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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

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

                 for the Twenty-six Weeks Ended March 31, 2002

              [ ] Transition Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
              for the transition period from _________ to_________

                        Commission file number 333-50683

                             SF HOLDINGS GROUP, INC.
             (Exact name of registrant as specified in its charter)

                 Delaware                                   13-3990796
      (State or other jurisdiction of                     (IRS Employer
     incorporation or organization)                    Identification No.)

373 Park Avenue South, New York, New York                     10016
(Address of principal executive offices)                   (Zip Code)

        Registrant's telephone number, including area code: 212/779-7448


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

Yes [X] No [   ]


        The number of shares outstanding of the Registrant's common stock
                              as of May 10, 2002:
SF Holdings Group, Inc. Class A Common Stock, $0.001 par value - 562,583 shares
SF Holdings Group, Inc. Class B Common Stock, $0.001 par value - 62,855 shares
SF Holdings Group, Inc. Class C Common Stock, $0.001 par value - 135,900 shares
SF Holdings Group, Inc. Class D Common Stock, $0.001 par value - No Shares


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<PAGE>
                         PART I - FINANCIAL INFORMATION

Item 1.  FINANCIAL STATEMENTS

                             SF HOLDINGS GROUP, INC.
                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                           (Unaudited)
                                                            March 31,         September 30,
                                                              2002                2001
                                                         ---------------    -----------------
<S>                                                      <C>                <C>
                              Assets
Current assets:
  Cash and cash equivalents                                $    5,944          $   11,869
  Cash in escrow                                                4,480                   8
  Receivables, less allowances of $4,456 and $3,395           156,373             167,855
  Due from affiliates                                              41               1,347
  Inventories                                                 207,149             225,021
  Deferred income taxes                                        23,469              24,007
  Refundable income taxes                                         665                 665
  Spare parts                                                  24,675              23,273
  Assets held for sale                                          7,428              10,210
  Other current assets                                          9,856               9,372
                                                           -----------         -----------
    Total current assets                                      440,080             473,627

Property, plant and equipment, net                            265,429             265,795
Deferred income taxes                                          31,065              38,107
Spare parts                                                    11,677              12,077
Goodwill, net                                                 121,451             118,307
Other assets                                                   25,709              24,472
                                                           -----------         -----------

    Total assets                                           $  895,411          $  932,385
                                                           ===========         ===========

               Liabilities and Shareholders' Deficit
Current liabilities:
  Accounts payable                                         $  115,912          $   96,072
  Accrued payroll and related costs                            42,593              46,892
  Other current liabilities                                    44,120              49,260
  Current portion of deferred gain on sale of assets           10,275              10,275
  Current portion of long-term debt                             8,726              16,942
                                                           -----------         -----------
    Total current liabilities                                 221,626             219,441

Commitments and contingencies  (See Notes)

Deferred income taxes                                           4,252               4,252
Long-term debt                                                496,737             542,575
Deferred gain on sale of assets                                78,535              83,672
Other liabilities                                              54,505              58,628
                                                           -----------         -----------

    Total liabilities                                         855,655             908,568

Minority interest in subsidiaries                               2,154               6,427
Exchangeable preferred stock                                   51,714              48,209
Preferred Stock B, Series 2                                    15,000              15,000
Redeemable common stock                                         2,393               2,356
Shareholders' deficit                                         (31,505)            (48,175)
                                                           -----------         -----------

    Total liabilities and shareholders' deficit            $  895,411          $  932,385
                                                           ===========         ===========
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.

                                       2
<PAGE>
                             SF HOLDINGS GROUP, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      AND OTHER COMPREHENSIVE INCOME (LOSS)
                                   (Unaudited)
                                 (In thousands)


<TABLE>
<CAPTION>
                                                 For the         For the          For the         For the
                                                Thirteen        Thirteen        Twenty-six      Twenty-six
                                               weeks ended     weeks ended     weeks ended     weeks ended
                                                March 31,       March 25,       March 31,       March 25,
                                                  2002            2001            2002            2001
                                              -------------   -------------   -------------   -------------
<S>                                           <C>             <C>             <C>             <C>
Net sales                                      $  296,371      $  292,793      $  617,246      $  619,296
Cost of sales                                     267,762         259,152         548,277         547,156
                                               -----------     -----------     -----------     -----------

