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 June 30, 2000

                        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
     August  1,  2000  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


Part I. Financial Information

        Item 1. Financial Statements

              Consolidated Balance Sheets as of December 31, 1999 and
                 June 30, 2000 (unaudited)............................     3

              Consolidated  Statements of  Operations  for each of the
                 three and six month periods ended June 30, 1999
                 and 2000 (unaudited).................................     4

              Consolidated Statement of Stockholder's Equity for the six
                 month period ended June 30, 2000 (unaudited).........     5

              Consolidated  Statements  of Cash Flows for each of the
                 six month periods ended June 30, 1999 and
                 2000 (unaudited).....................................     6

              Notes to Consolidated Financial Statements (unaudited)..     7

        Item 2. Management's Discussion and Analysis of Financial Condition
                   and Results of Operations..........................     9

        Item 3. Quantitative and Qualitative Disclosures About
                   Market Risk........................................    13

Part II.Other Information

        Item 1. Legal Proceedings.....................................    13

        Item 6. Exhibits and Reports on Form 8-K......................    13

Signatures............................................................    17

Exhibit Index.........................................................    18


                                       2
<PAGE>


                       HYDROCHEM INDUSTRIAL SERVICES, INC.
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)

<TABLE>
<CAPTION>
                                                        December 31,   June 30,
                                                            1999         2000
                                                        ------------   --------
                                      ASSETS
  <S>                                                   <C>            <C>
  Current assets:
      Cash and cash equivalents.....................     $  4,140      $  3,543
      Receivables, less allowance of $671
       and $736, respectively.......................       33,488        38,150
      Inventories...................................        4,721         4,810
      Prepaid expenses and other current assets.....        1,993         3,006
      Income taxes receivable.......................          504           504
      Deferred income taxes.........................        1,725         1,725
                                                          -------       -------
         Total current assets.......................       46,571        51,738

  Property and equipment, at cost...................       96,672        97,437
      Accumulated depreciation......................      (43,756)       48,145)
                                                          -------       -------
                                                           52,916        49,292

  Intangible assets, net............................      101,415        99,022
                                                          -------       -------

         Total assets...............................     $200,902      $200,052
                                                          =======       =======

                      LIABILITIES AND STOCKHOLDER'S EQUITY

  Current liabilities:
      Accounts payable..............................     $  6,829      $  8,005
      Accrued liabilities...........................       17,870        14,787
      Current portion of long-term debt.............        2,670         5,178
                                                          -------       -------
         Total current liabilities..................       27,369        27,970

  Long-term debt....................................      148,209       145,620
  Deferred income taxes.............................        9,205         9,205
  Commitments and contingencies

  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
      Retained earnings (deficit)...................         (440)          698
                                                          -------       -------
      Total stockholder's equity....................       16,119        17,257
                                                          -------       -------

         Total liabilities and stockholder's equity..    $200,902      $200,052
                                                          =======       =======
</TABLE>




                             See accompanying notes.

                                       3
<PAGE>


                       HYDROCHEM INDUSTRIAL SERVICES, INC.
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (in thousands)
<TABLE>
<CAPTION>
                                      Three months ended       Six months ended
                                            June 30,                June 30,
                                       1999        2000       1999        2000
                                       ----        ----       ----        ----
<S>                                 <C>         <C>         <C>         <C>
Revenue..........................   $ 52,194    $ 54,199    $103,099    $107,638
Cost of revenue..................     30,437      33,173      60,700      65,437
                                     -------     -------     -------     -------
     Gross profit................     21,757      21,026      42,399      42,201

Selling, general and
 administrative expense..........     12,874      12,257      25,374      25,058
Depreciation.....................      2,839       2,882       5,752       5,815
                                     -------     -------     -------     -------
     Operating income............      6,044       5,887      11,273      11,328

Other (income) expense:
     Interest expense, net.......      3,228       4,019       6,496       8,033
     Amortization of intangibles.        633       1,013       1,267       1,996
     Other, net..................        (26)        134         (68)        161
                                     -------     -------     -------     -------

Income before taxes..............      2,209         721       3,578       1,138

     Income tax provision........         -           -           -           -
                                     -------     -------     -------     -------

Net income.......................   $  2,209    $    721    $  3,578    $  1,138
                                     =======     =======     =======     =======
</TABLE>




















                             See accompanying notes.

