FORM 10-K/A

                       SECURITIES AND EXCHANGE COMMISSION
                             Attention: Filing Desk
                                    STOP 1-4
                               450 Fifth Street NW
                            Washington, DC 20549-1004
                Annual Report Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934

For the fiscal year ended December 25, 1999
Commission file number 0-8585

                               Dynamic Homes, Inc.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

             Minnesota                                 41-0960127
---------------------------------------  ---------------------------------------
(State or other jurisdiction of             (IRS Employer Identification No.)
 incorporation or organization)

525 Roosevelt Avenue, Detroit Lakes, MN               56501
---------------------------------------  ---------------------------------------
(Address of principal executive offices)            (Zip Code)

Registrant's telephone number including area code - (218) - 847-2611

Securities registered pursuant to Section 12(g) of the act:

                                                Name of Exchange on
         Title of Each Class                    Which Registered
         -------------------                    ----------------

         Common Stock, $.10 par value           NASDAQ Small Cap Market
         ----------------------------           -----------------------

         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 _____

         As of March 14, 2000, 2,240,850 common shares were outstanding, and the
aggregate market value of the common shares (based upon the sales price
information of these shares as compiled by the NASDAQ market) of Dynamic Homes,
Inc., held by non-affiliates was approximately $2,333,000. On January 7, 1995
the Company implemented a six-month plan to repurchase up to 100,000 shares of
its outstanding common stock. As of March 14, 2000, a total of 43,080 have been
repurchased. During 1996, the Company approved a new stock option plan and
granted 240,000 options to various officers, directors and employees. The
treasury stock and 205,000 available but unexercised options are excluded from
the common shares outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE
                              (See following page)

                 Total number pages, including cover page - __



<PAGE>


                      Documents Incorporated by Reference
                      -----------------------------------

Parts I, II, III, and IV of the Company's Annual Report to Shareholders for the
year ended December 25, 1999, except as amended herein.

EXPLANATORY NOTE
The Company filed a preliminary proxy statement (the "Proxy") pursuant to
Section 14(a) of the Securities Exchange Act of 1934 with the Securities and
Exchange Commission on October 6, 2000. The Proxy incorporated the Company's
Annual Report on Form 10-K for the fiscal year ended December 25, 1999 by
reference. In connection with the SEC's review of the Proxy, several comments
were raised by the Staff relative to certain financial disclosures in the
Company's Form 10-K. In response to the SEC's comments, the Company, in
consultation with the Company's accountants, has determined to restate its
financial statements for the fiscal year ended December 25, 1999. This Amendment
includes these restated financial statements, together with the report thereon
of EideBailly LLP dated November 16, 2000.

The restatements relate solely to the SEC's accounting comments regarding
restatement of financial statements for all periods presented prior to the
measurement date in accordance with APB 30. The restatements are necessary due
to the sale of the Company's wholly-owned subsidiary, Shagawa Resort, Inc. and
accordingly, to restate Shagawa Resort, Inc.'s operations as discontinued
operations.

The item(s) amended are as follows:

Part II, Item 6  Selected Financial Data
Part II, Item 8  Financial Statements and Supplementary Data
Part IV, Item 14 Exhibits, Financial Statement Schedules and Reports on
                 Form 8-K



                                    PART II

ITEM 6. SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                     Dec 25,          Dec 26,         Dec. 27,         Dec. 28,        Dec. 30,
YEARS ENDED                             1999             1998             1997             1996            1995
----------------------------------------------------------------------------------------------------------------
<S>                             <C>              <C>              <C>              <C>             <C>
Net sales                       $ 13,158,900     $ 11,969,000     $ 11,236,600     $ 12,172,200    $ 10,849,000
Gross profit                       2,389,000        2,412,500        2,183,900        2,965,300       2,351,500
Operating expenses                 1,644,700        1,458,300        1,340,900        1,365,000       1,041,100
Operating income                     744,300          954,200          843,000        1,600,300       1,310,400
Net loss from operations of
discontinued subsidiary              (84,100)        (115,300)        (131,900)              --              --
Net income (See page 14)             347,900          374,300          329,100          908,100         809,100
Basic net income per
     common share               $        .16     $        .17     $        .15     $        .41    $        .37
Diluted net income per
     common share               $        .16     $        .17     $        .15     $        .41    $        .37

AT YEAR END
----------------------------------------------------------------------------------------------------------------
Working capital                 $  3,344,700     $  3,035,400     $  2,630,200     $  1,895,800    $  1,746,700
Total assets                       9,784,000        9,425,200        8,881,500        7,619,900       5,833,200
Long-term debt, Net                2,752,300        2,852,500        2,951,400        2,077,400       1,066,300
Stockholders' equity               5,454,400        5,106,500        4,732,200        4,403,100       3,479,300
Weighted average number
common shares outstanding          2,241,000        2,241,000        2,241,000        2,223,000       2,209,000

STATISTICAL HIGHLIGHTS
----------------------------------------------------------------------------------------------------------------
Single-family unit sales                 224              206              201              219             192
Average square feet per
    single-family unit                 1,310            1,332            1,330            1,277           1,225
Total sq. feet of production         302,381          331,882          279,878          315,182         308,400
</TABLE>


                                       1

<PAGE>


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following consolidated Financial Statements of the Company, and its
subsidiaries, together with the reports of the independent auditors thereon,
are presented on pages: 3 through 20 hereof as set forth below:

