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

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

                                    FORM 10-Q

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

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

                For the quarterly period ended September 30, 2001

                                       OR

             [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

             For the transition period from ________ to _________.

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

                        Commission File Number: 000-24331

                      Raintree Resorts International, Inc.
                     CR Resorts Capital S. de R.L. de C.V. *
             (Exact name of Registrant as Specified in its Charter)

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

                Nevada                                       76-0549149
    (State or other jurisdiction                          (I.R.S. Employer
  of incorporation  or organization)                     Identification No.)


                         10000 Memorial Drive, Suite 480
                              Houston, Texas 77024
          (Address of principal executive offices, including zip code)

                                 (713) 613-2800
              (Registrant's telephone number, including area code)


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


     As of September 30, 2001, the  Registrant  had 12,039,807  shares of Common
Stock outstanding and Warrants to purchase 3,096,455 shares of Common Stock.

     *CR Resorts  Capital,  S. de R.L. de C.V., a subsidiary of Raintree Resorts
International,  Inc.,  is a  co-registrant,  formed under the laws of the United
Mexican   States   (Mexican   tax   identification    number   CRC   970811E5A).

                              --------------------
                                       1
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              RAINTREE RESORTS INTERNATIONAL, INC. AND SUBSIDIARIES

                                TABLE OF CONTENTS



                                                                                                            Page
<S>                                                                                                            <C>

PART I. FINANCIAL INFORMATION

     ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS:
         Consolidated Balance Sheets as of
              December 31, 2000 and September 30, 2001 (Unaudited) .........................................    3
         Consolidated Statements of Operations and Comprehensive Loss
              for the Three and Nine Months ended September 30, 2000 and 2001 (Unaudited) ..................    4
         Consolidated Statements of Cash Flows
              for the Nine Months ended September 30, 2000 and 2001 (Unaudited)..............................   5
         Notes to Consolidated Financial Statements (Unaudited) September 30, 2001 ..........................   6

     ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
             FINANCIAL CONDITION AND RESULTS OF OPERATIONS...................................................  13

     ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK......................................  21

PART II. OTHER INFORMATION

     ITEM 1. LEGAL PROCEEDINGS...............................................................................  22
     ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.......................................................  22
     ITEM 3. DEFAULTS UPON SENIOR SECURITIES.................................................................  22
     ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............................................  22
     ITEM 5. OTHER INFORMATION ..............................................................................  22
     ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K................................................................  22

SIGNATURES.................................................................................................... 23


</TABLE>
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<TABLE>
<CAPTION>
                          PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

              RAINTREE RESORTS INTERNATIONAL, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                 (in thousands, except share and per share data)

                                                                                                 (Unaudited)
                                                                                  December 31,   September 30,
                                                                                      2000           2001
                                                                                  ------------   -----------
<S>                                                                                <C>          <C>
Assets
    Cash and cash equivalents ..................................................   $   3,373    $   3,152
    Vacation Interval receivables and other trade receivables, net .............      76,140       78,168
    Inventories ................................................................         917        1,107
    Refundable Mexican taxes ...................................................       2,461          532
    Facilities, office furniture and equipment, net ............................       5,168        4,714
    Land held for vacation ownership development ...............................      11,503       12,493
    Property held for sale .....................................................       1,301          338
    Equity investments .........................................................       2,062        2,311
    Cost of unsold vacation ownership intervals and related club memberships ...      13,303       11,605
    Retained interest in hotel cash flows ......................................       4,000           --
    Deferred loan costs, net ...................................................       6,427        6,307
    Exclusivity agreement and other intangibles ................................       2,872        2,830
    Prepaid and other assets ...................................................       4,225        6,401
                                                                                   ---------    ---------
Total assets ...................................................................   $ 133,752    $ 129,958
                                                                                   =========    =========

Liabilities and Shareholders' Investment

Liabilities
    Accounts payable ...........................................................   $   9,313    $   8,234
      Accrued  interest payable ................................................       1,876        5,132
      Refurbishment reserve ....................................................       3,210        3,596
      Inventory acquisition liabilities ........................................       2,346        5,660
      Other accrued liabilities ................................................       8,109        8,335
    Notes payable ..............................................................      46,192       39,170
    Senior Notes, due 2004, net of unamortized original issue discount of $4,952
       and $4,006 at December 31, 2000 and September 30, 2001, respectively ....      89,548       90,494
    Taxes payable ..............................................................         940        4,514
    Sales deposits and unearned service fees ...................................       2,779       10,706
                                                                                   ---------    ---------
Total liabilities ..............................................................     164,313      175,841

Commitments and Contingencies

Redeemable Preferred Stock
    Redeemable Preferred stock; Par value $.001; 5,000,000 shares authorized,
       50,000 shares issued and outstanding at September 30, 2001; aggregate
       liquidation  preference of $5,941 at September 30, 2001 .................       5,630        6,022

Shareholders' Deficit
    Common stock; par value $.001; 45,000,000 shares authorized, 10,766,300
       and 12,039,807 shares issued and outstanding at December 31, 2000
       and September 30, 2001, respectively ....................................          11           12
    Additional paid-in capital .................................................       1,505        1,132
    Warrants to purchase, 4,369,962 and 3,096,455 shares of common stock
       at December 31, 2000 and September 30, 2001 .............................       9,341        9,335
    Accumulated deficit ........................................................     (47,025)     (62,201)
    Cumulative translation adjustment ..........................................         (23)        (183)

Total shareholders' deficit ....................................................     (36,191)     (51,905)
                                                                                   ---------    ---------
Total liabilities and shareholders' deficit ....................................   $ 133,752    $ 129,958
                                                                                   =========    =========
</TABLE>



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


                                       3
<PAGE>

<TABLE>
<CAPTION>


              RAINTREE RESORTS INTERNATIONAL, INC. AND SUBSIDIARIES

          CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                      (in thousands, except per share data)
                                   (Unaudited)

                                                        Nine Months Ended       Three Months Ended
                                                          September 30,          September 30,
                                                      --------------------    --------------------
                                                        2000        2001        2000        2001
                                                      --------    --------    --------    --------
<S>                                                  <C>         <C>         <C>         <C>
Statement of Operations
Revenues
   Vacation Interval sales ........................   $ 55,529    $ 44,417    $ 20,242    $  9,172
   Rental and service fee income ..................      8,142      11,105       2,590       3,351
   Interest income on Vacation Interval receivables      6,213       5,800       2,064       1,830
   Sale of assets and other income ................      2,014       2,407         700       1,773
                                                      --------    --------    --------    --------
     Total revenues ...............................     71,898      63,729      25,596      16,126
Costs and Operating Expenses
   Cost of Vacation Interval sales ................     13,175      12,154       4,722       2,987
   Provision for doubtful accounts ................      4,671       3,068       1,720         806
   Advertising, sales and marketing ...............     25,010      24,379       9,263       6,835
   Maintenance and energy .........................      9,418      13,154       3,480       4,306
   General and administrative .....................      8,926       9,104       3,343       3,567
   Depreciation ...................................      1,243       1,176         383         400
    Loss on sale of assets ........................      7,249          --       1,049          --
                                                      --------    --------    --------    --------
     Total costs and operating expenses ...........     69,692      63,035      23,960      18,901
                                                      --------    --------    --------    --------
Operating income (loss) ...........................      2,206         694       1,636      (2,775)
   Interest expense, net ..........................     15,824      15,079       5,172       4,905
   Equity in (gains) losses on equity investments .      1,106        (435)      1,059          54
   Foreign currency exchange (gains) losses, net ..        241        (937)       (755)        703
                                                      --------    --------    --------    --------
Net loss before taxes .............................    (14,965)    (13,013)     (3,840)     (8,437)
   Foreign income and asset taxes .................       (583)      2,163        (620)        823
                                                      --------    --------    --------    --------
Net loss before extraordinary gain ................    (14,382)    (15,176)     (3,220)     (9,260)
   Extinguishment of debt, net of taxes ...........      1,021          --       1,021          --
                                                      --------    --------    --------    --------

Net loss before preferred dividends ...............    (13,361)    (15,176)     (2,199)     (9,260)
   Preferred stock dividends ......................        376         391         122         138
                                                      --------    --------    --------    --------
Net loss available to common shareholders .........   $(13,737)   $(15,567)   $ (2,321)   $ (9,398)
                                                      ========    ========    ========    ========

Net loss per share before extraordinary gain
    (Basic and Diluted) ...........................   $  (1.17)   $  (1.06)   $  (0.26)   $  (0.64)

Net loss per share
    (Basic and Diluted) ...........................   $  (1.09)   $  (1.06)   $  (0.18)   $  (0.64)

Weighted average number of common shares
    (Basic and Diluted) ...........................     12,636      14,636      12,636      14,636

Comprehensive Loss
Net loss before preferred stock dividends .........   $(13,361)   $(15,176)   $ (2,199)   $ (9,260)
Other comprehensive loss:
   Foreign currency translation adjustment ........       (158)       (160)        (56)       (137)
                                                      --------    --------    --------    --------
Comprehensive loss ................................   $(13,519)   $(15,336)   $ (2,255)   $ (9,397)
                                                      ========    ========    ========    ========
</TABLE>



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


                                       4
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<TABLE>
<CAPTION>

              RAINTREE RESORTS INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

                                   (Unaudited)
                                                                                     Nine Months Ended
                                                                                       September 30,
                                                                                --------------------------
                                                                                   2000            2001
                                                                                -----------    -----------

<S>                                                                              <C>         <C>
Operating activities
Net loss ......................................................................   $(13,361)   $(15,176)
   Adjustments to reconcile net loss to net cash used in operating activities:
     Depreciation and amortization ............................................      2,231       2,122
     Amortization of deferred loan costs ......................................      1,064       1,359
     (Gain) loss on sale of assets ............................................      7,249      (1,788)
     Gain on extinguishments of debt ..........................................     (1,571)         --
     Provision for doubtful accounts ..........................................      4,671       3,068
     Equity in losses (gains) on equity investments ...........................      1,106        (435)
     Changes in other operating assets and liabilities:
       Vacation Interval receivables and other trade receivables ..............    (18,277)     (5,074)
       Cost of unsold vacation ownership intervals and related club memberships      7,098       1,265
       Prepaid and other assets ...............................................     (1,577)     (2,183)
       Accounts payable and accrued liabilities ...............................      3,954       6,297
       Taxes payable/refundable ...............................................      1,271       5,482
       Sales deposits and unearned services fees ..............................      1,180       7,927
                                                                                  --------    --------
Net cash provided by (used in) operating activities ...........................     (4,962)      2,864

