<PAGE>   1
                                    FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

 /X/  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934
                  For the quarterly period ended June 30, 2000


                                       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 333-51857

--------------------------------------------------------------------------------
                                 PLAINWELL INC.
             (Exact name of registrant as specified in its charter)

                       Delaware                         38-3391489
            (State or other jurisdiction of          (I.R.S. Employer
            incorporation or organization)          Identification No.)

            1270 Northland Drive, Suite 300
                Minneapolis, Minnesota                     55120
       (Address of principal executive offices)          (Zip Code)


        Registrant's telephone number, including area code: 651-365-3100

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

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

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 / /.

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of June 30, 2000: 500 shares, $1 par value Common Stock
outstanding.
<PAGE>   2
                                 PLAINWELL INC.
                                    FORM 10-Q


                                      INDEX

<TABLE>
<CAPTION>
                                                                             PAGE
                                                                             ----
<S>                                                                          <C>
PART I.           FINANCIAL INFORMATION

Item 1.  Financial Statements

         Condensed Statements of Operations for the three and six months
               ended June 30, 2000 and 1999 (unaudited)                        3

         Condensed Balance Sheets at June 30, 2000 (unaudited) and
               December 31, 1999                                               4

         Condensed Statements of Cash Flows for the six months ended
               June 30, 2000 and 1999 (unaudited)                              5


         Notes to Condensed Financial Statements - June 30, 2000               6


Item 2.  Management's Discussion and Analysis of Financial Position
               and Results of Operations                                      10

Item 3.  Quantitative and Qualitative Disclosures About Market Risk           14


PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings                                                    15

Item 4.  Submission of Matters to a Vote of Security Holders                  15

Item 6.  Exhibits and Reports on Form 8-K                                     15

Signatures                                                                    16

Exhibit Index                                                                 17
</TABLE>


                                       2
<PAGE>   3
PART I

                                 PLAINWELL INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                             (Thousands of Dollars)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                            Three months ended              Six months ended
                                                                 June 30                         June 30
                                                       ---------------------------     ---------------------------
                                                           2000           1999             2000           1999
                                                       -------------  ------------     ------------    -----------
<S>                                                    <C>            <C>              <C>             <C>
Net sales                                              $     60,107   $     58,229     $    113,366    $   114,740
Cost of sales                                                63,161         51,348          114,567        101,868
                                                       ------------   ------------     ------------    -----------
    Gross profit (loss)                                      (3,054)         6,881           (1,201)        12,872

Selling, general and
    Administrative expenses                                   5,408          4,341           10,184          9,063
                                                       ------------   ------------     ------------    -----------

Operating income (loss)                                      (8,462)         2,540          (11,385)         3,809

Interest expense                                              4,814          4,626            9,360          8,626
                                                       ------------   ------------     ------------    -----------

Loss before income tax expense (benefit)                    (13,276)        (2,086)         (20,745)        (4,817)
Income tax expense (benefit)                                    150           (515)            (350)        (1,256)
                                                       ------------   ------------     ------------    -----------

Net loss                                               $    (13,426)  $     (1,571)    $    (20,395)   $    (3,561)
                                                       ============   ============     ============    ===========
</TABLE>


            See accompanying notes to condensed financial statements.

                                       3

<PAGE>   4
                                 PLAINWELL INC.
                            CONDENSED BALANCE SHEETS
                              (Thousands of Dollars
                              Except Share Amounts)

<TABLE>
<CAPTION>
                                                                      June 30, 2000        December 31, 2000
                                                                    -----------------     -------------------
ASSETS                                                                 (Unaudited)

<S>                                                                 <C>                   <C>
Current assets:
    Cash and cash equivalents                                       $           2,504     $             2,961
    Accounts receivable, net                                                   22,723                  21,745
    Receivables due from affiliates                                             2,729                   4,008
    Inventories                                                                21,169                  32,008
    Other                                                                       2,783                   1,918
                                                                    -----------------     -------------------
        Total current assets                                                   51,908                  62,640

Property, plant and equipment                                                 163,225                 159,029
Accumulated depreciation
                                                                              (31,025)                (24,134)
                                                                    -----------------     -------------------
    Net property, plant and equipment                                         132,200                 134,895
Other assets                                                                   33,793                  32,600
                                                                    -----------------     -------------------

