<PAGE>


                                  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                       January 27, 1996
                               -------------------------------------------------
-

                                       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 1-6071




                                RYMER FOODS INC.


Incorporated in the State of Delaware            IRS Employer
                                                 Identification No. 36-1343930


                            4600 South Packers Avenue
                                    Suite 400
                             Chicago, Illinois 60609
                                  312/927-7777

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

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

                            Yes   X        No
                               -------       -------


Registrant had 10,754,032 shares of common stock outstanding as of March 12,
1996.
-------------------------------------------------------------------------------

                        This report consists of 18 pages.



                                       1.
<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.  Financial Statements

                        RYMER FOODS INC. AND SUBSIDIARIES
                      Condensed Consolidated Balance Sheets
                                   (unaudited)
<TABLE>
<CAPTION>

                                                             January 27,           October
                                                                1996                 1995
                                                              --------             -------
                                                                      (in thousands)
                    ASSETS
<S>                                                           <C>                 <C>
CURRENT ASSETS:
 Receivables, net                                             $  2,965            $  4,678
 Inventories                                                     7,536              12,119
 Assets held for sale, net                                       2,531               2,531
 Other                                                             628                 766
                                                              --------            --------
      TOTAL CURRENT ASSETS                                      13,660              20,094
PROPERTY, PLANT AND EQUIPMENT:
 Buildings and improvements                                      1,693               1,441
 Machinery and equipment                                         6,628               6,555
                                                              --------            --------
                                                                 8,321               7,996
 Less accumulated depreciation and amortization                  6,277               6,008
                                                              --------            --------
                                                                 2,044               1,988
OTHER:
 Assets held for sale or lease                                   1,600               1,600
 Other                                                             763                 920
                                                              --------            --------
                                                              $ 18,067            $ 24,602
                                                              --------            --------
                                                              --------            --------
           LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
 Current maturities of long-term debt:
 Banks                                                        $  3,999            $  8,127
 Senior Notes                                                   19,765              18,133
 Other                                                             265                 673
 Accounts payable                                                  664                 829
 Accrued liabilities                                             2,784               4,328
                                                              --------            --------
           TOTAL CURRENT LIABILITIES                            27,477              32,090
LONG-TERM DEBT:
 Other                                                              70                  70

OTHER NON-CURRENT LIABILITIES                                      760                 772
COMMITMENTS AND CONTINGENCIES (Note 6)
STOCKHOLDERS' EQUITY (DEFICIT):
 Common stock, $1 par - 20,000,000 shares
 authorized; 10,753,999 shares outstanding
 in 1996 and 10,753,934 shares outstanding
 in 1995 after deducting treasury shares of
 225,118 in 1996 and 225,183 in 1995                            10,754              10,754
 Additional paid-in capital                                     44,363              44,363
 Retained deficit                                              (65,357)            (63,041)
 Notes receivable from sale of common shares
 to related parties                                                  -                (406)
           TOTAL STOCKHOLDERS' DEFICIT                         (10,240)             (8,330)
                                                              --------            --------
                                                              $ 18,067           $  24,602
                                                              --------            --------
                                                              --------            --------
</TABLE>

See accompanying notes.


                                       2.

<PAGE>

                        RYMER FOODS INC. AND SUBSIDIARIES
                 Condensed Consolidated Statements of Operations
                                  (unaudited)
<TABLE>
<CAPTION>

                                                                   Thirteen Weeks Ended
                                                             -------------------------------
                                                             January 27,          January 28,
                                                               1996                  1995
                                                             -----------          -----------
                                                                                  (Restated)
                                                          (in thousands, except per share data)

<S>                                                           <C>                 <C>
Net sales                                                      $11,979             $21,979
Cost of sales                                                   11,999              19,838
                                                              --------            --------

Gross profit (loss)                                                (20)              2,141

Selling, general and administrative expenses                     1,324               2,199
                                                              --------            --------

Operating loss                                                  (1,344)                (58)

Interest expense                                                 1,010                 819
Other income                                                        (6)               (184)
                                                              --------            --------

Loss from continuing operations                                 (2,348)               (693)

Income from discontinued operations                                 32                  64
                                                              --------            --------

Net loss                                                       $(2,316)            $  (629)
                                                              --------            --------
                                                              --------            --------
Per common share data:

  Primary:
    Loss from continuing operations                            $  (.22)            $  (.06)
                                                              --------            --------
                                                              --------            --------

    Net loss                                                   $  (.22)            $  (.06)
                                                              --------            --------
                                                              --------            --------

  Fully diluted:
    Loss from continuing operations                            $  (.22)            $  (.06)
                                                              --------            --------
                                                              --------            --------

    Net loss                                                   $  (.22)            $  (.06)
                                                              --------            --------
                                                              --------            --------
</TABLE>


See accompanying notes.




                                       3.

<PAGE>



                       RYMER FOODS INC. AND SUBSIDIARIES
                 Condensed Consolidated Statements of Cash Flows
                                  (unaudited)

<TABLE>
<CAPTION>

                                                                  Thirteen Weeks Ended
                                                            -----------------------------------
                                                               Jan. 27,              Jan. 28,
                                                                1996                   1995 
                                                            -------------         -------------
                                                                                     (Restated)
                                                                    (in thousands)
<S>                                                          <C>                  <C>
CASH FLOWS FROM OPERATIONS
  Income (loss) from continuing operations                    $ (2,348)           $   (693)
  Non-cash adjustments to income (loss):
    Depreciation and amortization                                  268                 146
    Amortization of other assets                                    58                 465
    Other non-cash expense (income)                                  -                  (6)
    Provision for bad debts                                         79                 250
  Payment-in-kind interest
   on Senior Notes                                                 426                   -
  Net decrease (increase) to accounts receivable                 1,634                (216)
  Net decrease (increase) to inventories                         4,583              (9,096)
  Net decrease to other current and long-term assets               238                  67
  Net decrease to accounts payable and accrued expenses           (501)               (908)
                                                              --------            --------
  Net cash flows from operating activities of
   continuing operations                                         4,437              (9,991)
  Net cash flows from operating activities of
   discontinued operations                                         778               1,822
                                                              --------            --------
   NET CASH FLOWS FROM OPERATING ACTIVITIES                      5,215              (8,169)