                                                                        Page No.
INDEPENDENT AUDITOR'S REPORT                                            3

CONSOLIDATED FINANCIAL STATEMENTS
     Consolidated Balance Sheets                                        4
     Consolidated Statements of Operations                              5
     Consolidated Statements of Stockholders' Equity                    6
     Consolidated Statements of Cash Flows                              7
     Notes to Financial Statements                                      9













                                        2


<PAGE>


                          INDEPENDENT AUDITOR'S REPORT
--------------------------------------------------------------------------------


The Stockholders and Board of Directors
DYNAMIC HOMES, INC. AND SUBSIDIARIES
Detroit Lakes, Minnesota


We have audited the accompanying consolidated balance sheets of DYNAMIC HOMES,
INC. AND SUBSIDIARIES as of December 25, 1999 and December 26, 1998, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the three years in the period ended December 25, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of DYNAMIC HOMES, INC.
AND SUBSIDIARIES as of December 25, 1999 and December 26, 1998, and the results
of their operations and their cash flows for each of the three years in the
period ended December 25, 1999, in conformity with generally accepted accounting
principles.

As discussed in Note 1 to the consolidated financial statements, the Company
changed its accounting for amortization of start-up activities in 1998.


/s/ Eide Bailly LLP



Fargo, North Dakota
February 11, 2000, except for Note 18
  as to which the date is November 16, 2000


                                       3
<PAGE>


DYNAMIC HOMES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 25, 1999 AND DECEMBER 26, 1998
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                          1999             1998
                                                      ------------     ------------
<S>                                                   <C>              <C>
ASSETS

CURRENT ASSETS
     Cash and cash equivalents                        $    931,600     $    312,300
     Receivables
         Trade, less allowance for doubtful
             accounts 1999 $12,300; 1998 $60,000         1,796,900        1,491,500
         Refundable income taxes                            14,400               --
         Other                                               3,600           33,500
     Inventories                                         1,875,200        2,367,200
     Prepaid expenses                                       69,300           78,100
     Deferred income taxes                                 127,000          143,000
                                                      ------------     ------------

             Total current assets                        4,818,000        4,425,600


OTHER ASSETS, net of accumulated amortization              408,600          421,300


PROPERTY AND EQUIPMENT, net of accumulated
     depreciation                                        4,557,400        4,578,300
                                                      ------------     ------------

                                                      $  9,784,000     $  9,425,200
                                                      ============     ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Current maturities of long-term debt             $    268,100     $    196,900
     Accounts payable                                      346,800          350,000
     Customer deposits                                     127,000          199,500
     Accrued expenses                                      731,400          638,900
     Income taxes payable                                       --            4,900
                                                      ------------     ------------

             Total current liabilities                   1,473,300        1,390,200
                                                      ------------     ------------

LONG-TERM DEBT, less current maturities                  2,752,300        2,852,500
                                                      ------------     ------------

DEFERRED INCOME TAXES                                      104,000           76,000
                                                      ------------     ------------

STOCKHOLDERS' EQUITY
     Common stock, par value $.10 per share
         Authorized, 5,000,000 shares
         Issued, 2,284,000 shares in 1999 and 1998         228,400          228,400
     Additional paid-in capital                            147,100          147,100
     Retained earnings                                   5,223,000        4,875,100
                                                      ------------     ------------
                                                         5,598,500        5,250,600
     Less treasury stock, at cost (43,080 shares)         (144,100)        (144,100)
                                                      ------------     ------------
                                                         5,454,400        5,106,500
                                                      ------------     ------------

                                                      $  9,784,000     $  9,425,200
                                                      ============     ============
</TABLE>


See Notes to Consolidated Financial Statements                                 4
<PAGE>


DYNAMIC HOMES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 25, 1999, DECEMBER 26, 1998, AND DECEMBER 27, 1997
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                1999             1998             1997
                                                            ------------     ------------     ------------
<S>                                                         <C>              <C>              <C>
SALES                                                       $ 13,158,900     $ 11,969,000     $ 11,236,600

COST OF SALES                                                 10,769,900        9,556,500        9,052,700
                                                            ------------     ------------     ------------

GROSS PROFIT                                                   2,389,000        2,412,500        2,183,900

OPERATING EXPENSES                                             1,644,700        1,458,300        1,340,900
                                                            ------------     ------------     ------------

INCOME FROM OPERATIONS                                           744,300          954,200          843,000

OTHER INCOME (EXPENSES)
     Interest expense                                           (125,500)        (121,900)         (89,400)
     Interest income and service charges                          39,700           47,100           28,900
     Gain (loss) on sale of equipment                              8,000           19,400           (8,700)
     Other, net                                                   63,500           29,300            2,200
                                                            ------------     ------------     ------------

INCOME BEFORE INCOME TAXES                                       730,000          928,100          776,000

INCOME TAXES                                                     298,000          344,900          315,000
                                                            ------------     ------------     ------------

INCOME FROM CONTINUING OPERATIONS                                432,000          583,200          461,000

DISCONTINUED OPERATIONS
     Loss from operations of discontinued subsidiary,
         Shagawa Resort, Inc., net of income tax benefit         (84,100)        (115,300)        (131,900)
     Cumulative effect of accounting change, net of
         income tax                                                   --          (93,600)              --
                                                            ------------     ------------     ------------

NET INCOME                                                  $    347,900     $    374,300     $    329,100
                                                            ============     ============     ============