        Total assets                                                $         217,901     $           230,135
                                                                    =================     ===================

LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)

Current liabilities:
    Accounts payable                                                $          22,789     $            18,899
    Payables due to affiliates                                                  1,883                       -
    Borrowings under revolving line of credit (Note 3)                         26,963                  23,467
    Accrued liabilities                                                        15,899                  17,142
                                                                    -----------------     -------------------
        Total current liabilities                                              67,534                  59,508

Long-term debt                                                                152,300                 152,300
Other long-term debt                                                           12,367                  12,232

Commitments and Contingencies (Notes 4 and 5)

Stockholder's equity (deficit):
    Common stock $1 par value, authorized 1,000
        shares, issued and outstanding 500 shares                                   1                       1
    Paid-in capital                                                            24,319                  24,319
    Accumulated deficit                                                       (38,620)                (18,225)
                                                                    -----------------    --------------------
        Total stockholder's equity (deficit)                                  (14,300)                  6,095
                                                                    -----------------    --------------------
        Total liabilities and stockholder's equity (deficit)        $         217,901     $           230,135
                                                                    =================    ====================
</TABLE>

            See accompanying notes to condensed financial statements

                                       4
<PAGE>   5
                                 PLAINWELL INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                             (Thousands of Dollars)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                               Six months ended
                                                                                   June 30
                                                                         ---------------------------
                                                                             2000           1999
                                                                         ------------   ------------
<S>                                                                      <C>            <C>
OPERATING ACTIVITIES:
Net loss                                                                 $   (20,395)   $     (3,561)
Adjustments to reconcile net loss to net
      cash used in operating activities:
    Depreciation and amortization                                              7,779           6,835
    Gain from sale of equipment                                                 (162)              -
    Changes in operating assets and liabilities                               13,063          (4,687)
                                                                         -----------    ------------

  Net cash provided by (used in) operating activities                            285          (1,413)

INVESTING ACTIVITIES:
Capital expenditures                                                          (5,003)         (3,142)
Proceeds from sale of equipment                                                  765               -
                                                                         -----------    ------------

  Net cash used in investing activities                                       (4,238)         (3,142)

FINANCING ACTIVITIES:
Net borrowings under
    revolving lines of credit                                                  3,496           8,863
Dividends paid                                                                     -          (4,000)
                                                                         -----------    ------------

  Net cash provided by financing activities                                    3,496           4,863
                                                                         ------------   ------------

Net increase (decrease) in cash and cash equivalents
                                                                                (457)            308

Cash and cash equivalents at beginning of period                               2,961           1,846
                                                                         -----------    ------------
Cash and cash equivalents at end of period                               $     2,504    $      2,154
                                                                         ===========    ============
</TABLE>

            See accompanying notes to condensed financial statements.

                                       5
<PAGE>   6
                                 PLAINWELL INC.
               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
                                  JUNE 30, 2000



NOTE 1.  BASIS OF PRESENTATION

PLAINWELL INC. (the "Company") is a leading U.S. producer and marketer of value
added paper products for niche markets within the paper industry. The Company
conducts its business through two divisions: the Consumer Products Division,
which produces private label consumer tissue products such as bath tissue, paper
towels, napkins and facial tissue and the Specialty Paper Division, which
produces premium coated and uncoated printing papers and release and other
technical/specialty papers.

The Company is a wholly owned subsidiary of Plainwell Holding Company
("Holdings"). Holdings and four affiliated entities, Shasta Holding Company,
Inc., Shasta Paper Company, Plainwell Memphis Holding Company and Plainwell
Tissue-Memphis, Inc. are wholly owned subsidiaries, directly or indirectly, of
Plainwell Shasta Holdings, Inc. (the "Parent").

The Company's financial statements include the accounts of the Specialty Paper
Division and Consumer Products Division. All significant intercompany
transactions have been eliminated.

In the second quarter of fiscal 2000 the Company adopted Emerging Issues Task
Force (EITF) No. 00-11 Accounting for Shipping and Handling Fees and Costs. The
Company previously netted shipping costs against sales.

Certain amounts in the 1999 financial statements have been reclassified to
conform to the 2000 presentation.