  Gross profit                                     28,609          33,641          68,969          72,140

Selling, general and administrative
  expenses                                         28,847          29,767          58,345          59,207
Other income, net                                    (173)         (3,010)         (3,296)         (6,378)
                                               -----------     -----------     -----------     -----------

  Operating income (loss)                             (65)          6,884          13,920          19,311

Interest expense, net of interest income
of $57, $56, $91 and $91                           13,107          13,449          26,284          26,828
                                               -----------     -----------     -----------     -----------
  Loss before income tax  benefit,
  minority interest and
  extraordinary gain                              (13,172)         (6,565)        (12,364)         (7,517)

Income tax benefit                                 (4,921)         (2,254)         (4,210)         (2,492)
Minority interest in subsidiaries                     (93)           (206)             73             (58)
                                               -----------     -----------     -----------     -----------

  Loss before  extraordinary gain                  (8,158)         (4,105)         (8,227)         (4,967)

Extraordinary gain on debt
extinguishment(net of income tax
expense of $12,296 and $12,296)                   (18,444)              -         (18,444)              -
                                               -----------     -----------     -----------     -----------

  Net income (loss)                                10,286          (4,105)         10,217          (4,967)

Payment-in-kind dividends on exchangeable
preferred stock                                     1,791           1,567           3,505           3,066
                                               -----------     -----------     -----------     -----------

  Net income (loss) applicable to
  common shareholders                          $    8,495      $   (5,672)     $    6,712      $   (8,033)
                                               ===========     ===========     ===========     ===========

Other comprehensive income (loss):
  Net income (loss)                            $   10,286      $   (4,105)     $   10,217      $   (4,967)
  Foreign currency translation
    adjustment                                        159            (309)             20            (523)
  Minimum pension liability
  adjustment (net of income taxes
  of $813, $(517), $(748) and
  $(508))                                           1,220            (776)         (1,122)           (762)
                                               -----------     -----------     -----------     -----------

  Comprehensive income (loss)                   $  11,665      $   (5,190)     $    9,115      $   (6,252)
                                               ===========     ===========     ===========     ===========
</TABLE>


          See accompanying Notes to Consolidated Financial Statements.

                                       3
<PAGE>
                             SF HOLDINGS GROUP, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In thousands)


<TABLE>
<CAPTION>
                                                                 For the Twenty-six     For the Twenty-six
                                                                     weeks ended            weeks ended
                                                                      March 31,              March 25,
                                                                        2002                   2001
                                                                --------------------   --------------------
<S>                                                             <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES

  Net income (loss)                                                 $    10,217            $    (4,967)
  Adjustments to reconcile net income (loss) to net cash
  provided by (used in) operating activities:
    Depreciation and amortization                                        19,127                 17,082
    Amortization of deferred gain                                        (5,137)                (5,138)
    Gain on sale of assets                                               (2,526)                  (406)
    Interest accreted on debt                                             7,203                  6,801
    Minority interest in subsidiaries                                        73                    (58)
    Extraordinary gain on debt extinguishment                           (18,444)                     -
  Changes in operating assets and liabilities (net of business
  acquisition):
    Receivables                                                          12,788                  5,174
    Inventories                                                          17,872                 (3,112)
    Other current assets                                                 (1,885)                (1,994)
    Other assets                                                         (9,370)                 1,471
    Accounts payable                                                     19,840                 (8,672)
    Accrued payroll and related costs                                    (4,299)                (5,707)
    Other current liabilities                                            (4,928)                (4,889)
    Other liabilities                                                    (8,462)                (1,544)
    Other, net                                                              255                   (605)
                                                                    ------------           ------------
      Net cash provided by (used in) operating activities                32,324                 (6,564)
                                                                    ------------           ------------

CASH FLOWS FROM INVESTING ACTIVITIES

  Additions to property, plant and equipment                            (13,783)               (12,650)
  Payment for business acquisition                                            -                 (6,654)
  Proceeds from sale of assets                                            5,262                    322
                                                                    ------------           ------------
      Net cash used in investing activities                              (8,521)               (18,982)
                                                                    ------------           ------------