                                       4
<PAGE>


                       HYDROCHEM INDUSTRIAL SERVICES, INC.
                                AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
                                 (in thousands)

<TABLE>
<CAPTION>
                                                 Additional
                                        Common    Paid-in    Retained
                                        Stock     Capital    Deficit      Total
                                        -----     -------    -------      -----
<S>                                     <C>      <C>         <C>         <C>
Balance at December 31, 1999 .......... $   1    $ 16,558    $  (440)    $16,119


    Net income.........................     -           -      1,138       1,138
                                         ----     -------     ------     -------

Balance at June 30, 1999 .............. $   1    $ 16,558     $  698     $17,257
                                         ====     =======      =====      ======
</TABLE>































                             See accompanying notes.

                                       5
<PAGE>


                       HYDROCHEM INDUSTRIAL SERVICES, INC.
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
<TABLE>
<CAPTION>
                                                            Six months ended
                                                                June 30,
                                                           1999           2000
                                                           ----           ----
<S>                                                      <C>           <C>
Operating activities:
    Net income........................................   $  3,578      $  1,138
    Adjustments to reconcile net income
        to net cash provided by operating activities:
        Depreciation..................................      5,752         5,815
        Amortization..................................      1,267         1,996
        Amortization of deferred financing costs......        218           359
        Deferred income tax provision.................         -             -
        Loss (gain) on sale of property and equipment.         (5)          165
    Changes in operating assets and liabilities,
      net of effects of acquisition:
        Receivables, net..............................     (8,568)       (4,662)
        Inventories...................................       (921)          (89)
        Prepaid expenses and other current assets.....       (378)       (1,013)
        Accounts payable..............................        424         1,176
        Accrued liabilities...........................      5,015        (2,489)
                                                          -------       -------
           Net cash provided by operating activities..      6,382         2,396
                                                          -------       -------

Investing activities:
    Expenditures for property and equipment...........     (3,423)       (2,775)
    Proceeds from sale of property and equipment......        111           419
    Acquisitions, net of cash.........................    (31,971)         (446)
                                                          -------       -------
           Net cash used in investing activities......    (35,283)       (2,802)
                                                          -------       -------

Financing activities:
    Repayments of long-term debt, net.................     (2,317)          (81)
    Debt financing costs..............................         -           (110)
                                                          -------       -------
           Net cash used in financing activities......     (2,317)         (191)
                                                          -------       -------

Net decrease in cash..................................     31,218)         (597)
Cash at beginning of period...........................     33,775         4,140
                                                          -------       -------

Cash at end of period.................................   $  2,557      $  3,543
                                                          =======       =======
</TABLE>







                             See accompanying notes.

                                       6
<PAGE>


                       HYDROCHEM INDUSTRIAL SERVICES, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2000

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,
    including   HydroChem   International,    Inc. ("International")  and, since
    November 19, 1999, Landry Service Co., Inc. ("LANSCO").  HydroChem generally
    conducts   business  outside  the   United  States   through  International.
    (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,  rubber
    plants,  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,  and commissioning and other specialized  services.  The
    majority of these  services  involves  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 generally  accepted  accounting
    principles 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  generally  accepted
    accounting principles for complete financial statements. Certain information
    and  disclosures  normally  included  in  financial  statements  prepared in
    accordance with generally accepted accounting principles 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 six month  interim
    period  ended June 30, 2000 are not  necessarily  indicative  of the results
    that may be expected for the year ending December 31, 2000.  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, 1999.