CASH FLOWS FROM INVESTING ACTIVITIES
  Capital expenditures                                            (325)                (49)
  Other                                                             (6)                 (5)
  Net cash flows from investing activities of discontinued
  operations                                                        (4)                (14)
                                                              --------            --------
  NET CASH FLOWS FROM INVESTING ACTIVITIES                        (335)                (68)

CASH FLOWS FROM FINANCING ACTIVITIES
  Net borrowings (repayments) under line-of-credit facilities   (4,128)             10,320
  Principal payments on debt                                        (2)             (2,255)
  Proceeds from borrowings                                           -                  14
  Proceeds from issuance of common stock                             -                  16
  Net cash flows from financing activities
   of discontinued operations                                     (750)             (2,350)
  NET CASH FLOWS FROM FINANCING ACTIVITIES                      (4,880)              5,745

Net change in cash and cash equivalents                              -              (2,492)
Cash and cash equivalents balance at beginning of year               -               2,492
                                                              --------            --------
Cash and cash equivalents balance at end of first quarter       $    -            $      -
                                                              --------            --------

Supplemental cash flow information:
  Interest paid                                                 $  217            $  1,263
                                                              --------            --------
                                                              --------            --------
  Income taxes paid, net of refunds                             $    5            $    182
                                                              --------            --------
                                                              --------            --------

See accompanying notes.

</TABLE>

                                       4.



<PAGE>


                        RYMER FOODS INC. AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                   (unaudited)


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
     The accompanying unaudited condensed consolidated financial statements have
     been prepared in accordance with the instructions to Form 10-Q and
     therefore do not include all information and footnotes necessary for a fair
     presentation of financial position, results of operations, and cash flows
     in conformity with generally accepted accounting principles.  The Company
     operates on a fiscal year which ends on the last Saturday in October.
     References in the following notes to years and quarters are references to
     fiscal years and fiscal quarters.  For further information refer to the
     Consolidated Financial Statements and footnotes thereto included in Rymer
     Foods Inc.'s (the Company's or Rymer's) Annual Report on Form 10-K for the
     fiscal year ended October 28, 1995.

     In management's opinion, the condensed consolidated financial statements
     include all normal recurring adjustments which the Company considers
     necessary for a fair presentation of the results for the period.  Operating
     results for the fiscal period presented are not necessarily indicative of
     the results that may be expected for the entire fiscal year.

2.   GOING CONCERN
     The accompanying condensed consolidated financial statements have been
     prepared assuming the Company will continue as a going concern.

     In the first quarter of 1996, the Company reported a decrease in net sales
     from continuing operations as compared to the first quarter of 1995 of 45%
     principally due to the loss of certain major customers.  In 1995, the
     Company reported a net loss from continuing operations of $29.6 million,
     the fourth loss from continuing operations before extraordinary item in the
     last five years.  In the first quarter of 1996, the Company was informed
     that its supply contracts with restaurants owned by Darden Restaurants
     would not be renewed.  Sales to these restaurant chains comprised
     approximately 15% of net sales from continuing operations in the first
     quarters of both 1996 and 1995.  At January 27, 1996, the Company had a
     stockholders' deficit of $10.2 million.

     As explained more fully in Note 6, the Company was not in compliance at
     July 29, 1995, October 28, 1995 and January 27, 1996 with certain covenants
     contained in the loan agreement between the Company and LaSalle National
     Bank (LaSalle).  It is likely that in 1996, the Company will continue to be
     in violation of certain covenants contained in the loan agreement, unless
     such covenants are modified or waived.  The Company is renegotiating
     certain of these covenants, but there is no assurance that it will be
     successful in this regard.  In addition, an event of default under the
     LaSalle Agreement and a cross-default under the Senior Note Indenture
     existed at January 27, 1996 and October 28, 1995 due to the non-payment of
     certain notes to former affiliates in January 1996 (See Note 6).  The
     Company received a waiver of such event of default under the Indenture in
     March 1996 with an effective date as of February 8, 1996.

     These conditions raise substantial doubt about the Company's ability to
     continue operating as a going concern.  The accompanying condensed
     consolidated financial statements do not include any adjustments that might
     result from the outcome of this uncertainty.

     Management believes that the Company's future success is dependent upon
     reversing the sales decline experienced in 1995 and the first quarter of
     1996, on the continued reduction of operating costs and on the success of
     negotiations with its major lenders.  The Company is pursuing new sales
     opportunities while continuing to streamline its production process and to
     reduce other costs.  In addition, negotiations with the Company's lenders
     are continuing.  Significant expense and personnel reductions implemented
     during the fourth quarter of 1995, including an approximate 20% reduction
     of the Company's work force, are expected to reduce wage, salary and other
     expenses by approximately $4.0 million in 1996.




                                       5.


<PAGE>

3.   RECEIVABLES
     Receivables are net of allowances for doubtful accounts of $432,000 at
     January 27, 1996 and $353,000 at October 28, 1995.

4.   INVENTORIES
     Inventories are stated principally at the lower of first-in, first-out cost
     or market.  The composition of inventories at January 27, 1996 and October
     28, 1995 was:
<TABLE>
<CAPTION>

                                                         January 27, 1996         October 28, 1995
                                                         ----------------         ----------------
                                                                   (in thousands)
          <S>                                                <C>                     <C>
          Raw materials                                      $ 3,362                 $ 6,415
          Finished goods                                       4,174                   5,704
                                                               -----                  ------
             Total                                           $ 7,536                 $12,119
                                                               -----                 -------
                                                               -----                 -------

</TABLE>



5.   DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE OR LEASE
     The accompanying consolidated financial statements reflect the operations
     of the Company's Seafood subsidiary as a discontinued operation for
     accounting principles.

