UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


(Mark One)
[ X ]    QUARTERLY REPORT  PURSUANT TO  SECTION 13  OR 15(d)  OF THE  SECURITIES
         EXCHANGE ACT OF 1934

For the quarterly period ended               September 30, 2001
                               -------------------------------------------------

                                       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:    000-17962
                       -----------------


                         Applebee's International, Inc.
              ----------------------------------------------------
             (Exact name of registrant as specified in its charter)

              Delaware                                   43-1461763
  ---------------------------------         ------------------------------------
  (State or other jurisdiction of           (I.R.S. Employer Identification No.)
   incorporation or organization)

          4551 W. 107th Street, Suite 100, Overland Park, Kansas 66207
 -------------------------------------------------------------------------------
              (Address of principal executive offices and zip code)

                                 (913) 967-4000
               ---------------------------------------------------
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.   Yes   X     No
                                        ------     ------

The number of shares of the registrant's common stock  outstanding as of October
25, 2001 was 37,040,324.


                                       1
<PAGE>


                         APPLEBEE'S INTERNATIONAL, INC.
                                    FORM 10-Q
                     FISCAL QUARTER ENDED SEPTEMBER 30, 2001
                                      INDEX

<TABLE>
<CAPTION>

                                                                                                               Page

<S>                                                                                                             <C>
Part I              Financial Information

Item 1.             Consolidated Financial Statements:

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

                    Consolidated Statements of Earnings for the 13 Weeks and 39 Weeks
                       Ended September 30, 2001 and September 24, 2000......................................      4

                    Consolidated Statement of Stockholders' Equity for the
                       39 Weeks Ended September 30, 2001....................................................      5

                    Consolidated Statements of Cash Flows for the 39 Weeks
                       Ended September 30, 2001 and September 24, 2000......................................      6

                    Notes to Consolidated Financial Statements..............................................      8

Item 2.             Management's Discussion and Analysis of
                       Financial Condition and Results of Operations........................................     12

Item 3.             Quantitative and Qualitative Disclosures About Market Risk..............................     18


Part II             Other Information

Item 1.             Legal Proceedings.......................................................................     19

Item 6.             Exhibits and Reports on Form 8-K........................................................     19


Signatures .................................................................................................     20

Exhibit Index...............................................................................................     21

</TABLE>

                                       2
<PAGE>


                 APPLEBEE'S INTERNATIONAL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
                      (in thousands, except share amounts)

<TABLE>
<CAPTION>

                                                                                      September 30,      December 31,
                                                                                          2001               2000
                                                                                      --------------     -------------
                                     ASSETS

<S>                                                                                   <C>                <C>
Current assets:
     Cash and cash equivalents......................................................   $   13,372         $   10,763
     Short-term investments, at market value (amortized cost of $926 in 2001 and
        $1,250 in 2000).............................................................          963              1,312
     Receivables (less allowance for bad debts of $2,740 in 2001 and $2,295 in 2000)       19,969             19,760
     Inventories....................................................................        9,948             12,616
     Prepaid and other current assets...............................................        8,633              6,389
                                                                                      --------------     -------------
        Total current assets........................................................       52,885             50,840
Property and equipment, net.........................................................      327,440            314,216
Goodwill, net.......................................................................       79,290             83,265
Franchise interest and rights, net..................................................        2,574              2,949
Other assets........................................................................       22,351             20,437
                                                                                      --------------     -------------
                                                                                       $  484,540         $  471,707
                                                                                      ==============     =============


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Current portion of long-term debt..............................................   $      818         $      894
     Accounts payable...............................................................       22,867             26,556
     Accrued expenses and other current liabilities.................................       61,012             62,511
     Accrued dividends..............................................................           --              2,774
     Accrued income taxes...........................................................       10,954              1,100
                                                                                      --------------     -------------
        Total current liabilities...................................................       95,651             93,835
                                                                                      --------------     -------------
Non-current liabilities:
     Long-term debt - less current portion..........................................       79,121             90,461
     Deferred income taxes..........................................................          100              4,097
     Other non-current liabilities..................................................        5,599              1,596
                                                                                      --------------     -------------
        Total non-current liabilities...............................................       84,820             96,154
                                                                                      --------------     -------------
        Total liabilities...........................................................      180,471            189,989
                                                                                      --------------     -------------
Commitments and contingencies (Note 2)
Stockholders' equity:
     Preferred stock - par value $0.01 per share:  authorized - 1,000,000 shares;
        no shares issued............................................................           --                 --
     Common stock - par value $0.01 per share:  authorized - 125,000,000 shares;
        issued - 48,225,358 shares..................................................          482                482
     Additional paid-in capital.....................................................      177,886            172,037
     Retained earnings..............................................................      345,130            293,772
     Accumulated other comprehensive income (loss), net of income taxes ............       (2,595)                39
                                                                                      --------------     -------------
                                                                                          520,903            466,330
     Treasury stock - 11,394,299 shares in 2001 and 10,395,795 shares in 2000, at
        cost........................................................................     (216,834)          (184,612)
                                                                                      --------------     -------------
        Total stockholders' equity..................................................      304,069            281,718
                                                                                      --------------     -------------
                                                                                       $  484,540         $  471,707
                                                                                      ==============     =============
</TABLE>

                               See notes to consolidated financial statements.