CASH FLOWS FROM FINANCING ACTIVITIES

  Net borrowing under credit  facilities                                173,804                 32,263
  Repayment under credit  facilities                                   (196,144)                     -
  Payments of other debt                                                 (2,916)                (3,996)
  Increase in cash in escrow                                             (5,253)                    (7)
  Decrease in cash in escrow                                                781                      -
                                                                    ------------           ------------
      Net cash (used in) provided by financing activities               (29,728)                28,260
                                                                    ------------           ------------

NET (DECREASE) INCREASE IN CASH AND CASH
  EQUIVALENTS                                                            (5,925)                 2,714

CASH AND CASH EQUIVALENTS, beginning of period                           11,869                  6,352
                                                                    ------------           ------------

CASH AND CASH EQUIVALENTS, end of period                            $     5,944            $     9,066
                                                                    ============           ============

SUPPLEMENTAL CASH FLOW DISCLOSURES:

      Interest paid                                                 $    17,958            $    19,729
                                                                    ============           ============

      Income taxes paid                                             $       890            $       254
                                                                    ============           ============
</TABLE>


          See accompanying Notes to Consolidated Financial Statements.

                                       4
<PAGE>
                             SF HOLDINGS GROUP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


(1)  BASIS OF PRESENTATION

         SF Holdings  Group,  Inc. ("SF  Holdings"),  is a holding  company that
conducts  its  operations  through  its  subsidiary,  Sweetheart  Holdings  Inc.
("Sweetheart"),  and therefore has no significant cash flows independent of such
subsidiary.  Sweetheart  conducts its operations through its principal operating
subsidiary  Sweetheart Cup Company Inc.  ("Sweetheart Cup"). The "Company" shall
refer herein to SF Holdings and its subsidiary.  The  instruments  governing the
indebtedness  of Sweetheart  and  Sweetheart  Cup contain  numerous  restrictive
covenants   that  restrict   their  ability  to  pay  dividends  or  make  other
distributions to SF Holdings. The Company believes that it is one of the largest
converters and marketers of plastic and paper  disposable  food service and food
packaging products in North America.

         Pursuant  to an  agreement,  dated as of March 22, 2002 by and among SF
Holdings,  Dennis Mehiel,  the Company's  Chairman and Chief Executive  Officer,
American  Industrial  Partners  Management  Company,  Inc.,  American Industrial
Partners  Capital Fund L.P.  ("AIP") and the other  stockholders  of  Sweetheart
signatory  to  that  certain   Stockholders'   Agreement   (the   "Stockholders'
Agreement"),  dated as of March 12, 1998,  (together  with AIP and any permitted
transferee  of  shares  of  Class A common  stock  or  Class B  common  stock of
Sweetheart ("the Shares"), the "Original Stockholders"),  all of the outstanding
Shares not held by SF Holdings  (which  consisted  of 52% of the voting stock of
Sweetheart)  were  delivered to SF Holdings and  exchanged  for 96,000 shares of
Class C common stock of SF Holdings.  As a result,  SF Holdings  became the sole
beneficial  owner  of  100% of the  issued  and  outstanding  capital  stock  of
Sweetheart.  In addition and in connection therewith, the Stockholders Agreement
and related  stockholders'  right agreement were  terminated.  As a result,  the
excess of the fair  value of the  Class C common  stock  issued to the  Original
Stockholders  over the fair value of the  remaining  net assets  acquired  by SF
Holdings in the amount of $5.5 million has been recorded as goodwill.

         The information  included in the foregoing interim financial statements
of the Company is  unaudited  but, in the opinion of  management,  includes  all
adjustments (consisting only of normal recurring adjustments and accruals) which
the Company considers necessary for a fair presentation of the operating results
for  these  periods.  Results  for  the  interim  periods  are  not  necessarily
indicative  of  results  for  the  entire  year.  These  condensed  consolidated
financial   statements   should  be  read  in  conjunction  with  the  Company's
consolidated  financial  statements and notes thereto  included in the Company's
annual report on Form 10-K for the fiscal year ended September 30, 2001.