     RYMER INTERNATIONAL SEAFOOD On January 5, 1996, the Company announced 
     that it had signed an agreement in principle to sell the assets of Rymer 
     Seafood (Sale of Rymer Seafood) to an entity to be formed by the current 
     President of Rymer Seafood.  The agreement specifies that the sales 
     price for the assets, based on balances as of January 27, 1996, will be 
     approximately $12.2 million, consisting of $1.5 million in cash, $1.5 
     million in a ten year subordinated note of the buyer and the assumption 
     by the buyer of approximately $7.5 million in bank debt and $1.7 million 
     of other current liabilities.  During the fourth quarter of 1995, the 
     Company recorded a loss of $1.5 million to reduce the carrying value of 
     the net assets of Rymer Seafood to their estimated net realizable value 
     of $2.5 million.  Consummation of the transaction is subject to a 
     variety of conditions, including negotiation of definitive documentation 
     and approval by the holders of 66 2/3% of the outstanding Common Stock 
     of the Company and the holders of a majority of Rymer's outstanding 11% 
     Senior Notes.  The Company plans to proceed with solicitation of these 
     approvals and, if obtained, to complete the Sale of Rymer Seafood during 
     the third quarter of 1996.

     RYMER CHICKEN - PLANT CITY
     During 1992, the Company decided to place its idle Plant City chicken
     facility and equipment for sale.

     The facility has not yet been sold.  In January 1996, the Company entered
     into an agreement to lease the Plant City facility for a period of ten
     years.  The lease of the property is not expected to be finalized until
     June 1996.  The present value of the cash flows under the lease agreement
     supports the carrying value of the property of $1.6 million.  Rymer
     Chicken-Plant City assets are classified as assets held for sale or lease
     at both January 27, 1996 and October 28, 1995.

     Reserves established in 1992 and 1993 are considered adequate to maintain
     the idle facility.  The Company incurred costs related to maintaining the
     idle facility of approximately $14,000 during the first quarter of 1996 and
     $44,000 during the first quarter of 1995 which were charged to the reserve
     established for such losses during fiscal 1992 and 1993.




                                       6.


<PAGE>

<TABLE>
<CAPTION>

                                                            January 27,     October 28,
                                                               1996             1995
                                                            -----------     -----------
                                                                   (in thousands)
          CURRENT ASSETS HELD FOR SALE
          ----------------------------
          RYMER INTERNATIONAL SEAFOOD:
          <S>                                               <C>             <C>
            Receivables                                        $ 5,424        $ 6,537
            Inventories                                          7,584          6,866
            Other current assets                                     9              8
                                                                ------         ------
              Total current assets                              13,017         13,411
            Net property, plant and
             equipment                                              41             43
                                                                ------         ------
              Total assets                                      13,058         13,454
            Less:  current liabilities                          (9,055)        (9,451)
                                                                ------         ------
            Net current assets held for sale
             before loss on disposition                          4,003          4,003
            Less:  reserve for loss on dis-
             position of assets held for sale                   (1,472)        (1,472)
                                                                ------         ------
            Net current assets held for sale                   $ 2,531        $ 2,531
                                                                ------         ------
</TABLE>


     Sales for the discontinued Rymer International Seafood operation reflected
     in the accompanying condensed Consolidated Statements of Operations were
     $16.8 million in the first quarter of 1996 and $13.9 million in the first
     quarter of 1995.

6.   LONG-TERM DEBT AND LINES OF CREDIT
     Long-term debt consists of the following (in thousands):
<TABLE>
<CAPTION>



                                                            January 27,     October 28,
                                                                1996            1995
                                                            -----------     -----------
          <S>                                               <C>             <C>
          Banks, with interest of 1/2% over
           prime in 1996 and 1995                              $ 3,999        $ 8,127
          Senior Notes due December 15, 2000,
           with interest at 18%                                 19,765         18,133
          Other, including capitalized leases
           and amounts to related parties
          Due to former executives under restructured
           employment and consulting agreements                    255            656
          Other                                                     80             87
                                                                ------         ------
                                                                24,099         27,003
          Less amounts classified as current                    24,029         26,933
                                                                ------         ------
                                                               $    70         $   70
                                                                ------         ------
                                                                ------         ------

</TABLE>


     As of January 27, 1996, October 28, 1995 and July 29, 1995, the Company was
     in violation of certain covenants under its Loan and Security Agreement
     with LaSalle.  LaSalle agreed to waive these covenant violations for the
     third quarter of 1995.  The Company was charged a financing fee in
     connection with execution of this waiver.

     On January 5, 1996, LaSalle and the Company entered into the Forbearance
     Agreement and Amendment.  Under this agreement, which was subsequently
     amended, LaSalle agreed to temporarily forbear from exercising its remedies
     under the Loan and Security Agreement.  In addition, the Loan Agreement was
     amended to, among other things, reduce advance rates for inventories and,
     for purposes of computing interest, loan payments are applied by the bank
     on the second business day after available funds are received.


                                       7.

<PAGE>

     On February 7, 1996, LaSalle and the Company entered into an Amendment to
     the Forbearance Agreement (Letter Agreement).  In the Letter Agreement,
     LaSalle agreed to waive certain financial covenant violations and the
     resulting events of default as of October 28, 1995.  The Forbearance
     Agreement and the Letter Agreement were executed on the assumption that no
     other events of default existed under the loan agreement.  As discussed
     below, the Company subsequently determined that another event of default
     under the loan agreement existed at the time of the execution of these
     agreements.  This event of default related to the non-payment of certain
     notes payable to former executives of the Company (the Affiliate Debt
     default).  On February 22, 1996, the Company received a letter from LaSalle
     confirming that the waiver as of October 28, 1995 contained in the Letter
     Agreement was valid for the events of default specified in the 
     Forbearance Agreement despite the subsequent determination of the Affiliate
     Debt default.  The Company remains in default under the LaSalle agreement,
     however, due to non-payment of the Affiliate Debt.