Investing activities
   Purchase of land and other assets held for vacation ownership development ..       (694)       (779)
   Proceeds from sale of assets ...............................................      8,273       6,470
   Additions to facilities, office furniture and equipment ....................       (841)       (705)
                                                                                  --------    --------
Net cash  provided by investing activities ....................................      6,738       4,986

Financing activities
    Additional bank and other loans, net of related expenses ..................     18,849      19,843
    Repayment of bank loans and senior notes ..................................    (24,761)    (27,804)
    Exercise of warrants ......................................................         --          13
    Dividend payments on and redemption of  preferred stock ...................       (813)         --
                                                                                  --------    --------
Net cash used in financing activities .........................................     (6,725)     (7,948)

Decrease in cash and cash equivalents .........................................     (4,949)        (98)
Effect of exchange rate changes on cash .......................................        (80)       (123)
Cash and cash equivalents, at beginning of the period .........................      8,311       3,373
                                                                                  --------    --------
Cash and cash equivalents, at end of the period ...............................   $  3,282    $  3,152
                                                                                  ========    ========

Supplemental disclosures of cash flow information
    Cash paid during the period for interest ..................................   $ 11,212    $ 14,851
    Cash received during the period for income and asset taxes ................        (26)       (216)

Non-cash financing activities
      Stock dividends accrued and accretion on preferred stock ................   $    376    $    391

</TABLE>


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



                                       5
<PAGE>



              RAINTREE RESORTS INTERNATIONAL, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

                               September 30, 2001


NOTE 1. GENERAL INFORMATION

General

     The  financial   statements   include  the  accounts  of  Raintree  Resorts
International,  Inc., a Nevada  corporation,  (the "Ultimate Parent") and all of
its  wholly  owned  subsidiaries  (collectively,  the  "Company").  The  Company
develops, markets, and operates vacation ownership resorts in North America with
resorts in Mexico, Canada and the United States. The Company's  headquarters are
located in Houston, Texas with administrative offices in Mexico City, Mexico and
Whistler, British Columbia, Canada.

Liquidity

     In connection with the Company's  August 1997 purchase of its  subsidiaries
in Mexico,  the Company  borrowed  approximately  $83 million and replaced  such
borrowing with its Senior Notes. At September 30, 2001, the Company is, and will
continue to be, highly  leveraged,  with substantial debt service  requirements.
The Company incurs  significant  liquidity  needs to fund  semi-annual  interest
payments  of $6.1  million  due June 1 and  December  1 on its Senior  Notes.  A
significant  portion  of the  Company's  assets  are  pledged  against  existing
borrowings.  The Company has a shareholders'  deficit, has incurred losses since
its  inception  and  expects  to incur a net loss for  fiscal  2001.  To achieve
profitable  operations,  the  Company  is  dependent  on a  number  of  factors,
including  its ability to  increase  its  Vacation  Interval  inventory  through
development  projects or through the acquisition of existing resort  properties,
and to sell Vacation  Intervals on an economical basis,  taking into account the
cost of such intervals and related marketing and selling expenses, and to either
attract new equity or equity  equivalent  capital or reduce or  restructure  its
Senior Notes or a combination  of the  foregoing.  The Company has  historically
been successful in obtaining  additional  debt and issuing equity  securities to
fund negative cash flows from  operating  activities and to make the payments on
previously  incurred debt  obligations.  The Company expects that it will obtain
sufficient credit capacity or equity capital or complete a debt restructuring or
sale  of  assets  or  securitization  of  receivables  or a  combination  of the
foregoing to meet its debt service  obligations,  including interest payments on
its Senior  Notes  through  2002.  The Company  also  expects to be able to fund
capital requirements from anticipated capital project financings, which have not
yet been  negotiated.  However,  should the Company not be able to  successfully
negotiate  additional credit capacity or securitize its receivables or otherwise
reduce  through  acquisition  or  restructuring  its Senior  Notes,  there is no
assurance that the Company would be able to meet all of its working  capital and
short-term debt service obligations.

     The Company's payment of the Senior Notes interest through 2002 is based on
available  cash,  modifying  the  terms of its  current  credit  agreements  and
obtaining  new credit  capacity.  The  Company is  currently  in the  process of
soliciting  interim financing to enable it to meet its $6.1 million  semi-annual
interest  payment as of December 1, 2001, and working on restructuring a portion
of the Senior  Notes that would reduce the amount  required for future  interest
payments.  The  modifications  to its credit  agreements and  negotiation of new
credit capacity may involve  increasing the allowed amount of Vacation  Interval
receivables  from  Mexican  obligors or the portion of  collateral  which can be
based on Mexican currency and expanding the Company's  overall borrowing limits.
The Company is  currently  evaluating  several  alternatives  for  meeting  this
additional working capital need and is in discussions and negotiations regarding
these modifications,  new credit capacities and restructurings.  However,  these
discussions and negotiations as well as discussions  with new financing  sources
have not yet resulted in  commitments  that will satisfy the  Company's  working
capital needs through 2002.

     In order to meet  obligations  in the  long-term,  the Company will need to
achieve positive net income by reducing its high leverage  position,  expand and
extend its current  receivables  hypothecation  facilities and execute a capital
restructuring. The Company is pursuing several opportunities that may facilitate
a capital  restructuring.  While the Company  believes it will be able to obtain
additional  financing and execute a capital  restructuring  and has demonstrated
historically  that it has been successful in such efforts to secure financing or
generate  liquidity  necessary to service its high leverage,  should the Company
not  close one or more of these  opportunities  or one or more that may arise in
the future, the Company's operation could be materially  adversely affected.  If
the conditions


                                       6
<PAGE>
described  above  continue  to  exist at the time of  release  of its  financial
statements for the year that will end December 31, 2001, the Company's status as
a going concern could be jeopardized.

Basis of Presentation

     The  information  contained  in the  following  notes  to the  accompanying
consolidated  financial  statements is condensed from that which would appear in
the annual audited financial statements. Accordingly, the consolidated financial
statements   included  herein  should  be  reviewed  in  conjunction   with  the
consolidated  financial  statements  and related notes thereto  contained in the
Form 10-K  Annual  Report for the year ended  December  31,  2000,  filed by the
Company with the Securities and Exchange Commission.

     The condensed  consolidated  financial statements included herein have been
prepared by the Company, pursuant to the rules and regulations of the Securities
and Exchange  Commission  (the  "SEC").  Pursuant to such  regulations,  certain
information and footnote  disclosures  normally included in financial statements
prepared in accordance  with  accounting  principles  generally  accepted in the
United  States  have  been  condensed  or  omitted.  The  Company  believes  the
presentation  and  disclosures  herein are adequate to make the  information not
misleading.  The financial statements reflect all elimination entries and normal
adjustments  that are necessary for a fair  presentation  of the results for the
three and nine month period ended September 30, 2000 and 2001.

Use of Estimates

     The  preparation  of financial  statements  in conformity  with  accounting
principles  generally accepted in the United States requires  management to make
estimates  and  assumptions  that affect the amounts  reported in the  financial
statements  and  accompanying  notes.  Actual  results  could  differ from those
estimates.


NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Foreign Currency Fluctuations

     The Company  maintains  its Mexican  accounting  records and  prepares  its
financial  statements for its Mexican subsidiaries in Mexican pesos. The Mexican
pesos are translated to U.S. dollars for financial  reporting purposes using the
U.S.  dollar as the  functional  currency,  and  exchange  gains and  losses are
reported in income and expense.  The net gains and losses are primarily  related
to the increases or declines in the value of the peso to the U.S.  dollar during
such periods.

 The following  presents the foreign currency  exchange gains and losses for
the year 1999, 2000 and 2001 by quarter (in thousands):

Quarterly Gain/(Loss)            1999        2000          2001
---------------------           ------     --------       ------

First Quarter                  $  529      $    778      $  (239)
Second Quarter                   (727)       (1,774)       1,879
Third Quarter                     443           755         (703)
Fourth Quarter                    556          (884)
                               ------      --------      -------
                               $  801      $ (1,125)     $   937
                               ======      ========      =======


     The following table presents the quarter end exchange rates for the Mexican
peso:

                                           Pesos = 1.00 US Dollar
                                           ----------------------
                                         1999        2000        2001
                                        -----       -----       -----
     March 31 ........................  9.516       9.233       9.520
     June 30 .........................  9.488       9.954       9.085
     September 30 ....................  9.358       9.429       9.554
     December 31 .....................  9.522       9.600


     The future  valuation of the Mexican peso related to the U.S. dollar cannot
be determined, estimated or projected.


                                       7
<PAGE>
Cash and Cash Equivalents

     The Company  considers  demand  accounts and  short-term  investments  with
maturities of three months or less when purchased to be cash  equivalents.  Cash
and cash  equivalents  include $1.8 million in restricted funds at September 30,
2001.

Land Held for Vacation Ownership Development

     The Company owns a parcel of land adjacent to its Regina Resort  located in
Cabo San Lucas,  Mexico.  The Company  plans to  construct  additional  vacation
ownership facilities on this parcel of land. Although preliminary  architectural
and engineering planning has commenced,  no commitments have been made regarding
this planned expansion project.

     Land held for vacation ownership development includes the cost of land, and
additionally,  development costs and capitalized  interest.  Interest related to
these developmental  properties of $0.2 million and $0.7 million was capitalized
during  each of the three and nine  months  ended  September  30,  2000 and $0.2
million and $0.7 million for the three and nine months ended September 30, 2001.

     The Company  capitalizes  interest on  expenditures  incurred  for land and
development  when activities  have commenced  necessary to prepare the asset for
its  intended  use. The  capitalization  period ends when the asset is placed in
service or progress to complete the project is substantially suspended.