The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all the information and notes required by
generally accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting only of adjustments of a
normal and recurring nature) considered necessary for a fair presentation of the
financial position and results of operations have been included. Operating
results for the three and six months ended June 30, 2000 are not necessarily
indicative of the results that might be expected for the year ending December
31, 2000.

For further information, refer to the financial statements and footnotes for the
year ended December 31, 1999 included in the Company's Annual Report on Form
10-K, filed April 12, 2000.

                                       6
<PAGE>   7
                                 PLAINWELL INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS

NOTE 2.  INVENTORIES

Inventories consist of the following (in thousands of dollars):

<TABLE>
<CAPTION>
                                      June 30, 2000       December 31, 1999
                                      -------------       -----------------
<S>                                   <C>                 <C>
 Paper mill fiber                     $       1,456       $           3,675
 Work-in-progress                             3,966                   5,318
 Finished goods                              12,604                  19,842
 Chemicals and other                          3,143                   3,173
                                      -------------       -----------------
      Total                           $      21,169       $          32,008
                                      =============       =================
</TABLE>


NOTE 3.  REVOLVING LINE OF CREDIT

In November 1999, the Company entered into a loan and security agreement with
Congress Financial Corporation (the "Credit Facility"). The Credit Facility has
a three-year term and provides for a maximum aggregate credit amount of $55
million, including revolving loans and standby letter of credit guarantees. At
June 30, 2000, unused available borrowings under the revolving credit portion of
the Credit Facility were $5.8 million. Congress Financial Corporation also
provides a $25 million credit facility to Shasta. Shasta guarantees the
Company's Credit Facility.

Pursuant to the original terms of the Credit Facility, the Company was required
to maintain certain minimum net worth (as defined) of $8.0 million if the
borrowing availability (as defined) under the Credit Facility fell below $10.0
million. At December 31, 1999 and for the three months ended March 31, 2000, the
Company was not in compliance with the minimum net worth covenant. The Company
received a waiver for the violation of this covenant and on April 12, 2000, an
amendment to the Credit Facility was executed to modify the minimum net worth
covenant, whereby the minimum net worth covenant is measured on a monthly basis
in 2000. The Company was not in compliance with the minimum net worth covenant
(as amended) at June 30, 2000. The Credit Facility contains a subjective
acceleration clause and a lock-box agreement and accordingly the debt under the
Credit Facility has been classified as a current liability in the balance sheet.

NOTE 4.  CONTINGENT MATTERS

The Company is involved in various legal proceedings in the ordinary course of
business. Although the final outcome of any legal proceeding or environmental
matter is subject to a great many variables and cannot be predicted with any
degree of certainty, the Company presently believes that the ultimate outcome
from these proceedings would not have a material adverse effect on the current
financial position or on the operations of the Company; however, in any given
future reporting period such proceedings or matters could have a material effect
on the results of operations.

The Internal Revenue Service (the "IRS") is currently conducting an audit
related to whether the proceeds from the $18.8 million Wisconsin Industrial
Revenue Bonds ("IRB's") issued for the benefit of the Company were spent on
qualified expenditures. A determination by the IRS that the Wisconsin IRB's do
not qualify for tax exempt status could result in a mandatory redemption of the
IRB's. Management believes the proceeds were appropriately

                                       7
<PAGE>   8

invested and intends to vigorously defend its position. Management believes the
outcome of this matter will not have a material effect on its financial position
or results of operations.

NOTE 5.  ENVIRONMENTAL REMEDIATION

The Company is committed to abiding by the environmental, health and safety
principles of the American Forest & Paper Association. Each capital project has
been planned to comply with applicable environmental regulations and to enhance
environmental protection at existing facilities. The Company faces increasing
capital expenditures and operating costs to comply with expanding and more
stringent environmental regulations, although compliance with existing
environmental regulations is not expected to have a materially adverse effect on
the Company's earnings, financial position, or competitive position.

The Comprehensive Environmental Response, Compensation and Liability Act
(CERCLA) and similar state "Superfund" laws impose liability, without regard to
fault or to the legality of the original action, on certain classes of persons
(referred to as potentially responsible parties or PRPs) associated with a
release or threat of a release of hazardous substances into the environment.
Financial responsibility for the cleanup or other remediation of contaminated
property or for natural resource damages can extend to previously owned or used
properties, waterways, and properties owned by third parties, as well as to
properties currently owned and used by a company even if contamination is
attributable entirely to prior owners.