     LaSalle also agreed to amend the Loan and Security Agreement in order to 
     revise the next test date for the financial covenants to be as of 
     February 24, 1996.  On March 12, 1996, the Company and LaSalle entered 
     into an Amendment to Loan Agreement that modified certain provisions of 
     the Loan and Security Agreement between the Company and LaSalle, 
     including covenants relating to financial amounts and ratios. The 
     Company expects to be in compliance with such financial covenants, as so 
     modified. However, there is no assurance that the Company will remain in 
     compliance with the covenants, as modified. LaSalle has the right, upon 
     the occurrence of an event of default, to terminate the credit facility 
     and declare all loans due and payable on demand.  The Company's bank 
     indebtedness and indebtedness under the Senior Notes have been 
     classified as current liabilities at both January 27, 1996 and October 
     28, 1995.


     In January 1996, the Company did not make required payments of $255,000
     under notes payable due to former executives (Affiliate Debt).  The
     Affiliate Debt is related to certain amended employment and consulting
     agreements between the Company and the former executives (See Note 11 to
     the Consolidated Financial Statements in the Company's Annual Report on
     Form 10-K for the year ended October 28, 1995).  The Company has deferred
     payment of this debt in order to conserve cash for use in operation of its
     business.  The Company intends to continue to accrue interest on the debt
     at 9.5%.  The non-payment of the Affiliate Debt caused cross-defaults under
     the Loan and Security Agreement with LaSalle and under the Senior Note
     Indenture.While LaSalle has not waived this default, the Company believes
     that it is LaSalle's intention not to take any action as a result of the
     default.  However, there can be no assurance that LaSalle will continue to
     forbear from taking action as a result of these defaults.

     In March of 1996, the Company entered into Supplement No. 1 to the
     Indenture (Supplemental Indenture) with Continental Stock Transfer and
     Trust Company as Trustee for the Senior Notes which was dated as of
     February 8, 1996.  The Supplemental Indenture, which received the approval
     of a majority of the Senior Note holders, amended the Indenture to exclude
     the non-payment of the Affiliate Debt, and the resulting cross-default
     under any other debt that arises by reason of non-payment of the Affiliate
     Debt, from the definition of events of default under the Indenture.  If 
     another event of default occurs and continues under the Company's bank 
     agreement with LaSalle, however, it would constitute an event of default 
     under the Indenture, enabling the Trustee or the holders of 25% in 
     aggregate principal amount of the Notes to declare the Notes to be
     immediately due and payable.

     The Senior Notes were issued pursuant to the Indenture between the Company
     and Continental Stock Transfer & Trust Company, as trustee (the Indenture).
     The Senior Notes bear interest at 11% payable semi-annually in arrears on
     June 15 and December 15.  Through December 15, 1996, the Company may issue
     additional Senior Notes in payment of interest to the extent that the
     Company lacks sufficient available cash (as defined in the Indenture) to
     pay the interest in cash.  For interest paid by the issuance of additional
     Senior Notes after June 15, 1993, and through December 15, 1996, the
     interest rate will be increased to 18% per annum.

     At January 27, 1996 and October 28, 1995, the Company had a bank loan of
     $4.0 million and $8.1 million, respectively, outstanding under its line of
     credit with LaSalle for Rymer Meat.  In addition, as of January 27, 1996
     and October 28, 1995, $7.5 million and $8.2 million, respectively, was
     outstanding under the LaSalle line of credit for Rymer International
     Seafood.  According to the proposed agreement to sell Rymer Seafood, the
     loan balance for Rymer Seafood is to be assumed by the buyers of Rymer
     Seafood.


                                       8.

<PAGE>

     The Company's continuing Rymer Meat subsidiary had total lines of credit
     available under notes payable of $6.3 million at January 27, 1996 and $11.7
     million at October 28, 1995 of which $2.3 million and $3.6 million,
     respectively, was unused.


     The Company's discontinued Seafood subsidiary had total lines of credit
     available under notes payable of $10.9 million at January 27, 1996 and
     $10.8 million at October 28, 1995 of which $0.9 million and $1.1 million,
     respectively, was unused.

     Total availability under credit lines is reduced by the amount of letters
     of credit outstanding.  Letters of credit are used primarily for purchases
     of seafood inventory from foreign sources.  Rymer Seafood had letters of
     credit outstanding totalling approximately $2.5 million and $1.5 million at
     January 27, 1996 and October 28, 1995, respectively.

     The following table summarizes the activity of the Company's Senior Notes
     (in thousands):

<TABLE>
<CAPTION>
          <S>                                                         <C>
          Senior Notes originally issued in connection
           with the 1993 Restructuring                                $19,977
          Interest payment-in-kind on June 15, 1993                     1,456
          Mandatory redemptions:
            June 1994                                                  (1,050)
            December 1994                                              (2,250)
                                                                        -----
          Senior Note principal outstanding at October 28, 1995        18,133
          Interest payment-in-kind on December 15, 1995                 1,632
                                                                        -----
          Senior Note principal outstanding at January 27, 1996       $19,765
                                                                       ------
                                                                       ------
</TABLE>

     On December 15, 1995, the Company announced that, as permitted by the terms
     of its 11% Senior Notes due December 15, 2000, it had elected to make its
     December 15, 1995 interest payment on its Senior Notes by issuing
     additional Senior Notes in a principal amount equal to the interest payment
     due of $1,632,000.  According to the Senior Note Indenture, such an
     election requires the Company to pay its interest at a rate of 18% versus
     the 11% rate applicable if the interest was paid in cash.  Accordingly, the
     Company recorded an additional interest charge of approximately $470,000 in
     the fourth quarter of 1995 related to this interest payment.  There is
     doubt whether the Company will have funds available to pay its June 15,
     1996 or December 15, 1996 Senior Note interest payments in cash.
     Accordingly, the Company is accruing interest expense on the Senior Notes
     at a rate of 18% for fiscal 1996.