                                       3
<PAGE>

<TABLE>
<CAPTION>

                 APPLEBEE'S INTERNATIONAL, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF EARNINGS
                                   (Unaudited)
                    (in thousands, except per share amounts)

                                                              13 Weeks Ended                   39 Weeks Ended
                                                       ------------------------------   ------------------------------
                                                       September 30,    September 24,   September 30,    September 24,
                                                           2001            2000              2001             2000
                                                       -------------   --------------   -------------    -------------
<S>                                                     <C>              <C>            <C>              <C>
Revenues:
     Company restaurant sales....................        $ 164,238        $ 151,038      $ 486,416        $ 444,398
     Franchise income............................           23,787           21,252         69,906           61,787
                                                       -------------   --------------   -------------    -------------
        Total operating revenues.................          188,025          172,290        556,322          506,185
                                                       -------------   --------------   -------------    -------------
Cost of company restaurant sales:
     Food and beverage...........................           44,489           41,408        131,427          120,789
     Labor.......................................           52,864           47,703        155,297          140,825
     Direct and occupancy........................           41,459           38,005        123,322          109,760
     Pre-opening expense.........................              632              322            899              831
                                                       -------------   --------------   -------------    -------------
        Total cost of company restaurant sales...          139,444          127,438        410,945          372,205
                                                       -------------   --------------   -------------    -------------
General and administrative expenses..............           19,197           16,224         54,448           48,569
Amortization of intangible assets................            1,463            1,460          4,388            4,366
Loss on disposition of restaurants and equipment.              329              231          1,087              906
                                                       -------------   --------------   -------------    -------------
Operating earnings...............................           27,592           26,937         85,454           80,139
                                                       -------------   --------------   -------------    -------------
Other income (expense):
     Investment income...........................              479              389          1,251            1,105
     Interest expense............................           (1,831)          (2,225)        (6,231)          (6,856)
     Other income (expense)......................              322              (79)           797              342
                                                       -------------   --------------   -------------    -------------
        Total other expense......................           (1,030)          (1,915)        (4,183)          (5,409)
                                                       -------------   --------------   -------------    -------------
Earnings before income taxes.....................           26,562           25,022         81,271           74,730
Income taxes.....................................            9,776            9,208         29,908           27,501
                                                       -------------   --------------   -------------    -------------
Net earnings.....................................        $  16,786      $    15,814      $  51,363        $  47,229
                                                       =============   ==============   =============    =============

Basic net earnings per common share..............        $    0.45      $      0.40      $    1.39        $    1.19
                                                       =============   ==============   =============    =============
Diluted net earnings per common share............        $    0.44      $      0.40      $    1.36        $    1.18
                                                       =============   ==============   =============    =============

Basic weighted average shares outstanding........           36,911           39,147         36,980           39,729
                                                       =============   ==============   =============    =============
Diluted weighted average shares outstanding......           37,880           39,280         37,824           39,940
                                                       =============   ==============   =============    =============


</TABLE>



                 See notes to consolidated financial statements.


                                       4
<PAGE>


                 APPLEBEE'S INTERNATIONAL, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                   (Unaudited)
                      (in thousands, except share amounts)

<TABLE>
<CAPTION>



                                                                                         Accumulated
                                          Common Stock         Additional                    Other                     Total
                                    -------------------------   Paid-In      Retained   Comprehensive   Treasury   Stockholders'
                                       Shares       Amount      Capital      Earnings    Income (Loss)    Stock        Equity
                                    -------------- ---------- ------------ ------------ -------------- ---------- ---------------

<S>                                  <C>             <C>       <C>          <C>           <C>         <C>           <C>
alance, December 31, 2000..........   48,225,358      $ 482     $ 172,037    $ 293,772     $      39   $(184,612)    $ 281,718

   Comprehensive income:
     Net earnings..................        --           --           --         51,363            --        --          51,363
     Change in unrealized gain on
       short-term investments,
       net of income taxes.........        --           --           --            --            (16)       --             (16)
     Transition adjustment related
       to financial instruments,
       net of taxes................        --           --           --            --           (250)       --            (250)
     Loss on financial
       instruments, net of taxes...        --           --           --            --         (2,368)       --          (2,368)

                                    -------------- ---------- ------------ ------------ -------------- ----------- --------------
   Total comprehensive income......        --           --           --         51,363        (2,634)       --          48,729
                                    -------------- ---------- ------------ ------------ -------------- ----------- --------------

   Purchases of treasury stock.....        --           --           --            --             --     (44,987)      (44,987)
   Stock options exercised and
     related tax benefit...........        --           --          4,772          --             --      11,294        16,066
   Shares issued under employee
     stock and 401(k) plans........        --           --            716          --             --       1,141         1,857
    Restricted stock shares awarded
     under equity incentive plan,
     net of cancellations..........        --           --           (202)         --             --         330           128
   Unearned compensation relating
     to restricted shares..........        --           --            203          --             --         --            203
   Notes receivable from officers
     for stock sales...............        --           --            360          --             --         --            360
   Dividends paid for fractional
     shares........................        --           --           --             (5)           --         --             (5)
                                    -------------- ---------- ------------ ------------ -------------- ----------- --------------

Balance, September 30, 2001........   48,225,358      $ 482     $ 177,886    $ 345,130     $  (2,595)  $(216,834)    $ 304,069
                                    ============== ========== ============ ============ ============== =========== ==============

</TABLE>

                 See notes to consolidated financial statements.