2.  Long-term Debt

        Long-term  debt at December 31, 1999 and June 30, 2000  consisted of the
following (in thousands):
<TABLE>
<CAPTION>
                                                      1999         2000
                                                      ----         ----
       <S>                                          <C>          <C>
       Senior Subordinated Notes ................   $ 110,000    $ 110,000
       Term Loan ................................      30,000       30,000
       Revolver .................................        --           --
       Mortgage Loan ............................       7,379        7,298
       Seller Notes .............................       3,500        3,500
                                                    ---------   ----------
           Total long-term debt .................     150,879      150,798
           Less current portion of long-term debt      (2,670)      (5,178)
                                                    ---------   ----------
                                                    $ 148,209   $  145,620
                                                    =========   ==========
</TABLE>

        Effective  June 30, 2000, the credit  agreement  governing the Term Loan
    and Revolver was amended to modify,  among other  things,  certain  interest
    rate margins, and financial ratios and covenants.

                                       7
<PAGE>

3.  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,  state income taxes and changes in the
    valuation allowance for deferred tax assets.

4.  Summary Financial Information

        Summary  financial  information for  International as consolidated  with
    HydroChem is as follows (in thousands):
<TABLE>
<CAPTION>
                                                        As of            As of
                                                     December 31,       June 30,
                                                        1999              2000
                                                        ----              ----
       <S>                                             <C>              <C>
       Current assets.........................         $ 2,727          $ 3,406
       Noncurrent assets......................              92               87
       Current liabilities....................             496              490
       Noncurrent liabilities.................             -                -
</TABLE>

<TABLE>
<CAPTION>
                                       Three months ended      Six months ended
                                            June 30,               June 30,
                                        1999        2000        1999      2000
                                        ----        ----        ----      ----
<S>                                    <C>         <C>         <C>        <C>
       Revenue..................       $1,705      $1,558      $2,815     $3,016
       Gross profit.............          685         558       1,107      1,215
       Net income (1)...........          318         547         481        680
</TABLE>
----------
    (1) Net income does not  include  any  allocation  from  HydroChem  of SG&A,
amortization, or interest expense.

5.  Commitments and Contingencies

        The Company has substantially  completed the settlement of approximately
    70 lawsuits  originally  filed in the 18th Judicial  District  Court for the
    Parish of Iberville,  Louisiana  against Georgia Gulf Corporation  ("Georgia
    Gulf"),  the  Company  and other  defendants,  which  arose  from a chemical
    exposure  incident at a Georgia Gulf  facility in  Plaquemine,  Louisiana in
    September  1996.  As of  June  30,  2000,  approximately  95% of the  escrow
    established  by the  Company's insurance  carriers and the other  defendants
    pursuant to a settlement agreement with the plaintiffs  had been  disbursed.
    By  separate  agreement, and  in exchange for a payment funded by insurance,
    Georgia Gulf assumed the Company's  defense and indemnity against the claims
    of any plaintiff who did not  participate in the  settlement agreement,  the
    claims  of approximately  twenty  plaintiffs  who were  not  parties  to the
    settlement  agreement,  certain  additional  claims  which  have  been filed
    against the Company,  and   future claims which may arise in connection with
    this incident.

        The Company is also a defendant in a lawsuit filed on September 20, 1999
    in the 24th Judicial District Court for the Parish of Jefferson,  Louisiana,
    which  seeks  class   certification  on  behalf  of  an  unknown  number  of
    plaintiffs,  who allege  personal  and  property  damages  arising  from the
    release of a single  330-gallon  container of hydrochloric  acid on a public
    highway in Kenner,  Louisiana in September  1999.  This litigation is in its
    initial stages,  and  is  being  defended  by one of the Company's insurance
    carriers.

        The  Company is a defendant  in various  other  lawsuits  arising in the
    normal  course  of  business.  Substantially  all of these  suits  are being
    defended  by  the  Company's  insurance  carriers.

        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 such litigation  will  not  have a
    material adverse effect on the Company's  consolidated financial position or
    results of operations.