(2)  RECENTLY ISSUED ACCOUNTING STANDARDS

         In June 2001, the Financial  Accounting Standards Board ("FASB") issued
two new pronouncements: Statement of Financial Accounting Standards ("SFAS") No.
141,  Business  Combinations  and SFAS No. 142,  Goodwill  and Other  Intangible
Assets.  SFAS No. 141  prohibits the use of the  pooling-of-interest  method for
business  combinations  initiated  after June 30,  2001 and also  applies to all
business  combinations  accounted for by the purchase  method that are completed
after June 30, 2001. There are also transition provisions that apply to business
combinations  completed  before  July 1, 2001,  that were  accounted  for by the
purchase  method.  SFAS No. 142 is effective  for fiscal years  beginning  after
December  15,  2001 and  applies to all  goodwill  and other  intangible  assets
recognized in an entity's  balance  sheet.  The Company has adopted SFAS No. 141
and is  currently  evaluating  the  impact of SFAS No.  142 on its  consolidated
financial statements.

         In October 2001, the FASB issued pronouncement SFAS No. 144, Impairment
or Disposal of Long-Lived Assets. This Statement addresses financial  accounting
and  reporting  for the  impairment  or  disposal  of  long-lived  assets.  This
Statement  supersedes  FASB Statement No. 121,  Accounting for the Impairment of
Long-Lived  Assets  and  for  Long-Lived  Assets  to Be  Disposed  Of,  and  the
accounting and reporting  provisions of Accounting  Principals Board Opinion No.
30, Reporting the Results of

                                       5
<PAGE>
Operations-Reporting  the Effects of  Disposal  of a Segment of a Business,  and
Extraordinary,  Unusual and Infrequently Occurring Events and Transactions,  for
the disposal of a segment of a business (as previously defined in that Opinion).
This Statement also amends  Accounting  Research  Bulletin No. 51,  Consolidated
Financial  Statements,  to  eliminate  the  exception  to  consolidation  for  a
subsidiary  for  which  control  is  likely  to be  temporary.  SFAS No.  144 is
effective for fiscal years  beginning  after  December 15, 2001.  The Company is
currently  evaluating the impact of SFAS No. 144 on its  consolidated  financial
statements.


(3)   INVENTORIES

         The components of inventories are as follows (in thousands):


                              (Unaudited)
                               March 31,              September 30,
                                 2002                     2001
                             -------------           ---------------

Raw materials and supplies    $   51,156               $   55,955
Finished products                145,950                  158,297
Work in progress                  10,043                   10,769
                              ----------               ----------
  Total inventories           $  207,149               $  225,021
                              ==========               ==========


(4)  RELATED PARTY TRANSACTIONS

         All of the affiliates referenced below are directly or indirectly under
the common  ownership of the  Company's  Chief  Executive  Officer.  The Company
believes  that the  transactions  described  below which were  entered into with
related  parties were  negotiated on terms which are at least as favorable as it
could have obtained from unrelated third parties and were negotiated on an arm's
length basis.

         During the twenty-six weeks ended March 31, 2002,  Sweetheart sold $3.8
million of scrap paper to Fibre  Marketing  Group,  LLC, a waste paper  recovery
business in which  Sweetheart has a 25% interest ("Fibre  Marketing").  Accounts
receivable as of March 31, 2002 included $0.8 million due from Fibre Marketing.

         During the  twenty-six  weeks ended  March 31,  2002,  Fibre  Marketing
issued to Sweetheart a promissory  note in the principal  amount of $1.2 million
in exchange for outstanding  accounts receivable from Fibre Marketing.  The note
bears  interest  at an annual  rate of 7.0% and is payable  in 36 equal  monthly
installments. As of March 31, 2002, $1.1 million is due to Sweetheart.

         During the twenty-six weeks ended March 31, 2002,  Sweetheart purchased
$4.9 million of corrugated containers from Box USA Holdings, Inc. ("Box USA"), a
company in which the Company's Chief Executive  Officer owns in excess of 10% of
its outstanding  capital stock, and $0.6 million of travel services from Emerald
Lady,  Inc, a company  wholly owned by the  Company's  Chief  Executive  Officer
("Emerald Lady").  Accounts payable,  as of March 31, 2002 included $0.9 million
due to Box USA.