                                       5
<PAGE>


                 APPLEBEE'S INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                                             39 Weeks Ended
                                                                                   -----------------------------------
                                                                                   September 30,       September 24,
                                                                                        2001               2000
                                                                                   ---------------    ----------------
<S>                                                                                 <C>                <C>
       CASH FLOWS FROM OPERATING ACTIVITIES:
            Net earnings.....................................................        $    51,363        $    47,229
            Adjustments to reconcile net earnings to net
               cash provided by operating activities:
               Depreciation and amortization.................................             23,544              21,999
               Amortization of intangible assets.............................              4,388               4,366
               Amortization of deferred financing costs......................                544                 537
               Deferred income tax benefit (provision).......................             (3,503)              1,310
               Loss on disposition of restaurants and equipment..............              1,087                 906
            Changes in assets and liabilities:
               Receivables...................................................               (209)             (4,851)
               Inventories...................................................              2,668                (619)
               Prepaid and other current assets..............................             (1,205)             (4,266)
               Accounts payable..............................................             (3,689)             12,692
               Accrued expenses and other current liabilities................               (471)              1,548
               Accrued income taxes..........................................              9,854                (303)
               Other non-current liabilities.................................               (140)                (83)
               Income tax benefit from exercise of options...................              3,017                 110
               Other.........................................................             (1,897)               (953)
                                                                                   ---------------    ----------------
               NET CASH PROVIDED BY OPERATING ACTIVITIES.....................             85,351              79,622
                                                                                   ---------------    ----------------
       CASH FLOWS FROM INVESTING ACTIVITIES:
            Purchases of property and equipment..............................            (38,181)            (30,680)
            Purchases of short-term investments..............................               (149)               (100)
            Maturities and sales of short-term investments...................                474               1,050
            Equity investment in unaffiliated company........................                --               (2,000)
            Proceeds from sale of restaurants and equipment..................                433                  11
                                                                                   ---------------    ----------------
               NET CASH USED BY INVESTING ACTIVITIES.........................            (37,423)            (31,719)
                                                                                   ---------------    ----------------
       CASH FLOWS FROM FINANCING ACTIVITIES:
            Purchases of treasury stock......................................            (44,987)            (42,167)
            Dividends paid...................................................             (2,779)             (2,660)
            Issuance of common stock upon exercise of stock options..........             13,049               5,281
            Shares sold under employee stock purchase plan...................                828                 892
            Payments on long-term debt.......................................            (11,430)             (2,556)
                                                                                   ---------------    ----------------
               NET CASH USED BY FINANCING ACTIVITIES.........................            (45,319)            (41,210)
                                                                                   ---------------    ----------------
       NET INCREASE IN CASH AND CASH EQUIVALENTS.............................              2,609               6,693
       CASH AND CASH EQUIVALENTS, beginning of period........................             10,763               1,427
                                                                                   ---------------    ----------------
       CASH AND CASH EQUIVALENTS, end of period..............................        $    13,372        $      8,120
                                                                                   ===============    ================


</TABLE>

                 See notes to consolidated financial statements.

                                       6
<PAGE>


                 APPLEBEE'S INTERNATIONAL, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)
                                   (Unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>

                                                                                            39 Weeks Ended
                                                                                 -------------------------------------
                                                                                  September 30,       September 24,
                                                                                      2001                 2000
                                                                                 ----------------    -----------------

<S>                                                                               <C>                 <C>
Supplemental disclosures of cash flow information:
     Cash paid during the 39 week period for:
       Income taxes........................................................         $   20,483          $   31,272
                                                                                 ================    =================
       Interest............................................................         $    5,676          $    6,083
                                                                                 ================    =================
</TABLE>



Disclosure of Accounting Policy:

For purposes of the consolidated statements of cash flows, the Company considers
all highly liquid investments purchased with a maturity of three months  or less
to be cash equivalents.


                 See notes to consolidated financial statements.



                                       7
<PAGE>


                 APPLEBEE'S INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.    Basis of Presentation

Our  consolidated  financial  statements  included  in this  Form 10-Q have been
prepared without audit (except that the balance sheet information as of December
31, 2000 has been  derived from  consolidated  financial  statements  which were
audited) in accordance  with the rules and  regulations  of the  Securities  and
Exchange  Commission.  Although  certain  information  and footnote  disclosures
normally included in financial statements prepared in accordance with accounting
principles  generally  accepted  in the  United  States  of  America  have  been
condensed or omitted,  we believe that the  disclosures are adequate to make the
information presented not misleading.  The accompanying  consolidated  financial
statements should be read in conjunction with the audited  financial  statements
and notes thereto included in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2000.

We  believe  that  all   adjustments,   consisting  only  of  normal   recurring
adjustments,  necessary  for a fair  presentation  of the results of the interim
periods  presented  have been made.  The results of  operations  for the interim
periods  presented are not necessarily  indicative of the results to be expected
for the full year.

We have made certain  reclassifications to the consolidated financial statements
to conform to the 2001 presentation.

2.  Commitments and Contingencies

Litigation,  claims and  disputes:  We are  involved  in various  legal  actions
arising  in the  normal  course of  business.  These  matters  include,  without
limitation,  such matters as  employment  law related  claims and disputes  with
certain  international  franchisees  regarding  disclosures we allegedly made or
omitted. In each instance,  we believe that we have meritorious  defenses to the
allegations made and we are vigorously defending these claims.

While the  resolution of the matters  described  above may have an impact on the
financial results for the period in which they are resolved, we believe that the
ultimate  disposition  of these  matters  will  not,  in the  aggregate,  have a
material adverse effect upon our business or consolidated financial position.

Franchise  financing:  In 1992,  we entered into an  agreement  with a financing
source to provide up to  $75,000,000  of  financing to our  franchisees  to fund
development  of new  franchise  restaurants.  We provided a limited  guaranty of
loans  made  under the  agreement.  Our  maximum  recourse  obligation  for each
long-term  loan is 10% of the  amount  funded,  and  this is  gradually  reduced
beginning in the second year of each loan.  After the seventh year of each loan,
it  decreases  to  zero.  Approximately  $49,000,000  was  funded  through  this
financing  source.  Of this,  approximately  $2,500,000  was  outstanding  as of
September  30,  2001.  This  agreement  expired on December 31, 1994 and was not
renewed.

Lease guaranties:  In connection with the sale of restaurants to franchisees and
other parties, we have, in certain cases,  remained  contingently liable for the
remaining  lease  payments.  As of September 30, 2001,  the aggregate  amount of
these  lease  payments  totaled  approximately  $27,600,000.   The  buyers  have
indemnified us from any losses related to these guaranties.

                                       8
<PAGE>


Philadelphia  divestiture:  In  connection  with  the  sale of the  Philadelphia
restaurants,  we provided a guarantee to a franchise group totaling  $1,250,000.
As of September 30, 2001, approximately $500,000 remains outstanding.

Severance  agreements:  We have severance and employment agreements with certain
officers  providing for severance  payments to be made in the event the employee
resigns or is terminated  related to a change in control.  The agreements define
the  circumstances  which will constitute a change in control.  If the severance
payments had been due as of September  30, 2001,  we would have been required to
make payments totaling approximately  $7,700,000. In addition, we have severance
and  employment   agreements  with  certain  officers  which  contain  severance
provisions  not  related to a change in  control.  Those  provisions  would have
required  aggregate  payments of  approximately  $4,300,000 if such officers had
been terminated as of September 30, 2001.