                                       8
<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,  1999.  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

    The  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      Six months ended
                                            June 30,                June 30,
                                         1999       2000        1999      2000
                                       -------     ------      ------   -------
      <S>                               <C>        <C>         <C>      <C>
      Revenue....................       100.0%     100.0%      100.0%   100.0%
      Cost of revenue............        58.3       61.2        58.9     60.8
                                        -----      -----       -----    -----
         Gross profit............        41.7       38.8        41.1     39.2
      SG&A expense...............        24.7       22.6        24.6     23.3
      Depreciation...............         5.4        5.3         5.6      5.4
                                        -----      -----       -----    -----
         Operating income........        11.6       10.9        10.9     10.5
      Other (income) expense:
         Interest expense, net...         6.2        7.4         6.3      7.5
         Other (income) expense, net        -        0.3        (0.1)     0.1
         Amortization of intangibles      1.2        1.9         1.2      1.8
                                        -----      -----       -----    -----
       Income before taxes........        4.2        1.3         3.5      1.1
              Income tax provision         -          -           -        -
                                        -----      -----       -----    -----
      Net income ................         4.2%       1.3%        3.5%     1.1%
                                        =====      =====       =====    =====

      EBITDA(1)..................        17.0%      16.2%       16.5%    15.9%
                                        =====      =====       =====    =====
</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 generally  accepted  accounting  principles.  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.

                                       9
<PAGE>


Three months Ended June 30, 2000 Compared to Three months Ended June 30, 1999
-----------------------------------------------------------------------------

    Revenue.  Revenue increased $2.0 million,  or 3.8%, to $54.2 million for the
three  months  ended June 30, 2000 from $52.2  million in the prior year period.
The increase  resulted from tank cleaning  revenue to $5.6 million,  principally
attributable to the LANSCO acquisition,  and an increase in industrial vacuuming
revenue of $2.5 million,  or 32.0%,  from $8.0 million to $10.5  million.  These
increases were partially offset by a decrease in  hydroblasting  revenue of $2.4
million,  or 10.6%, from $22.4 million to $20.0 million;  a decrease in chemical
cleaning revenue of $2.4 million, or 13.9%, from $17.3 million to $14.9 million,
and a decrease in other services  revenue of $1.2 million,  or 28.6%,  from $4.3
million to $3.1 million.  The increase in industrial  vacuuming revenue resulted
from additional vacuum trucks placed in service by the Company in 1999 and 2000.
The decrease in hydroblasting revenue principally resulted from a reduced volume
of projects and reduced customer  spending.  Chemical cleaning revenue decreased
primarily as a result of a decreased volume of projects.  Other services revenue
decreased principally as a result of decreased mechanical services projects.

    Gross profit. Gross profit decreased $731,000,  or 3.4%, to $21.0 million in
2000 from $21.8 million in the prior year period. Cost of revenue increased $2.7
million,  or 9.0%, to $33.1 million in 2000 from $30.4 million in the prior year
period  primarily  due to the  LANSCO  acquisition  and  the  revenue  increases
described above, partially offset by reduced profit sharing, insurance and bonus
expense.

    SG&A expense.  SG&A expense decreased $617,000, or 4.8%, to $12.3 million in
2000 from  $12.9  million  in the prior  year  period.  The  decrease  primarily
resulted from reduced profit  sharing,  insurance and bonus  expense,  partially
offset by the SG&A expense of LANSCO.

    EBITDA.  Decreased gross profit, partially offset by decreased SG&A expense,
resulted in a $114,000, or 1.3%, decrease in EBITDA to $8.8 million in 2000 from
$8.9 million in the prior year period.

    Depreciation.  Depreciation  expense  increased  $43,000,  or 1.5%,  to $2.9
million in 2000 from $2.8  million in the prior year  period.  The  increase  in
depreciation  expense  principally  resulted from the acquired LANSCO assets and
from capital  expenditures in 1999 and 2000,  partially offset by a reduction in
depreciation associated with fully depreciated assets.