The Company has been identified by certain governmental entities or other
parties as a PRP with respect to possible investigation and cleanup costs
associated with certain contaminated sites. The Company has recorded a liability
for the estimated work at the locations and a receivable for remediation costs
recoverable under related indemnification agreements.

In 1990, a predecessor to the Company was named as one of several PRPs at a
Superfund site in Kalamazoo, Michigan, which has five distinct operable units.
PRPs may be held jointly and severally liable for cleanup plus related costs.
One operable unit of the Kalamazoo River Site is the 12th Street Landfill, a
property wholly owned by the Company. The Company expects to pay for the entire
cost of the investigation and remediation work at this location. The Company has
recorded a liability for the estimated cost to remediate this unit as well as a
receivable for remediation costs recoverable under an indemnification agreement.
Investigations at a second operable unit, which includes a portion of the
Kalamazoo River, continue. Environmental remediation costs, if any, that may be
incurred cannot presently be estimated. Based on management's understanding of
the contamination at the Kalamazoo River operable unit, the involvement of other
PRPs and the indemnity rights the Company has against the predecessor company,
the Company does not expect this matter to have a material adverse effect on
operations, liquidity and financial condition.

The Company owns and operates a landfill in Washington Township, Wisconsin, for
disposal of its papermaking sludge. The Company has closed two of the three
sections of the landfill and is currently monitoring those sections in
accordance with requirements of state environmental laws. The Company expects to
begin closure of the third section by 2002. Estimated closure costs of $1.3
million are being accrued over the operating life of the landfill. Monitoring
costs estimated at $80,000 per year will be required for 40 years following the
closure of the landfill. The Company believes that, based on current information
and regulatory requirements, the estimates of the landfill closure costs are
adequate, although there can be no assurance that the cost will not eventually
exceed the amount presently estimated.

                                       8
<PAGE>   9
                                 PLAINWELL INC.
               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)


NOTE 5.  ENVIRONMENTAL REMEDIATION (CONTINUED)

The Company is also considered a PRP with respect to the Blue Valley Landfill
Superfund Site in Eau Claire, Wisconsin. Based on the amount of material sent to
the Blue Valley Landfill and the Company's indemnification with a predecessor
company, the Company does not anticipate that its costs associated with the site
will have a material adverse effect on its operations, liquidity or financial
condition.

In 1998, the EPA published regulations establishing standards and limitations
for non-combustion sources under the Clean Air Act and revised regulations under
the Clean Water Act. The new rules require more stringent controls on air
emissions and wastewater discharges from the Company's paper and tissue mills.
These regulations are collectively referred to as the "Cluster Rules." The
Company estimates that future capital spending to comply with the cluster rules
could be up to $5 million.

NOTE 6.  PAID-IN CAPITAL AND STOCKHOLDER'S EQUITY

In January 1999, Shasta Paper Company acquired the pulp and paper operations of
Simpson Paper Company located in Anderson, California. The Company paid a
dividend of $4.0 million to finance the transaction. The Company has various
transactions with Shasta Paper Company, including intercompany sales, shared
sales and marketing costs, shared corporate administrative costs, and shared
information services costs.

NOTE 7.  BUSINESS SEGMENT INFORMATION

The Company's business segments are (i) the Consumer Products Division, which
produces private label consumer tissue products, such as bath tissue, paper
towels, napkins, and facial tissue and (ii) the Specialty Paper Division, which
produces premium coated and uncoated printing papers and release and other high
performance industrial specialty papers. The markets in which the Company sells
its products are affected by several factors, including industry capacities and
the level of economic growth in domestic and international markets. The
principal markets for the Company's products are in the United States. Segment
operating profit is revenue less specific and allocable operating expenses.
General net corporate expenses include nonoperating overhead, interest expense,
and amortization of deferred financing costs and interest and other income
(expense). Income before interest and income taxes is used to measure the
performance of the segments and to allocate resources.