Impairment of Long-Lived Assets and Identifiable Intangibles

     The Company  periodically  evaluates its long-lived assets and identifiable
intangibles for impairment. If upon evaluation the Company's management believes
that  the  cost of one of its  assets  may be  impaired,  the  Company  will (a)
evaluate the extent to which that cost is  recoverable  by comparing  the future
undiscounted  cash  flows  estimated  to be  associated  with that asset to that
asset's  carrying amount and (b) write down that carrying amount to market value
or discounted cash flows value to the extent necessary.

New Accounting Pronouncement

     In  August  2001,  the  FASB  issued  SFAS  No.  144  "Accounting  for  the
Impairment/Disposal  of Long-Lived Assets." SFAS No. 144 addresses the financial
accounting  and reporting for the  impairment or disposal or long-lived  assets.
The Company is  required to and will adopt SFAS No. 144 on January 1, 2002.  The
Company is currently  analyzing  the  provisions of SFAS No. 144 and has not yet
made a  determination  of the impact the adoption will have on the  consolidated
financial statements.

Loss Per Share

     Basic per share results are computed by dividing income available to common
shareholders by the weighted average number of common shares outstanding for the
period.  Additionally,  shares  issuable  for  little  or no  consideration  are
considered  common shares and are included in the  computation of basic earnings
per share. At September 30, 2001, the Company had outstanding 2,596,455 warrants
to  purchase  shares of common  stock at an  exercise  price of $0.01 per share.
Since the common  shares  issuable  under these  warrants can be  purchased  for
little or no cash  consideration  and these  warrants  were  fully  vested  upon
issuance, they are included in the computation of basic earnings per share as of
the date they were issued.

     At September 30, 2001,  the Company had  outstanding  721,500 stock options
with a weighted-average  exercise price of $3.23 per share, 500,000 common stock
warrants with an exercise  price of $5.00 per share and  preferred  stock with a
$5.9 million Liquidation Preference convertible upon redemption at the Company's
option into shares of common stock valued at the Liquidation  Preference.  These
warrants,  common stock options and preferred  stock are not included in diluted
EPS as the exercise prices exceed the estimated fair value of common stock.  The
warrants  for  2,596,455  shares  of  common  stock  are  included  in both  the
computation of basic and diluted EPS.


                                       8
<PAGE>
NOTE 3.  VACATION INTERVAL RECEIVABLES AND OTHER TRADE RECEIVABLES

         Vacation Interval receivables and other trade receivables were as
follows (in thousands):


                                                December 31,      September 30,
                                                    2000              2001
                                                ------------       ----------
Vacation Interval receivables .........           $ 78,709         $ 78,274
Other trade receivables ...............              6,985            8,686
Less - allowances for doubtful accounts             (9,554)          (8,792)
                                                  --------         --------
      Total ..........................            $ 76,140         $ 78,168
                                                  ========         ========

     Allowances  for  uncollectible  accounts  increased  by  $3.1  million  for
additional  estimated  reserves,  and  decreased by $3.8 million for  receivable
write-offs, net of recoveries during the nine months ended September 30, 2001.

     The Company  estimates that at December 31, 2000 and at September 30, 2001,
approximately  46%  and  49%,  respectively,  of all of  the  Vacation  Interval
receivables  were U.S.  dollar  denominated,  37% and 35% of  Vacation  Interval
receivables were  denominated in UDIs, an obligation  denominated in pesos which
is adjusted  for Mexican  inflation  ("UDI"),  11% and 10% of Vacation  Interval
receivables  were  denominated  in Mexican  pesos,  and 6% of Vacation  Interval
receivables were denominated in Canadian dollars for both periods.


NOTE 4. INVENTORY ACQUISITION AND OTHER ACCRUED LIABILITIES

     Inventory acquisition liabilities are for the Cimarron, Kona and Puerto Mio
inventory   purchases.   Other  accrued  liabilities   includes  such  items  as
commissions, payroll, withholding taxes and legal accruals.


NOTE 5.  NOTES PAYABLE

Summary of Notes Payable (in thousands) -

<TABLE>
<CAPTION>

                                                                               December 31,       September 30,
                                                                                  2000                2001
                                                                             --------------       ------------
<S>                                                                                <C>                <C>
     Credit Agreement Notes and Loans ....................................         $ 36,588           $ 31,370
     Mortgages Payable ...................................................            4,112              4,442
     Cabos West Notes Payable  ...........................................            2,350              2,350
     Notes Payable to Financial Institution and Other Debt ...............            2,142              1,008
     Notes Payable to Shareholders .......................................            1,000                 --
                                                                                   --------           --------
                                                                                   $ 46,192           $ 39,170
                                                                                   ========           ========
</TABLE>
     Credit  Agreement  Notes  and  Loans - The  November  1998  amended  credit
agreement with FINOVA Capital Corporation  (FINOVA) includes a receivables based
credit  facility of $20.0  million and a $16.5  million  inventory  based credit
facility.  The  aggregate  borrowing  limit under the credit  agreement is $34.0
million.  FINOVA will lend 90% on pledged notes receivable denominated in United
States  dollars  and held by  United  States,  Canadian  and  Mexican  residents
(Mexican obligors limited to 15% of total receivables pledged).  These notes are
assigned to the lender and as payments  are  received,  they are applied to this
loan. The outstanding  receivables  loan balance bears interest at a fluctuating
base  rate  plus 175  basis  points,  which  was  11.25%  and 8.25% per annum at
December 31, 2000 and September 30, 2001 respectively. The outstanding inventory
loan balance bears  interest at a  fluctuating  base rate plus 225 basis points,
which was 11.75% per annum at December 31, 2000. Interest under the notes is due
monthly.  The  fluctuating  base rate is the "Corporate  Base" rate of Citibank,
N.A.,  New York,  which the bank publicly  announces from time to time, and is a
rate charged by the bank to its most creditworthy  commercial  borrowers.  Also,
the agreement  requires the Company to maintain certain minimum financial ratios
including a minimum capital requirement.  The receivables line of credit matures
84 months  from the date of the last  advance  made  against it, and the advance
period ends November  2001. As of December 31, 2000 and September 30, 2001,  the
outstanding  balance of the  receivables  line of credit was $14.6  million  and
$13.0  million,  respectively.  The  inventory  based  credit  facility was $4.4
million  as of  December  31,  2000 and was paid in full in  March  2001.  As of
September  30,  2001,  the  Company was not in  compliance  with the FINOVA loan
covenants related to the ratio of  administrative,  sales and marketing expenses
to Vacation Interval sales, "Mexican and other" receivables delinquency test and
the  minimum  capital  test  covenant,  and  obtained  timely  waivers  for such
non-compliance.


                                       9
<PAGE>
     In November 1999, the Company entered into a notes receivable loan facility
with  Textron  Financial  Corporation  (Textron)  that has a borrowing  limit of
$22.357  million,  as  amended.   Certain  of  the  Company's  notes  receivable
collateralize the loan, and the loan has three borrowing  components.  The first
borrowing component has a $13.0 million borrowing limit and is collateralized by
up to 60% by number of notes of notes receivable denominated in Mexican pesos or
UDI's  and  the  remainder  in  U.S.  dollars.  The  amount  of UDI  denominated
receivable  is further  limited to $3.0  million  of the  outstanding  principal
balance. Textron will lend 85%, 80% and 50% on pledged U.S. dollar, Mexican Peso
and  UDI  denominated  notes  receivable,  respectively.  The  second  borrowing
component has a $5.0 million  borrowing limit and is collateralized by up to 60%
by number of notes of notes  receivables  denominated  in Mexican  pesos and the
remainder in U.S.  dollars.  Textron will lend up to 80% on these pledged notes.
The third borrowing  component has a $4.357 million  borrowing limit relating to
sales of Kona Reef  inventory  and is  collateralized  by up to 60% by number of
notes  of notes  receivable  denominated  in  Mexican  pesos  or  UDI's  and the
remainder  in U.S.  dollars.  Textron will lend 85%, 80% and 50% on pledged U.S.
dollar, Mexican Peso and UDI denominated notes receivable,  respectively.  These
notes are assigned to the lender and as payments  are received  they are applied
to this  loan.  The  agreement  limits the use of  proceeds  to payment of debt,
sales, marketing, working capital, project development and administrative costs,
and for future  expansion of  timeshare  development.  Additionally,  the entire
outstanding  loan balance is to be paid in full on or before  December 31, 2005.
The  outstanding  loans bear  interest at a  fluctuating  base rate based on the
Chase  Manhattan Bank prime rate plus 200 basis points for the $13.0 million and
the  $4.357  million  and 275  basis  points  for the $5.0  million  components,
respectively,  that is adjusted on the first day of each month with the interest
due monthly.  As of December 31, 2000 and  September 30, 2001,  the  outstanding
balance under the $13.0  million  portion of the loan facility was $12.7 million
and $12.3 million, with an interest rate on the outstanding balance of 11.5% and
8.5%, respectively. Draws on the $5.0 million portion of the loan facility began
in 2001,  with an  outstanding  loan balance of $4.5 million as of September 30,
2001 and an interest rate of 9.25%.  No advances have been made under the $4.357
million portion of loan facility.

     Additionally,  the Company has available $20.0 million of notes  receivable
based facility  capacity in conjunction with the Cimarron  Project  Development,
Management  and Sales  Agreement.  This  credit  facility  with  Textron  can be
utilized only in conjunction with the credit sales of inventory acquired through
the Cimarron agreement. Textron will lend up to 70% of the outstanding principal
balance of all eligible notes receivable  executed by Mexican  residents with no
less than 30% of the outstanding  principal balance of eligible notes receivable
executed by United States or Canadian residents. Additionally, Textron will lend
90%,  85%,  80% and 50% on pledged  U.S.  dollar  denominated  notes  receivable
executed by a United States or Canadian resident,  U.S. dollar denominated notes
receivable  executed  by a Mexican  resident,  Mexican  Peso  denominated  notes
receivable executed by a Mexican resident,  and UDI denominated notes receivable
held by a Mexican resident, respectively. The facility matures November 1, 2004.
The  outstanding  loans bear interest at a fluctuating  base rate based on Chase
Manhattan Bank prime rate (6.5% at September 30, 2001) plus 225 basis points. No
advances have been made under the receivables credit facility.