3.  Earnings Per Share

We compute  basic  earnings  per share by dividing  income  available  to common
shareholders by the weighted average number of common shares outstanding for the
reporting  period.  Diluted  earnings per share reflects the potential  dilution
that could occur if holders of options or other  contracts to issue common stock
exercised or converted  their  holdings  into common  stock.  Outstanding  stock
options and performance  shares  represent the only dilutive effects on weighted
average  shares.  The chart below  presents a  reconciliation  between basic and
diluted weighted average shares  outstanding and the related earnings per share.
All amounts in the chart except per share amounts are expressed in thousands.



<TABLE>
<CAPTION>

                                                            13 Weeks Ended                   39 Weeks Ended
                                                   -------------------------------  -------------------------------
                                                    September 30,   September 24,    September 30,   September 24,
                                                        2001             2000            2001             2000
                                                   --------------- ---------------  --------------- ---------------

<S>                                                 <C>             <C>              <C>             <C>
Net earnings......................................   $   16,786      $    15,814      $   51,363      $    47,229
                                                   =============== ===============  =============== ===============

Basic weighted average shares outstanding.........       36,911           39,147          36,980           39,729
Dilutive effect of stock options and
     performance shares...........................          969              133             844              211
                                                   --------------- ---------------  --------------- ---------------
Diluted weighted average shares outstanding.......       37,880           39,280          37,824           39,940
                                                   =============== ===============  =============== ===============

Basic net earnings per common share...............   $     0.45      $      0.40      $     1.39      $      1.19
                                                   =============== ===============  =============== ===============
Diluted net earnings per common share.............   $     0.44      $      0.40      $     1.36      $      1.18
                                                   =============== ===============  =============== ===============
</TABLE>


4.  Stock Split

On May 10, 2001, we declared a three-for-two stock split, effected in the form
of a 50% stock dividend, to shareholders of record on May 25, 2001, payable on
June 12, 2001. We issued approximately 16,100,000 shares of common stock as a
result of the stock split. All references to the number of shares and per share
amounts of common stock have been restated to reflect the stock split. We have
reclassified an amount equal to the par value of the number of shares issued to
common stock from retained earnings.


                                       9

<PAGE>

5.  New Accounting Pronouncements

Effective  January 1, 2001, we adopted the  provisions of Statement of Financial
Accounting  Standards ("SFAS") No. 133,  "Accounting for Derivative  Instruments
and Hedging Activities" issued by the Financial Accounting Standards Board. SFAS
No.  133,  as  amended  by SFAS Nos.  137 and 138,  establishes  accounting  and
reporting  standards  for  derivative  instruments  and hedging  activities.  It
requires an entity to recognize all  derivatives as either assets or liabilities
on the balance sheet.  The statement also requires  changes in the fair value of
the  derivative  instruments  to be  recorded  in either net  earnings  or other
comprehensive income depending on their intended use.

We have  interest  rate swap  agreements to manage our exposure to interest rate
fluctuations.  The swap agreements  effectively  fix the underlying  three-month
LIBOR  interest rate on  $75,000,000  of our senior  credit  facilities to rates
ranging from 5.91% to 6.05%.  The  estimated  fair value of these  agreements at
September  30,  2001 was a net  payable of  $4,143,000  and is included in other
non-current  liabilities on the accompanying  balance sheets.  Our interest rate
swap  agreements meet the criteria for hedge  accounting  under SFAS No. 133 and
accordingly,  the cumulative after-tax fair value of the interest rate hedges is
included  as a  reduction  of other  comprehensive  income.  As a result  of the
refinancing  of our  existing  credit  agreement  (see  Note 6),  we  expect  to
terminate our interest rate swap agreements.

In July 2001,  the  Financial  Accounting  Standards  Board issued SFAS No. 141,
"Business  Combinations"  and SFAS  No.  142,  "Goodwill  and  Other  Intangible
Assets." SFAS No. 141 requires that all business  combinations  be accounted for
using the purchase  method of accounting  and requires  separate  recognition of
intangible  assets that meet certain  criteria.  This  statement  applies to all
business combinations after June 30, 2001.

SFAS No.  142  requires  that an  intangible  asset  that is  acquired  shall be
initially  recognized and measured based on its fair value.  This statement also
provides  that  goodwill  should  not be  amortized,  but  shall be  tested  for
impairment  annually,  or more frequently if  circumstances  indicate  potential
impairment,  through a comparison of fair value to its carrying amount. SFAS No.
142 is effective for fiscal periods  beginning  after December 15, 2001. We will
continue to amortize  existing goodwill through the remainder of fiscal 2001, at
which time amortization  will cease and we will perform a transitional  goodwill
impairment  test. We are currently  evaluating  the impact of the new accounting
standards on existing goodwill and other intangible  assets. The ultimate impact
of  the  new  accounting  standards  has  not  yet  been  determined.   Goodwill
amortization  expense for the  thirty-nine  weeks ended  September  30, 2001 was
$3,975,000.

In October 2001, the Financial  Accounting  Standards Board issued SFAS No. 144,
"Accounting for the Impairment of Long-Lived  Assets" which  supersedes SFAS No.
121,  "Accounting  for the  Impairment of Long-Lived  Assets and for  Long-Lived
Assets to be Disposed of" and the accounting and reporting provisions of APB No.
30,  "Reporting the Results of Operations - Reporting the Effects of Disposal of
a Segment of a Business,  and Extraordinary,  Unusual and Infrequently Occurring
Events and Transactions"  for the disposal of a segment of a business.  SFAS No.
144 retains  many of the  provisions  of SFAS No.  121,  but  addresses  certain
implementation issues associated with that Statement. We will adopt SFAS No. 144
beginning in fiscal 2002. We have not yet  determined the impact of SFAS No. 144
on our consolidated financial statements.

                                       10
<PAGE>



6.  Financing

In November  2001,  we anticipate  completing  the  refinancing  of our existing
credit facilities. The new bank credit agreement will provide for a $150,000,000
three-year  unsecured  working capital facility of which $25,000,000 may be used
for the issuance of letters of credit and  $5,000,000 may be used for short-term
borrowings.  The  proceeds  will be used to repay  indebtedness  related  to our
existing credit facilities and for general corporate purposes.