     The Company may seek to restructure the terms of its 11% Senior Notes in an
     effort to improve its liquidity.  There can be no assurances that such a
     restructuring will occur.

     The notes payable to former executives under the restructured employment
     and consulting agreements were amended in connection with the Restructuring
     (See Note 11 to the Consolidated Financial Statements in the Company's
     Annual Report on Form 10-K for the year ended October 28, 1995).  At
     October 28, 1995, the balance consisted of unsecured notes totalling
     $406,000 which bore interest at 9.5% per annum and matured on January 2,
     1996 and non-interest bearing notes with a face value of $255,000 which
     were due and payable on January 2, 1996.  The Company did not make the
     required payments under these notes, as discussed previously.


     The interest bearing notes payable were equal to, and were offset on
     January 2, 1996 against, notes receivable owed to the Company by the
     executives under stock purchase agreements.  The notes receivable also bore
     interest at 9.5% per annum and were due January 1, 1996.

7.   INCOME TAXES
     In both 1996 and 1995, no provision for income taxes was recorded due to
     the loss from operations. The components of the net deferred tax asset
     recorded in the accompanying balance sheet as of January 27, 1996 has not
     changed significantly from balances as of October 28, 1995.  The Company
     did not record any income


                                       9.

<PAGE>

     tax benefit during the first quarter of 1996 because of the uncertainty of
     the utilization of the benefit.  The Company continues to record a full
     valuation allowance for its deferred tax asset so that the balance of the
     net deferred tax asset at both January 27, 1996 and October 28, 1995 is
     zero.

8.   COMMITMENTS AND CONTINGENCIES
     The Company has agreements with certain of its customers to sell
     merchandise over the next year for specified prices.  The Company's
     aggregate commitment under sales agreements was approximately $4.2 million
     and $4.1 million at January 27, 1996 and October 28, 1995, respectively.
     The Company also has agreements with certain of its suppliers to purchase
     raw materials.  The agreements extend for up to one year and provide the
     price and quantity of materials to be supplied.  The Company had purchase
     commitments of approximately $2.9 million at both January 27, 1996 and
     October 28, 1995.


                                       10.

<PAGE>

              Notes to Financial Statements (unaudited) -- cont'd.

<TABLE>
<CAPTION>

COMPUTATION OF EARNINGS PER SHARE

                                                ASSUMING PRIMARY DILUTION                ASSUMING FULL DILUTION
                                                -------------------------                ----------------------
                                                  Thirteen Weeks Ended                    Thirteen Weeks Ended
                                                  --------------------                    --------------------
                                             January 27,         January 28,         January 27,         January 28,
                                                1996                1995                1996                1995
                                             -----------         -----------         -----------         -----------
                                                            (In thousands, except per share amounts)


AVERAGE SHARES OUTSTANDING
<S>                                          <C>                 <C>                 <C>                 <C>
  1  Average shares outstanding                  10,754              10,741              10,754              10,741
  2  Net additional shares outstanding
      assuming exercise of stock options            -                  297                   74                 297
                                                -------             -------             -------             -------
  3  Average number of common shares
      outstanding                                10,754              11,038              10,828              11,038
                                                -------             -------             -------             -------
                                                -------             -------             -------             -------

EARNINGS

  4  Income from continuing
      operations                                $(2,348)           $   (693)            $(2,348)           $   (693)
                                                -------             -------             -------             -------
                                                -------             -------             -------             -------
  5  Net loss                                   $(2,316)           $   (629)            $(2,316)           $   (629)
                                                -------             -------             -------             -------
                                                -------             -------             -------             -------
PER SHARE AMOUNTS

     Loss from continuing
      operations (line 4 / line 3)             $   (.22)           $   (.06)           $   (.21)(a)       $    (.06)
                                                -------             -------             -------             -------
                                                -------             -------             -------             -------
     Net loss
      (line 5 / line 3)                        $   (.22)           $   (.06)           $   (.22)          $    (.06)
                                                -------             -------             -------             -------
                                                -------             -------             -------             -------
</TABLE>

NOTE - In all years, earnings per share was calculated using the treasury 
stock method.

(a)  Amount is anti-dilutive; accordingly, primary earnings per share is 
disclosed for reporting purposes in accordance with generally accepted 
accounting principles.

                                       11.

<PAGE>

                        RYMER FOODS INC. AND SUBSIDIARIES


ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

GENERAL

The Company's consolidated results from operations are generated by its meat
processing operation.

GOING CONCERN

The accompanying condensed consolidated financial statements have been prepared
assuming the Company will continue as a going concern.  As discussed in Note 2
to the condensed consolidated financial statements, certain conditions raise
substantial doubt about the Company's ability to continue operating as a going
concern.  The accompanying condensed consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

FIRST QUARTER OF 1996 VERSUS FIRST QUARTER OF 1995

Consolidated sales for the first quarter of 1996 of $12 million decreased from
the first quarter of 1995 by $10 million or 45%.  Sales decreased primarily due
to reduced sales volume due to increased competition.  A significant portion of
the sales volume decrease resulted from the termination of sales to a major
customer during the second quarter of 1995.

The Company experienced a decline in unit sales of approximately 49% primarily
due to increased competition.  In addition, sales decreased partially as a
result of the Company's customers experiencing sales declines.  Many restaurant
chains have experienced sales declines due to ever-increasing competitive
pressures in the casual dining segment of the foodservice market and due to
adverse weather conditions in certain areas of the country.  The Company
experienced an increase of 6.6% in the average selling price primarily due to a
higher priced mix of products sold in 1996 as compared to 1995.