                                       9
<PAGE>   10
                                 PLAINWELL INC.
               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)



NOTE 7. BUSINESS SEGMENT INFORMATION (CONTINUED)

<TABLE>
<CAPTION>
                                                       Consumer         Specialty
                                                       Products           Paper
                                                       Division          Division        Corporate          Total
                                                     --------------   ---------------   -------------    -------------
<S>                                                  <C>              <C>               <C>              <C>
Three months ended June 30, 2000:
    Net sales                                        $      37,035    $       23,072    $          -     $     60,107
    Operating loss                                          (3,077)           (4,136)         (1,249)          (8,462)
    Interest expense                                           395                48           4,371            4,814
    Depreciation and amortization                            3,276               390             268            3,934
    Capital expenditures                                     1,886                67               8            1,961
    Total assets                                            54,112            18,605         145,184          217,901

Three months ended June 30, 1999:
    Net sales                                        $      36,813    $       21,416    $          -     $     58,229
    Operating income (loss)                                  1,499             1,170            (129)           2,540
    Interest expense                                           244                39           4,343            4,626
    Depreciation and amortization                            2,863               369               -            3,232
    Capital expenditures                                     1,282                13             474            1,769
    Total assets                                            56,985            19,765         148,594          225,344

Six months ended June 30, 2000
    Net sales                                        $      69,412    $       43,954    $          -     $    113,366
    Operating loss                                          (5,887)           (3,440)         (2,058)         (11,385)
    Interest expense                                           715                88           8,557            9,360
    Depreciation and amortization                            6,462               780             537            7,779
    Capital expenditures                                     4,852               110              41            5,003

Six months ended June 30, 1999:
    Net sales                                        $      73,237    $       41,503    $          -     $    114,740
    Operating income (loss)                                  2,623             1,860            (674)           3,809
    Interest expense                                           434                73           8,119            8,626
    Depreciation and amortization                            5,712               738               -            6,450
    Capital expenditures                                     2,361               300             481            3,142
</TABLE>


                                       10
<PAGE>   11
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

RESULTS OF OPERATIONS:

THREE MONTHS ENDED JUNE 30, 2000 COMPARED TO THE THREE MONTHS ENDED JUNE 30,
1999

NET SALES.

The Company's net sales increased to $60.1 million for the three months ended
June 30, 2000 compared to $58.2 million for the three months ended June 30,
1999. This increase reflects a $1.7 million increase in net sales in the
Specialty Paper Division, and a $200,000 increase in net sales from the Consumer
Products Division.

The $1.7 million increase in net sales at the Specialty Paper division is the
result of a 12.9% increase in the average selling price per unit sold, partially
offset by a 2.6% reduction in volume.

The Consumer Products Division experienced a 9.9% decrease in volume for the
three months ended June 30, 2000 compared to the three months ended June 30,
1999. This decrease is partially offset by an 11.7% increase in the net selling
price per unit sold, resulting in a $200,000 increase in net sales at the
Consumer Products Division. The increase in sales price per unit is the result
of industry-wide selling price increases effected in the second quarter of 2000,
enabling the Division to partially offset raw material price increases.

COST OF SALES AND GROSS PROFIT.

During the three months ended June 30, 2000, the Specialty Paper Division
experienced increased fiber costs, partially offset by increases in net selling
prices. The Specialty Paper Division recorded a $3.3 million charge to cost of
sales during the quarter to reflect appropriate inventory valuation and
quantities. In addition, both the Specialty Paper Division and the Consumer
Products Division experienced increased period costs in the second quarter as a
result of production capacity utilization to reduce inventories.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.

Selling General and Administrative Expenses increased $1.1 million for the three
months ended June 30, 2000 to $5.4 million compared to $4.3 million for the
three months ended June 30, 1999. The increase is primarily attributable to
severance costs recorded in connection with the replacement of the Company's
Chief Executive Officer.

INTEREST EXPENSE.

Interest expense increased $200,000 to $4.8 million for the three months ended
June 30, 2000 from $4.6 million for the three months ended June 30, 1999. The
increase is primarily attributable to the increase in borrowings on its
revolving credit line.

INCOME TAXES.

The Company, which is a member of a consolidated group for federal and certain
state income tax purposes of which Plainwell Shasta Holdings, Inc. (the
"Parent") is the parent corporation, has a tax sharing agreement with other
members of the group. Under the terms of the tax sharing agreement, each member
computes its taxes on a separate basis and makes or receives payments to other
group members.

