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, 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
     November 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
                 September 30, 2000 (unaudited).......................     3

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

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

              Consolidated  Statements  of Cash Flows for each of the
                 nine month periods ended September 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..........................    10

        Item 3. Quantitative and Qualitative Disclosures About
                   Market Risk........................................    14

Part II.Other Information

        Item 1. Legal Proceedings.....................................    14

        Item 6. Exhibits and Reports on Form 8-K......................    14

Signatures............................................................    18

Exhibit Index.........................................................    19


                                       2
<PAGE>

                       HYDROCHEM INDUSTRIAL SERVICES, INC.
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)
<TABLE>
<CAPTION>
                                                    December 31,   September 30,
                                                        1999            2000
                                                    ------------   ------------
                                      ASSETS
  <S>                                                  <C>           <C>
  Current assets:
      Cash and cash equivalents.....................   $  4,140      $  2,425
      Receivables, less allowance of $671
       and $736, respectively.......................     33,488        38,730
      Inventories...................................      4,721         4,493
      Prepaid expenses and other current assets.....      1,993         2,888
      Income taxes receivable.......................        504           504
      Deferred income taxes.........................      1,725         1,725
                                                        -------       -------
         Total current assets.......................     46,571        50,765

  Property and equipment, at cost...................     96,672        97,982
      Accumulated depreciation......................    (43,756)      (50,912)
                                                        -------       -------
                                                         52,916        47,070

  Intangible assets, net............................    101,415        98,158
                                                        -------       -------

         Total assets...............................   $200,902      $195,993
                                                        =======       =======

                      LIABILITIES AND STOCKHOLDER'S EQUITY
  Current liabilities:
      Accounts payable..............................   $  6,829      $  7,301
      Accrued liabilities...........................     17,870        12,889
      Current portion of long-term debt.............      2,670         5,932
                                                        -------       -------
         Total current liabilities..................     27,369        26,122

  Long-term debt....................................    148,209       144,321
  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)         (214)
                                                        -------       -------
      Total stockholder's equity....................     16,119        16,345
                                                        -------       -------

         Total liabilities and stockholder's equity..  $200,902      $195,993
                                                        =======       =======
</TABLE>


                             See accompanying notes.

                                       3
<PAGE>

                       HYDROCHEM INDUSTRIAL SERVICES, INC.
                                AND SUBSIDIARIES

                CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
                                 (in thousands)

<TABLE>
<CAPTION>
                                      Three months ended      Nine months ended
                                         September 30,          September 30,
                                       1999        2000       1999        2000
                                       ----        ----       ----        ----
<S>                                 <C>         <C>         <C>         <C>
Revenue..........................   $ 43,010    $ 52,049    $146,109    $159,687
Cost of revenue..................     25,709      32,733      86,409      98,170
                                     -------     -------     -------     -------
     Gross profit................     17,301      19,316      59,700      61,517

Selling, general and
 administrative expense..........     11,144      12,293      36,518      37,351
Depreciation.....................      2,836       3,016       8,588       8,831
                                     -------     -------     -------     -------
     Operating income............      3,321       4,007      14,594      15,335

Other (income) expense:
     Interest expense, net.......      3,229       4,018       9,725      12,051
     Amortization of intangibles.        634         999       1,901       2,995
     Other, net..................        105         (98)         37          63
                                     -------     -------     -------     -------

Income(loss) before taxes........       (647)       (912)      2,931         226

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

Net income (loss)................   $   (647)   $   (912)   $  2,931    $    226
                                     =======     =======     =======     =======
</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.........................     -           -        226         226
                                         ----     -------     ------     -------

Balance at September 30, 2000.......... $   1    $ 16,558     $ (214)    $16,345
                                         ====     =======      =====      ======
</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,
                                                           1999           2000
                                                           ----           ----
<S>                                                      <C>           <C>
Operating activities:
    Net income........................................   $  2,931      $    226
    Adjustments to reconcile net income
        to net cash provided by operating activities:
        Depreciation..................................      8,588         8,831
        Amortization..................................      1,901         2,995
        Amortization of deferred financing costs......        356           544
        Loss on sale of property and equipment........        110           122
    Changes in operating assets and liabilities,
      net of effects of acquisition:
        Receivables, net..............................     (4,187)       (5,242)
        Inventories...................................       (684)          228
        Prepaid expenses and other current assets.....         17          (887)
        Accounts payable..............................        (71)          472
        Accrued liabilities...........................       (144)       (3,965)
                                                          -------       -------
           Net cash provided by operating activities..      8,817         3,324
                                                          -------       -------