BASIC INCOME PER COMMON SHARE
     Income from continuing operations                      $       0.19     $       0.26     $       0.21
     Discontinued operations:
         Loss from operations of discontinued subsidiary           (0.03)           (0.05)           (0.06)
         Cumulative effect of accounting change                       --            (0.04)              --
                                                            ------------     ------------     ------------

     Net income                                             $       0.16     $       0.17     $       0.15
                                                            ============     ============     ============

DILUTED INCOME PER COMMON SHARE
     Income from continuing operations                      $       0.19     $       0.26     $       0.21
     Discontinued operations:
         Loss from operations of discontinued subsidiary           (0.03)           (0.05)           (0.06)
         Cumulative effect of accounting change                       --            (0.04)              --
                                                            ------------     ------------     ------------

     Net income                                             $       0.16     $       0.17     $       0.15
                                                            ============     ============     ============

PRO FORMA AMOUNTS ASSUMING RETROACTIVE
      APPLICATION OF ACCOUNTING CHANGE
         Net income                                                          $    523,900     $    370,100
         Basic income per common share                                               0.23             0.17
         Diluted income per common share                                             0.23             0.17
                                                                             ============     ============
</TABLE>


See Notes to Consolidated Financial Statements                                 5
<PAGE>


DYNAMIC HOMES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 25, 1999, DECEMBER 26, 1998, AND DECEMBER 27, 1997

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

<TABLE>
<CAPTION>
                                      Common Stock             Additional
                              ----------------------------       Paid-in        Retained       Treasury
                                 Shares          Amount          Capital        Earnings         Stock            Total
                              ------------    ------------    ------------    ------------    ------------     ------------
<S>                           <C>             <C>             <C>             <C>             <C>              <C>
BALANCE, DECEMBER 28, 1996       2,284,000    $    228,400    $    147,100    $  4,171,700    $   (144,100)    $  4,403,100
     Net income                         --              --              --         329,100              --          329,100
                              ------------    ------------    ------------    ------------    ------------     ------------

BALANCE, DECEMBER 27, 1997       2,284,000         228,400         147,100       4,500,800        (144,100)       4,732,200
     Net income                         --              --              --         374,300              --          374,300
                              ------------    ------------    ------------    ------------    ------------     ------------

BALANCE, DECEMBER 26, 1998       2,284,000         228,400         147,100       4,875,100        (144,100)       5,106,500
     Net income                         --              --              --         347,900              --          347,900
                              ------------    ------------    ------------    ------------    ------------     ------------

BALANCE, DECEMBER 25, 1999       2,284,000    $    228,400    $    147,100    $  5,223,000    $   (144,100)    $  5,454,400
                              ============    ============    ============    ============    ============     ============
</TABLE>


See Notes to Consolidated Financial Statements                                 6
<PAGE>


DYNAMIC HOMES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 25, 1999, DECEMBER 26, 1998, AND DECEMBER 27, 1997
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                           1999             1998             1997
                                                       ------------     ------------     ------------
<S>                                                    <C>              <C>              <C>
OPERATING ACTIVITIES
     Net income                                        $    347,900     $    374,300     $    329,100
     Charges and credits to net income
         not affecting cash
             Depreciation                                   466,200          430,100          376,400
             Amortization                                    30,300           22,900           59,400
             (Gain) loss on sale of equipment                (8,000)         (19,400)           8,700
             Deferred income taxes                           44,000          (48,000)          42,000
             Cumulative effect of accounting change              --          149,600               --
     Changes in assets and liabilities
         Receivables                                       (275,500)        (778,700)         (60,500)
         Inventories                                        492,000         (878,900)         107,000
         Prepaid expenses                                     8,800          (30,700)         (18,200)
         Accounts payable                                    (3,200)          89,000           44,900
         Customer deposits                                  (72,500)          22,400         (148,700)
         Accrued expenses                                    92,500          113,300           69,200
         Income taxes                                       (19,300)          42,500            4,200
                                                       ------------     ------------     ------------

NET CASH FROM (USED FOR) OPERATING
     ACTIVITIES                                           1,103,200         (511,600)         813,500
                                                       ------------     ------------     ------------

INVESTING ACTIVITIES
     Proceeds from sale of equipment                          8,000           34,100           13,000
     Payments for other assets                              (17,600)         (64,100)        (187,200)
     Purchase of property and equipment                    (445,300)        (353,500)        (653,500)
                                                       ------------     ------------     ------------

NET CASH USED FOR INVESTING ACTIVITIES                     (454,900)        (383,500)        (827,700)
                                                       ------------     ------------     ------------

FINANCING ACTIVITIES
     Principal payments on long-term debt                  (222,000)        (171,700)        (210,400)
     Proceeds from long-term debt borrowings                193,000           49,600        1,000,000
                                                       ------------     ------------     ------------

NET CASH FROM (USED FOR) FINANCING
     ACTIVITIES                                             (29,000)        (122,100)         789,600
                                                       ------------     ------------     ------------

NET CHANGE IN CASH AND CASH
     EQUIVALENTS                                            619,300       (1,017,200)         775,400

CASH AND CASH EQUIVALENTS AT
     BEGINNING OF YEAR                                      312,300        1,329,500          554,100
                                                       ------------     ------------     ------------

CASH AND CASH EQUIVALENTS AT
     END OF YEAR                                       $    931,600     $    312,300     $  1,329,500
                                                       ============     ============     ============
</TABLE>