As compared to 1995, consolidated cost of sales decreased by $7.8 million or
39.5% while total gross profit decreased by $2.2 million or 100.9%.  As a
percentage of sales, the gross margin decreased to (0.2%) as compared to 9.7% in
1995.

Gross profit decreased compared to 1995 primarily due to decreased unit sales.
The Company was unable to achieve reductions in certain factory expenses
proportionate to the decline in sales.  Factory expenses declined by 20% as
compared to a 49% decrease in unit sales.  The Company experienced increases in
maintenance and depreciation expense.  Increased maintenance and building
improvements have been necessary primarily due to the age and condition of the
current Meat facility.  The Company is depreciating the building improvements
over the building lease term which is through July 1996.  Management is
currently evaluating alternative building facilities and intends to relocate to
a more efficient facility as soon as is practicable.  Management is continuing
to streamline its operations.  The hourly work force has declined by
approximately 24% at the end of the first quarter of 1996 versus 1995.

Selling, general and administrative expenses decreased by $875,000 or 39.8% in
1996 as compared to 1995.  Administrative expenses decreased by $736,000.  A
reduction in goodwill amortization of $290,000 was experienced as compared to
the first quarter of 1995 due to the required writedown of goodwill recorded in
the Company's 1995 fourth quarter.  Reductions in salaries and related expenses
due to headcount reductions at the meat processing operation and of corporate
personnel contributed to the majority of the remaining decrease of $445,000.
Selling expenses decreased by $140,000 primarily due to a reduction in expenses
related to the Company's retail products sold in grocery and wholesale club
stores and reduced salary expenses due to decreases in personnel.


                                       12.

<PAGE>


INTEREST EXPENSE

Interest expense increased by $191,000 or 23.3% as compared to 1995.  This
increased was attributable to increased interest expense on the Company's 11%
Senior Notes.  On December 15, 1995, the Company announced that, as permitted by
the terms of its 11% Senior Notes due December 15, 2000, it had elected to make
its December 15, 1995 interest payment on its Senior Notes by issuing additional
Senior Notes in a principal amount equal to the interest payment due.  According
to the Senior Note Indenture, such an election requires the Company to pay its
interest at a rate of 18% versus the 11% rate applicable if the interest is paid
in cash.  There is doubt whether the Company will have funds available to pay
its June 15, 1996 or December 15, 1996 Senior Note interest payments in cash.
Accordingly, the Company is accruing interest expense on the Senior Notes at a
rate of 18% for fiscal 1996.  The Company recorded an additional interest charge
of approximately $335,000 in the first quarter of 1996 related to the increase
in the interest rate on the Senior Notes.  After considering the increase in
Senior Note interest of approximately $335,000, interest expense decreased by
approximately $144,000 compared to 1995 due primarily to lower interest rates
on the credit line facility due to the replacement of the higher-cost former
credit facility with BA Business Credit Inc. with the LaSalle credit facility 
on April 7, 1995.

The Company may also seek to restructure the terms of its 11% Senior Notes in an
effort to improve its liquidity.  There can be no assurances that such a
restructuring will occur.

OTHER INCOME

The Company earned other income of $184,000 in 1995 which was comprised
primarily of consulting fees.  The Company earned other income in 1996 of $6,000
consisting primarily of interest income.


DISCONTINUED OPERATIONS

On January 5, 1996, the Company announced that it had signed an agreement in 
principle to sell the assets of Rymer Seafood (Sale of Rymer Seafood) to an 
entity to be formed by the current President of Rymer Seafood.  The agreement 
specifies that the sales price for the assets, based on balances as of 
January 27, 1996, would be approximately $12.2 million, consisting of $1.5 
million in cash, $1.5 million in a ten year subordinated note of the buyer 
and the assumption by the buyer of approximately $7.5 million in bank debt 
and $1.7 million of other current liabilities.  The Company recorded a loss 
of $1.5 million during the fourth quarter of 1995 to reduce the carrying 
value of the net assets of Rymer Seafood to their estimated net realizable 
value of $2.5 million.  The net assets of Rymer Seafood have been classified 
as Assets Held For Sale on the consolidated balance sheets.  Consummation of 
the transaction is subject to a variety of conditions, including negotiation 
of definitive documentation and approval by the holders of 66 2/3% of the 
outstanding Common Stock of the Company and the holders of a majority of 
Rymer's outstanding 11% Senior Notes. The Company plans to seek these 
approvals and, if received, to complete the Sale of Rymer Seafood during the 
third quarter of 1996.

The Company recorded income related to its discontinued seafood operation during
the first quarter of 1996 of $32,000 compared to income of $64,000 in 1995.

While Seafood sales increased by $2.9 million or 20.9% as compared to 1995, the
decrease in income reflects increased raw material costs and increased operating
expenses.

The Company continues to carry its idle Plant City, Florida property at its
estimated net realizable value of $1.6 million.  In January 1996, the Company
entered into a preliminary agreement to lease the Plant City facility for a
period of ten years.  The lease of this property is not expected to be finalized
until June 1996.

INCOME TAXES

In both 1996 and 1995, no provision for income taxes was recorded due to the
loss from operations.


                                       13.

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

The Company makes sales primarily on a seven to thirty day balance due basis.
Purchases from suppliers have payment terms generally ranging from wire transfer
to fourteen days.  Rymer International Seafood uses letters of credit for
purchases of imported seafood.

The Company's cash management techniques involve the use of zero balance
disbursement accounts.  Check clearings are covered by advances from the
Company's credit lines.  Thus, in the absence of excess funds classified as cash
equivalents, the Company's cash balances are credit balance accounts
representing outstanding checks.  The Company classified such credit balances as
accounts payable in the condensed consolidated financial statements as of
January 27, 1996 and October 28, 1995.