         Sweetheart  had a loan  receivable  from its  Chief  Executive  Officer
totaling $0.3 million plus accrued interest at 5.06% at March 31, 2002. The loan
is payable upon demand.

         During Fiscal 2000,  Sweetheart entered into a lease agreement with D&L
Development,  LLC,  an entity in which the  Company's  Chief  Executive  Officer
indirectly  owns 47%, to lease a  warehouse  facility  in  Hampstead,  Maryland.
During the  twenty-six  weeks  ending  March 31, 2002 and the  twenty-six  weeks
ending March 25, 2001,  rental  payments  under this lease were $1.9 million and
$1.5 million,

                                       6
<PAGE>
respectively.  Annual rental  payments  under the 20 year lease are $3.7 million
for the first 10 years of the lease and $3.8 million annually, thereafter.

         During  Fiscal  2000,  Sweetheart  began  leasing a  facility  in North
Andover,  Massachusetts  from D&L Andover Property,  LLC, an entity in which the
Company's  Chief  Executive  Officer  indirectly owns 50%. During the twenty-six
weeks  ending  March 31, 2002 and the  twenty-six  weeks  ending March 25, 2001,
rental   payments   under  this  lease  were  $0.8  million  and  $0.6  million,
respectively. Annual rental payments under the 20 year lease are $1.5 million in
the first year, which escalates at a rate of 2% each year thereafter.

         Sweetheart  leases  a  building  in  Jacksonville,   Florida  from  the
Company's  Chief  Executive  Officer.  Annual  payments under the lease are $0.2
million  plus  annual  increases  based on changes in the  Consumer  Price Index
("CPI") through December 31, 2014. In addition,  the Chief Executive Officer can
require  Sweetheart  to purchase  the facility  for $1.5  million,  subject to a
CPI-based escalation, until July 31, 2006. In Fiscal 1998, Sweetheart terminated
its operations at this facility and is currently subleasing the entire facility.
Rent expense, net of sublease income on the portion of the premises subleased is
not significant.

         During the twenty-six weeks ended March 25, 2001,  Sweetheart sold $3.8
million of scrap paper to Fibre Marketing.  Accounts  receivable as of March 25,
2001 included $1.6 million due from Fibre Marketing.

         During the twenty-six weeks ended March 25, 2001,  Sweetheart purchased
$3.6 million of  corrugated  containers  from Box USA and $0.7 million of travel
services from Emerald Lady.  Accounts  payable,  as of March 25, 2001,  included
$0.5 million due to Box USA.


(5)   LONG-TERM DEBT OBLIGATIONS

         On January 25,  2002,  SF Holdings  refinanced a portion of its 12 3/4%
Senior Discount Notes due 2008 (the "SF Holdings  Discount  Notes") with a group
of  unaffiliated  investment  entities  (the  "Investor"),  whereby the Investor
purchased $103.2 million  (approximately  71%) of the aggregate principal amount
outstanding  of the SF Holdings  Discount  Notes  which had a carrying  value of
$89.6 million. SF Holdings and the Investor have amended,  effective January 25,
2002,  the  Indenture  governing  the SF Holdings  Discount  Notes to  eliminate
substantially  all of the  restrictive  covenants.  SF Holdings'  certificate of
incorporation  has also been  amended to conform  the terms of its  Exchangeable
Preferred  Stock to the amendments  made to the  Indenture.  SF Holdings and the
Investor  have also agreed to reduce the  aggregate  principal  amount of the SF
Holdings  Discount Notes held by the Investor to $55 million,  with an effective
cash interest rate of 14.26% (15.25% if interest is  paid-in-kind  through March
31,  2004) and extended  the  maturity  date to January 25,  2009.  Interest and
principal  under the SF  Holdings  Discount  Notes are  collateralized  by a 49%
interest in the common stock of Sweetheart.

         Extraordinary  gain on debt  extinguishment  included  a gain of  $19.5
million  which was net of the  write-off of $2.1  million of deferred  financing
fees and $13.0 million of income tax expenses, resulting from the refinancing of
the SF Holdings Discount Notes.