(continued on next page)                                                       7
<PAGE>


CONSOLIDATED STATEMENTS OF CASH FLOWS- PAGE - 2
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                   1999             1998            1997
                                                               ------------     ------------    ------------
<S>                                                            <C>              <C>             <C>
SUPPLEMENTAL DISCLOSURES OF CASH
     FLOW INFORMATION
         Cash payments for
             Income taxes, net of refunds                      $    217,300     $    217,500    $    180,800
             Interest                                               267,800          254,700         232,000
                                                               ============     ============    ============


SUPPLEMENTAL SCHEDULE OF NONCASH
     INVESTING AND FINANCING ACTIVITIES

         Capital lease obligation incurred
             for use of new equipment                                           $     65,900    $     69,000
                                                                                ============    ============

         Contract for deed incurred for purchase of land                                        $     62,500
                                                                                                ============

         Purchase of assets, net of liabilities assumed, of
             Holiday Inn Sunspree Resort:
                 Fair value of assets acquired                                                  $    156,900
                 Liabilities assumed                                                                (104,300)
                                                                                                ------------

                 Cash paid                                                                      $     52,600
                                                                                                ============
</TABLE>


See Notes to Consolidated Financial Statements                                 8
<PAGE>


DYNAMIC HOMES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 25, 1999, DECEMBER 26, 1998, AND DECEMBER 27, 1997
--------------------------------------------------------------------------------

NOTE 1 - PRINCIPAL ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Dynamic Homes,
Inc., its wholly-owned subsidiary, Shagawa Resort, Inc., and three additional
wholly-owned subsidiaries which had no significant operations during 1999, 1998,
and 1997. All significant intercompany accounts and transactions have been
eliminated.

PRINCIPAL BUSINESS ACTIVITY

Dynamic Homes, Inc. manufactures modular, preconstructed buildings for
single-family, multiple-family and commercial use. Commercial operations include
the manufacture of preconstructed office buildings, motels and apartments.

Shagawa Resort, Inc. (a wholly-owned subsidiary) owns a hotel/resort which
opened in May 1996. The resort was managed by an unrelated party through a
management agreement with the Company through March 1997, at which time
management of the resort was assumed by the Company.

CONCENTRATIONS OF CREDIT RISK

In the normal course of business the Company extends credit to its customers.
The Company performs periodic credit evaluations of its customers' financial
condition and generally does not require collateral. Accounts receivable are
primarily due from customers in the Upper Midwest and are not concentrated in a
particular industry.

The Company's cash balances are maintained in several bank deposit accounts.
Periodically, balances in these accounts are in excess of federally insured
limits.

ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.

INVENTORIES

Inventories are stated at the lower of cost (standard cost, which approximates
average cost) or market. Cost of work in process and finished goods inventories
includes materials, labor and factory overhead.

REVENUE RECOGNITION

Sales of Dynamic Homes, Inc. including transportation revenues, are recognized
and recorded upon delivery of the finished product. Sales of Shagawa Resort,
Inc. are recognized and recorded upon delivery of service.


(continued on next page)                                                       9
<PAGE>


NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost, including the cost of capitalized
leased assets. Depreciation of property and equipment is computed using the
straight-line method over the following estimated useful lives:

           Land improvements                           7-20 years
           Buildings                                  15-39 years
           Machinery and equipment                     3-10 years
           Capitalized leases                          7-10 years

Amortization of the capitalized leased assets is included with depreciation.

CASH EQUIVALENTS

The Company considers all highly liquid investments purchased with a maturity of
three months or less to be cash equivalents.

FINANCIAL INSTRUMENTS

The carrying amount of cash and cash equivalents and accounts receivable
approximate fair value because of the short maturity of these instruments.

The fair value of long-term debt is estimated based on borrowing rates currently
available to the Company for bank loans with similar items and average
maturities. The carrying amount of long-term debt approximates the estimated
fair value at December 25, 1999 and December 26, 1998.

AMORTIZATION

Included in other assets are costs associated with obtaining financing which are
being amortized on the straight-line basis over the life of the loans. Also
included in other assets is goodwill related to the acquisition of Shagawa
Resort, Inc., which is being amortized on the straight-line method over its
estimated useful life.

During 1998, the Company adopted the provisions of Statement of Position 98-5,
"Reporting on the Costs of Start-up Activities', which requires companies to
expense the cost of start-up activities as incurred. In accordance with the
provisions of the statement, unamortized amounts of previously capitalized costs
have been charged to operations as of the beginning of the year in which the
statement was adopted. The provisions of the statement required implementation
for years beginning after December 15, 1998, however, the Company elected to
adopt the statement early.

INCOME TAXES

Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily to differences between the basis of receivables, property and
equipment, other assets, and accrued expenses, for financial and income tax
reporting. The deferred tax assets and liabilities represent future tax return
consequences of those differences, which will either be taxable or deductible
when the assets and liabilities are recovered or settled.


(continued on next page)                                                      10
<PAGE>


NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

ADVERTISING COSTS

Costs incurred for producing and distributing advertising are expensed as
incurred. The Company incurred advertising costs of $157,100 in 1999, $188,300
in 1998, and $148,000 in 1997.

FISCAL YEAR

The reporting period for the Company ends on the last Saturday of December each
year, with the exception of Shagawa Resort, Inc. which has a reporting year
ending on December 31. The year ended December 25, 1999 contained 52 weeks, the
year ended December 26, 1998 contained 52 weeks, and the year ended December 27,
1997 contained 52 weeks.