     The Bancomer  November  1999 UDI based $7.0 million loan  agreement and the
June 2001 additional  $800,000 U.S. dollar borrowings are  collateralized by the
Company's UDI denominated  notes  receivable.  The collateral  maintained by the
Company  equals 3 times the  outstanding  borrowings  under the loan.  The notes
receivable  are  assigned to the lender and as payments are  received,  they are
applied to this loan. The loan bears simple interest at a rate of 12% per annum.
As of December 31, 2000 and September 30, 2001, the outstanding balance was $4.8
million and $1.6 million, respectively.

Mortgages  Payable - Mortgages  payable  consist of the  assignment  of specific
Whiski Jack Vacation Interval receivables to related and third party buyers. The
mortgages  payable bear interest at 8.25% to 15.25% during 2000 and at September
30,  2001,  and were payable in monthly  installments  including  interest  over
periods ranging from twelve months to ten years during both periods. The average
interest rate paid was 11.4% and 11.5% during 2000 and 2001, respectively.

Cabos West Notes Payable - On September  17, 1998, in connection  with the Cabos
West land purchase,  the Company entered into notes payable secured by the land.
The notes bear interest at approximately 13% and are due on demand.

Notes Payable to Financial  Institutions  - In April 2000,  the Company  entered
into a note payable to North Shore Credit Union, in connection with the Canadian
units  purchased.  The notes bear an  interest  rate of prime  plus 2.5%,  which
totaled  10.0% and 7.75%,  and an  outstanding  loan balance of $2.0 million and
$1.0 million at December 31, 2000 and September 30, 2001,  respectively,  and is
due on demand.


                                       10
<PAGE>
NOTE 6. OPERATIONS BY INDUSTRY SEGMENT AND GEOGRAPHIC AREA

     The  Company  has only one line of  business  which  develops,  markets and
operates luxury vacation  ownership resorts in three geographic  areas;  Mexico,
Canada and the United  States.  The Company's  reportable  segments are based on
geographic  area.  The reportable  segments are managed  separately due to their
geographic  location  with  managers  focused on improving  and  expanding  each
segment's  operations.  However,  resource allocation is not based on individual
country  results,  but based on the best location for future resorts in order to
enhance the Company's  overall  ability to sell timeshare  under a club concept.
Revenues are  attributed  to countries  based on the location of the sale of the
vacation ownership interest.

     The following table presents segment information (in thousands):

<TABLE>
<CAPTION>

                                                                                              Corporate
                                                 Mexico         Canada           U.S.         and Other        Total
                                               ------------   ------------    ------------   ------------    -----------
<S>                                             <C>            <C>             <C>             <C>            <C>
As of and for the three months ended
  September 30, 2001:
Revenues from external customers*...             $ 11,871       $  2,487        $     35        $  1,733       $ 16,126
Depreciation and amortization ......                  347             41              --              12            400
Operating income (loss) ............               (3,769)           (67)             35           1,026         (2,775)
Income tax expense .................                  940           (117)             --              --            823
Capital expenditures ...............                  221             20              --               1            242
</TABLE>

     *  Mexico's  revenues  exclude  deferred  Vacation  Interval  sales of $7.3
million  pending title transfer on the  acquisition of the underlying  units for
the three months ended September 30, 2001.
<TABLE>
<CAPTION>

                                                                               Corporate
                                                 Mexico         Canada         and Other        Total
                                               ------------   ------------    ------------    -----------
<S>                                             <C>            <C>             <C>              <C>
As of and for the three months ended
  September 30, 2000:
Revenues from external customers ...             $ 22,958       $  2,627        $     11        $ 25,596
Depreciation and amortization ......                  327             40              16             383
Operating income (loss) ............                2,401           (189)           (576)          1,636
Income tax expense .................                 (452)          (168)             --            (620)
Capital expenditures ...............                  476            143              77             696

</TABLE>
<TABLE>
<CAPTION>
                                                                                              Corporate
                                                 Mexico         Canada           U.S.         and Other        Total
                                               ------------   ------------    ------------   ------------    -----------
<S>                                             <C>            <C>             <C>              <C>           <C>
As of and for the nine months ended
  September 30, 2001:
Revenues from external customers*............    $ 52,770       $  9,109        $     90        $  1,760       $ 63,729
Depreciation and amortization................       1,014            124              --              38          1,176
Operating income ............................         258            520              90            (174)           694
Income tax expense...........................       2,169             (6)             --              --          2,163
Capital expenditures ........................       1,418             57              --               9          1,484
Total assets ................................     112,868         11,748             201           5,141        129,958
</TABLE>
     * Mexico's  revenues  exclude  deferred  Vacation  Interval  sales of $12.6
million  pending title transfer on the  acquisition of the underlying  units for
the nine months ended September 30, 2001.

<TABLE>
<CAPTION>
                                                                               Corporate
                                                 Mexico         Canada         and Other        Total
                                               ------------   ------------    ------------    -----------
<S>                                             <C>            <C>             <C>              <C>
As of and for the nine months ended
  September 30, 2000:
Revenues from external customers ............    $ 63,669       $  8,099        $    130        $ 71,898
Depreciation and amortization................         929            266              48           1,243
Operating income (loss) .....................       3,954           (116)         (1,632)          2,206
Income tax expense...........................        (399)          (184)             --            (583)
Capital expenditures ........................       1,108            337             120           1,565
Total assets ................................     116,313         12,720           2,839         131,872
</TABLE>


                                       11
<PAGE>
Corporate and Other

     The amounts shown as an operating loss under the column heading  "Corporate
and Other" consist  primarily of general and  administrative  costs that are not
allocated to the segments. In July 2001, the Company and Starwood terminated the
Asset Management  Agreement between the parties,  which is reflected as Retained
Interest in Hotel Cash Flows for $4.0  million on the  December 31, 2000 balance
sheet.   Starwood  paid  the  Company  $5.4  million  in  conjunction  with  the
termination.  The Company recorded a gain of  approximately  $1.4 million during
the third quarter 2001,  which is included in Corporate and Other.  Also, the U.
S. joint venture is included in Corporate and Other,  after the operating  loss,
and had an equity loss of $1.1  million and $0.05  million for the three  months
ended  September  30,  2000 and 2001,  respectively,  and an equity loss of $1.1
million and gain of $0.4  million for the nine months ended  September  30, 2000
and 2001, respectively.


NOTE 7. REDEEMABLE PREFERRED STOCK

     The Redeemable  Preferred  requires that annual dividends be paid either in
cash equaling 9% of the Preferred's $100 per share  Liquidation  Preference,  or
accrued and added to the Liquidation  Preference.  Furthermore,  the Company has
the right,  at its  option to redeem at any time the  Redeemable  Preferred,  in
whole or in part,  but not later than March 2005,  at which time  redemption  is
mandatory  upon payment in cash of the  Liquidation  Preference  or in shares of
capital stock valued at the Liquidation Preference.


NOTE 8. CONTINGENCIES AND COMMITMENTS

     The Company is subject to various claims arising in the ordinary  course of
business, and is a party to various legal proceedings, which constitute ordinary
routine  litigation  incidental  to the  Company's  business.  In the opinion of
management,  all such matters are either adequately  covered by insurance or are
not expected to have a material adverse effect on the Company.


NOTE 9. JOINT VENTURE OPERATIONS

     The Teton Club, LLC ("Teton Club"),  is a joint venture between the Company
and the owner and developer of the Teton Village area near Jackson Hole, Wyoming
that is accounted for using the equity accounting  method.  The Teton Club has a
financing  commitment from FINOVA  consisting of $33.3 million for  construction
financing,  $7.5 million for pre-sale  working  capital  requirements  and $20.0
million for receivables  financing.  The receivable financing is a hypothecation
line-of-credit and will be used to repay the construction and pre-sale loans and
to fund  operating  expenses.  Also,  the  agreement  requires the Teton Club to
maintain certain minimum financial and operating ratio requirements.  As part of
the  financing  arrangement,  the Company is directly  obligated  for 25% of the
construction loan, the pre-sale working capital loan and the receivables loan to
the  extent of  nonpayment  by the Teton  Club.  Additionally,  the  Company  is
responsible for any working capital  deficits at the Teton Club. As of September
30, 2001,  the Teton Club had balances of $16.1  million and $5.6 million on the
construction  and  accounts  receivable  financing,  respectively.  The  working
capital loan was paid off in June 2001.


NOTE 10. INVENTORY ACQUISITION

     In May and July 2001,  the Company  entered  into  agreements  with Diamond
Resorts International,  a developer,  marketer and manager of vacation ownership
resorts, to acquire vacation ownership intervals.  The inventory to be purchased
will be  financed  with the  proceeds  from sales of the  inventory  or with the
proceeds  from  hypothecation  of  loans  made  to  purchasers.   The  Company's
obligation  to acquire  the  individual  vacation  ownership  intervals  will be
exercised  only as  required  to  meet  current  sales  demands.  The  inventory
acquisition will include  approximately 960 one-bedroom intervals from Diamond's
Kona Reef  Resort on the Big Island of Hawaii and  approximately  700  intervals
from Diamond's Polo Resort, located on the Las Vegas "Strip".


NOTE 11. TERMINATION OF RETAINED INTEREST IN HOTEL CASH FLOWS

     In July 2001,  the Company and  Starwood  terminated  the Asset  Management
Agreement between the parties,  which is reflected as Retained Interest in Hotel
Cash Flows for $4.0 million on the December  31, 2000


                                       12
<PAGE>
balance sheet.  Starwood paid the Company $5.4 million in  conjunction  with the
termination.  The Company recorded a gain of  approximately  $1.4 million during
the third quarter 2001 which is included in Sale of assets and other income.


