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

                                  FORM 10 - QSB

        (MARK ONE)

 [X]  Quarterly Report pursuant to Section 13 or 15(d) of the
      Securities Exchange Act of 1934

                  For the Quarterly Period Ended February 29, 2004 or
                                             -----------------
 [ ]  Transition Report pursuant to Section 13 or 15(d) of the
      Securities Exchange Act of 1934

      For the Transition Period From                 to
                                      --------------     ---------------
                         COMMISSION FILE NUMBER 0-18091

                               RSI HOLDINGS, INC.
        (Exact name of small business issuer as specified in its charter)

          NORTH CAROLINA                             56-1200363
----------------------------------           -------------------------
(State or other jurisdiction of                   (I.R.S. Employer
 incorporation or organization)                  Identification No.)

                      28 East Court Street, P. O. Box 6847
                        Greenville, South Carolina 29606
 ------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (864) 271-7171
 ------------------------------------------------------------------------------
                (Issuer's telephone number, including area code)

                                 Not Applicable
 ------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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 [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

Common Stock, $.01 Par Value - 7,846,455 shares outstanding as of April 14, 2004

Transitional Small Business Disclosure Format (check one):Yes [ ] No [X]



<PAGE>


                                      INDEX


                               RSI HOLDINGS, INC.

<TABLE>
<CAPTION>


PART I.  FINANCIAL INFORMATION                                                                     PAGE

Item 1.  Financial Statements (Unaudited)

<S>                                                                                                   <C>
     Condensed consolidated balance sheet - February 29, 2004                                          1

     Condensed consolidated statements of operations - Three and
     six months ended February 29, 2004 and February 28, 2003                                          2

     Condensed consolidated statements of cash flows - Six
     months ended February 29, 2004 and February 28, 2003                                              3

     Notes to condensed consolidated financial statements -
     February 29, 2004                                                                                 4

Item 2.  Management's discussion and analysis of financial
         condition and results of operations                                                           7

Item 3.  Controls and Procedures                                                                      10

PART II. OTHER INFORMATION                                                                            10

Item 1.  Legal Proceedings                                                                            10

Item 2.  Changes in Securities and Small Business Issuer
                  Purchases of Equity Securities                                                      10

Item 3.  Defaults upon senior securities                                                              10

Item 4.  Submission of Matters to a Vote of Security Holders                                          11

Item 5.  Other Information                                                                            11

Item 6.  Exhibits and Reports on Form 8-K                                                             11

SIGNATURES                                                                                            12


</TABLE>



<PAGE>

                                   RSI HOLDINGS, INC.
                    CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
                                  FEBRUARY 29, 2004

  Assets
Current Assets
      Cash                                                        $    65,670
      Accounts receivable                                             160,943
      Prepaid expenses and other                                       81,158
                                                                  -----------

           Total current assets                                       307,771

Property and equipment
      Cost                                                            134,517
      Less accumulated depreciation                                    59,068
                                                                  -----------

      Property and equipment - net                                     75,449

Other assets:
      Customer related intangible assets, net of
           amortization of $257,732                                 1,678,557
                                                                  -----------

                                                                  $ 2,061,777
                                                                  ===========

  Liabilities and Shareholders' Deficit

Current liabilities
      Accounts payable                                            $    85,230
      Accrued expenses                                                 36,992
      Current maturities of long-term debt                            164,059
                                                                  -----------

           Total current liabilities                                  286,281

Long-term debt and other liabilities
      Long-term debt                                                1,879,039
      Accrued interest                                                177,485

Commitments and contingencies

Shareholders' deficit:
      Common Stock, $.01 par value-authorized
           25,000,000 shares, issued and outstanding
           7,846,455 shares                                            78,464
      Additional paid-in capital                                    4,951,741
      Deficit                                                      (5,311,233)
                                                                  -----------

           Total shareholders' deficit                               (281,028)
                                                                  -----------

                                                                  $ 2,061,777
                                                                  ===========



The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                       1
<PAGE>
<TABLE>
<CAPTION>

                                                    RSI HOLDINGS, INC.
                                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
                         FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 29, 2004 AND FEBRUARY 28, 2003