INCOME PER COMMON SHARE

Basic income per common share is computed by dividing net income by the weighted
average number of common shares outstanding during each year. Weighted average
outstanding common shares were 2,241,000 in 1999, 1998, and 1997.

Diluted income per common share is computed by dividing net income by the
weighted average number of common shares outstanding during the year plus the
incremental shares that are outstanding upon the exercise of dilutive stock
options.

During 1997, the Company adopted the provisions of Statement of Financial
Accounting Standards No. 128, "Earnings Per Share", which requires companies to
present basic earnings per share and diluted earnings per share, instead of
primary earnings per share and fully diluted earnings per share as previously
required.

NOTE 2 - INVENTORIES

                                                       1999            1998
                                                   ------------    ------------

     Raw materials                                 $    853,500    $    832,000
     Work in process                                    135,100         155,600
     Finished goods                                     886,600       1,379,600
                                                   ------------    ------------

                                                   $  1,875,200    $  2,367,200
                                                   ============    ============


(continued on next page)                                                      11
<PAGE>


NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 3 - OTHER ASSETS

                                                     1999              1998
                                                 ------------     ------------

     Capitalized debt expense                    $    221,700     $    218,900
     Goodwill                                         119,400          119,400
     Replacement reserve account                      104,000          100,800
     Other                                             43,700           22,400
                                                 ------------     ------------
                                                      488,800          461,500
     Less accumulated amortization                    (80,200)         (40,200)
                                                 ------------     ------------

                                                 $    408,600     $    421,300
                                                 ============     ============


     NOTE 4 - PROPERTY AND EQUIPMENT

                                                     1999             1998
                                                 ------------     ------------

     Land and improvements                       $    426,100     $    401,500
     Buildings                                      3,756,800        3,700,100
     Machinery and equipment                        2,932,900        2,660,200
                                                 ------------     ------------
                                                    7,115,800        6,761,800
     Less accumulated depreciation                 (2,558,400)      (2,183,500)
                                                 ------------     ------------

                                                 $  4,557,400     $  4,578,300
                                                 ============     ============


NOTE 5 - LEASES

The Company leases equipment under long-term capital lease agreements. The lease
agreements provide for varying monthly payments through July 2003.

                                                     1999             1998
                                                 ------------     ------------
     Capitalized leased assets consist of:

     Equipment                                   $    393,100     $    393,100
     Less accumulated amortization                   (165,800)        (109,700)
                                                 ------------     ------------

                                                 $    227,300     $    283,400
                                                 ============     ============


(continued on next page)                                                      12
<PAGE>


NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Minimum lease payments for the capital leases in future years are as follows:

     Years Ending December
     -----------------------

         2000                                           $     80,500
         2001                                                142,300
         2002                                                 41,900
         2003                                                 22,700
                                                        ------------
         Total minimum lease payments                        287,400
             Less interest                                   (48,600)
                                                        ------------

         Present value of minimum lease
             payments - Note 6                          $    238,800
                                                        ============


NOTE 6 - NOTE PAYABLE AND LONG-TERM DEBT

The Company has available a line of credit which is secured by inventories and
receivables. The credit available is based on specified percentages of
inventories and receivables to a maximum of $1,500,000. As of December 25, 1999
and December 26, 1998, there were no borrowings outstanding under the line of
credit. Borrowings under the line of credit bear interest at a variable rate
(8.5% at December 25, 1999) and there are no compensating balance requirements.

Long-term debt consists of:

                                                          1999         1998
                                                      -----------   -----------
Variable rate note payable (8.75% at December
     25, 1999), due in monthly installments of
     $8,200, including interest, to September
     2006, when the remaining balance is due,
     secured by substantially all assets of
     Shagawa Resort, Inc.                             $   861,900   $   882,900

7.32% note payable, due in monthly installments
     of $7,556, including interest, until August
     2016, secured by substantially all assets of
     Shagawa Resort, Inc., and a partial guarantee
     of the Small Business Administration                 869,500       895,500

8.25% note payable, due in monthly installments
     of $6,000, including interest, to March 2002,
     at which time the balance is due, secured by
     real estate and equipment                            551,100       576,500

Capitalized lease obligations, secured by leased
     assets - Note 5                                      238,800       291,800


(continued on next page)                                                      13
<PAGE>


NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

8.25% note payable, due in monthly installments
     of $1,819, including interest, to April 2002,
     when the remaining balance is due, secured
     by second mortgage on building                       169,200       176,800

8.5% note payable, due in monthly installments
     of $3,302, including interest, to June 2003,
     secured by transportation equipment                  122,000            --

8% note payable, due in varying monthly
     installments, including interest, to March
     2002, secured by equipment                            96,700       136,900

6.5% contract for deed, due in annual installments
     of $10,500, plus interest, to August 2001,
     with a final payment of $15,500, plus interest,
     due August 2002, secured by land                      36,500        47,000

8.25% note payable, due in monthly installments
     of $1,892, including interest, to June 2001,
     secured by computer equipment                         33,600            --

4.9% note payable, due in monthly installments of
     $1,479, including interest, to June 2001,
     secured by equipment                                  25,700        41,800

Other                                                      15,400           200
                                                      -----------   -----------
                                                        3,020,400     3,049,400
Less current maturities                                  (268,100)     (196,900)
                                                      -----------   -----------

