquisitions  will be  consummated,  or that any
related  financing  will be available when required on terms  satisfactory  to
the Company.

                                       16
<PAGE>

                     HYDROCHEM INDUSTRIAL SERVICES, INC.
                               AND SUBSIDIARIES

                   QUANTITATIVE AND QUALITATIVE DISCLOSURES
                              ABOUT MARKET RISK


    The  following  discussion regarding  the  Company's  market risk includes
"forward-looking"  statements  that involve  risks and  uncertainties.  Actual
results could differ materially from those projected in these  forward-looking
statements.

    The Company is exposed to certain  market risks, which  include  financial
instruments such as short-term investments,  trade receivables,  and long-term
debt.  The adverse  effects of  potential  changes in these  market  risks are
discussed  below.  The  sensitivity  analyses  presented  do not  consider the
effects that such adverse  changes may have on overall  economic  activity nor
do they  consider  additional  actions  management  may take to  mitigate  the
Company's  exposure  to such  changes.  The  Notes to  Consolidated  Financial
Statements  herein  and in the  Company's  Annual  Report on Form 10-K for the
year  ended   December  31,  2000  provide  a  description  of  the  Company's
accounting   policies  and  other  information   related  to  these  financial
instruments.  The  Company  does not engage in  speculative  transactions  and
does not use derivative  instruments or engage in hedging  activities,  except
for the Interest  Rate Swap which was entered  into during 1998 in  connection
with the Mortgage Loan.

    As of  September  30,  2001,  the Company's  outstanding  long-term  debt
consisted of the Senior  Subordinated Notes, the Term Loan, the Mortgage Loan,
and the Seller Notes.  The Senior  Subordinated  Notes totaled $110.0 million,
are due in the year 2007,  and bear  interest  at a fixed rate of 10 3/8%.  As
of September  30, 2001,  their fair value was  estimated to be $68.0  million.
At the same date,  the Term Loan,  the  Mortgage  Loan,  and the Seller  Notes
totaled $24.6  million,  $7.1 million,  and $2.0  million,  respectively,  and
approximated  their fair  value.  There was no funded debt  outstanding  under
the Revolver at September 30, 2001.

    On October 25, 2001, HydroChem entered into a financing agreement with The
CIT  Group/Business  Credit,  Inc., the  proceeds  of  which were used for the
refinancing of certain existing debt.  The  new  credit facility in the amount
of  $62.5  million  consists  of  (i) a  revolving  line  of  credit (the "New
Revolver")  up  to  $32.5 million,  subject  to  borrowing  base  limitations,
(ii) a term  loan in the amount of $24.3 million (the "Machinery and Equipment
Loan")  and (iii) a term loan in the amount of $5.8  million (the "Real Estate
Loan").  The Machinery and Equipment  Loan and the Real  Estate  Loan  require
quarterly principal payments beginning January 2002.  The financing  agreement
expires  on  October 25,  2006,  requires  the Company to meet a fixed  charge
coverage ratio and  certain other customary covenants,  and  is secured by all
current and future assets of the Company.  HydroChem,  at its discretion,  can
pay interest on a Base Rate or Eurodollar  ("LIBOR")  basis,  plus  applicable
margins.  Base  rate margins range from 0.50% to 1.00% and LIBOR-based margins
range from 2.75% to 3.25%.  Interest payments are required  monthly.  Proceeds
from this new financing agreement  were used to repay the  Company's  previous
Term Loan, Revolver and Mortgage Loan.  The remaining  balance of  the  Seller
Notes is due on November 19, 2001.  The Seller  Notes  bear  interest at 8.00%
per annum.  The market risk, estimated as a  potential  increase in fair value
of these debt  instruments  resulting  from a  hypothetical  1.0%  decrease in
interest rates, is estimated not to be material to the Company during 2001.

                                       17
<PAGE>
Part II.  Other Information
---------------------------

     Item 1.  Legal Proceedings

           Reference is made to the  description  of the purported  class action
     lawsuit filed on September 20, 1999,  in the 24th Judicial  District  Court
     of the  Parish of  Jefferson,  Louisiana  which is  contained  in the third
     paragraph of "Item 3-Legal  Proceedings" in the Registrants'  Annual Report
     on Form 10-K for the year ended  December 31, 2000.  On September 13, 2001,
     the  Court  entered  a  Judgment  denying   plaintiffs'  Motion  for  Class
     Certification.  At this  time it is not  known  how many  persons,  if any,
     will file individual claims.