         In  connection  with the above,  SF Holdings  issued to the  Investor a
warrant to purchase a 7% ownership  interest in SF Holdings (the "SF  Warrant").
The fair value of this SF Warrant at the date of  issuance  of $1.2  million was
recorded as paid-in capital with a corresponding reduction in the carrying value
of the SF Holdings Discount Notes, and will be amortized as additional  interest
expense over the term of the SF Holdings Discount Notes.

                                       7
<PAGE>
         On March 25, 2002, Sweetheart entered into a supplemental  indenture to
the  Indenture  (the  "Indenture")  governing  its $110  million 10 1/2%  Senior
Subordinated Notes due 2003 (the "$110 Senior Subordinated  Notes") to amend the
definition of "Change of Control" in the Indenture to substitute  Dennis Mehiel,
the Company's Chairman and Chief Executive Officer,  for AIP and to make certain
other  conforming  changes.  Sweetheart  offered to pay $5.00 for each $1,000 in
principal  amount of the $110 Senior  Subordinated  Notes (the "Consent Fee") to
holders of the $110 Senior  Subordinated Notes who had properly  furnished,  and
not revoked,  their  consent on or prior to the  expiration  date of the consent
solicitation  (the "Consent  Solicitation").  As a result of the consummation of
the Consent  Solicitation,  the $110 Senior  Subordinated  Notes began to accrue
interest at 12% per annum as of March 1, 2002.  Sweetheart  paid the Consent Fee
to the holders of the $110 Senior  Subordinated Notes who consented prior to the
expiration of the Consent Solicitation. Such Consent Fee has been capitalized in
other  assets  and  is  being  amortized  over  the  term  of  the  $110  Senior
Subordinated Notes.

         On March 25, 2002,  Sweetheart  refinanced its senior  revolving credit
facility with Bank of America,  N.A., as agent (the "Senior  Credit  Facility"),
which  replaced each of  Sweetheart  Cup and the Fonda Group,  Inc.'s  ("Fonda")
existing domestic  revolving credit and term loan facilities.  The Senior Credit
Facility  has a  maturity  date of March 25,  2007;  however,  in the event that
Sweetheart has not refinanced,  repaid or extended the $110 Senior  Subordinated
Notes prior to March 1, 2003, the Senior Credit Facility shall terminate on that
date. The Senior Credit Facility  allows for a maximum credit  borrowing of $235
million  subject  to  borrowing  base  limitations  and  satisfaction  of  other
conditions of borrowing.  The revolving  borrowings have a maximum of the lesser
of $235  million  less the balance of the term loans or $215  million.  The term
loans have a maximum of $25 million and are payable  monthly through March 2005.
Borrowings  under the Senior Credit  Facility,  at Sweetheart's  election,  bear
interest at either (i) a bank's base rate  revolving  loan  reference  rate plus
0.5% or (ii) LIBOR plus 2.5%. For the twenty-six weeks ended March 31, 2002, the
weighted  average annual interest rate for the Senior Credit Facility was 4.92%.
The Senior  Credit  Facility  is  collateralized  by  Sweetheart's  receivables,
inventory, general intangibles and certain other assets. The fee for outstanding
letters of credit is 2.00% per annum and there is a commitment fee of 0.375% per
annum on the daily  average  unused amount of the  commitments.  As of March 31,
2002, $52.5 million was available under the Senior Credit Facility.

         Extraordinary  gain  on  debt  extinguishment  included  a loss of $1.1
million,  net of the income  tax  benefit of $0.7  million,  resulting  from the
refinancing of Sweetheart's Senior Credit Facility.


(6)  SF HOLDINGS STOCK OPTION PLAN

         During the twenty-six  weeks ended March 25, 2001, the Company  adopted
the SF Holdings Group, Inc. Share Incentive Plan ("the Share Incentive Plan") in
which the Company may grant  options to its  employees  to purchase up to 95,995
shares of SF Holdings'  Class D common  stock.  SF Holdings has reserved  95,995
shares of Class D common stock for issuance upon exercise of these options.  The
exercise  price of each option is determined by SF Holdings at the date of grant
and an option's maximum term is 10 years.