                                                              For the           For the            For the          For the
                                                           Three months        Six months       Three months       Six months
                                                               Ended             Ended              Ended            Ended
                                                            February 29       February 29        February 28      February 28
                                                               2004               2004              2003              2003
                                                           ------------       ------------      ------------      ------------

<S>                                                         <C>               <C>               <C>              <C>
Revenues from services                                      $1,205,371        $ 2,454,800       $ 1,265,510      $ 2,688,088
Cost of services                                             1,012,012          2,031,779         1,028,591        2,170,652
                                                            ----------        -----------       -----------      -----------

Gross profit                                                   193,359            423,021           236,919          517,436

Expenses:
      Selling, general and administrative                      225,010            439,083           256,741          454,428
                                                            ----------        -----------       -----------      -----------

           Income (loss) from operations                       (31,651)           (16,062)          (19,822)          63,008

Other income (expense):
      Interest income and other                                     21                 55               142              647
      Interest expense                                         (35,438)           (71,465)          (37,446)         (75,379)
                                                            ----------        -----------       -----------      -----------

           Total other income (expense)                        (35,417)           (71,410)          (37,304)         (74,732)
                                                            ----------        -----------       -----------      -----------

Loss before income taxes                                    $  (67,068)       $   (87,472)      $   (57,126)     $   (11,724)
Income tax expense                                                   -                  -                 -                -
                                                            ----------        -----------       -----------      -----------

Net (loss)                                                  $  (67,068)       $   (87,472)      $   (57,126)     $   (11,724)
                                                            ==========        ===========       ===========      ===========

Basic and diluted (loss) per share                          $    (0.01)       $     (0.01)      $     (0.01)     $         -
                                                            ==========        ===========       ===========      ===========

Shares used in computing basic and
      diluted (loss) per share                               7,846,455          7,846,455         7,831,733        7,826,565
                                                            ==========        ===========       ===========      ===========







</TABLE>







The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                       2

<PAGE>
<TABLE>
<CAPTION>

                                                   RSI HOLDINGS, INC.
                         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
                              FOR THE SIX MONTHS ENDED FEBRUARY 29, 2004 AND FEBRUARY 28, 2003



                                                                                                   For the           For the
                                                                                                  Six months       Six months
                                                                                                    Ended             Ended
                                                                                                 February 29       February 28
                                                                                                    2004              2003
                                                                                                 -----------       -----------

OPERATING ACTIVITIES
<S>                                                                                               <C>              <C>
      Net loss                                                                                    $ (87,472)       $ (11,724)
      Adjustments to reconcile net loss to net
           cash (used for) provided by operating activities:
           Depreciation                                                                              11,512           11,073
           Amortization                                                                              64,560           64,440
           Changes in current assets and liabilities                                               (121,785)          51,355
                                                                                                  ---------        ---------

                Net cash (used for) provided by operating activities                               (133,185)         115,144

INVESTING ACTIVITIES
      Purchase of property and equipment                                                             (3,716)         (34,604)
      Purchase of customer intangible assets                                                              -           (4,273)
                                                                                                  ---------        ---------

           Net cash used for investing activities                                                    (3,716)         (38,877)

FINANCING ACTIVITIES
      Proceeds from long-term debt borrowings                                                             -           30,393
      Increase in non-current accrued interest                                                       47,918                -
      Payment of long-term debt                                                                     (78,402)         (73,151)
      Proceeds from issuance of common stock                                                              -            6,500
                                                                                                  ---------        ---------

           Net cash used for financing activities                                                   (30,484)         (36,258)
                                                                                                  ---------        ---------

           Net (decrease) increase in cash                                                         (167,385)          40,009

CASH, BEGINNING OF PERIOD                                                                           233,055          165,267
                                                                                                  ---------        ---------

CASH, END OF PERIOD                                                                               $  65,670        $ 205,276
                                                                                                  =========        =========










</TABLE>




The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                       3

<PAGE>

RSI Holdings, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACTIVITIES

NATURE OF BUSINESS

         The Company's wholly-owned  subsidiary,  Employment Solutions,  Inc., a
South Carolina corporation ("Employment Solutions"), conducts the Company's only
business,  which is the business of locating and  providing  labor to industrial
companies.