The facility bears interest at either the bank's prime rate or LIBOR plus 1%, at
our  option.  We are  required  to pay a  commitment  fee of 0.20% on any unused
portion of the  facility.  The interest rate and  commitment  fee are subject to
change based upon our leverage ratio.  The facility is subject to standard other
terms, conditions, covenants, and fees.

As a result of this refinancing,  we will write-off the remaining balance of the
deferred  financing  costs  related to our existing  agreement and terminate our
interest rate swap  agreements.  The costs associated with this refinancing will
be reflected in the  consolidated  statement of income for the fourth quarter of
2001.  As of  September  30,  2001,  these costs  would have been  approximately
$3,900,000, net of tax.


                                       11

<PAGE>



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

General

Our revenues are generated from two primary sources:

o   Company restaurant sales (food and beverage sales)
o   Franchise income

Franchise  income consists of franchise  restaurant  royalties  (generally 4% of
each  franchise  restaurant's  monthly  gross sales) and  franchise  fees (which
typically  range from $30,000 to $35,000 for each restaurant  opened).  Beverage
sales include sales of alcoholic  beverages,  while non-alcoholic  beverages are
included in food sales.

Certain expenses relate only to company operated restaurants. These include:

o Food and beverage costs
o Labor costs
o Direct and occupancy costs
o Pre-opening expenses

Other expenses,  such as general and administrative  and amortization  expenses,
relate to both company operated restaurants and franchise operations.

We operate on a 52 or 53 week fiscal year ending on the last Sunday in December.
Our fiscal  quarters  ended  September  30,  2001 and  September  24,  2000 each
contained 13 weeks and are  referred to hereafter as the "2001  quarter" and the
"2000 quarter",  respectively.  Our 39 week periods ended September 30, 2001 and
September 24, 2000 are referred to hereafter as the "2001  year-to-date  period"
and the "2000 year-to-date period," respectively.


                                       12


<PAGE>


Results of Operations

The  following  table  contains   information   derived  from  our  consolidated
statements of earnings  expressed as a percentage of total  operating  revenues,
except where otherwise noted. Percentages may not add due to rounding.
<TABLE>
<CAPTION>

                                                            13 Weeks Ended                         39 Weeks Ended
                                                  -----------------------------------    ------------------------------------
                                                   September 30,       September 24,      September 30,       September 24,
                                                       2001                2000               2001                2000
                                                  ----------------    ---------------    ----------------    ----------------
<S>                                                    <C>                 <C>                <C>                 <C>
Revenues:
     Company restaurant sales................            87.3%               87.7%              87.4%               87.8%
     Franchise income........................            12.7                12.3               12.6                12.2
                                                  ----------------    ---------------    ----------------    ----------------
        Total operating revenues.............           100.0%              100.0%             100.0%              100.0%
                                                  ================    ===============    ================    ================

Cost of sales (as a percentage of company
    restaurant sales):
     Food and beverage.......................            27.1%               27.4%              27.0%               27.2%
     Labor...................................            32.2                31.6               31.9                31.7
     Direct and occupancy....................            25.2                25.2               25.4                24.7
     Pre-opening expense.....................             0.4                 0.2                0.2                 0.2
                                                  ----------------    ---------------    ----------------    ----------------
        Total cost of sales..................            84.9%               84.4%              84.5%               83.8%
                                                  ================    ===============    ================    ================
General and administrative expenses..........            10.2%                9.4%               9.8%                9.6%
Amortization of intangible assets............             0.8                 0.8                0.8                 0.9
Loss on disposition of restaurants
  and equipment..............................             0.2                 0.1                0.2                 0.2
                                                  ----------------    ---------------    ----------------    ----------------
Operating earnings...........................            14.7                15.6               15.4                15.8
                                                  ----------------    ---------------    ----------------    ----------------
Other income (expense):
     Investment income.......................             0.3                 0.2                0.2                 0.2
     Interest expense........................            (1.0)               (1.3)              (1.1)               (1.4)
     Other income............................             0.2                  --                0.1                 0.1
                                                  ----------------    ---------------    ----------------    ----------------
        Total other expense..................            (0.5)               (1.1)              (0.8)               (1.1)
                                                  ----------------    ---------------    ----------------    ----------------
Earnings before income taxes.................            14.1                14.5               14.6                14.8
Income taxes.................................             5.2                 5.3                5.4                 5.4
                                                  ----------------    ---------------    ----------------    ----------------
Net earnings.................................             8.9%                9.2%               9.2%                9.3%
                                                  ================    ===============    ================    ================
</TABLE>



                                       13


<PAGE>


The following table sets forth certain unaudited financial information and other
restaurant data relating to company and franchise restaurants, as reported to us
by franchisees:
<TABLE>
<CAPTION>

                                                           13 Weeks Ended                   39 Weeks Ended
                                                    -------------------------------  -------------------------------
                                                     September 30,   September 24,    September 30,   September 24,
                                                          2001            2000            2001             2000
                                                    --------------- ---------------  ---------------  --------------
<S>                                                  <C>            <C>              <C>              <C>
 Number of restaurants:
      Company:
          Beginning of period.....................          289             268              285              262
          Restaurant openings.....................            9               5               13               13
          Restaurant closings.....................           --              --               --               (2)
                                                    --------------- ---------------  ---------------  --------------
          End of period...........................          298             273              298              273
                                                    --------------- ---------------  ---------------  --------------
      Franchise:
          Beginning of period.....................        1,035             942            1,001              906
          Restaurant openings.....................           25              27               61               67
          Restaurant closings.....................           --              --               (2)              (4)
                                                    --------------- ---------------  ---------------  --------------
          End of period...........................        1,060             969            1,060              969
                                                    --------------- ---------------  ---------------  --------------
      Total:
          Beginning of period.....................        1,324           1,210            1,286            1,168
          Restaurant openings.....................           34              32               74               80
          Restaurant closings.....................           --              --               (2)              (6)
                                                    --------------- ---------------  ---------------  --------------
          End of period...........................        1,358           1,242            1,358            1,242
                                                    =============== ===============  ===============  ==============