           On October 3, 2001, the Company's  primary  insurance carrier in this
     matter  entered into a liquidation  proceeding.  At this time,  the Company
     is attempting to determine  whether any coverage in this  litigation may be
     available  from  the  Louisiana  Insurance  Guaranty   Association  or  any
     reinsurance  carriers.   The  Company's  excess  insurance  policy  is  not
     affected by the liquidation of the primary carrier.

           Although it is difficult to predict with  certainty  until the actual
     number of any claimants is known,  management believes,  that regardless of
     the foregoing insurance  considerations,  the resolution of any such claims
     will  not  have  a  material  adverse  affect  on the  Company's  financial
     position or results of operations.

     Item 5.   Other Information

           On  October  26,  2001,  the  Company  entered  into  a new financing
     agreement with The  CIT  Group/Business  Credit,  Inc.  See Note 7 of Notes
     to  Consolidated  Financial  Statements  contained  in  Item  1,  "Item 2 -
     Management's Discussion and Analysis of  Financial  Condition  and  Results
     of  Operations",  and  "Item 3 - Quantitative  and  Qualitative Disclosures
     about Market Risk".

     Item 6.   Exhibits and Reports on Form 8-K
      (a)      Exhibits

       Exhibit
       Number       Description
       ------       -----------
       3.1         Certificate   of    Incorporation   of  HydroChem  Industrial
                   Services,  Inc.  as  amended.   (Exhibit 3.1 to the Company's
                   Registration Statement on Form S-4, filed August 25, 1997, is
                   hereby incorporated by reference.)

       3.2         Certificate of Incorporation of HydroChem International, Inc.
                   as  amended.  (Exhibit  3.2  to  the  Company's  Registration
                   Statement  on  Form S-4,  filed  August 25,  1997,  is hereby
                   incorporated by reference.)

       3.3         By-Laws of HydroChem Industrial Services, Inc.   (Exhibit 3.3
                   to  the Company's  Registration Statement on Form S-4,  filed
                   August 25, 1997, is hereby incorporated by reference.)

       3.4         By-Laws of HydroChem International, Inc.  (Exhibit 3.4 to the
                   Company's  Registration  Statement on Form S-4,  filed August
                   25, 1997, is hereby incorporated by reference.)

       4.1         Purchase Agreement, dated as of July 30, 1997,  by and  among
                   HydroChem Industrial Services, Inc., HydroChem International,
                   Inc. and Donaldson, Lufkin & Jenrette Securities Corporation,
                   as Initial Purchaser, relating to the 10 3/8% Series A Senior
                   Subordinated  Notes due 2007.   (Exhibit 4.1 to the Company's
                   Registration Statement on Form S-4, filed August 25, 1997, is
                   hereby incorporated by reference.)

       4.2         Indenture,  dated  as of  August  1,  1997,  among  HydroChem
                   Industrial  Services,  Inc., HydroChem  International,  Inc.,
                   as  Guarantor, and Norwest Bank, Minnesota, N.A., as Trustee.
                   (Exhibit 4.2 to the Company's Registration Statement on  Form
                   S-4,  filed  August  25,  1997,  is  hereby  incorporated  by
                   reference.)
                                       18
<PAGE>

       4.3         Registration  Rights  Agreement  dated August 4, 1997, by and
                   among   HydroChem   Industrial  Services,   Inc.,   HydroChem
                   International,  Inc.   and   Donaldson,  Lufkin  &   Jenrette
                   Securities Corporation,  as Initial Purchaser.   (Exhibit 4.3
                   to the Company's  Registration  Statement on Form S-4,  filed
                   August 25, 1997, is hereby incorporated by reference.)

      10.1         HydroChem  Holding,  Inc.  1994  Stock Option Plan.  (Exhibit
                   10.1  to  the  Company's Registration  Statement on Form S-4,
                   filed August 25, 1997, is hereby incorporated  by reference.)

      10.2         Deferred  Bonus  Plan of HydroChem Industrial Services,  Inc.
                   effective May 1, 1999.   (Exhibit 10.14 to the Company's Form
                   10-Q  filed  August  10,  1999,  is  hereby  incorporated  by
                   reference.)

      10.3         First  Amendment  to   Deferred   Bonus  Plan  of   HydroChem
                   Industrial Services,  Inc. dated as of May 1, 2000.  (Exhibit
                   10.3 to the  Company's  Form  10-Q  filed August 11, 2000, is
                   hereby incorporated by reference.)

      10.4         Second   Amendment   to  Deferred  Bonus  Plan  of  HydroChem
                   Industrial Services, Inc. dated as of May 1, 2001.   (Exhibit
                   10.4 to the Company's Form 10-Q filed May 11, 2001, is hereby
                   incorporated by reference.)