                                                      $ 2,752,300   $ 2,852,500
                                                      ===========   ===========

Long-term debt maturities are as follows:

     Years Ending December
     -----------------------

         2000                                         $   268,100
         2001                                             332,100
         2002                                             802,200
         2003                                             110,200
         2004                                              72,800
         Thereafter                                     1,435,000
                                                      -----------

                                                      $ 3,020,400
                                                      ===========


(continued on next page)                                                      14
<PAGE>


NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 7 - CUSTOMER DEPOSITS

Customer deposits of $127,000 at December 25, 1999 and $199,500 at December 26,
1998 consisted of advance payments from customers for sales to be recognized in
the following year. Sales to be recognized in 2000 related to customer deposits
at December 25, 1999 are estimated to be $1,645,000.

NOTE 8 - ACCRUED EXPENSES

                                                      1999            1998
                                                  ------------    ------------

     Salaries, wages and vacations                $    259,700    $    259,500
     Taxes, other than income taxes                    125,300          97,300
     Warranty                                           75,700          72,300
     Other                                             270,700         209,800
                                                  ------------    ------------

                                                  $    731,400    $    638,900
                                                  ============    ============


NOTE 9 - STOCK OPTION PLAN

The Company approved a stock option plan in 1996, authorizing the use of 400,000
shares for the plan. During 1996, 240,000 options were granted; 200,000 to
officers and directors at $2.3125 per share and 40,000 shares to various
employees at $2.1562 per share. No options were exercised during 1999, 1998, or
1997, however during 1997, 25,000 of options to officers and 10,000 of options
to employees were forfeited as a result of the respective individuals'
separation from the Company. Compensation cost related to the options granted in
1996 had no effect on net income or income per share.

The fair value of each option grant was estimated on the date of grant in 1996
using the Black-Scholes option pricing model with the following weighted-average
options: a risk-free interest rate of 6.5 percent, expected volatility of 28.77
percent, and no dividend yield. The assumption regarding the stock options
issued to officers, directors, and employees in 1996 was that 100 percent of
such options vested in 1996.


NOTE 10 - SALES

                                         1999           1998           1997
                                     ------------   ------------   ------------

     Dynamic Homes, Inc.
          Single-family              $ 10,904,300   $  9,924,800   $  9,681,600
          Multi-family/commercial       1,109,000        989,300        617,300
          Transportation                  703,200        645,000        568,400
          Other                           442,400        409,900        369,300
                                     ------------   ------------   ------------
                                       13,158,900     11,969,000     11,236,600
     Shagawa Resort, Inc.,
          discontinued subsidiary       2,050,700      1,936,300      1,622,400
                                     ------------   ------------   ------------

                                     $ 15,209,600   $ 13,905,300   $ 12,859,000
                                     ============   ============   ============


(continued on next page)                                                      15
<PAGE>


NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 11 - COST OF SALES

                                         1999           1998            1997
                                     ------------   ------------   ------------

     Dynamic Homes, Inc.
          Single-family              $  7,076,000   $  6,261,600   $  5,965,000
          Multi-family/commercial       1,088,100      1,073,300      1,001,600
          Transportation                1,643,400      1,358,500      1,336,200
          Other                           962,400        863,100        749,900
                                     ------------   ------------   ------------
                                       10,769,900      9,556,500      9,052,700
     Shagawa Resort, Inc.,
          discontinued subsidiary       1,128,400      1,098,100        951,900
                                     ------------   ------------   ------------

                                     $ 11,898,300   $ 10,654,600   $ 10,004,600
                                     ============   ============   ============


NOTE 12 - OPERATING EXPENSES

                                         1999           1998            1997
                                     ------------   ------------   ------------

     Dynamic Homes, Inc.
          Marketing                  $    619,300   $    534,900   $    462,300
          Administration                1,025,400        923,400        878,600
                                     ------------   ------------   ------------
                                        1,644,700      1,458,300      1,340,900
                                     ------------   ------------   ------------
     Shagawa Resort, Inc.
          Marketing                        77,400         68,000         75,100
          Administration                  846,200        817,700        724,000
                                     ------------   ------------   ------------
                                          923,600        885,700        799,100
                                     ------------   ------------   ------------

                                     $  2,568,300   $  2,344,000   $  2,140,000
                                     ============   ============   ============


NOTE 13 - INCOME TAXES

Net deferred tax assets and liabilities consist of the following components as
of December 25, 1999 and December 26, 1998:

                                                        1999           1998
                                                    ------------   ------------

     Deferred tax assets
          Receivable allowances                     $      5,000   $     24,000
          Book/tax inventory adjustment                   26,000         30,000
          Intangible and other assets                     32,000         53,000
          Accrued expenses                                96,000         89,000
                                                    ------------   ------------

                                                    $    159,000   $    196,000
                                                    ============   ============

     Deferred tax liabilities
          Property and equipment                    $    136,000   $    129,000
                                                    ============   ============


(continued on next page)                                                      16
<PAGE>


NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

The deferred tax amounts described above have been included in the accompanying
balance sheets as of December 25, 1999 and December 26, 1998:

<TABLE>
<CAPTION>
                                                                       1999            1998
                                                                   ------------    ------------
<S>                                                                <C>             <C>
     Current assets                                                $    127,000    $    143,000
     Noncurrent liabilities                                            (104,000)        (76,000)
                                                                   ------------    ------------