 Weighted average weekly sales per restaurant:
          Company.................................    $  43,118      $   42,799       $   43,126       $   42,591
          Franchise...............................    $  42,680      $   41,536       $   42,646       $   41,660
          Total...................................    $  42,776      $   41,815       $   42,752       $   41,868
 Change in comparable restaurant sales:(1)
          Company.................................          1.9%            1.1%             2.9%             2.5%
          Franchise...............................          2.9%            1.6%             3.0%             2.2%
          Total...................................          2.7%            1.5%             3.0%             2.2%

 Total system sales (in thousands)................    $ 745,887      $  667,494       $2,191,326       $1,959,837










<FN>


(1)  When computing comparable restaurant sales,  restaurants open for at  least
     18 months are compared from period to period.
</FN>

</TABLE>



                                       14


<PAGE>



Company Restaurant Sales.  Total company restaurant sales increased  $13,200,000
(9%) from  $151,038,000  in the 2000 quarter to $164,238,000 in the 2001 quarter
and increased $42,018,000 (9%) from $444,398,000 in the 2000 year-to-date period
to  $486,416,000  in the 2001  year-to-date  period  due  primarily  to  company
restaurant openings and increases in comparable restaurant sales.

Comparable restaurant sales at company restaurants increased by 1.9% and 2.9% in
the  2001  quarter  and the 2001  year-to-date  period,  respectively.  Weighted
average weekly sales at company  restaurants  increased 0.7% from $42,799 in the
2000 quarter to $43,118 in the 2001 quarter and  increased  1.3% from $42,591 in
the 2000 year-to-date period to $43,126 in the 2001 year-to-date  period.  These
increases were due primarily to an increase in the average guest check resulting
from the company's  food  promotions and menu price  increases of  approximately
2.0%.

Franchise  Income.  Overall  franchise  income  increased  $2,535,000 (12%) from
$21,252,000 in the 2000 quarter to $23,787,000 in the 2001 quarter and increased
$8,119,000 (13%) from $61,787,000 in the 2000 year-to-date period to $69,906,000
in the 2001  year-to-date  period.  These  increases  were due  primarily to the
increased number of franchise Applebee's  restaurants  operating during the 2001
quarter and 2001  year-to-date  period and  increases in  comparable  restaurant
sales. Weighted average weekly sales at franchise restaurants increased 2.8% and
2.4%  in the  2001  quarter  and  2001  year-to-date  period,  respectively  and
franchise  comparable  restaurant  sales  increased  2.9%  and  3.0% in the 2001
quarter and 2001 year-to-date periods, respectively.

Cost of Company  Restaurant  Sales. Food and beverage costs decreased from 27.4%
in the 2000 quarter to 27.1% in the 2001 quarter and decreased from 27.2% in the
2000 year-to-date period to 27.0% in the 2001 year-to-date period. Both the 2001
quarter and the 2001 year-to-date  periods were favorably impacted by menu price
increases in 2001.

Labor  costs  increased  from 31.6% and 31.7% in the 2000  quarter  and the 2000
year-to-date  period,  respectively,  to 32.2% and 31.9% in the 2001 quarter and
2001 year-to-date  period,  respectively.  These increases were due primarily to
continued  pressure on management  costs due to low  unemployment as well as the
highly competitive nature of the restaurant industry.

Direct and occupancy costs were 25.2% in both the 2000 quarter and 2001 quarter.
Direct and occupancy costs increased from 24.7% in the 2000 year-to-date  period
to 25.4% in the 2001  year-to-date  period.  This  increase was due primarily to
higher utility costs and repairs and maintenance expense.

General  and  Administrative  Expenses.   General  and  administrative  expenses
increased  from  9.4% in the 2000  quarter  to 10.2%  in the  2001  quarter  and
increased  from  9.6% in the  2000  year-to-date  period  to  9.8%  in the  2001
year-to-date period.  General and administrative  expenses were impacted in both
the 2001  quarter  and 2001  year-to-date  period by costs  associated  with our
purchasing  supply chain and strategic brand  assessment  projects.  These costs
were partially offset by the absorption of general and  administrative  expenses
over a larger revenue base.

Income Taxes.  The effective income tax rate, as a percentage of earnings before
income taxes, was 36.8% in both the 2000 quarter and 2000  year-to-date  period,
as well as the 2001 quarter and the 2001 year-to-date period.

                                       15
<PAGE>


Liquidity and Capital Resources

Our need for capital  resources  historically has resulted from the construction
and acquisition of restaurants. For the foreseeable future, this should continue
to be the case.  In the past,  we have  obtained  capital  through  public stock
offerings,  debt financing, and our ongoing operations.  Income from our ongoing
operations includes cash generated from company and franchise operations, credit
from trade suppliers, real estate lease financing, and landlord contributions to
leasehold  improvements.  We have also used our common stock as consideration in
the acquisition of restaurants.  In addition, we have assumed debt or issued new
debt in connection with certain mergers and acquisitions.

Capital expenditures were $46,220,000 in fiscal year 2000 and $38,181,000 in the
2001 year-to-date  period. In 2001, we currently expect to open approximately 25
restaurants and capital  expenditures are expected to be between $50,000,000 and
$55,000,000. ___ These expenditures will primarily be for the development of new
restaurants,  refurbishment and capital replacement in existing restaurants, and
the  enhancement  of  information  systems.  Because  we expect to  continue  to
purchase a portion of our sites, the amount of actual capital  expenditures will
be dependent  upon,  among other things,  the  proportion of leased versus owned
properties.  In  addition,  if  we  open  more  restaurants  than  we  currently
anticipate or acquire  additional  restaurants,  our capital  requirements  will
increase accordingly.