On April 7, 1995, the Company replaced its credit facility of $20 million
provided by BA Business Credit, Inc. (BABC) and $12.5 million provided by
LaSalle with a $25 million credit facility provided by LaSalle.  The credit line
facility, with an initial term of two years, has lower interest rates and
reduced lending restrictions as compared to the former facilities.  The LaSalle
credit facility has an annual interest rate of 1/2% over Prime as compared to an
annual rate of 2% over Prime on the former BABC facility and 1% over Prime on
the former LaSalle facility.

As of January 27, 1996, October 28, 1995 and July 29, 1995, the Company was in
violation of certain financial covenants under its Loan and Security Agreement
with LaSalle.  LaSalle agreed to waive these covenant violations for the third
quarter of 1995.  The Company was charged a financing fee in connection with
execution of this waiver.

In response to the October 28, 1995 violations, on January 5, 1996, LaSalle and
the Company entered into a Forbearance Agreement and Amendment.  Under this
agreement, which was subsequently amended, LaSalle agreed to temporarily forbear
from exercising its remedies under the Loan and Security Agreement.  In
addition, the Loan Agreement was amended to, among other things, reduce advance
rates for inventories and, for purposes of computing interest, loan payments are
applied by the bank on the second business day after available funds are
received.

On February 7, 1996, LaSalle and the Company entered into an Amendment to the
Forbearance Agreement (Letter Agreement).  In the Letter Agreement, LaSalle
agreed to waive certain financial covenant violations and the resulting events
of default as of October 28, 1995.  The Forbearance Agreement and the Letter
Agreement were executed on the assumption that no other events of default
existed under the loan agreement.  As discussed below, the Company subsequently
determined that another event of default under the loan agreement existed at the
time of the execution of these agreements.  This event of default related to the
non-payment of certain notes payable to former executives of the Company (the
Affiliate Debt default).  On February 22, 1996, the Company received a letter
from LaSalle confirming that the waiver as of October 28, 1995 contained in the
Letter Agreement was valid for the specified events of default despite the
subsequent determination of the Affiliate Debt default.  The Company remains in
default under the LaSalle agreement, however, due to non-payment of the
Affiliate Debt.

In the Letter Agreement, LaSalle also agreed to amend the Loan and Security 
Agreement in order to revise the next test date for the financial covenants 
to be as of February 24, 1996.  On March 12, 1996, the Company and LaSalle 
entered into an Amendment to Loan Agreement that modified certain provisions 
of the Loan and Security Agreement between the Company and LaSalle, including 
covenants relating to financial amounts and ratios. The Company expects to be 
in compliance with such financial covenants, as so modified. However, there 
is no assurance that the Company will remain in compliance with the 
covenants, as modified. LaSalle has the right, upon the occurrence of an 
event of default, to terminate the credit facility and declare all loans due 
and payable on demand. The Company's bank indebtedness and indebtedness under 
the Senior Notes have been classified as current liabilities at both January 
27, 1996 and October 28, 1995.

In January of 1996, the Company did not make required payments of $255,000 under
notes payable due to former executives (Affiliate Debt).  The Affiliate Debt is
related to certain amended employment and consulting agreements between the
Company and the former executives (See Note 11 to the Consolidated Financial
Statements in the Company's Annual Report on Form 10-K for the year ended
October 28, 1995).  The Company has deferred payment of this debt in order to
conserve cash for use in operation of its business.  The Company intends to
continue

                                       14.


<PAGE>

to accrue interest on the debt at 9.5%.  The non-payment of the Affiliate Debt
caused cross-defaults under the Loan and Security Agreement with LaSalle and
under the Senior Note Indenture.  While LaSalle has not waived this default, the
Company believes that it is LaSalle's intention not to take any action as a
result of the default.  However, there can be no assurance that LaSalle will
continue to forbear from taking action as a result of these defaults.

In March of 1996, the Company entered into Supplement No. 1 to the Indenture
(Supplemental Indenture) with Continental Stock Transfer and Trust Company as
Trustee for the Senior Notes which was dated as of February 8, 1996.  The
Supplemental Indenture, which received the approval of a majority of the Senior
Note holders, amended the Indenture to exclude the non-payment of the Affiliate
Debt, and the resulting cross-default under any other debt that arises by reason
of non-payment of the Affiliate Debt, from the definition of events of default
under the Indenture.  If another event of default occurs and continues under the
Company's bank agreement with LaSalle, however, it would constitute an event of
default under the Indenture, enabling the Trustee or the holders of 25% in 
aggregate principal amount of the Notes to declare the Notes to be immediately 
due and payable.

At January 27, 1996 and October 28, 1995, the Company had a bank loan of $4.0
million and $8.1 million, respectively, outstanding under its line of credit
with LaSalle for Rymer Meat.  In addition, as of January 27, 1996 and October
28, 1995, $7.5 million and $8.2 million, respectively, was outstanding under the
LaSalle line of credit for Rymer International Seafood.  According to the
proposed agreement to sell Rymer Seafood, the loan balance for Rymer Seafood is
to be assumed by the buyers of Rymer Seafood.

The bank loan and other liabilities to be assumed by the buyer of Rymer Seafood
have been netted against the assets to be sold and are shown as Assets Held For
Sale, net in the Consolidated Balance Sheets.  (See Note 5 to the condensed
consolidated financial statements.)

On December 15, 1995, the Company announced that, as permitted by the terms of
its 11% Senior Notes due December 15, 2000, it had elected to make its December
15, 1995 interest payment on its Senior Notes by issuing additional Senior Notes
in a principal amount equal to the interest payment due of $1,632,000.
According to the Senior Note Indenture, such an election requires the Company to
pay its interest at a rate of 18% versus the 11% rate applicable if the interest
is paid in cash.  There is doubt whether the Company will have funds available
to pay its June 15, 1996 or December 15, 1996 Senior Note interest payments in
cash.  Accordingly, the Company intends to accrue interest expense on the Senior
Notes at a rate of 18% for fiscal 1996.