Investing activities:
    Expenditures for property and equipment...........     (5,044)       (3,592)
    Proceeds from sale of property and equipment......        187           477
    Acquisitions, net of cash.........................    (32,170)         (964)
                                                          -------       -------
           Net cash used in investing activities......    (37,022)       (4,079)
                                                          -------       -------

Financing activities:
    Repayments of long-term debt, net.................     (3,359)         (626)
    Debt financing costs..............................         -           (334)
                                                          -------       -------
           Net cash used in financing activities......     (3,359)         (960)
                                                          -------       -------

Net decrease in cash..................................    (31,569)       (1,715)
Cash at beginning of period...........................     33,775         4,140
                                                          -------       -------

Cash at end of period.................................   $  2,206      $  2,425
                                                          =======       =======
</TABLE>







                             See accompanying notes.

                                       6
<PAGE>

                       HYDROCHEM INDUSTRIAL SERVICES, INC.
                                AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 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 nine month interim period ended
   September 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. New Accounting Pronouncement

      In December  1999, the  Securities  and Exchange  Commission  issued Staff
   Accounting  Bulletin No. 101, or SAB 101,  Revenue  Recognition  in Financial
   Statements.   SAB  101  provides  guidance  on  applying  generally  accepted
   accounting  principles to revenue recognition issues in financial statements.
   The company is required  to adopt SAB 101 in the fourth  calendar  quarter of
   2000.  Based upon its review to date of SAB 101, the Company does not believe
   that  any  changes  will  be  required  in its  current  revenue  recognition
   policies,  practices or procedures.  The Company will complete its evaluation
   of the provisions of SAB 101 during the fourth calendar quarter of 2000.

                                       7
<PAGE>

3. Long-term Debt

      Long-term  debt at December 31, 1999 and September  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       29,500
      Revolver........................................      -               -
      Mortgage Loan...................................        7,379       7,253
      Seller Notes....................................        3,500       3,500
                                                          ---------     -------
         Total long-term debt.........................     150,879      150,253
         Less current portion of long-term debt.......      (2,670)      (5,932)
                                                          --------      -------
                                                           $148,209    $144,321
                                                           =======      =======
</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.

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

5. 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,     September 30,
                                               1999             2000
                                               ----             ----
      <S>                                     <C>           <C>
      Current assets...................       $2,727        $3,639
      Noncurrent assets................           92           122
      Current liabilities..............          496           469
      Noncurrent liabilities...........          -             -
</TABLE>

<TABLE>
<CAPTION>
                                  Three months ended       Nine months ended
                                     September 30,            September 30,
                                     -------------            -------------
                                    1999        2000        1999        2000
                                    ----        ----        ----        ----
      <S>                          <C>         <C>         <C>         <C>
      Revenue......................$1,815      $1,731      $4,630      $4,747
      Gross profit....................636         632       1,743       1,847
      Net income (1)..................199         289         680         969
</TABLE>
----------
   (1) Net income  does not  include  any  allocation  from  HydroChem  of SG&A,
amortization, or interest expense.

6. 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 September 30, 2000,  approximately 95% of the escrow  established
   by the Company's  insurance  carriers and the other defendants  pursuant to a

                                       8
<PAGE>

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


                                       9
<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       Nine months ended
                                        September 30,           September 30,
                                        -------------           -------------
                                       1999      2000          1999      2000
                                       ----      ----          ----      ----
<S>                                   <C>        <C>          <C>        <C>
   Revenue.....................       100.0%     100.0%       100.0%     100.0%
   Cost of Revenue.............        58.3       62.9         58.9       61.5
                                       ----       ----         ----       ----
       Gross profit............        41.7       37.1         41.1       38.5
   SG&A expense................        24.7       23.6         24.6       23.4
   Depreciation................         5.4        5.8          5.6        5.5
                                       ----       ----         ----       ----
       Operating income........        11.6        7.7         10.9        9.6
   Other (income) expense:
       Interest expense, net...         6.2        7.7          6.3        7.5
       Amortization of intangibles      1.2        1.9          1.2        1.9
       Other, net..............           -       (0.1)        (0.1)       0.1
                                       ----       ----         ----       ----
   Income (loss) before taxes..         4.2       (1.8)         3.5        0.1
       Income tax provision....           -          -            -          -
                                       ----       ----         ----       ----
   Net income (loss)...........         4.2%      (1.8)%        3.5%       0.1%
                                       ====       ====         ====       ====

   EBITDA (1)..................        17.0%      13.5%        16.5%      15.1%
                                       ====       ====         ====       ====
</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.