                                                                   $     23,000    $     67,000
                                                                   ============    ============
</TABLE>

The provision for income taxes charged to operations for the years ended
December 25, 1999, December 26, 1998, and December 27, 1997, consists of the
following:

<TABLE>
<CAPTION>
                                                       1999            1998            1997
                                                   ------------    ------------    ------------
<S>                                                <C>            <C>             <C>
     Current expense
          Continuing operations                    $    254,000   $    392,900    $    273,000
          Discontinued operations                       (56,000)       (76,900)        (88,000)
          Cumulative effect of accounting change             --        (56,000)             --
     Deferred tax expense (benefit)                      44,000        (48,000)         42,000
                                                   ------------   ------------    ------------

                                                   $    242,000   $    212,000    $    227,000
                                                   ============   ============    ============
</TABLE>

The income tax provision differs from the amount of income tax determined by
applying the U.S. federal income tax rate to pretax income for the years ended
December 25, 1999, December 26, 1998, and December 27, 1997 due to the
following:

<TABLE>
<CAPTION>
                                                       1999           1998            1997
                                                   ------------   ------------    ------------
<S>                                                <C>            <C>             <C>
     Income tax computed at federal
          statutory rates                          $    201,000   $    199,000    $    189,000
     State taxes, net of federal
          tax benefit                                    35,000         35,000          33,000
     Change in income taxes resulting
          from non-deductible expenses                    6,000        (22,000)          5,000
                                                   ------------   ------------    ------------

                                                   $    242,000   $    212,000    $    227,000
                                                   ============   ============    ============
</TABLE>


NOTE 14 - RELATED PARTY TRANSACTIONS

The Company had sales totaling approximately $2,001,300 in 1999, $868,000 in
1998, and $633,900 in 1997 to members of the board of directors and entities
owned by Board members. At December 25, 1999 and December 26, 1998, the Company
had accounts receivable of $229,000 and $115,100, respectively, relating to
these sales.


(continued on next page)                                                      17
<PAGE>


NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 15 - MAJOR CUSTOMER

Dynamic Homes, Inc. and Subsidiaries derived approximately 10 percent of its
revenue from one customer during the year ended December 25, 1999, 15 percent of
its revenue from one customer during the year ended December 26, 1998; and 12
percent of its revenue from one customer during the year ended December 27,
1997.


NOTE 16 - EMPLOYEE BENEFIT PLAN

The Company has a qualified 401(k) plan which covers all employees who meet
eligibility requirements of being actively employed at year end. Under the terms
of the plan, employees may contribute 1 percent to 5 percent of their annual
salary, up to the maximum allowed by Internal Revenue Service regulations. The
Company's contribution to the plan, as determined by the board of directors, is
discretionary but may not exceed 100 percent of the employees' contribution. The
Company contributed $9,700 to the plan for the year ended December 25, 1999,
$8,100 to the plan for the year ended December 26, 1998, and $7,000 for the year
ended December 27, 1997.


NOTE 17 - BUSINESS SEGMENTS

The Company operates in two business segments: Dynamic Homes, Inc, which
manufactures modular, pre-constructed buildings; and Shagawa Resort, Inc., which
owns and operates a hotel/resort in northern Minnesota.

Information concerning the operations, net of eliminations, in these business
segments as of December 25, 1999, December 26, 1998, and December 27, 1997 are
as follows:

<TABLE>
<CAPTION>
                                                   Dynamic        Shagawa
                                                 Homes, Inc.    Resort, Inc.     Consolidated
                                                ------------    ------------     ------------
<S>                                             <C>             <C>              <C>
     Year ended December 25, 1999:

         Sales                                  $ 13,158,900    $  2,050,700     $ 15,209,600
         Gross profit                              2,389,000         922,300        3,311,300
         Income (loss) from operations               744,300          (1,200)         743,100
         Interest expense                            125,500         141,900          267,400
         Net income (loss)                           432,000         (84,100)         347,900

         Depreciation                                298,900         167,300          466,200
         Amortization                                  5,000          25,300           30,300

         Total assets                              6,644,500       3,139,500        9,784,000
         Capital expenditures, including
             capital lease obligations               417,600          27,700          445,300
</TABLE>


(continued on next page)                                                      18
<PAGE>


NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                   Dynamic        Shagawa
                                                 Homes, Inc.    Resort, Inc.     Consolidated
                                                ------------    ------------     ------------
<S>                                             <C>             <C>              <C>
     Year ended December 26, 1998:

         Sales                                  $ 11,969,000    $  1,936,300     $ 13,905,300
         Gross profit                              2,412,500         838,200        3,250,700
         Income (loss) from operations               954,200         (47,500)         906,700
         Interest expense                            121,900         147,200          269,100
         Net income (loss) before cumulative
             effect of accounting change             583,200        (115,300)         467,900

         Depreciation                                266,900         163,200          430,100
         Amortization                                  5,100          17,800           22,900

         Total assets                              6,124,100       3,301,100        9,425,200
         Capital expenditures, including
             capital lease obligations               365,500          53,900          419,400


     Year ended December 27, 1997:

         Sales                                  $ 11,236,600    $  1,622,400     $ 12,859,000
         Gross profit                              2,183,900         670,600        2,854,500
         Income (loss) from operations               843,000        (128,500)         714,500
         Interest expense                             89,400         147,900          237,300
         Net income (loss)                           461,000        (131,900)         329,100

         Depreciation                                220,600         155,800          376,400
         Amortization                                  5,300          54,100           59,400

         Total assets                              5,363,400       3,518,100        8,881,500
         Capital expenditures, including
             capital lease obligations               646,300          76,200          722,500
</TABLE>


(continued on next page)                                                      19
<PAGE>


NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 18 - DISCONTINUED OPERATIONS

In May 2000, the Company completed the sale of its wholly-owned subsidiary,
Shagawa Resort, Inc., for which the Company has recorded a loss of approximately
$516,000. As a result of this transaction, the results of operations of Shagawa
Resort, Inc. have been classified as discontinued operations and operating
results for the years ended December 25, 1999, December 26, 1998 and December
27, 1997 have been restated.