                                       11

<PAGE>   12
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED

SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1999

NET SALES.

During the six months ended June 30, 2000, the Company had net sales of $113.4
million compared to $114.7 million in the same period of 1999. This slight
decrease is primarily attributable to lower volume of shipments in both the
Specialty Paper Division and the Consumer Products Division in the second
quarter of 2000.

COST OF SALES AND GROSS PROFIT.

Cost of sales increased to $114.6 million for the six months ended June 30, 2000
compared to $101.9 million for the six months ended June 30, 1999. The increase
in cost of sales and negative gross profit are primarily attributable to the
$3.3 million inventory valuation and quantity adjustment recorded during the
second quarter of 2000, the increased fiber costs and production capacity
utilization in the six months ended June 30, 2000, combined with slower revenue
per unit sales increases to offset the fiber price increases.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.

Selling, general and administrative expenses increased to $10.2 million for the
six months ended June 30, 2000 from $9.1 million for the six months ended June
30, 1999. The increase is primarily attributable to severance costs recorded in
connection with the replacement of the Company's Chief Executive Officer.

INTEREST EXPENSE

Interest expense increased $700,000 to $9.4 million during the first six months
of 2000 compared to $8.6 million in the same period of 1999. This increase is
primarily attributable to the Company's increased borrowings on its revolving
line of credit.

INCOME TAX EXPENSE

The current income tax benefit for the six months ended June 30, 2000 includes
$350 thousand of payments in lieu of taxes, which will be paid to the Company by
other members of the group under the terms of the tax sharing agreement with
affiliated companies.

FINANCIAL CONDITION

Inventories

Inventories decreased $10.8 million to $21.2 million at June 30, 2000 compared
to $32.0 million at December 31, 1999. This change reflects initiatives
achieved by the Company in reducing inventories as well as the $3.3 million
inventory valuation and quantity adjustment recorded during the second quarter
of 2000.

                                       12
<PAGE>   13
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED

LIQUIDITY AND CAPITAL RESOURCES.

USES OF CASH

The Company's primary capital requirements are for working capital, debt service
and capital expenditures. The Company believes that cash generated from
operations, together with borrowings under its revolving credit facility, will
be sufficient to meet the Company's capital needs in the foreseeable future. The
Company's Credit Facility is guaranteed by Shasta Paper Company ("Shasta"), an
affiliate company.

WORKING CAPITAL

The Company's most significant cash requirement is related to funding the costs
of production from the time of manufacturing through the time of sale and
collection of sales proceeds. At June 30, 2000, the Company had $21.2 million of
inventory and $22.7 million of accounts receivable compared to $32.0 million and
$21.7 million at December 31, 1999, respectively.

DEBT SERVICE

The Company also utilizes a substantial amount of cash to fund the interest
costs associated with its 11% Senior Subordinated Notes as well as interest
expenses associated with its Credit Facility utilized to fund its working
capital requirements. During the six months ended June 30, 2000, the Company
incurred approximately $9.4 million of interest expense compared to $8.6 million
in the six months ended June 30, 1999.

CAPITAL EXPENDITURES

During the six months ended June 30, 2000, the Company spent approximately $5.0
million on capital expenditures compared to $3.1 million in the six months ended
June 30, 1999.

It is further estimated that future capital spending to comply with the Cluster
Rules and the "GLI" may cost as much as $5.0 million. The Company cannot predict
if or when such rules will be promulgated such that the Company will be required
to incur such expenditures. In addition, the Company has limited indemnification
rights under various agreements with respect to certain contingent environmental
liabilities.

SOURCES OF CASH

CREDIT FACILITY

The Company has a loan and security agreement with Congress Financial
Corporation (the "Credit Facility") which provides for a maximum aggregate
credit amount of $55 million, including letter of credit commitments. This
facility is utilized to fund working capital needs and standby letter of credit
guarantees. At June 30, 2000, unused available borrowings under the revolving
credit portion of the Credit Facility were $5.8 million. Congress Financial
Corporation also provides a $25 million credit facility to Shasta. Shasta
guarantees the Company's Credit Facility.