    Operating income. Decreased gross profit and increased depreciation expense,
partially offset by decreased SG&A expense,  resulted in a decrease in operating
income of $157,000, or 2.6%, to $5.9 million in 2000 from $6.0 million in 1999.

    Interest expense,  net. Interest expense, net increased $791,000,  or 24.5%,
to $4.0 million in 2000 from $3.2  million in the prior year  period.  Increased
interest expense, net resulted from additional  borrowings to finance the LANSCO
acquisition.

    Amortization.  Amortization  expense increased  $380,000,  or 60.0%, to $1.0
million in 2000 from $633,000 in the prior year period.  Increased  amortization
expense  resulted from goodwill  incurred in connection  with the acquisition of
LANSCO.

    Income before taxes.  For the reasons  described above, the Company's income
before taxes  decreased  $1.5 million,  or 67.4%,  to $721,000 in 2000 from $2.2
million in the prior year period.

    Income tax provision. The income tax provision of zero in 2000 was unchanged
from the prior year period,  principally as a result of changes in the valuation
allowance for deferred tax assets.

    Net income.  For the  reasons  described  above,  the  Company's  net income
decreased $1.5 million,  or 67.4%,  to $721,000 in 2000 from $2.2 million in the
prior year period.

                                       10
<PAGE>

Six Months Ended June 30, 2000 Compared to Six Months Ended June 30, 1999
-------------------------------------------------------------------------

    Revenue.  Revenue increased $4.5 million, or 4.4%, to $107.6 million for the
six months ended June 30, 2000 from $103.1 million in the prior year period. The
increase  resulted  from tank  cleaning  revenue  to $8.8  million,  principally
attributable  to the LANSCO  acquisition,  an increase in  industrial  vacuuming
revenue of $3.8 million,  or 22.1%, from $17.3 million to $21.1 million,  and an
increase in other services revenue of $735,000,  or 10.8%,  from $6.8 million to
$7.5  million.   These  increases  were  partially   offset  by  a  decrease  in
hydroblasting  revenue of $7.3  million,  or 15.1%  from $48.1  million to $40.8
million and a decrease in chemical  cleaning  revenue of $1.0 million,  or 3.4%,
from $30.3  million to $29.3  million.  The  increase  in  industrial  vacuuming
revenue resulted from additional  vacuum trucks placed in service by the Company
in 1999 and 2000.  Other services revenue  increased  principally as a result of
increased commissioning services projects. The decrease in hydroblasting revenue
resulted  from a reduced  volume of  projects  and  reduced  customer  spending.
Chemical cleaning revenue  decreased  primarily as a result of a decrease in the
volume of projects.

    Gross profit. Gross profit decreased $198,000,  or 0.5%, to $42.2 million in
2000 from $42.4 million in the prior year period. Cost of revenue increased $4.7
million,  or 7.8%, to $65.4 million in 2000 from $60.7 million in the prior year
period  primarily  due to the  LANSCO  acquisition  and  the  revenue  increases
described above, partially offset by reduced profit sharing, insurance and bonus
expense.

    SG&A expense.  SG&A expense decreased $316,000, or 1.2%, to $25.1 million in
2000 from  $25.4  million  in the prior  year  period.  The  decrease  primarily
resulted from reduced profit  sharing,  insurance and bonus  expense,  partially
offset by the SG&A expense of LANSCO.

    EBITDA. Decreased SG&A expense,  partially offset by decreased gross profit,
resulted in a  $118,000,  or 0.7%,  increase in EBITDA to $17.1  million in 2000
from $17.0 million in the prior year period.

    Depreciation.  Depreciation  expense  increased  $63,000,  or 1.1%,  to $5.8
million in 2000 from $5.8  million in the prior year  period.  The  increase  in
depreciation  expense  principally  resulted from the acquired LANSCO assets and
from capital  expenditures in 1999 and 2000,  partially offset by a reduction in
depreciation associated with fully depreciated assets.