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

     This  report  contains  forward-looking  statements  within the  meaning of
Section 21E of the Securities Exchange Act of 1934, as amended,  which represent
the Company's  expectations  and beliefs  concerning  future events that involve
risks and  uncertainties,  including  those  associated  with the effects of (i)
international,  national and regional economic  conditions and conditions in the
international  tourism  and  vacation  ownership  markets,  (ii)  the  Company's
capacity to integrate  acquisitions that it has made, and (iii) the availability
of capital resources necessary for the Company to execute its business strategy.
Investors are cautioned that all  forward-looking  statements  involve risks and
uncertainty. Discussions containing such forward-looking statements may be found
in the  material  set forth  under  "Management's  Discussion  and  Analysis  of
Financial  Condition  and Results of  Operations"  as well as elsewhere  herein.
Actual results may differ materially from those projected in the forward-looking
statements.  Although the Company  believes that the assumptions  underlying the
forward-looking   statements  contained  herein  are  reasonable,   any  of  the
assumptions could be inaccurate,  and therefore,  there can be no assurance that
the  forward-looking  statements  included  in  this  report  will  prove  to be
accurate. Important factors that could cause actual results to differ materially
from the Company's  expectations  are disclosed in this report.  Considering the
significant  uncertainties  inherent in the forward-looking  statements included
herein,  the  inclusion  of  such  information  should  not  be  regarded  as  a
representation  by the Company or any other person that the objectives and plans
of the Company  will be achieved.  The  following  discussion  should be read in
conjunction  with the financial  statements of Raintree  Resorts  International,
Inc. and related notes thereto, the management's discussion and analysis related
thereto,  all of which are included in the Form 10-K Annual  Report for the year
ended  December 31, 2000,  filed by the Company with the Securities and Exchange
Commission and the financial statements and notes thereto contained herein.

COMPARISONS OF THE NINE MONTHS ENDED SEPTEMBER 30, 2001 TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2000.

Segment Results

     General. The Company has only one line of business which develops,  markets
and  operates  luxury  vacation  ownership  resorts in three  geographic  areas;
Mexico,  Canada and the United  States.  The Company's  reportable  segments are
based on geographic area. The reportable  segments are managed separately due to
their geographic  location with managers focused on improving and expanding each
segment's  operations.  However,  resource allocation is not based on individual
country  results,  but based on the best location for future resorts in order to
enhance the Company's  overall ability to sell timeshares  under a club concept.
Revenues are  attributed  to countries  based on the location of the sale of the
vacation ownership interest.

The following presents segment data in thousands:
<TABLE>
<CAPTION>


                                               For the Nine Months ended September 30,
                      ---------------------------------------------------------------------------------------------
                                                        Operating
                                                          Income                          Capital
                          Revenues*         %             (Loss)             %          Expenditures        %
                        -------------    ---------     -------------    ------------    ------------    -----------
<S>                      <C>               <C>         <C>                <C>            <C>              <C>
 2001 -
 Mexico                   $ 52,770          82.8%        $    258          37.2%          $  1,418         95.6%
 Canada                      9,109          14.3%             520          74.9%                57          3.8%
 United States                  90           0.1%              90          13.0%                --          0.0%
 Corporate and other         1,760           2.8%            (174)        (25.1)%                9          0.6%
                          --------         -----         --------         -----           --------        -----
    Total                 $ 63,729         100.0%        $    694         100.0%          $  1,484        100.0%
                          ========         =====         ========         =====           ========        =====

 2000 -
 Mexico                   $ 63,669          88.5%        $  3,954         179.3%          $  1,108         70.8%
 Canada                      8,099          11.3%            (116)         (5.3)%              337         21.5%
 Corporate and other           130           0.2%          (1,632)        (74.0)%              120          7.7%
                          --------         -----         --------         -----           --------        -----
    Total                 $ 71,898         100.0%        $  2,206         100.0%          $  1,565        100.0%
                          ========         =====         ========         =====           ========        =====

</TABLE>


* Mexico's revenues exclude deferred Vacation Interval sales of $12.6 million
pending title transfer on the acquisition of the underlying units.


                                       13
<PAGE>
     Mexico's  Segment  Results - Comparison of the nine months ended  September
30, 2001 to the nine months ended September 30, 2000.  Revenues  decreased $10.9
million as the number of weeks sold  decreased  by 39.2% and the  average  price
increased  $3,195  for the  nine  months  ended  September  30,  2001  over  the
comparable  prior  year  period.  Operating  income  decreased  $3.7  million in
conjunction  with the  decrease in sales  offset by the prior year $7.2  million
provision  for loss on the sale of property.  Excluding  the impact of the prior
year loss on the sale of  property,  operating  income was down  $10.9  million.
However,  in 2001 the Company received deposits,  on 710 weeks of sales totaling
$12.6 million,  for which Vacation  Interval revenues are deferred pending title
transfer on the acquisition of the underlying  units. The Company  estimates the
impact of deferral of the Vacation  Interval  sales was to reduce 2001 operating
profit by $6.1  million.  After  consideration  of the  impact  of the  deferred
Vacation  Interval sales on operating  income,  operating  income decreased $4.8
million  resulting  from a higher  cost of  Vacation  Interval  sales  per sales
dollar, lower other income and overall higher net maintenance and energy costs.

     Canada's  Segment  Results - Comparison of the nine months ended  September
30, 2001 to the nine months ended  September 30, 2000.  Revenues  increased $1.0
million,  primarily as the number of weeks sold  increased  6.7% and the average
price  increased  $1,153.  The increase in both the number of weeks sold and the
average price is due to the closing of Westin  Vacation  Interval sales that had
not  been  recognized  previously  since  titles  had not been  received  on the
underlying  units.  Operating  income increased $0.6 million in conjunction with
the increased Vacation Interval sales.

     Corporate  and Other - Comparison  of the nine months ended  September  30,
2001 to the nine months ended  September  30, 2000.  Revenues  increased by $1.6
million and operating income increased $1.5 million, a result of the Company and
Starwood  terminating the Asset Management Agreement between the parties in July
2001. Starwood paid the Company $5.4 million in conjunction with the termination
and The Company recorded a gain of approximately $1.4 million.

Consolidated Results

     Comparison  of the nine months ended  September 30, 2001 to the nine months
ended September 30, 2000.

     Vacation  Interval sales  decreased $11.1 million,  or 20.0%,  for the nine
months ended  September  30, 2001 when  compared to the same period during 2000.
The number of Vacation  Interval  memberships  sold decreased by 1,449 weeks, or
34.2%,  from 4,239 weeks for the nine months ended  September  30, 2000 to 2,790
weeks for the nine months ended  September 30, 2001.  Additionally,  the average
price increased $2,821 or 21.5% from $13,099 for the nine months ended September
30, 2000 to $15,920 for the nine months ended September 30, 2001.  However,  the
Company  deferred 710 Vacation  Interval sales  totaling  $12.6 million  pending
title transfer on the acquisition of the underlying  units.  Contributing to the
higher average price is the increase in  availability of two bedroom units which
result in the Company  receiving an overall higher average price on sales of its
memberships  and a reduction in sales  discounts  during  2001.  The decrease in
sales  volume  adjusted  for the  impact of  deferred  Vacation  Interval  sales
primarily  took place during the 3rd quarter which  decreased 600 weeks with the
month of September down 283 weeks.  September was negatively impacted by reduced
travel  after the  terrorist  attcks on the World  Trade  Center  and  Pentagon.
Additionally,  the current year sales volume decrease is magnified by the strong
prior year sales volume which was up 355 weeks, or 29.2% over the prior year.

     Rental and service fee income  increased by $3.0 million,  or 36.4% for the
nine months  ended  September  30, 2001  compared to the  comparable  prior year
period.  The increase results primarily from an increase of approximately  4,685
new members paying service fees during the first nine months of 2001 compared to
the prior year period and an overall 5% increase in the 2001 service fee charged
to members.

     Interest income on Vacation Interval receivables  decreased by $0.4 million
or 6.6% for the nine months ended  September 30, 2001 compared to the prior year
period.   The  Company  records  UDI  inflation  impact  on  Vacation   Interval
receivables  as interest  income,  which was $0.3 million lower when compared to
the prior year in response to the lower inflation rates in Mexico in the current
period.

     Sale of assets and other income increased  approximately  $0.4 million from
approximately  $2.0  million for the nine  months  ended  September  30, 2000 to
approximately  $2.4 million for the nine months ended  September  30, 2001.  The
increase in other  income was a result of the Company and  Starwood  terminating
the Asset Management  Agreement between the parties in July 2001.  Starwood paid
the Company $5.4 million in  conjunction  with the  termination  and the Company
recorded a gain of approximately $1.4 million.  Additionally a decrease in


                                       14
<PAGE>
hotel  operations of $0.6 million at the Villa Vera during 2001 occurred because
of lower  occupancy and decreased  average rates and the Company had lower sales
during 2001 at retail theme store operations.

     Cost of Vacation Interval sales decreased by $1.1 million,  or 7.7% for the
nine months ended  September 30, 2001 compared to the same period during 2000 in
response to overall lower sale  revenues.  However,  as a percentage of Vacation
Interval sales,  Cost of Vacation  Interval sales  increased from  approximately
23.7% for the nine months ended  September 30, 2000 to  approximately  27.1% for
the nine months ended  September 30, 2001.  The increase  results from inventory
currently  being acquired from Cimarron,  Kona,  Puerto Mio and Westin  Whistler
that are at a higher cost per week acquired than the company's  historical  cost
rate per week of inventory.

     Provision for bad debt  reserves  decreased  approximately  $1.6 million or
34.3% from  approximately  $4.7 million for the nine months ended  September 30,
2000 to $3.1 million for the nine months ended  September  30, 2001.  Based on a
review of historical receivables defaults, the actual default rate was less than
the anticipated  default rate and therefore,  the current rate used to determine
the  provision  was adjusted.  The Company  believes  that the recorded  reserve
provides adequate coverage of default risk for the Vacation Interval receivables
under  current  market  conditions.  Additionally,  the  provision for bad debts
decreased in response to the 20.0% decrease in Vacation Interval sales.