                                       13
<PAGE>   14

Pursuant to the terms of the Credit Facility, the Company was required to
maintain a minimum net worth (as defined) of $8.0 million if the borrowing
availability (as defined) under the Credit Facility falls below $10.0 million.
At December 31, 1999 and through April 12, 2000, the Company was not in
compliance with the minimum net worth covenant. The Company received a waiver
for the violation of this covenant and on April 12, 2000, an amendment to the
Credit Facility was executed to modify the minimum net worth covenant, whereby
the minimum net worth covenant is measured on a monthly basis in 2000. The
Company was not in compliance with the minimum net worth covenant (as amended)
at June 30, 2000. Management expects to negotiate an amendment to the Credit
Facility and receive a waiver from Congress Financial Credit during the third
quarter of fiscal 2000.

The Company expects to incur losses from operations throughout fiscal 2000 due
to low gross margins incurred in the first six months of 2000. The Company
expects that losses in the third and fourth quarters of 2000 will decline as
recently announced price increases take effect and modifications to product
offerings at the Consumer Products Division are implemented. Cash from
operations, together with borrowings under the Credit Facility, should be
sufficient to meet the Company's operating and debt service requirements. The
Company anticipates using primarily leases to finance its capital expenditure
requirements.


INFLATION.

The Company believes that general inflation has not had a material impact on the
results of operations of either the Consumer Products Division or the Specialty
Paper Division. The risk of commodity price fluctuations, including raw
materials and energy, is material to the operations of the Company.


CONTINGENT MATTERS.

Refer to Notes 4 and 5 of the Notes to the Condensed Financial Statements for a
discussion of contingencies.


FORWARD-LOOKING INFORMATION

Certain statements in the Management's Discussion and Analysis of Financial
Condition and Results of Operation for the three and six months ended June 30,
2000 compared to the three and six months ended June 30, 1999 may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Because these forward-looking statements include
risks and uncertainties, actual future results may differ materially from those
expressed in or implied by the statements. Factors that could cause actual
results to differ include, among other things; (1) Increased competition from
either domestic or foreign paper producers, including increases in more
competitive capacity through construction of new mills or conversion of older
facilities to produce competitive products; (2) variations in demand for our
products; (3) changes in the cost or availability of the raw materials that we
use, particularly market pulp; (4) costs of compliance with new environmental
laws and regulations; (5) any decisions by us to make a significant acquisition
or a significant increase in production capacity.

                                       14
<PAGE>   15
ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risks related to changes in interest rates. The
Company does not use derivative financial instruments for speculative or trading
purposes.

Interest Rate Sensitivity. The Company's earnings are affected by changes in
short-term interest rates as a result of its borrowings under its revolving
credit facility. If market interest rates for such borrowings had averaged 1%
more during the six months ended June 30, 2000, the Company's interest expense
would have increased, and income before income taxes would have decreased by
approximately $50,000. This analysis does not consider the effects of the
reduced level of overall economic activity that could exist in such an
environment. Further, in the event of a change of a significant change in
short-term interest rates, management could take actions to further mitigate its
exposure to the change. However, due to the uncertainty of the specific actions
that would be taken and their possible effects, the sensitivity analysis assumes
no changes in the Company's financial structure.

                                       15

<PAGE>   16
PART II


ITEM 1.    LEGAL PROCEEDINGS

Reference is made to Note 7 of the Notes to Financial Statements included with
the Company's Annual Report on Form 10-K filed April 12, 2000.

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


(1)      None


ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

The following exhibit is filed in response to Item 601 of Regulation S-K:

Exhibit No.       Description

27                Financial Data Schedule (filed herewith)


(b)      Reports on Form 8-K
         Reports on Form 8-K was filed March 30
         Report on Form 8-K was filed June 29



                                       16
<PAGE>   17
SIGNATURES

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.

PLAINWELL INC.
(Registrant)


      August 14, 2000                 By:    \s\ Jeffrey A. Arnesen
----------------------------          ------------------------------------------
            Date                                 Jeffrey A. Arnesen
                                               Chief Financial Officer
                                             (Principal Financial Officer)

      August 14, 2000                 By:       \s\ Gary A. Hayden
----------------------------          ------------------------------------------
            Date                                    Gary A. Hayden
                                         President and Chief Operating Officer

                                       17

<PAGE>   18
                                  EXHIBIT INDEX

Exhibit No.       Description

27       Financial Data Schedule

















                                       18