    Operating  income.  Decreased  SG&A expense,  partially  offset by decreased
gross  profit and  increased  depreciation  expense,  resulted in an increase in
operating  income of  $55,000,  or 0.5%,  to $11.3  million in 2000,  from $11.3
million in the prior year period.

    Interest  expense,  net. Interest  expense,  net increased $1.5 million,  or
23.7%,  to $8.0  million in 2000 from $6.5  million  in the prior  year  period.
Increased interest expense,  net resulted from additional  borrowings to finance
the LANSCO acquisition.

    Amortization.  Amortization  expense increased  $729,000,  or 57.5%, to $2.0
million  in  2000  from  $1.3  million  in  the  prior  year  period.  Increased
amortization  expense  resulted  from goodwill  incurred in connection  with the
acquisition of LANSCO.

    Income before taxes. For the reasons  described  above,  income before taxes
decreased $2.4 million,  or 68.2%,  to $1.1 million in 2000 from $3.5 million in
the prior year period.

    Income tax provision. The income tax provision of zero in 2000 was unchanged
from the prior year period,  principally as a result of changes in the valuation
allowance for deferred tax assets.

    Net income.  For the  reasons  described  above,  the  Company's  net income
decreased $2.4 million,  or 68.2%,  to $1.1 million in 2000 from $3.5 million in
the prior year period.
                                       11
<PAGE>

Liquidity and Capital Resources

    Effective June 30, 2000, the credit  agreement  governing the Company's Term
Loan and Revolver was amended to modify,  among other things,  certain  interest
rate margins, and financial ratios and covenants. Also, as of June 30, 2000, (i)
$2.3 million had been drawn under the Revolver in the form of standby letters of
credit, (ii) there were no outstanding  borrowings under the Revolver, and (iii)
as adjusted  for  covenant  limitations,  the Company had net  available  unused
borrowings of $15.3 million.

    For the six  months  ended  June  30,  2000,  the  Company  used net cash of
$464,000 for operating and investing  activities which consisted of $2.3 million
provided by operating activities and $2.8 million used in investing  activities.
For the six months  ended June 30, 1999,  $28.9  million of net cash was used in
operating and investing  activities  which consisted of $6.4 million provided by
operating activities and $35.3 million used in investing  activities,  including
$32.0 million for acquisitions.

    Expenditures  for property and  equipment  for the six months ended June 30,
2000 were $2.8  million.  These  expenditures  were  principally  for  operating
equipment.  For the six months ended June 30, 1999, $3.4 million of expenditures
for property and  equipment  included $1.9 million for the purchase of operating
equipment,  $1.0  million  to  implement  new  field and  corporate  information
software  and  hardware  systems,  and  $501,000  for  the  construction  of the
Company's headquarters and operating facility.

    Management  believes that cash and cash  equivalents  at June 30, 2000,  net
cash  expected  to be  provided  by  operating  activities  and  borrowings,  if
necessary, under the Company's Revolver will be sufficient to meet the Company's
cash requirements for operations,  expenditures for property and equipment,  and
debt service 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  complete  additional
acquisitions.   There  can  be  no  assurance,  however,  that  any  acquisition
opportunities will arise, that any acquisitions will be consummated, or that any
related  financing  will be available if required on terms  satisfactory  to the
Company.



                                       12
<PAGE>


                       HYDROCHEM INDUSTRIAL SERVICES, INC.
                                AND SUBSIDIARIES

                    QUANTITATIVE AND QUALITATIVE DISCLOSURES
                                ABOUT MARKET RISK

           The Company is exposed to certain market risks from transactions that
    are entered into during the normal course of business.  The Company does not
    enter into derivative instruments for trading purposes, however, an Interest
    Rate Swap was  entered  into during 1998 in  connection  with the  Company's
    Mortgage Loan. The Interest Rate Swap protects the Company against  interest
    rate  fluctuation  by fixing the Mortgage Loan interest rate from a variable
    rate. The Company's  primary  market risk exposure  relates to interest rate
    risk.  The Term Loan balance of $30.0  million at December 31, 1999 and June
    30, 2000 is subject to variable  interest rates.  Assuming no change in Term
    Loan  borrowings,  a one hundred basis point change in interest  rates would
    impact net interest expense by approximately $300,000 per year.