Condensed operating results and balance sheets for the discontinued operation
are as follows:

<TABLE>
<CAPTION>
                                       1999             1998             1997
                                   ------------     ------------     ------------
<S>                                <C>              <C>              <C>
OPERATIONS

     Sales                         $  2,050,700     $  1,936,300     $  1,622,400
     Cost of sales and expenses       2,052,000        1,983,800        1,751,000
                                   ------------     ------------     ------------
     Operating loss                      (1,300)         (47,500)        (128,600)
     Other income (expense)            (138,800)        (144,700)         (91,300)
                                   ------------     ------------     ------------
     Loss before income taxes          (140,100)        (192,200)        (219,900)
     Income tax benefit                  56,000           76,900           88,000
                                   ------------     ------------     ------------

     Net loss                      $    (84,100)    $   (115,300)    $   (131,900)
                                   ============     ============     ============


BALANCE SHEETS

     Current assets                $    135,600     $    135,600
     Noncurrent assets                3,003,900        3,165,600
                                   ------------     ------------
                                   $  3,139,500     $  3,301,200
                                   ============     ============


     Current liabilities           $  1,444,900     $  1,413,900
     Noncurrent liabilities           1,681,600        1,734,400
     Stockholders' equity                13,000          152,900
                                   ------------     ------------
                                   $  3,139,500     $  3,301,200
                                   ============     ============
</TABLE>


                                                                              20
<PAGE>


                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

         (A) 1. FINANCIAL STATEMENTS - Included in Part II, Item 8
                                                                            Page
                                                                            ----
               Independent Auditor's Report                                  18
               Consolidated Balance Sheets at December 25, 1999
                     and December 26, 1998                                   19
               Consolidated Statements of Operations for the years
                     ended December 25, 1999, December 26, 1998
                     and December 27, 1997                                   20
               Consolidated Statements of Stockholders' Equity for
                     the years ended December 25, 1999, December
                     26, 1998 and December 27, 1997                          21
               Consolidated Statements of Cash flows for the years
                     ended December 25, 1999, December 26, 1998
                     and December 27, 1997                                22-23
               Notes to Consolidated Financial Statements                    24

             2. FINANCIAL STATEMENT SCHEDULE - Included in Part IV

               Schedule V - Property and Equipment(1)                        39
               Schedule VI - Accumulated Depreciation of Property
                     and Equipment(1)                                        40
               Schedule VIII - Valuation and Qualifying Accounts(1)          41
               Schedule IX - Short-term Borrowings(1)                        42
               Schedule X - Supplementary Income Statement
                     Information(1)                                          43


         Other schedules are omitted because of the absence of conditions under
         which they are required or because the required information is given in
         the financial statements or notes thereto.

(1) Documents incorporated by reference to Form 10-K as filed for the year
ended 1999.



                   (Balance of page left intentionally blank)



                                       21

<PAGE>


3. EXHIBITS:

             (3) Articles of Incorporation and Bylaws incorporated by reference
                  to Form 10-K as filed for the year ended December 27, 1986.**

             (13) Annual Report to Security Holders.**

             (21) Subsidiaries of Dynamic Homes, Inc.:
                    21.1 Dynamic Homes of Fargo/Moorhead, Inc. - Inactive
                    21.2 Dynamic Homes of Dakota, Inc. - Inactive
                    21.3 Rapid Building Systems, Inc. - Inactive
                    21.4 Shagawa Resort, Inc.

             ** - Omitted

         (B) REPORTS ON FORM 8-K:
                  No reports on Form 8-K have been filed by the registrant
                  during the last quarter of the period covered by this report.










                   (Balance of page left intentionally blank)






                                       22




<PAGE>


                                   SIGNATURES:

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities on the dates indicated.



/s/ Scott D. Lindemann                       /s/ Israel Mirviss
-----------------------------------          -----------------------------------
SCOTT D. LINDEMANN                           ISRAEL MIRVISS,
PRESIDENT, CEO                               CHAIRMAN OF THE BOARD
11/20/00                                     11/20/00

/s/ Ronald L. Gustafson                      /s/ Clyde R. Lund, Jr.
-----------------------------------          -----------------------------------
RONALD L. GUSTAFSON,                         CLYDE R. LUND, JR.,
DIRECTOR                                     SECRETARY
11/20/00                                     11/20/00

/s/ Peter K. Pichetti                        Eldon R. Matz
-----------------------------------          -----------------------------------
PETER K. PICHETTI,                           ELDON R. MATZ,
DIRECTOR                                     CONTROLLER & TREASURER
11/20/00                                     11/20/00




DATED: NOVEMBER 20, 2000




                                       23