BASIS OF PRESENTATION

         The accompanying  unaudited condensed consolidated financial statements
at February 29, 2004 have been prepared in accordance with accounting principles
generally  accepted  in the  United  States of  America  for  interim  financial
information  and  with the  instructions  to Form  10-QSB  and  Item  310(b)  of
Regulation  S-B.  Accordingly,  they  do not  include  all the  information  and
footnotes  required by accounting  principles  generally  accepted in the United
States  of  America  for  complete  financial  statements.  In  the  opinion  of
management,  all adjustments  including  normal  recurring  accruals  considered
necessary for a fair presentation have been included.  For further  information,
refer to the consolidated financial statements and footnotes thereto included in
the Company's annual report on Form 10-KSB for the year ended August 31, 2003.

NET INCOME (LOSS) PER COMMON SHARE

         Basic net income  (loss) per common  share is  computed on the basis of
the weighted  average  number of common shares  outstanding  in accordance  with
Statement of Financial  Accounting Standards (SFAS) No. 128, Earnings per Share.
The treasury  stock method is used to compute the effect of stock options on the
weighted  average number of common shares  outstanding  for the diluted  method.
Since the  Company  incurred a net loss  during  the three and six months  ended
February 29, 2004 and three and six months ended  February 28, 2003,  the effect
of the stock  options on the  treasury  stock  method was  anti-dilutive  in all
periods presented herein.









                                       4
<PAGE>

NOTE 2 - LONG-TERM DEBT AND OTHER LIABILITIES

Long-term debt consists of the following:
<TABLE>

<S>                                                                                              <C>
Unsecured note payable to Minor H. Mickel with interest payable quarterly at 8.0
    percent per year. The unpaid principal balance is due on August 14, 2006.                    $  250,000

Unsecured note payable to Minor H. Mickel with interest payable quarterly at 7.0
     percent per year. The unpaid principal balance is due on February 14, 2007.                  1,200,000

Unsecured notes  payable to Buck A. Mickel,  Charles C. Mickel and Minor M. Shaw
     in the  amount of  $20,000  each with  interest  payable  quarterly  at 7.0
     percent per year. The unpaid principal balance is due on February 25, 2007.                     60,000

Note payable in the original  principal  amount of $800,000 to Eadon  Solutions,
     LLC (formerly Employment Solutions, LLC) in monthly installments of $15,466
     including  interest at 6.0% per year  through  March 4, 2007 secured by the
     outstanding common stock of Employment Solutions, Inc.                                         508,391

Note payable in the original  principal amount of $30,393 to First Citizens Bank
     in monthly  installments  of $520  including  interest at an annual rate of
     approximately 7.0% through October 24, 2008 and is secured by a vehicle.                        24,707
                                                                                                 -----------
                                                                                                  2,043,098
Less current portion                                                                                164,059
                                                                                                 ------------
                                                                                                 $1,879,039
                                                                                                 ==========
</TABLE>

         Buck A.  Mickel is the  President  and Chief  Executive  Officer  and a
director of the Company.  Charles C. Mickel is a Vice  President and director of
the Company.  Buck A.  Mickel,  Charles C. Mickel and Minor M. Shaw are siblings
and Minor H. Mickel is their mother.

         On March 25,  2004,  Minor H. Mickel gave the two notes  payable  above
having  principal  unpaid  balances of $250,000  and  $1,200,000  and the unpaid
accrued  interest  at  February  29,  2004 of $177,485 in equal parts to Buck A.
Mickel, Charles C. Mickel and Minor M. Shaw.

         Buck A. Mickel,  Charles C. Mickel and Minor M. Shaw (and, before March
25, 2004, Minor H. Mickel),  the creditors of the $1,200,000 note payable,  have
permitted the deferral of payment of interest  since the notes  issuance.  Since
November  2003,  these  creditors  have  permitted  the  deferral  of payment of
interest under the other notes payable held by them, in the aggregate  amount of
$310,000.  These  creditors  have agreed  that they will not require  payment of
interest in the next twelve  months.  Management  of the Company could decide at
any time to pay all or part of the accrued  interest if they determine that cash
balances are sufficient to pay the interest without a detrimental  effect on the
future  operations  of the Company.  The long-term  portion of accrued  expenses
consists of interest  that has been accrued on the unsecured  notes  aggregating
$1,510,000 payable to Buck A. Mickel, Charles C. Mickel and Minor M. Shaw.