                                       10

<PAGE>

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

   Revenue.  Revenue increased $9.0 million,  or 21.0%, to $52.0 million for the
three  months  ended  September  30,  2000 from $43.0  million in the prior year
period.  The  increase  resulted  from tank  cleaning  revenue of $4.9  million,
principally  attributable to the LANSCO  acquisition,  an increase in industrial
vacuuming revenue of $1.7 million, or 19.3%, from $9.0 million to $10.8 million,
an increase in chemical  cleaning revenue of $1.3 million,  or 12.3%, from $10.6
million to $11.9  million,  and an  increase  in  hydroblasting  revenue of $1.2
million,  or 6.0%,  from $20.1 million to $21.4  million.  These  increases were
partially offset by a decrease in other services  revenue of $109,000,  or 3.5%,
from $3.1 million to $3.0 million.  The increase in industrial vacuuming revenue
resulted from additional  vacuum trucks placed in service by the Company in 1999
and  2000.  Chemical  cleaning  revenue  increased  primarily  as a result  of a
increased volume of projects.  The increase in hydroblasting revenue principally
resulted  from an increase in the volume of  projects.  Other  services  revenue
decreased principally as a result of decreased mechanical services projects.

   Gross profit.  Gross profit increased 2.0 million, or 11.6%, to $19.3 million
in 2000 from $17.3 million in the prior year period.  Cost of revenue  increased
$7.0 million, or 27.3%, to $32.7 million in 2000 from $25.7 million in the prior
year period  primarily due to the LANSCO  acquisition and the revenue  increases
described above.  The 4.6% decrease from the prior  year period in gross  profit
as a  percentage  of  revenue  principally  resulted  from  the  acquired LANSCO
operations, and proportionately higher direct compensation costs.

   SG&A expense. SG&A expense increased $1.1 million, or 10.3%, to $12.3 million
in 2000 from $11.1  million in the prior year  period.  The  increase  primarily
resulted   from  the  SG&A   expense  of  LANSCO,   and  proportionately  higher
compensation expense.

   EBITDA.  Increased gross profit,  partially offset by increased SG&A expense,
resulted in a  $866,000,  or 14.1%,  increase in EBITDA to $7.0  million in 2000
from $6.2 million in the prior year period.

   Depreciation.  Depreciation  expense  increased  $182,000,  or 6.3%,  to $3.0
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.  Increased gross profit, partially offset by increased SG&A
and  depreciation  expense,  resulted  in an  increase  in  operating  income of
$686,000, or 20.7%, to $4.0 million in 2000 from $3.3 million in 1999.

   Interest expense, net. Interest expense, net increased $789,000, or 24.4%, 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  $365,000,  or 57.6%, to $1.0
million in 2000 from $634,000 in the prior year period.  Increased  amortization
expense  resulted from goodwill  incurred in connection  with the acquisition of
LANSCO.

   Income (loss) before taxes.  For the reasons  described  above, the Company's
loss  before  taxes  increased  $265,000,  or 41.0%,  to  $912,000  in 2000 from
$647,000 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 (loss).  For the reasons  described  above, the Company's net loss
increased  $265,000,  or 41.0%,  to $912,000 in 2000 from  $647,000 in the prior
year period.

                                       11
<PAGE>

Nine Months Ended September 30, 2000 Compared to Nine Months Ended
September 30, 1999
------------------

   Revenue.  Revenue increased $13.6 million, or 9.3%, to $159.7 million for the
nine months  ended  September  30,  2000 from  $146.1  million in the prior year
period.  The increase  resulted  from tank  cleaning  revenue of $13.1  million,
principally  attributable to the LANSCO  acquisition,  an increase in industrial
vacuuming  revenue  of $5.6  million,  or 21.1%,  from  $26.3  million  to $31.9
million,  an increase in other services revenue of $626,000,  or 6.3%, from $9.9
million to $10.6  million,  and an  increase  in  chemical  cleaning  revenue of
$281,000,  or 0.7%,  from $41.0 million to $41.3 million.  These  increases were
partially offset by a decrease in hydroblasting revenue of $6.0 million, or 8.8%
from $68.2  million to $62.2  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.  Chemical cleaning revenue increased
primarily as a result of an increase in the volume of projects.  The decrease in
hydroblasting  revenue  resulted  from a reduced  volume of projects and reduced
customer spending.