The Company had a net working capital deficit at January 27, 1996 of $13.8
million which is a decrease in working capital of $1.8 million as compared to a
working capital deficit of $12 million at October 28, 1995.  The decrease was
primarily due to a decrease in current assets of $6.4 million partially offset
by a decrease in current liabilities of $4.6 million.

Accounts receivable decreased by $1.7 million primarily due to decreased sales.
Inventories decreased by $4.6 million due to decreased purchasing along with
efforts by the Company to reduce inventories in order to reduce debt.

Current liabilities decreased due to a decrease in bank loans of $4.1 million, a
decrease in accrued liabilities of $1.5 million, and decreases in accounts
payable and other long-term debt of $0.2 million and $0.4 million, respectively.
These decreases were partially offset by an increase in the principal amount of
Senior Notes of $1.6 million.

The decrease in accrued expenses is primarily attributable to the payment of
Senior Note interest of $1.6 million on December 15, 1995 by the issuance of new
Senior Notes.  Other long-term debt decreased due to the offset of note payables
of approximately $406,000 against notes receivable of approximately the same
amount on January 2, 1996.  The notes receivable were classified as a reduction
of stockholders' equity as they related to stock purchase agreements.

Under its Senior Note Indenture, the Company made a mandatory redemption of its
Senior Notes of $2,250,000 on December 29, 1994 using funds available under bank
lines of credit.


                                       15.

<PAGE>

Upon favorable conclusion of negotiations with LaSalle, of which there is no
assurance, availability under this facility is expected by management to provide
sufficient resources to meet its working capital needs through the next year.
The anticipated future cash flows of the Company may not be sufficient to retire
the Senior Notes upon maturity on December 15, 2000.  Accordingly, the Company
may seek to restructure the terms of its 11% Senior Notes.  There can be no
assurances that such a restructuring will occur.  Furthermore, if a Senior Note
restructuring should occur, it would likely affect the equity capitalization of
the Company.

The Company's continuing Rymer Meat subsidiary had total lines of credit
available under notes payable of $6.3 million at January 27, 1996 and $11.7
million at October 28, 1995 of which $2.3 million and $3.6 million,
respectively, was unused.

The Company's discontinued Seafood subsidiary had total lines of credit
available under notes payable of $10.9 million at January 27, 1996 and $10.8
million at October 28, 1995 of which $0.9 million and $1.1 million,
respectively, was unused.

Total availability under credit lines is reduced by the amount of letters of
credit outstanding.  Letters of credit are used primarily for purchases of
seafood inventory from foreign sources.  Rymer Seafood had letters of credit
outstanding totalling approximately $2.5 million and $1.5 million at January 27,
1996 and October 28, 1995, respectively.

The Company has agreements with certain of its customers to sell merchandise
over the next year for specified prices.  The Company's aggregate commitment
under sales agreements was approximately $4.2 million and $4.1 million at
January 27, 1996 and October 28, 1995, respectively.  The Company also has
agreements with certain of its suppliers to purchase raw materials.  The
agreements extend for up to one year and provide the price and quantity of
materials to be supplied.  The Company had purchase commitments of approximately
$2.9 million as of both January 27, 1996 and October 28, 1995.

At October 28, 1995, the Company had an operating loss carryforward for tax
reporting purposes of approximately $31.2 million.  See Note 8 to the
Consolidated Financial Statements included in the Company's Annual Report on
Form 10-K for the year ended October 28, 1995 for expiration dates of the
carryforwards.  The utilization of operating loss carryforwards is expected to
enhance future cash flow by reducing cash outlays which would otherwise be
required for income tax payments.

The Company anticipates a total of approximately $500,000 for capital
expenditures in 1996.  The expenditures are primarily for planned improvements
at the Meat operation.  There are no specific commitments outstanding related to
these planned expenditures.

SEASONALITY

The quarterly results of the Company are affected by seasonal factors.  Sales
are usually lower in the fall and winter.

IMPACT OF INFLATION

Raw materials are subject to fluctuations in price.  However, the Company does
not expect such fluctuations to materially impact its competitive position.


                                       16.

<PAGE>

                        RYMER FOODS INC. AND SUBSIDIARIES
                           PART II - OTHER INFORMATION


ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

  (a)    Exhibits filed:

  10.1    Supplement No. 1, dated as of February 8, 1996, to the Indenture dated
          as of April 7, 1993 between Rymer Foods Inc. and Continental Stock
          Transfer & Trust Company as Trustee for Rymer Foods Inc. 11% Senior 
          Notes due 2000 (filed herewith).

  10.2    Amendment to Loan Agreement, dated as of February 24, 1996, by and 
          among Rymer Meat Inc., Rymer International Seafood Inc., Rymer Foods 
          Inc. and LaSalle National Bank (filed herewith).

  11      Computations of earnings per share are included in the Notes to
          Condensed Consolidated Financial Statements included in Item 1 of this
          Form 10-Q.

         Exhibits incorporated by reference:

  13.1    Annual Report on Form 10-K of Rymer Foods Inc. for the fiscal year
          ended October 28, 1995 (Incorporated by reference).

  21.1    Subsidiaries of the Company.  (Incorporated by reference to Exhibit 22
          to the Annual Report of Form 10-K of Rymer Foods Inc. for the fiscal
          year ended October 28, 1995.)

  (b)    Reports on Form 8-K:

            None


                                       17.



<PAGE>


                                RYMER FOODS INC.
                                    SIGNATURE


Pursuant to the requirements 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.

                                  RYMER FOODS INC.
                                  (Registrant)



                                  By /s/       Edward M. Hebert
                                    --------------------------------------------
                                    Edward M. Hebert, Senior Vice President,
                                    Chief Financial Officer and Treasurer



Date:  March 12, 1996


                                       18.