                                       5

<PAGE>

NOTE 3 - INCOME TAXES

         Net deferred income tax benefits have not been recorded and a valuation
allowance has been recorded relating to temporary  differences since the Company
believes  that it is more likely than not that the  realization  of the deferred
income  tax  assets  will  not be  realized.  The  valuation  allowance  relates
primarily to future  income tax  benefits of net  operating  loss  carryforward.
Management  continues to assess the likelihood of the future  realization of the
deferred  tax assets on a quarterly  basis.  Such  carryforwards  expire in 2006
through 2022.

NOTE 4 - RECENTLY ISSUED ACCOUNTING STANDARDS

         No recently issued  accounting  standards have been proposed or adopted
that are anticipated to have a material effect.


















                                       6
<PAGE>

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

General

         Special Cautionary Notice Regarding Forward-Looking Statements.

         This Report on Form 10-QSB contains various forward-looking statements.
Forward-looking  statements  are indicated by such terms as "expects",  "plans",
"anticipates",  and words to similar effect. Such forward-looking statements are
subject to known and unknown  risks,  uncertainties  and other  factors that may
cause the actual  results,  performance  or  achievements  of the  Company to be
materially different from future results,  performance or achievements expressed
or implied by such  forward-looking  statements.  Important factors ("Cautionary
Statements") that could cause the actual results, performance or achievements of
the Company to differ  materially from the Company's  expectations are disclosed
in this Report on Form 10-QSB.  All written or oral  forward-looking  statements
attributable  to the Company are  expressly  qualified in their  entirety by the
Cautionary Statements.

Results of operations

         During the three  months and six months  ended  February  29,  2004 the
Company's  revenues were $1,205,371 and $2,454,800,  respectively,  all of which
were generated by its wholly-owned subsidiary, Employment Solutions, Inc. (which
we refer to as "Employment  Solutions").  Employment  Solutions operates from an
office facility in Greenwood,  South  Carolina.  Revenues  generated  during the
three and six months ended  February 28, 2003 were  $1,265,510  and  $2,688,088,
respectively.  The  decrease in revenues  during the three and six months  ended
February 29, 2004 as compared to the similar  periods of fiscal year 2003 can be
attributed  to a decrease  in the number of workers  provided.  The  decrease in
average number of workers of 7% during the six months ended February 29, 2004 as
compared to the six months ended  February 28, 2003  accounts for a 12% decrease
in hours worked.  This  decrease  resulted  from reduced  demand for  Employment
Solutions'  services from  existing  customers.  The Company  believes that this
reduction in demand is associated with relatively  high  unemployment  levels in
the areas served by Employment  Solutions  (compared to  unemployment  levels in
recent years),  which increases the availability of alternatives to the services
provided by Employment  Solutions.  The number of workers employed is determined
on a daily basis based on requests from the  customers of Employment  Solutions.
Unless unemployment  levels are reduced in the areas served by the Company,  the
Company expects reduced demand for its services to continue, which will continue
to adversely affect the Company's revenues and income from operations.

         Employment Solutions incurred cost of services during the three and six
months ended February 29, 2004 of $1,012,012 and $2,031,779,  respectively. Cost
of  services  during  the three and six  months  ended  February  28,  2003 were
$1,028,591 and $2,170,652, respectively. These costs include wages paid directly
to the workers,  payroll taxes, workers  compensation  insurance and other costs
directly  associated  with  employment  of the workers.  The decrease in cost of
services  during the three and six months ended February 29, 2004 as compared to
the similar period of fiscal year 2003 can be attributed to a decrease in number
of workers provided and hours worked.