      10.5         Employment Agreement  dated  December  15,  1993 by and among
                   HydroChem Holding, Inc., HydroChem Industrial Services,  Inc.
                   and  B. Tom Carter, Jr., as amended through December 9, 1996.
                   (Exhibit 10.5 to the Company's Registration Statement on Form
                   S-4,  filed  August  25,  1997,  is  hereby  incorporated  by
                   reference.)

      10.6         Fourth Amendment to Employment Agreement dated  April 9, 1998
                   by and among HydroChem  Holding,  Inc., HydroChem  Industrial
                   Services,  Inc. and  B. Tom Carter, Jr.  (Exhibit 10.8 to the
                   Company's  Form  10-Q,   filed   May  14,  1998,   is  hereby
                   incorporated by reference.)

      10.7         Secured Promissory Note dated  February  9, 2001 from  B. Tom
                   Carter,  Jr. to  HydroChem  Holding,  Inc.  (Exhibit  10.6 to
                   the Company  Form  10-K  filed  March  21,  2001,  is  hereby
                   incorporated by reference.)

      10.8         Pledge Agreement dated February 9, 2001 between B.Tom Carter,
                   Jr. and  HydroChem  Holding,   Inc.   (Exhibit  10.7  to  the
                   Company's  Form  10-K   filed  March  21,  2001,   is  hereby
                   incorporated by reference.)

      10.9         Employment Agreement dated November 1, 1992 between HydroChem
                   Industrial  Services,  Inc. and Gary D. Noto.  (Exhibit  10.3
                   to  the  Company's Registration Statement on Form S-4,  filed
                   August 25, 1997, is hereby incorporated by reference.)

      10.10        Amendment  dated  January  27,  1999 to Employment  Agreement
                   dated November 1, 1992 between HydroChem Industrial Services,
                   Inc. and  Gary D.  Noto.   (Exhibit  10.8  to  the  Company's
                   Form 10-K,  filed  March 29, 1999,  is hereby incorporated by
                   reference.)

      10.11        Employment Agreement dated November 1, 1992 between HydroChem
                   Industrial Services,  Inc. and J. Pat DeBusk.  (Exhibit  10.2
                   to the  Company's  Registration  Statement on Form S-4, filed
                   August 25, 1997, is hereby incorporated by reference.)

      10.12        Employment   Agreement  dated  September  26,  1997   between
                   HydroChem  Industrial  Services,   Inc.  and Donovan W. Boyd.
                   (Exhibit  10.10  to the Company's  Form 10-K  filed March 29,
                   1999, is hereby incorporated by reference.)

                                       19
<PAGE>

      10.13        First Amendment to Employment  Agreement dated as of June 28,
                   1999 to  Employment  Agreement dated as of September 26, 1997
                   between  HydroChem  Industrial  Services, Inc. and Donovan W.
                   Boyd.  (Exhibit  10.10  to  the  Company's  Form  10-Q  filed
                   August 10, 1999, is hereby incorporated by reference.)

      10.14        Second  Amendment to Employment Agreement dated as of January
                   17,  2001  to  Employment Agreement dated as of September 26,
                   1997  between HydroChem  Industrial  Services  and Donovan W.
                   Boyd.   (Exhibit 10.13 to the Company's Form 10-K filed March
                   21, 2001, is hereby incorporated by reference.)

      10.15        Letter  Agreement  regarding  severance  compensation   dated
                   October 31, 1997 between HydroChem Industrial Services,  Inc.
                   and Pelham H. A. Smith.  (Exhibit  10.7 to the Company's Form
                   10-Q,  filed  November 14,  1997,  is  hereby incorporated by
                   reference.)

      10.16        Form of Indemnification Agreement entered into with directors
                   and officers.  (Exhibit 10.8 to the Company's Amendment No. 1
                   to the Registration  Statement on Form S-4,  filed October 3,
                   1997, is hereby incorporated by reference.)

      10.17        Loan  Agreement  dated  July  17,   1998   between  HydroChem
                   Industrial  Services,  Inc. and  Bank  One,  Texas,  National
                   Association. (Exhibit 10.15 to the Company's Form 10-Q, filed
                   August 14, 1998, is hereby incorporated by reference.)

      10.18        Amendment No.1 dated as of February 2, 1999 to Loan Agreement
                   dated  July 17,  1998  between HydroChem Industrial Services,
                   Inc. and Bank One, Texas National Association. (Exhibit 10.21
                   to  the  Company's  Form  10-K  filed  March  29,  1999,   is
                   hereby incorporated by reference.)