     Advertising,  sales and marketing  expenses  decreased  approximately  $0.6
million,  or 2.5%,  from  approximately  $25.0 million for the nine months ended
September  30, 2000,  to  approximately  $24.4 million for the nine months ended
September 30, 2001. As a percent of Vacation Interval sales, advertising,  sales
and marketing expenses  increased from  approximately  45.0% for the nine months
ended  September  30,  2000 to  approximately  54.9% for the nine  months  ended
September 30, 2001. The increase in 2001 results from marketing costs associated
with the $12.6 million deferral of sales in Mexico (see Vacation  Interval Sales
discussion  above). On a proforma basis assuming the recognition of the deferred
sales and the $2.3 million of deferred commissions,  the advertising,  sales and
marketing  expenses as a percentage of Vacation  Interval  sales would be 46.8%,
which is an increase of 4.0% from the nine months ended September 30, 2000.

     Maintenance and energy expenses increased  approximately  $3.7 million,  or
39.7%, from  approximately  $9.4 million for the nine months ended September 30,
2000, to  approximately  $13.1  million for the nine months ended  September 30,
2001.  The increase in expenses was caused by  maintenance  and energy  expenses
associated  with new units from the Westin  Whistler  acquisition in March 2000,
the Cimarron acquisition in May 2000, the addition of 42 units previously leased
to Westin in Mexico in October,  2000 and increased costs associated with higher
occupancy  rates in  Mexico.  Additionally,  expenses  increased  as a result of
maintaining a higher membership base from the prior year.

     Interest  expense was  approximately  $0.7  million  less in the first nine
months of 2001 as compared to the first nine months of 2000 due primarily to the
lower level of debt  outstanding  including the $5.5 million  decrease in Senior
Notes between  periods.  The weighted  average interest rate decreased 0.4% from
September 30, 2000 to September 30, 2001,  and the average debt  decreased  $8.4
million.

     The foreign currency  exchange gain was  approximately  $0.9 million during
the first nine months of 2001 compared to a loss of  approximately  $0.2 million
during the first nine months of 2000.  The decrease in the loss between  periods
results from a stronger  peso against the U.S.  dollar during the nine months of
2001 compared to the prior year period.

     Foreign  income and asset taxes  increased $2.7 million for the nine months
ended  September  30,  2001  compared to the prior year  period.  The Company is
subject to Mexican asset taxes, a portion of which was  previously  subject to a
three-year exemption period, which is now expired.


MEXICO'S INFLATION AND CURRENCY CHANGES

     Management  believes that in  interpreting  the  comparisons of operational
results discussed above, two factors are of importance:  currency exchange rates
and  inflation.  Changes in costs  between  prior year and current  year periods
could be the result of  increases or  decreases  in the peso  exchange  rate and
inflation in Mexico.  In particular,  the average monthly peso exchange rate for
the nine months  ended  September  30, 2001  increased  1% when  compared to the
average monthly peso exchange rate for the nine months ended September 30, 2000.


                                       15
<PAGE>
However,  the Company estimates that inflation in Mexico was approximately  6.1%
since  September  2000.  Expenditures  in  Mexico  for  advertising,  sales  and
marketing,  maintenance and energy, and general and administrative  expenses are
primarily  settled  in pesos,  and were  negatively  impacted  by the  effect of
inflation.

COMPARISONS  OF THE THREE  MONTHS ENDED  SEPTEMBER  30, 2001 TO THE THREE MONTHS
ENDED SEPTEMBER 30, 2000.

Segment Results

The following presents segment data in thousands:
<TABLE>
<CAPTION>

                                              For the Three Months ended September 30,
                      --------------------------------------------------------------------------------------------
                                                        Operating
                                                          Income                         Capital
                         Revenues*          %             (Loss)            %          Expenditures         %
                        -------------    ---------     -------------    -----------    -------------    --------
<S>                      <C>              <C>          <C>               <C>            <C>              <C>
 2001 -
 Mexico                   $ 11,871          73.6%       $  (3,769)        135.9%         $    221          91.3%
 Canada                      2,487          15.4%             (67)          2.4%               20           8.3%
 United States                  35           0.2%              35          (1.3)%              --           0.0%
 Corporate and other         1,733          10.8%           1,026         (37.0)%               1           0.4%
                          --------         -----        ---------         -----          --------         -----
    Total                 $ 16,126         100.0%       $  (2,775)        100.0%         $    242         100.0%
                          ========         ======       =========         ======         ========         ======

 2000 -
 Mexico                   $ 22,958          89.7%       $   2,401         146.8%         $    476          68.4%
 Canada                      2,627          10.3%            (189)        (11.6)%             143          20.5%
 Corporate and other            11           0.0%            (576)        (35.2)%              77          11.1%
                          --------         -----        ---------         -----          --------         -----
    Total                 $ 25,596         100.0%       $   1,636         100.0%         $    696         100.0%
                          ========         ======       =========         ======         ========         ======
</TABLE>


* Mexico's revenues exclude deferred Vacation Interval sales of $7.3 million
pending title transfer on the acquisition of the underlying units.


     Mexico's  Segment  Results - Comparison of the three months ended September
30, 2001 to the three months ended September 30, 2000.  Revenues decreased $11.1
million,  or 48.3%,  and operating  income  decreased $6.2 million for the three
months ended  September 30, 2001. The current year decrease in operating  income
is  predominantly  caused by the  decrease  in  revenues.  However,  in 2001 the
Company received deposits for which revenues are deferred pending title transfer
on the acquisition of the underlying  units. The Company estimates the impact of
deferral of the sales was to reduce 2001  revenues by $7.3 million and operating
profit by $3.9 million.

     Corporate  and Other - Comparison  of the three months ended  September 30,
2001 to the three  months ended  September  30, 2000.  Revenues  increased  $1.7
million and operating income increased $1.6 million, a result of the Company and
Starwood  terminating the Asset Management Agreement between the parties in July
2001. Starwood paid the Company $5.4 million in conjunction with the termination
and The Company recorded a gain of approximately $1.4 million.


Consolidated Results

     Comparison of the three months ended September 30, 2001 to the three months
ended September 30, 2000.

     Vacation Interval sales decreased by approximately $11.0 million, or 54.7%,
from  approximately  $20.2 million for the three months ended September 30, 2000
to approximately $9.2 million for the three months ended September 30, 2001. The
number of Vacation  Interval  memberships sold decreased by 967 weeks, or 61.6%,
from 1,571 weeks for the three months ended  September 30, 2000 to 604 weeks for
the three  months ended  September  30, 2001.  Additionally,  the average  price
increased  $2,301 or 17.9% from $12,885 for the three months ended September 30,
2000 to $15,185 for the three months ended  September  30,  2001.  However,  the
Company  deferred 367 sales totaling $7.3 million  pending title transfer on the
acquisition of the underlying  units.  Of the 600 weeks decrease in sales volume
adjusted  for the impact of  deferred  Vacation  Interval  sales that took place
during the 3rd quarter, the month of September was down 283 weeks. September was
negatively  impacted by reduced travel after the terrorist  attacks on the World
Trade  Center and  Pentagon.  Additionally,  the current  quarter  sales  volume
decrease is magnified by the strong prior year quarter sales volume which was up
355 weeks, or 29.2% over the prior year quarter.

     Rental and service fee income  increased by $0.8 million,  or 29.4% for the
three months ended  September  30, 2001  compared to the prior year period.  The
increase results primarily from an increase in new members for the


                                       16

<PAGE>
third  quarter of 2001  compared to the same prior year period and an overall 5%
increase in the 2001 service fee charged to members.

     Interest on vacation  interval  receivables  decreased $0.2 million for the
three  months  ending  September  30,  2001  compared to the prior year due to a
decrease in UDI income.

     Sale of assets and other income increased  approximately  $1.1 million from
approximately  $0.7  million for the three months  ended  September  30, 2000 to
approximately  $1.8 million for the three months ended  September 30, 2001.  The
increase  in sale of assets  and other  income  is a result of the  Company  and
Starwood  terminating the Asset Management Agreement between the parties in July
2001. Starwood paid the Company $5.4 million in conjunction with the termination
and the Company recorded a gain of approximately $1.4 million.  The gain on sale
of  assets  was  offset  with  lower net  revenues  from the  Villa  Vera  hotel
operations,  which  experienced lower occupancy levels and average rates for the
three months ended  September  30, 2001 when  compared to the same period in the
prior year.  Additionally,  Puerto Mio hotel  operations that were added in June
2001 experienced net losses for the three months ended September 30, 2001.

     Provision for bad debt decreased $0.9 million or  approximately  53.1% from
approximately $1.7 million for the three months ended September 30, 2000 to $0.8
million for the three months  ended  September  30,  2001.  Based on a review of
historical  receivables  defaults,  the  actual  default  rate was less than the
anticipated  default rate and therefore,  the current rate used to determine the
provision was adjusted.  The Company believes that the recorded reserve provides
adequate  coverage of default risk for the Vacation  Interval  receivables under
current market conditions.  Additionally,  the provision for bad debts decreased
in response to the 54.7% decrease in Vacation Interval sales.

     Cost of Vacation Interval sales decreased $1.7 million for the three months
ended September 30, 2001 compared to the same period during 2000.  However, as a
percent of Vacation  Interval sales,  Cost of Vacation  Interval sales increased
from  approximately  23.3% for the three  months  ended  September  30,  2000 to
approximately  32.6% for the three months ended September 30, 2001. The increase
results from inventory currently being acquired from Cimarron,  Kona, Puerto Mio
and  Westin  Whistler  that are at a higher  cost  per  week  acquired  than the
Company's historical cost rate per week of inventory.

     Advertising,  sales and marketing  expenses  decreased  approximately  $2.4
million,  or 26.2%, from  approximately  $9.2 million for the three months ended
September  30,  2000,  to  approximately  $6.8  million for three  months  ended
September 30, 2001. As a percent of Vacation Interval sales, advertising,  sales
and marketing expenses  increased from approximately  45.8% for the three months
ended  September  30, 2000 to  approximately  74.6% for the three  months  ended
September  30,  2001.  The increase in 2001  results  from the  marketing  costs
associated  with the $7.3  million  deferral  of sales in Mexico  (see  Vacation
Interval sales above).  With the  recognition of the deferred sales and the $1.3
million of deferred commissions,  the advertising,  sales and marketing expenses
as a  percentage  of  Vacation  Interval  sales  would be 49.4%  which is a 7.9%
increase from the three months ended September 30, 2000.