   Gross profit.  Gross profit increased $1.8 million, or 3.0%, to $61.5 million
in 2000 from $59.7 million in the prior year period.  Cost of revenue  increased
$11.8  million,  or 13.6%,  to $98.2  million in 2000 from $86.4  million in the
prior year period primarily  due to the  LANSCO  acquisition.  The 2.6% decrease
from  the  prior  year  period  in  gross  profit  as a  percentage  of  revenue
principally  resulted  from the  acquired  LANSCO operations, and increased fuel
and equipment maintenance costs.

   SG&A expense.  SG&A expense increased $833,000,  or 2.3%, to $37.4 million in
2000 from  $36.5  million  in the prior  year  period.  The  increase  primarily
resulted from the SG&A expense of LANSCO,  partially offset by reduced insurance
expense.

   EBITDA.  Increased gross profit,  partially offset by increased SG&A expense,
resulted in a  $984,000,  or 4.2%,  increase in EBITDA to $24.2  million in 2000
from $23.2 million in the prior year period.

   Depreciation.  Depreciation  expense  increased  $243,000,  or 2.8%,  to $8.8
million in 2000 from $8.6  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.  Increased gross profit, partially offset by increased SG&A
and  depreciation  expense,  resulted  in an  increase  in  operating  income of
$741,000,  or 5.1%,  to $15.3  million in 2000,  from $14.6 million in the prior
year period.

   Interest  expense,  net.  Interest  expense,  net increased $2.3 million,  or
23.9%,  to $12.1  million in 2000 from $9.7  million  in the prior year  period.
Increased interest expense,  net resulted from additional  borrowings to finance
the LANSCO acquisition.

   Amortization.  Amortization expense increased $1.1 million, or 57.5%, to $3.0
million  in  2000  from  $1.9  million  in  the  prior  year  period.  Increased
amortization  expense  resulted  from goodwill  incurred in connection  with the
acquisition of LANSCO.

   Income (loss) before taxes. For the reasons  described  above,  income before
taxes decreased $2.7 million, or 92.3%, to $226,000 in 2000 from $2.9 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 (loss).  For the reasons described above, the Company's net income
decreased $2.7 million,  or 92.3%,  to $226,000 in 2000 from $2.9 million in the
prior year period.

                                       12
<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.  As of September 30, 2000, (i)
$1.9 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 $18.9 million.

   For the nine months ended  September  30, 2000,  the Company used net cash of
$928,000 in operating and investing  activities  which consisted of $2.3 million
provided by operating activities and $3.2 million used in investing  activities.
For the nine months ended September 30, 1999, $23.2 million of net cash was used
in operating and investing  activities  which consisted of $8.8 million provided
by  operating  activities  and  $37.0  million  used  in  investing  activities,
including $32.0 million for acquisitions.

   Expenditures  for property and equipment for the nine months ended  September
30, 2000 were $3.6 million.  These  expenditures  were principally for operating
equipment.  For the nine  months  ended  September  30,  1999,  $5.0  million of
expenditures  for property and equipment  included $3.1 million for the purchase
of  operating  equipment,  $1.1  million to  implement  new field and  corporate
information  software and hardware systems, and $770,000 for the construction of
the Company's headquarters and operating facility.



                                       13
<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  $29.5  million  at  September 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 $295,000 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.)

                                       14
<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.
                          (Exhibit 10.3  to the Company's Form 10-Q filed August
                          11, 2000, is hereby incorporated by reference.)

               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. (Exhibit
                          10.8 to the Company's Form 10-Q filed August 11, 2000,
                          is hereby incorporated by reference.)

               10.9       Pledge Agreement dated May 15, 2000 between  HydroChem
                          Holding, Inc. and B. Tom Carter, Jr.  (Exhibit 10.9 to
                          the  Company's  Form  10-Q  filed  August 11, 2000, is
                          hereby incorporated by reference.)

               10.10      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.)

                                       15
<PAGE>

               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.)

               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 W. 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.)

                                       16
<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.  (Exhibit 10.24 to the Company's
                          Form   10-Q   filed   August  11,  2000,   is   hereby
                          incorporated by reference.)

               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.

                                       17
<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 13, 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: November 13, 2000        By: /s/ Selby F.  Little, III
                                      ---------------------------
                                  Selby F. Little, III, Executive Vice President
                                  and Chief Financial Officer
                                  (Principal Financial and Accounting Officer)




                                       18
<PAGE>



                                         EXHIBIT INDEX


        27.1   Financial Data Schedule


                                       19