      10.19        Extension  Agreement  dated  as  of  February 2, 1999 between
                   HydroChem  Industrial  Services,  Inc.  and  Bank One, Texas,
                   National Association.   (Exhibit 10.22 to the Company's  Form
                   10-K  filed  March  29,  1999,   is  hereby  incorporated  by
                   reference.)

      10.20        International Swap Dealers Association, Inc. Master Agreement
                   and Schedule dated July 17, 1998 between HydroChem Industrial
                   Services,  Inc. and Bank  One,  Texas,  National Association.
                   (Exhibit 10.16 to the Company's  Form 10-Q,  filed August 14,
                   1998, is hereby incorporated by reference.)

      10.21        Credit Agreement dated  November  19,  1999  among  HydroChem
                   Holding, Inc.,  HydroChem Industrial Services, Inc.,  various
                   lenders and Bank of America,  N.A.,  as administrative agent.
                   (Exhibit 2.2 to the Company's  Form  8-K  filed  December  3,
                   1999, is hereby incorporated by reference.)

      10.22        First  Amendment  dated  as  of  December 17, 1999  to Credit
                   Agreement dated  November 19,  1999  among HydroChem Holding,
                   Inc., HydroChem  Industrial  Services,  Inc., various lenders
                   and Bank of America, N.A., as administrative  agent. (Exhibit
                   10.20  to the Company's Form  10-K  filed  March 24, 2000, is
                   hereby incorporated by reference.)

      10.23        Second  Amendment  dated  as  of  June  30,  2000  to  Credit
                   Agreement  dated  November  19, 1999 among HydroChem Holding,
                   Inc., HydroChem  Industrial  Services,  Inc., various lenders
                   and Bank of America, N.A., as administrative  agent. (Exhibit
                   10.24  to the Company's  Form  10-Q filed August 11, 2000, is
                   hereby incorporated by reference.)

      10.24        Third Amendment dated as of June 30, 2001 to Credit Agreement
                   dated  November  19,  1999  among  HydroChem  Holding,  Inc.,
                   HydroChem Industrial Services, Inc., various lenders and Bank
                   of America, N.A., as administrative agent.  (Exhibit 10.24 to
                   the  Company's  Form  10-Q  filed  August 3, 2001,  is hereby
                   incorporated by reference).

                                       20
<PAGE>


      10.25        Finance  Agreement  dated  October 25, 2001  among  HydroChem
                   Industrial   Services,  Inc.,    HydroChem   Holding,   Inc.,
                   HydroChem International Inc.,  HydroChem Industrial Cleaning,
                   Inc. and  The CIT Group/Business Credit, Inc.,  as Agent  and
                   Lender.  (Filed herewith.)

      10.26        Amended  and  Restated  Asset Purchase Agreement by and among
                   HydroChem Industrial Services, Inc.,  Valley Systems of Ohio,
                   Inc. and Valley Systems,  Inc. dated as of September 8, 1998.
                   (Exhibit 10.1 to the Company's Form 8-K,  filed  January  20,
                   1999, is hereby incorporated by reference.)

      10.27        Stock Purchase Agreement dated November 19, 1999 by and among
                   HydroChem Industrial Services,  Inc.  and each stockholder of
                   Landry  Service  Co., Inc.  including  Kenneth  C. Landry and
                   Charles A. Landry,  Jr.  (Exhibit 2.1  to the Company's  Form
                   8-K  filed  December  3,  1999,  is  hereby  incorporated  by
                   reference.)

      (b)      Reports on Form 8-K.

               None.

                                       21
<PAGE>




                                   SIGNATURES


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




                               HYDROCHEM INDUSTRIAL SERVICES, INC.


   Date: November 8, 2001           By:  /s/ Pelham H. A. Smith
                                    ------------------------------------
                                    Pelham H. A. Smith, Executive Vice President
                                    and Chief Financial Officer





                               HYDROCHEM INTERNATIONAL, INC.


   Date: November 8, 2001           By:  /s/ Pelham H. A. Smith
                                    ------------------------------------
                                    Pelham H. A. Smith, Executive Vice President
                                    and Chief Financial Officer




                                       22

<PAGE>



                                  EXHIBIT INDEX



      10.25       Finance Agreement dated  October  25,  2001  among  HydroChem
                  Industrial Services, Inc., HydroChem Holding, Inc., HydroChem
                  International Inc.,  HydroChem Industrial Cleaning, Inc.  and
                  The CIT Group/Business Credit, Inc., as Agent and Lender.


                                       23