     Maintenance and energy expenses increased  approximately  $0.8 million,  or
23.7%, from  approximately $3.5 million for the three months ended September 30,
2000,  to  approximately  $4.3 million for the three months ended  September 30,
2001.  The  increase  in expenses  was caused by  maintenance  and energy  costs
associated with the higher  occupancy  rates in Mexico and the costs  associated
with maintaining a higher membership base.

     Interest  expense was  approximately  $0.2  million less in the third three
months of 2001 as compared to the third three  months of 2000 due  primarily  to
the $5.5 million decrease in Senior Notes between periods.  The weighted average
interest rate  decreased 0.7% from September 30, 2000 to September 30, 2001, and
the average debt decreased $7.9 million, respectively.

     Foreign currency  exchange loss was  approximately  $0.7 million during the
three months ended September 30, 2001 compared to a gain of  approximately  $0.8
million during the  comparable  period of 2000. The increase in the loss between
periods  occurred due to a weaker peso against the U.S.  dollar during the three
months of 2001 compared to the prior year period.

     Foreign income and asset taxes  increased $1.4 million for the three months
ended  September  30,  2001  compared to the prior year  period.  The Company is
subject to Mexican asset taxes, a portion of which was  previously  subject to a
three-year exemption period, which is now expired.


                                       17
<PAGE>
MEXICO'S INFLATION AND CURRENCY CHANGES

     Management  believes that in  interpreting  the  comparisons of operational
results discussed above, two factors are of importance:  currency exchange rates
and  inflation.  Changes in costs  between  prior year and current  year periods
could be the result of  increases or  decreases  in the peso  exchange  rate and
inflation in Mexico.  In particular,  the average monthly peso exchange rate for
the three months ended  September 30, 2001 weakened when compared to the average
monthly peso  exchange rate for the three months ended  September 30, 2000.  The
Company  estimates that current period costs settled in Mexican pesos  decreased
by approximately  1.3% because of fluctuations in the average peso exchange rate
between periods. In addition, the Company estimates that inflation in Mexico was
approximately 6.1% since September 2000. Expenditures in Mexico for advertising,
sales and marketing,  maintenance and energy, and for general and administrative
expenses are primarily  settled in pesos,  and were  negatively  impacted by the
combined effects of inflation and peso changes.


COMPARISONS  OF SEPTEMBER  30, 2001 BALANCE  SHEET  AMOUNTS TO DECEMBER 31, 2000
BALANCE SHEET AMOUNTS

     The Retained  Interest in Hotel Cash Flows agreement was terminated in July
2001. The Company and Starwood terminated the Asset Management Agreement between
the parties and Starwood paid the Company $5.4 million in  conjunction  with the
termination.  The Company recorded a gain of  approximately  $1.4 million during
the third quarter 2001.

     Cost of unsold vacation  ownership  intervals and related club  memberships
(unit inventory)  decreased  approximately $1.7 million from approximately $13.3
million as of December 31, 2000 to  approximately  $11.6 million as of September
30, 2001.  The sale of units  reduced  unit  inventory  by  approximately  $12.1
million,  which was offset by purchases in Canada of approximately $1.9 million,
and in Mexico of  approximately  $6.2 million.  The remainder of the decrease is
primarily from reinstatement of inventory from defaulting owners in Mexico.

     Prepaids,  deposits  and other  assets  increased  $2.2  million  from $4.2
million as of December 31, 2000 to $6.4 million as of  September  30, 2001.  The
increase  in  prepaids  is  related  to the  deferral  of $2.3  million of sales
commissions  corresponding  to the $12.6 million of deferred  Vacation  Interval
sales pending title transfer on the acquisition of the underlying units.

     Accrued interest payable  increased $3.3 million from $1.9 million December
31, 2000 to $5.1 million due to an additional  three months of interest  related
to the Senior Notes.

     Inventory acquisition  liabilities increased $3.4 million from $2.3 million
December 31, 2000 to $5.7  million  because of  acquisitions  in Kona and Puerto
Mio.

     Taxes  payable  increased  $3.6  million  from $0.9 million to $4.5 million
primarily  due to receipt of a refund  relating  to prior  period VAT taxes paid
reflected as a reduction in prior year taxes payable,  and increases  associated
with higher revenues and the asset tax discussed  above,  resulting in a current
year net liability.

     Sales  deposits and  unearned  service fees  increased  approximately  $7.9
million from approximately $2.8 million as of December 31, 2000 to approximately
$10.7  million as of September  30, 2001.  This  balance  increased  due to $7.5
million in deposits held for the deferred  Vacation Interval sales pending title
transfer on the  acquisition of the  underlying  units.  Additionally,  unearned
service fees were higher  because a majority of the related  fees are  typically
invoiced at the beginning of each year and then earned  throughout the remainder
of the year.

LIQUIDITY AND CAPITAL RESOURCES

     The  Company  generates  cash  for  operations  primarily  from the sale of
Vacation   Interval  weeks,   receipt  of  payments  on  the  Vacation  Interval
receivables, and the receipt of service fees charged to members. With respect to
the sale of Vacation  Interval weeks,  the Company  generates cash from all-cash
sales,  cash down  payments on financed  sales and  collection  of principal and
interest on Vacation Interval  receivables from financed sales. The Company also
generates  cash  through  loans  secured by Vacation  Interval  receivables.  At
September  30,  2001,  the  Company  had  $78.3  million  of  Vacation  Interval
receivables  of which  approximately  $41.4 million were pledged.  At such date,
approximately:  (i) 49.4% of  Vacation  Interval  receivables  were U.S.  dollar
denominated,  (ii) 34.7% of Vacation  Interval  receivables  were denominated in
UDI's,  an  obligation  denominated  in pesos  which  is  adjusted  for


                                       18

<PAGE>
Mexican inflation, (iii) 10.3% of Vacation Interval receivables were denominated
in Mexican pesos and 5.6% of Vacation Interval  receivables were Canadian dollar
denominated.

     The  Company  intends to pursue a  growth-oriented  strategy.  From time to
time, the Company may acquire, among other things, additional vacation ownership
properties,  resorts and completed  vacation  ownership  units,  land upon which
additional  vacation  ownership  resorts may be built (which may require capital
expenditures by the Company) and/or other  operations in the vacation  ownership
industry.  The  Company  is  evaluating  certain  resort  asset  acquisition  or
development  opportunities,  but  it  currently  has  no  contracts  or  capital
commitments  relating to any potential  acquisitions or developments  other than
those discussed below.  However,  the Company is actively pursuing financing for
development  of the Los Cabos  land.  In  addition,  the  Company is  evaluating
several  strategic  partnership  opportunities,  but it  likewise  has  no  firm
agreements relating to any such potential strategic partnership opportunities.

     The Company has planned 2001 capital  expenditures  of  approximately  $3.6
million.  These  expenditures  include the  development  of sales and  marketing
programs,   MIS/IT,   accounting   software  and  other   office   improvements.
Additionally,  the Company has 2001  planned  expenditures  for the  purchase of
Vacation  Interval  inventory in Palm  Springs,  California,  Whistler,  British
Columbia,  Kona,  Hawaii,  Polo, Nevada and Puerto Mio, Mexico. The expenditures
for  purchases of the Palm  Springs,  Kona,  Polo and Puerto Mio  inventory  are
incurred  only as the  inventory  is  required  when  the  sale  of the  related
timeshare is finalized pursuant to the agreement with the original developer. In
Whistler,  the  expenditures  for  purchases  of  inventory  are incurred in the
ordinary business  operations of the Whiski Jack subsidiary through the purchase
of individual  condominium  units which are resold as timeshare thereby limiting
the  working  capital  requirement   consistent  with  historical  business  and
financial  practices.  The total 2001 planned expenditures for inventory are $18
million.  Also,  the Company  will  expend  approximately  $3.7  million for the
refurbishment of the resort  properties,  substantially all of which is financed
through annual maintenance fees received from owners of Vacation Intervals.

     The future  development  of the Los Cabos  property  will  require  project
financing for the first phase of approximately  $6.5 million before  development
can proceed.  The Company is currently  negotiating for such financing with both
U.S.  and  Mexican  financial  institutions  and other  investors.  However,  no
commitment  has been received  from such  institutions  or investors.  The Cabos
project  is  included  conditionally  in the  Company's  2001  plan,  subject to
obtaining such financing.

     At September  30, 2001,  the Company had  available  inventory of developed
Vacation  Interval  weeks of  1,228  weeks  for Club  Regina  in  Mexico,  which
includes,  360 weeks at the Westin Whistler Hotel and 4,035 weeks available from
Cimarron,  Kona, Polo and Puerto Mio where weeks are purchased as they are sold.
Lastly,  there  are 907  weeks  remaining  at Whiski  Jack in  Canada.  Based on
historical sales levels and planned sales for 2001, the remaining  inventory for
Club Regina and Whiski Jack will provide  approximately  11 months and 6 months,
respectively,  of inventory for sales in 2001.  Also, at September 30, 2001, the
Company had approximately  1,124 of remaining  developed Vacation Interval weeks
at Teton  Club  joint  venture  and  anticipates  it will  sell  this  remaining
inventory  by the end of 2003.  The  Company  plans  to  increase  its  Vacation
Interval weeks inventory through development of additional properties and making
acquisitions  in the short term from  Puerto  Mio,  Polo  Resorts  and Kona Reef
Resorts,  developing its land in Los Cabos,  and making  acquisitions in Mexico,
the United States and Canada.