Our senior  term loan and  working  capital  facilities  are  subject to various
covenants and restrictions which, among other things, require the maintenance of
stipulated fixed charge,  interest coverage and leverage ratios, as defined, and
limit additional  indebtedness  and capital  expenditures in excess of specified
amounts.  The credit  agreement  permits annual cash dividends of the greater of
$5,000,000 or 50% of consolidated  net income.  In addition,  in April 2000, the
credit agreement was amended to permit additional repurchases of common stock of
up to $50,000,000 through December 31, 2001. We are currently in compliance with
the covenants contained in our credit agreement.

In February  2001,  our Board of Directors  authorized  the  repurchase of up to
$55,000,000 of our common stock through 2001,  subject to market  conditions and
applicable  restrictions  imposed by our credit  agreement.  As of September 30,
2001,  $20,626,000 remains available under this  authorization.  During 2001, we
have  repurchased  1,909,000  shares of our common stock at an average  price of
$23.56 per share for an aggregate  cost of  $44,987,000  under this and previous
authorizations.

In November  2001,  we anticipate  completing  the  refinancing  of our existing
credit facilities. The new bank credit agreement will provide for a $150,000,000
three-year  unsecured  working capital facility of which $25,000,000 may be used
for the issuance of letters of credit and  $5,000,000 may be used for short-term
borrowings.  The  proceeds  will be used to repay  indebtedness  related  to our
existing credit facilities and for general corporate purposes.

As of September 30, 2001,  our liquid assets totaled  $14,335,000.  These assets
consisted  of cash  and  cash  equivalents  in the  amount  of  $13,372,000  and
short-term  investments in the amount of $963,000.  The working  capital deficit
decreased  from  $42,995,000  as of  December  31,  2000  to  $42,766,000  as of
September 30, 2001. As of September 30, 2001, we had no  outstanding  borrowings
under our working capital or line of credit  facilities,  and standby letters of
credit  totaling   $6,313,000  were  outstanding  under  our  letter  of  credit
facilities.

                                       16
<PAGE>

We believe that our liquid assets and cash generated from  operations,  combined
with borrowings  available under our credit facilities,  will provide sufficient
funds for our  operating,  capital and other  requirements  for the  foreseeable
future.

Inflation

Substantial  increases in costs and expenses could impact our operating  results
to the extent such increases cannot be passed along to customers. In particular,
increases  in  food,  supplies,  labor  and  operating  expenses  could  have  a
significant  impact on our operating  results.  We do not believe that inflation
has materially affected our operating results during the past three years.

A majority of our  employees  are paid hourly rates related to federal and state
minimum  wage laws and  various  laws that allow for  credits to that wage.  The
Federal  government  continues  to consider  an  increase  in the minimum  wage.
Several  state  governments  have  increased  the  minimum  wage and other state
governments are also discussing an increased  minimum wage. In the past, we have
been able to minimize  the effect of these  increases  through food and beverage
price  increases or  improvements  in efficiency and  productivity,  and we will
attempt to do so in the future.  We cannot guarantee,  however,  that all future
cost increases can be reflected in our prices or that  increased  prices will be
absorbed by customers without at least somewhat diminishing customer spending in
our restaurants.

New Accounting Pronouncements

Effective  January  1,  2001,  we  adopted  the  provisions  of  SFAS  No.  133,
"Accounting  for Derivative  Instruments and Hedging  Activities"  issued by the
Financial  Accounting Standards Board. SFAS No. 133, as amended by SFAS Nos. 137
and  138,   establishes   accounting  and  reporting  standards  for  derivative
instruments  and hedging  activities.  It requires  an entity to  recognize  all
derivatives as either assets or liabilities on the balance sheet.  The statement
also  requires  changes in the fair value of the  derivative  instruments  to be
recorded in either net earnings or other comprehensive income depending on their
intended use.

We have  interest  rate swap  agreements to manage our exposure to interest rate
fluctuations.  The swap agreements  effectively  fix the underlying  three-month
LIBOR  interest rate on  $75,000,000  of our senior  credit  facilities to rates
ranging from 5.91% to 6.05%.  The  estimated  fair value of these  agreements at
September  30,  2001 was a net  payable of  $4,143,000  and is included in other
non-current  liabilities on the accompanying  balance sheets.  Our interest rate
swap  agreements meet the criteria for hedge  accounting  under SFAS No. 133 and
accordingly,  the cumulative after-tax fair value of the interest rate hedges is
included  as a  reduction  of other  comprehensive  income.  As a result  of the
refinancing  of our  existing  credit  agreement,  we  expect to  terminate  our
interest rate swap agreements.

In July 2001,  the  Financial  Accounting  Standards  Board issued SFAS No. 141,
"Business  Combinations"  and SFAS  No.  142,  "Goodwill  and  Other  Intangible
Assets." SFAS No. 141 requires that all business  combinations  be accounted for
using the purchase  method of accounting  and requires  separate  recognition of
intangible  assets that meet certain  criteria.  This  statement  applies to all
business combinations after June 30, 2001.


                                       17
<PAGE>



SFAS No.  142  requires  that an  intangible  asset  that is  acquired  shall be
initially  recognized and measured based on its fair value.  This statement also
provides  that  goodwill  should  not be  amortized,  but  shall be  tested  for
impairment  annually,  or more frequently if  circumstances  indicate  potential
impairment,  through a comparison of fair value to its carrying amount. SFAS No.
142 is effective for fiscal periods  beginning  after December 15, 2001. We will
continue to amortize  existing goodwill through the remainder of fiscal 2001, at
which time amortization  will cease and we will perform a transitional  goodwill
impairment  test. We are currently  evaluating  the impact of the new accounting
standards on existing goodwill and other intangible  assets. The ultimate impact
of  the  new  accounting  standards  has  not  yet  been  determined.   Goodwill
amortization  expense for the  thirty-nine  weeks ended  September  30, 2001 was
$3,975,000.