         Selling,  general and administrative  expenses during the three and six
months ended  February 29, 2004 were  $225,010 and  $439,083,  respectively,  as
compared to $256,741 and $454,428, respectively, during the three and six months
ended February 28, 2003.  These  expenses  during the three and six months ended
February  29, 2004,  exclusive  of  Employment  Solutions  operations,  included
salaries  and  related  costs of  $84,601  and  $167,755,  respectively;  legal,
accounting,   and   shareholder   related   expenses  of  $37,490  and  $52,535,
respectively; rent of $8,925 and $17,850, respectively; and other administrative
expenses of $10,078 and $28,286, respectively. The expenses during the three and
six months ended  February  29, 2004 also  included  selling and  administrative
expenses incurred by Employment Solutions of $51,636 and $108,097, respectively;
and the  amortization  of  customer  related  intangible  assets of $32,280  and
$64,560,  respectively.  These  expenses  during the three and six months  ended
February  28, 2003,  exclusive  of  Employment  Solutions  operations,  included
salaries  and  related  costs of  $97,394  and  $171,922,  respectively;  legal,
accounting,   and   shareholder   related   expenses  of  $27,725  and  $39,325,
respectively; rent of $8,900 and $17,750, respectively; and other administrative
expenses of $26,548 and $42,344, respectively. The expenses during the three and


                                       7
<PAGE>

six months ended  February  28, 2003 also  included  selling and  administrative
expenses incurred by Employment Solutions of $63,880 and $118,647, respectively;
and the  amortization  of  customer  related  intangible  assets of $32,294  and
$64,440, respectively.

         Interest  expense incurred during the six months ended February 29 2004
was $71,465 as  compared to $75,379  during the six months  ended  February  28,
2003.  The  reduction  in  interest  expense  results  from  monthly   principal
reductions  of the  note  payable  to Eadon  Solutions,  LLC.  Interest  expense
includes  interest  accrued but not paid during the six months of $41,885 on the
note payable to Minor H. Mickel in the amount of $1,200,000.

Critical Accounting Policy -- Income taxes

         The Company has adopted  various  accounting  policies which govern the
application of accounting  principles generally accepted in the United States of
America  in  the  preparation  of  our  financial  statements.  The  significant
accounting  policies  of the  company  are  described  in the  footnotes  to the
consolidated  financial statements at August 31, 2003 contained in the Company's
Annual Report on Form 10-KSB for the year ended on such date.

         Certain   accounting   policies  involve   significant   judgments  and
assumptions by management  which have a material impact on the carrying value of
certain assets and liabilities; management considers such accounting policies to
be  critical  accounting  policies.   The  judgments  and  assumptions  used  by
management  are based on  historical  experience  and other  factors,  which are
believed to be reasonable under the circumstances.  Because of the nature of the
judgments and assumptions  made by management,  actual results could differ from
these judgments and estimates which could have a material impact on the carrying
values of assets and liabilities and the results of operations of our company.

           The Company  believes  that the  valuation  allowance  related to the
deferred  tax asset is a  critical  accounting  policy  that  requires  the most
significant  judgments and estimates  used in  preparation  of our  consolidated
financial  statements.  When income and  expenses  are  recognized  in different
periods for financial  reporting  purposes than for purposes of computing income
taxes currently payable, deferred tax assets or liabilities are provided on such
temporary differences.  The Company accounts for income taxes in accordance with
SFAS No. 109,  Accounting  for Income  Taxes.  Under SFAS No. 109,  deferred tax
assets and liabilities  are recognized for the expected future tax  consequences
of events that have been recognized in the consolidated  financial statements or
tax return.  Deferred tax assets and  liabilities are measured using the enacted
tax rates  expected  to apply to  taxable  income  in the  years in which  those
temporary differences are expected to be realized or settled.

         At August 31, 2003,  the Company has net operating  loss  carryforwards
("NOLs")  available for income tax purposes of approximately  $12,731,000.  Such
carryforwards  expire in 2006 through  2022.  The  Company's  ability to use its
existing net  operating  loss  carryforward  may be  jeopardized  or lost if the
Company undergoes an "ownership change" as defined by the Internal Revenue Code.
Under SFAS No.  109,  the  Company  can record a net  deferred  tax asset on its
balance sheet and a net deferred tax benefit on its income statement  related to
its NOLs if it believes  that it is more likely than not that it will be able to
utilize its NOLs to offset future  taxable  income  utilizing  certain  criteria
required by SFAS No. 109. If the Company does not believe,  based on the balance
of the  evidence,  that it is more likely than not that it can fully utilize its
NOLs, it must reduce its deferred tax asset to the amount that is expected to be
realized through future realization of profits.