     To finance its growth strategy, in addition to accessing its existing lines
of credit,  the Company may from time to time consider  issuing debt,  equity or
other  securities,  entering into traditional  construction  financing or credit
agreements,  entering into joint venture or development  agreements with respect
to its undeveloped  property,  or  hypothecating  additional  Vacation  Interval
receivables.  The operating and financial restrictions and covenants in our debt
agreements, including our bank credit facilities and the indenture governing the
Senior Notes, may adversely  affect our ability to finance future  operations or
capital needs or to engage in other business  activities.  These debt agreements
include covenants that require us to meet certain financial ratios and financial
tests,  including a minimum capital test, a maximum general  administrative  and
sales  expenses to Vacation  Interval  sales ratio test and a minimum  "Adjusted
Current  Assets" to  "Adjusted  Current  Liabilities"  ratio (as each is defined
therein).  In  addition,  the  debt  agreements  restrict  our  ability  to take
additional  action  without the consent of the lenders such as the incurrence of
additional  debt or the sale of our  interest in the  resorts.  Such  covenants,
required  ratios and tests may require  that we take action to reduce debt or to
act in a manner that delays the  achievement of our business  objectives.  If we
breach any of these  restrictions  or  covenants  or suffer a  material  adverse
change which  restricts  our borrowing  ability  under our credit  facilities we
would be unable  to  borrow  funds  thereunder  without  a  waiver.  A breach or
inability to obtain timely  waivers could cause a default under the Senior Notes
and our other  debt.


                                       19

<PAGE>
Our indebtedness could then become immediately due and payable, in which case we
may not have or be able to obtain  sufficient  funds to make  these  accelerated
payments, including payments on the notes.

     At September  30, 2001 and December 31, 2000,  the Company had  outstanding
$94.5 million of 13% Senior Notes,  $13.0 million and $19.0 million  outstanding
under the FINOVA  line of credit that bears  interest  at 8.3% and 11.4%,  $16.8
million and $12.7 million  outstanding  under the Textron credit line that bears
interest at 8.7% and 11.5%, $1.6 million and $4.8 million  outstanding under the
Bancomer loan that bears interest at 12%, $4.4 million and $4.1 million mortgage
notes  payable  that bears  interest  at an average  interest  rate of 11.5% and
11.4%,  and $3.3  million  and $5.6  million  of bank and other  debt that bears
interest at an average  interest  rate of 12.5% and 12.6%.  Approximately  $14.1
million,  $9.0  million,  $7.6  million,  $99.5  million,  $2.6 million and $0.9
million of the  outstanding  debt which has stated  repayment  amounts is due in
2001, 2002, 2003, 2004, 2005 and thereafter,  respectively.  In addition to such
debt, the Company has $5.9 million of Reedemable  Preferred Stock outstanding at
September 30, 2001.  The  Redeemable  Preferred  Stock is redeemable at any time
before March 2005, at which time the redemption is mandatory. With the exception
of the $6.1 million  semi-annual  interest payments due June 1 and December 1 on
the  Senior  Notes,  interest  is paid  monthly on all debt  obligations  of the
Company.  At  September  30,  2001,  the Company had $4.1 million of accrued and
unpaid  interest on Senior Notes.  As of September 30, 2001, the Company was not
in  compliance   with  the  FINOVA  loan  covenant   related  to  the  ratio  of
administrative,  sales  and  marketing  expenses  to  Vacation  Interval  sales,
"Mexican and other"  receivables  delinquency  test and the minimum capital test
covenant and obtained timely waivers for such non-compliance.

     At September  30,  2001,  the Company  was,  and  continues  to be,  highly
leveraged,  with substantial debt service requirements.  As discussed above, the
Company incurs significant  liquidity needs to fund its semi-annual Senior Notes
interest  payments  due June 1 and  December  1. A  significant  portion  of the
Company's  assets is pledged  against  existing  borrowings.  The  Company has a
shareholders'  deficit,  has incurred  losses since its inception and expects to
incur a net loss for fiscal 2001. To achieve profitable operations,  the Company
is  principally  dependent  on its ability to  increase  its  Vacation  Interval
inventory  through  development  projects or through the acquisition of existing
resort  properties and sell Vacation  Intervals on an economical  basis,  taking
into  account  the cost of such  intervals  and  related  marketing  and selling
expenses,  and to either  attract  new  equity or equity  equivalent  capital or
reduce or restructure  its Senior notes or a combination  of the foregoing.  The
Company has  historically  been  successful  in  obtaining  additional  debt and
issuing equity securities to fund negative cash flows from operating  activities
and to make the payments on previously  incurred debt  obligations.  The Company
expects  that it will obtain  sufficient  additional  credit  capacity or equity
capital or  complete a debt  restructuring,  sale of assets,  securitization  of
receivables  or a  combination  of  the  foregoing  to  meet  its  debt  service
obligations,  including  interest payments on its Senior Notes through 2002. The
Company also expects to be able to fund capital  requirements  from  anticipated
capital project financings, which have not yet been negotiated.  However, should
the Company not be able to successfully  negotiate additional credit capacity or
securitize  its   receivables  or  otherwise   reduce  through   acquisition  or
restructuring its Senior Notes,  there is no assurance that the Company would be
able to meet all of its working capital and short-term debt service obligations.

     The  Company's  borrowing  capacities  under the FINOVA and  Textron  notes
receivable  based  credit  facilities  are  $20.0  million  and  $22.4  million,
respectively.  The Company estimates that based on Vacation Interval receivables
not  currently  pledged,  approximately  $0.2 million and $1.5 million under the
FINOVA and Textron lines of credit  respectively,  at September  30, 2001,  were
available for borrowing under the credit  facilities.  The FINOVA advance period
ends November  2001.  Additionally,  the Company has available  $20.0 million of
notes   receivable   based  facility   capacity  through  the  Cimarron  Project
Development,  Management and Sales Agreement.  This credit facility with Textron
can be utilized only in conjunction with the credit sales of inventory  acquired
through  the  Cimarron  agreement  and  outstanding  loans  bear  interest  at a
fluctuating  base  rate  based on  Chase  Manhattan  Bank  prime  rate  (6.5% at
September  30,  2001) plus 225 basis  points.  Textron  will lend 90% on pledged
notes receivable  denominated in United States dollars and held by United States
residents.  Borrowings  can be made under this  facility for 24 months after the
date of the first draw, and the facility matures five years from the date of the
first draw. No advances have been made under the receivables credit facility.

     The Company's payment of the Senior Notes interest through 2002 is based on
available  cash,  modifying  the  terms of its  current  credit  agreements  and
obtaining  new credit  capacity.  The  Company is  currently  in the  process of
soliciting  interim financing to enable it to meet its $6.1 million  semi-annual
interest  payment as of December 1, 2001, and working on restructuring a portion
of the Senior  Notes that would reduce the amount  required for future  interest
payments.  The  modifications  to its credit  agreements and  negotiation of new
credit capacity may involve  increasing the allowed amount of Vacation  Interval
receivables  from  Mexican  obligors or the portion of  collateral  which can be
based on Mexican currency and expanding the Company's  overall borrowing limits.
The


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<PAGE>
Company is currently evaluating several alternatives for meeting this additional
working  capital need and is in discussions  and  negotiations  regarding  these
modifications,   new  credit  capacities  and  restructurings.   However,  these
discussions and negotiations as well as discussions  with new financing  sources
have not yet resulted in  commitments  that will satisfy the  Company's  working
capital needs through 2002.

     In order to meet  obligations  in the  long-term,  the Company will need to
achieve positive net income by reducing its high leverage  position,  expand and
extend its current  receivables  hypothecation  facilities and execute a capital
restructuring. The Company is pursuing several opportunities that may facilitate
a capital  restructuring.  While the Company  believes it will be able to obtain
additional  financing and execute a capital  restructuring  and has demonstrated
historically  that it has been successful in such efforts to secure financing or
generate  liquidity  necessary to service its high leverage,  should the Company
not  close one or more of these  opportunities  or one or more that may arise in
the future, the Company's operation could be materially  adversely affected.  If
the conditions  described  above continue to exist at the time of release of its
financial statements for the year that will end December 31, 2001, the Company's
status as a going concern could be jeopardized.

     As part of the Teton Club financing arrangement with FINOVA, the Company is
directly  obligated for 25% of the  construction  loan and receivables  loan not
repaid  by the Teton  Club,  and is also  responsible  for any  working  capital
deficits at the Teton Club.

New Accounting Pronouncement

     In  August  2001,  the  FASB  issued  SFAS  No.  144  "Accounting  for  the
Impairment/Disposal  of Long-Lived Assets." SFAS No. 144 addresses the financial
accounting  and reporting for the  impairment of disposal or long-lived  assets.
The Company is  required to and will adopt SFAS No. 144 on January 1, 2002.  The
Company is currently  analyzing  the  provisions of SFAS No. 144 and has not yet
made a  determination  of the impact the adoption will have on the  consolidated
financial statements.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
        Not applicable



                                       21
<PAGE>
PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

    None

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

    None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

    None

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

    None

ITEM 5.  OTHER INFORMATION

     Christel  DeHaan  resigned  as a director  on October 31, 2001 to be better
able to devote time to her charitable activities.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

    The following is a list of exhibits filed as part of this quarterly report.

  Exhibit No.                    Description

10.1 -- Third Amendment for the Cimarron loan Facility between Textron Financial
     Corporation, Royale Mirage Partners LLP and Raintree Resorts International,
     Inc dated September 28, 2001

10.2 -- Third Loan Modification between Textron Financial Corporation,  Raintree
     Resorts International, Inc dated September 28, 2001

(b)      Reports on Form 8-K.

    None

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<PAGE>


                                   SIGNATURES


     Pursuant  to  the   requirements   of  the  Securities  Act  of  1934,  the
Registrants,  Raintree Resorts International, Inc. and CR Resorts Capital, S. de
R.L. de C.V.,  have duly caused this report to be signed on their  behalf by the
undersigned, thereunto duly authorized.


                                      RAINTREE RESORTS INTERNATIONAL, INC.
                                      CR RESORTS CAPITAL, S.  DE  R.L.  DE  C.V.




Date: November 13, 2001                   By:   /S/ George E. Aldrich
                                               ----------------------

                                                   George E. Aldrich
                                              Senior Vice President - Finance
                                                    and Accounting
                                               (Principal Accounting Officer)






                                       23
<PAGE>


                                  EXHIBIT INDEX


  Exhibit No.                                                   Description

     10.1+-- Third  Amendment for the Cimarron loan  Facility  between  Textron,
          Royale Mirage  Partners LLP and Raintree  Resorts Inc dated  September
          28, 2001

     10.2+-- Third Loan  Modification  between  Textron  Financial  Corporation,
          Raintree Resorts  International,  Inc dated September 28, 2001

        +    Filed herein






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