In October 2001, the Financial  Accounting  Standards Board issued SFAS No. 144,
"Accounting for the Impairment of Long-Lived  Assets" which  supersedes SFAS No.
121,  "Accounting  for the  Impairment of Long-Lived  Assets and for  Long-Lived
Assets to be Disposed of" and the accounting and reporting provisions of APB No.
30,  "Reporting the Results of Operations - Reporting the Effects of Disposal of
a Segment of a Business,  and Extraordinary,  Unusual and Infrequently Occurring
Events and Transactions"  for the disposal of a segment of a business.  SFAS No.
144 retains  many of the  provisions  of SFAS No.  121,  but  addresses  certain
implementation issues associated with that Statement. We will adopt SFAS No. 144
beginning in fiscal 2002. We have not yet  determined the impact of SFAS No. 144
on our consolidated financial statements.

Forward-Looking Statements

The  statements  contained  in the  "Management's  Discussion  and  Analysis  of
Financial  Condition and Results of  Operations"  section  regarding  restaurant
development and capital  expenditures are  forward-looking  and based on current
expectations.  There are several risks and uncertainties that could cause actual
results to differ  materially from those described.  These risks include but are
not limited to the impact of intense competition in the casual dining segment of
the restaurant  industry and our ability to control  restaurant  operating costs
which are impacted by market changes,  minimum wage and other  employment  laws,
food  costs and  inflation.  For a more  detailed  discussion  of the  principal
factors that could cause actual results to be materially  different,  you should
read our  current  report on Form 8-K  which we filed  with the  Securities  and
Exchange  Commission on February 13, 2001. We disclaim any  obligation to update
forward-looking statements.


Item 3.       Quantitative and Qualitative Disclosures About Market Risk

Our senior term loan bears  interest at either the bank's  prime rate plus 1.25%
or LIBOR plus 2.25%, at our option.  Our working capital facility bears interest
at either the bank's prime rate plus 0.125% or LIBOR plus 1.125%, at our option.
The  interest  rate on the working  capital  facility is subject to change based
upon our leverage ratio.

We have  interest  rate swap  agreements  in place to  manage  our  exposure  to
interest rate fluctuations.  The swap agreements  effectively fix the underlying
three-month  LIBOR interest rate on $75,000,000 of the senior credit  facilities
to rates  ranging  from 5.91% to 6.05%.  As a result of the  refinancing  of our
existing  credit  agreement,  we  expect to  terminate  our  interest  rate swap
agreements.

As of  September  30, 2001,  the total  amount of debt subject to interest  rate
fluctuations  was $372,000  under our term loan.  A 1% change in interest  rates
would result in an increase or decrease in interest expense of $4,000 per year.


                                       18
<PAGE>

                           PART II. OTHER INFORMATION

Item 1.     Legal Proceedings

As of September 30, 2001,  we were using assets owned by a former  franchisee in
the operation of one restaurant. That restaurant remains under a purchase rights
agreement that required us to make certain payments to the franchisee's  lender.
In 1991,  a dispute  arose  between  the  lender  and us over the  amount of the
payments due the lender under that  agreement  and over whether we had agreed to
guarantee  the  franchisee's   debt.  Based  upon  a  then-current   independent
appraisal, we offered to settle the dispute and purchase the assets of the three
then-existing  restaurants  for  $1,000,000 in 1991. In November  1992, the FDIC
declared  the lender  insolvent,  and the lender has since been  liquidated.  We
closed  one of the  three  restaurants  in 1994  and  one of the  two  remaining
restaurants  in  February  1996.  In the  fourth  quarter of 1996,  we  received
information  indicating  that  a  third  party  had  acquired  the  franchisee's
indebtedness  to the FDIC. In June 1997, the third party filed a lawsuit against
us seeking approximately  $3,800,000.  In April 1999, the district court awarded
summary judgment to the third party. In June 2000, the court of appeals reversed
the summary  judgment and  remanded  the case to the district  court for further
action. The third party appealed the court's decision but its appeal was denied.
In May  2001,  we  reached  an  agreement  to  settle  this  matter  within  our
established  reserves.  There was no impact on our  consolidated  statements  of
earnings.

We are  involved  in various  legal  actions  arising  in the  normal  course of
business.  These matters include without limitation,  such matters as employment
law related claims and disputes with certain international franchisees regarding
disclosures we allegedly made or omitted.  In each instance,  we believe that we
have  meritorious  defenses  to the  allegations  made  and  we  are  vigorously
defending these claims.

While the  resolution of the matters  described  above may have an impact on the
financial results for the period in which they are resolved, we believe that the
ultimate  disposition  of these  matters  will  not,  in the  aggregate,  have a
material adverse effect upon our business or consolidated financial position

Item 6.     Exhibits and Reports on Form 8-K

         (a)        The Exhibits  listed on the  accompanying  Exhibit Index are
                    filed as part of this report.

         (b)        We filed a report  on Form 8-K on July 25,  2001  announcing
                    senior management changes.

                    We filed a report on Form 8-K on July 25, 2001  announcing a
                    new Chief Marketing Officer.

                    We filed a report on Form 8-K on August 2, 2001 under Item 5
                    reporting second quarter earnings.

                    We filed a report on Form 8-K on August 8, 2001 announcing a
                    new Vice President of Research and Development.

                    We filed a report on Form 8-K on August 29, 2001  announcing
                    August comparable sales.


                                       19
<PAGE>

                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                  APPLEBEE'S INTERNATIONAL, INC.
                                  (Registrant)



Date:    October 30, 2001         By:  /s/    Lloyd L. Hill
         -------------------           -----------------------------------------
                                       Lloyd L. Hill
                                       Chairman and Chief Executive Officer
                                       (principal executive officer)


Date:    October 30, 2001         By:  /s/    George D. Shadid
         -------------------           -----------------------------------------
                                       George D. Shadid
                                       Executive Vice President and
                                       Chief Financial Officer
                                       (principal financial officer)


Date:    October 30, 2001         By:  /s/    Mark A. Peterson
         -------------------           -----------------------------------------
                                       Mark A. Peterson
                                       Vice President and Controller
                                       (principal accounting officer)



                                       20
<PAGE>


                         APPLEBEE'S INTERNATIONAL, INC.
                                  EXHIBIT INDEX



  Exhibit
   Number                          Description of Exhibit
------------- ------------------------------------------------------------------


      10.1    Agreement Regarding Employment.
      10.2    Second Amendment to Employee Stock Purchase Plan.


                                       21