         Because  the  Company  did not have net income in fiscal 2003 and 2002,
SFAS No. 109  required  that the Company not carry any net deferred tax asset on
its balance sheets for August 31, 2003 or record any net deferred tax benefit on


                                       8
<PAGE>

its income statements for the years ended on such dates. If the Company had been
permitted  under  SFAS No.  109 to record a full net  deferred  tax asset on its
balance sheet at August 31, 2003, the amount of the net deferred tax asset would
have been $4,765,000,  and if the Company had similarly been permitted to show a
full net deferred tax benefit on its income  statement for the year ended August
31, 2003, the amount of the benefit would have been $4,000.

         The  analysis of available  evidence is performed on an ongoing  basis.
Adjustments to the valuation allowance are made accordingly. Were the Company to
become profitable before its NOLs expire or are otherwise lost, it would be able
to utilize them to offset future taxable income, reducing its income tax expense
and increasing  its net earnings,  and the Company would be able to record a net
deferred  tax asset on its balance  sheet.  There can be no  assurance  that the
Company  will  become  profitable  or that it will be able to utilize any of its
NOLs. If the Company does become profitable and utilize its NOLs, any recordable
deferred  tax asset could be  substantially  different  from the August 31, 2003
amount set forth in the preceding paragraph.

Liquidity and Capital Resources

         At February 29, 2004,  the  Company's  total  liabilities  exceeded its
assets by $281,028 as compared  to $193,556 at August 31,  2003.  The  Company's
cash balances  decreased from $233,055 at August 31, 2003 to $65,670 at February
29, 2004, a decrease of $167,385.  The decrease in cash includes cash used by an
increase in accounts  receivable of $41,255 and an increase in prepaid  expenses
of $63,205.  All accounts  receivable were collected  subsequent to February 29,
2004. The increase in prepaid  expenses  primarily  consist of a premium paid on
the Company's workers compensation  insurance policy that will be amortized over
the policy  period that expires on September  30, 2004.  The  Company's  working
capital (current assets less current  liabilities)  decreased $56,494 during the
six months ended February 29, 2004 to $21,490.

         The  Company  is  dependent  upon  the  cash  generated  by  Employment
Solutions,  Inc. to meet its cash  liquidity  requirements.  Please refer to the
discussion of the decrease in revenues under "Results of operations".

         Buck A. Mickel,  Charles C. Mickel and Minor M. Shaw (and, before March
25, 2004, Minor H. Mickel),  the creditors of the $1,200,000 note payable,  have
permitted the deferral of payment of interest since the notes issuance.  Buck A.
Mickel is the  President  and Chief  Executive  Officer  and a  director  of the
Company. Charles C. Mickel is a Vice President and director of the Company. Buck
A.  Mickel,  Charles C. Mickel and Minor M. Shaw are  siblings.  Since  November
2003,  these  creditors have permitted the deferral of payment of interest under
the other notes payable held by them, in the aggregate amount of $310,000. These
creditors have agreed that they will not require payment of interest in the next
twelve months.  Management of the Company could decide at any time to pay all or
part of the accrued interest if they determine that cash balances are sufficient
to pay the interest without a detrimental effect on the future operations of the
Company.

         Subject  to the  continued  deferral  of  payment  of  interest  on the
$1,510,000  in aggregate  principal  amount of notes  payable to Buck A. Mickel,
Charles C. Mickel and Minor M. Shaw, the Company  expects that its existing cash
balances and cash  generated by the  operations of Employment  Solutions will be
sufficient to fund its cash requirements  during the next twelve months,  though
the deferral of payment of interest on the  $1,510,000  in  aggregate  principal
amount of  Mickel  notes  and the  continued  amortization  of  intangibles  are
expected to cause negative  shareholders'  equity to continue to increase unless
results of operations improve substantially.  If the Company is able continue to
defer the payment of interest on these notes and if business  conditions  do not
worsen,  the Company  expects its existing cash  balances and cash  generated by
operations to be similarly  sufficient to fund its cash requirements  beyond the
next  twelve  months;  however,  results  of  operations  will  have to  improve
substantially, or the Company will have to obtain capital from other sources, in
order to be able to pay off the $1,510,000  principal plus the accrued  interest
on the Mickel notes at maturity, which become due in 2006 and 2007. There can be
no assurance  that results of  operations  will  improve  substantially  or that
alternative sources of capital will be available at such times.