Part II.  Other Information

    Item 1.Legal Proceedings

           There have been no  material  changes to the  proceedings  previously
    reported in the  Registrants'  Quarterly Report on Form 10-Q for the quarter
    ended March 31, 2000.


    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.)
                                       13
<PAGE>

               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.)

               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.
                          (Filed herewith.)

               10.4       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.)

               10.5       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.)

               10.6       Secured Promissory Note dated  April 30,  1999 from B.
                          Tom  Carter, Jr. to  HydroChem  Holding  Inc. (Exhibit
                          10.4  to  the Company's  Form 10-Q filed May 11, 1999,
                          is hereby  incorporated by reference.)

               10.7       Pledge  Agreement  dated April 30, 1999 between B. Tom
                          Carter, Jr. and HydroChem Holding, Inc. (Exhibit  10.5
                          to the  Company's  Form 10-Q  filed May 11,  1999,  is
                          hereby  incorporated  by reference.)

               10.8       Secured Promissory Note dated May 15, 2000 from B. Tom
                          Carter,  Jr.  to   HydroChem   Holding,  Inc.   (Filed
                          herewith.)

               10.9       Pledge Agreement dated May 15, 2000 between  HydroChem
                          Holding, Inc. and B. Tom Carter, Jr. (Filed herewith.)

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

               10.11      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.)
                                       14
<PAGE>

               10.12      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.)

               10.13      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.)

               10.14      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 Boyd.  (Exhibit 10.10 to the
                          Company's  Form 10-Q filed August 10, 1999,  is hereby
                          incorporated by reference.)

               10.15      Employment  Offer  Letter  dated  June  3,  1996  from
                          HydroChem  Industrial  Services,   Inc.  to  Selby  F.
                          Little,   III.   (Exhibit  10.6   to   the   Company's
                          Registration  Statement on  Form S-4, filed August 25,
                          1997, is hereby incorporated by reference.)

               10.16      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.)

               10.17      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.)

               10.18      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.)

               10.19      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.)

               10.20      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.)

               10.21      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.)

               10.22      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.)

               10.23      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.)
                                       15
<PAGE>

               10.24      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.  (Filed herewith).

               10.25      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.)

               10.26      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.)

               27.1       Financial Data Schedule.  (Filed herewith.)

    (b)    Reports on Form 8-K.

           None.

                                       16
<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: August 11, 2000          By: /s/  Selby F.  Little, III
                                      ---------------------------
                                  Selby F. Little, III, Executive Vice President
                                  and Chief Financial Officer
                                  (Principal Financial and Accounting Officer)






                                  HYDROCHEM INTERNATIONAL, INC.


   Date: August 11, 2000          By: /s/ Selby F.  Little, III
                                      ---------------------------
                                  Selby F. Little, III, Executive Vice President
                                  and Chief Financial Officer
                                  (Principal Financial and Accounting Officer)




                                       17
<PAGE>



                                         EXHIBIT INDEX

        10.3   First Amendment  to Deferred  Bonus Plan of HydroChem  Industrial
               Services,  Inc.  dated as of May 1, 2000.  (Filed herewith.)

        10.8   Secured Promissory Note dated  May 15, 2000  from  B. Tom Carter,
               Jr. to HydroChem  Holding,  Inc. (Filed herewith.)

        10.9   Pledge  Agreement dated  May 15, 2000  between HydroChem Holding,
               Inc., and B. Tom Carter, Jr. (Filed herewith.)

        10.24  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.  (Filed herewith).

        27.1   Financial Data Schedule


                                       18