                                       9
<PAGE>

OFF BALANCE SHEET ARRANGEMENTS

         The Company has no material off-balance sheet arrangements.

Item 3.  Controls and procedures.

         Our  disclosure  controls  and  procedures  are our  controls and other
procedures that are designed to ensure that information required to be disclosed
by us in the  reports we file or submit  under the  Securities  Exchange  Act of
1934, as amended, are recorded,  processed,  summarized and reported, within the
time  periods  specified in the rules and forms of the  Securities  and Exchange
Commission.  Disclosure  controls and  procedures  include  without  limitation,
controls  and  procedures  designed  to ensure that  information  required to be
disclosed  by us in the  reports  we file or submit  under the  Exchange  Act is
accumulated and  communicated  to our management,  including our Chief Executive
Officer and Chief Financial  Officer,  as appropriate to allow timely  decisions
regarding required disclosure.

         Our  management,  with the participation of our Chief Executive Officer
and  our  Chief  Financial  Officer  has  evaluated  the  effectiveness  of  our
disclosure   controls  and  procedures   (as  defined  in  17  C.F.R.   Sections
240.13a-15(e)  and  240.15d-15(e))  as of February 29,  2004,  and based on such
evaluation,  our Chief Executive  Officer and Chief Financial  Officer concluded
that such controls and procedures were effective as of February 29, 2004.

         There were no changes in our internal controls over financial reporting
that  occurred  during  the  three  months  ended  February  29,  2004 that have
materially affected, or are reasonably likely to materially affect, our internal
controls over financial reporting.

PART II.  Other information

ITEM 1.  LEGAL PROCEEDINGS*

ITEM 2.   CHANGES IN SECURITIES AND SMALL BUSINESS ISSUER  PURCHASES  OF  EQUITY
          SECURITIES*

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES*










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<PAGE>

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The  following  summarizes  the votes at the  Annual  Meeting  of the  Company's
shareholders held on January 29, 2004.
<TABLE>
<CAPTION>

                                                                                                 Broker
               Matter                 For         Against        Withheld       Abstentions     Nonvotes

     Election of Directors
     <S>                           <C>              <C>            <C>              <C>                <C>
         Buck A. Mickel            7,624,872        N/A            4,418            N/A                0
         C. C. Guy                 7,625,158        N/A            4,132            N/A                0
         Charles M. Bolt           7,625,158        N/A            4,132            N/A                0
         Joe F. Ogburn             7,625,158        N/A            4,132            N/A                0
         Charles C. Mickel         7,625,158        N/A            4,132            N/A                0

     Ratification of
     Appointment of Elliott
     Davis, LLC for fiscal 2004
                                   7,627,386        83              N/A           1,821                0
</TABLE>

ITEM 5.      OTHER INFORMATION*

*Items  1, 2, 3,  and 5 are not  presented  as they  are not  applicable  or the
information  required  thereunder  is  substantially  the  same  as  information
previously reported.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Listing of Exhibit

                31.1       Section 302 Certification of Chief Executive Officer
                31.2       Section 302 Certification of Chief Financial Officer
                32.1       Section 906 Certification of Chief Executive Officer
                32.2       Section 906 Certification of Chief Financial Officer

           (b) Reports on Form 8-K

                There  were no  reports  on Form 8-K  filed  during  the  fiscal
quarter ended February 29, 2004.









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<PAGE>

                                   SIGNATURES








In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.




                                              RSI HOLDINGS, INC.
                                          ---------------------------------



April 14, 2004                            /s/ Joe F. Ogburn
-----------------------                   ------------------------------
     (Date)                               Joe F. Ogburn,
                                          Treasurer and Chief
                                          Financial Officer
                                          (Principal Accounting Officer)









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