         During the twenty-six  weeks ended March 25, 2001, SF Holdings  granted
options to  purchase  shares of its common  stock to  certain  employees  of the
Company.  Certain  officers  of the  Company  were  issued  options  that vested
one-third  immediately with the remaining options vesting over two years,  while
all other  eligible  employees  were issued  options  that vest over a period of
three  years.  The  exercise  prices of the options  granted to the officers and
certain  employees were below the fair market value of SF Holdings' common stock
at the date of the grant.  During the vesting  periods,  these discounts of $1.6
million are being amortized as  compensation  expense and credited to additional
paid-in capital by SF Holdings.  Amortization  expense  relating to SF Holdings'
stock options was $0.2 million for the

                                       8
<PAGE>
twenty-six  weeks ended March 31, 2002 and $0.6 million for the twenty-six weeks
ended March 25, 2001.


(7)  OTHER (INCOME) EXPENSE

         During the twenty-six weeks ended March 31, 2002,  Sweetheart  realized
$5.1 million due to the  amortization  of the deferred gain in conjunction  with
the Fiscal 2000  sale-leaseback  transaction.  Also, during the twenty-six weeks
ended March 31, 2002,  Sweetheart  recognized a $3.0 million gain in association
with  the  sale  of a  Sweetheart  manufacturing  facility  in  Manchester,  New
Hampshire.  These  gains  were  partially  offset by $4.4  million  in  expenses
reflecting  certain costs incurred with the  rationalization,  consolidation and
improvement of Sweetheart's manufacturing facilities.

         During the twenty-six weeks ended March 25, 2001,  Sweetheart  realized
$5.1 million due to the amortization of the deferred gain in connection with the
Fiscal 2000 sale-leaseback transaction.


(8)  CONTINGENCIES

         During  Fiscal  2001,  Sweetheart  experienced  a casualty  loss at its
Somerville,  Massachusetts  facility.  Sweetheart carries business  interruption
insurance  and has filed a claim with the insurance  company.  Settlement of the
recovery amount is to be determined.

         A lawsuit entitled Aldridge v. Lily-Tulip,  Inc. Salary Retirement Plan
Benefits Committee and Fort Howard Cup Corporation, Civil Action No. CV 187-084,
was filed in state  court in Georgia in April 1987 and later  removed to federal
court. The Plaintiffs claimed,  among other things,  that Sweetheart  wrongfully
terminated the Lily Tulip, Inc. Salary Retirement Plan (the "Plan") in violation
of the Employee  Retirement Income Security Act of 1974, as amended.  The relief
sought by Plaintiffs was to have the Plan termination declared ineffective.  The
United States Court of Appeals for the Eleventh  Circuit (the  "Circuit  Court")
ruled that the Plan was lawfully  terminated on December 31, 1986,  and judgment
was entered  dismissing  the case in March 1996.  The Circuit Court affirmed the
judgment entered in favor of Sweetheart. Plaintiffs filed a petition for writ of
certiorari to the United States Supreme Court, which was denied in January 1999.
Sweetheart  expects  to  complete  paying  out  the  termination  liability  and
associated expenses in connection with the Plan termination by June 30, 2002. As
of March 31, 2002,  Sweetheart disbursed $19.6 million in termination  payments.
The estimate of the total termination  liability and associated  expenses,  less
payments, exceeds the assets set aside in the Plan by $0.1 million, which amount
has been fully reserved by Sweetheart.

         On November 29, 2001, the  liquidating  trustee of Ace Baking  Company,
Limited   Partnership,   filed  a  Complaint  for  Avoidance  of  Transfers  and
Disallowance or Subordination of Claims against  Sweetheart in the United States
Bankruptcy  Court Eastern  District of  Wisconsin.  The  Complaint,  among other
things, seeks to avoid a portion of the consideration paid by Ace Baking Company
to  Sweetheart,  as a  fraudulent  transfer,  in  connection  with  the  sale by
Sweetheart of its bakery  business to Ace Baking in November  1997. In addition,
the trustee  alleges  that  certain  subsequent  payments  made by Ace Baking to
Sweetheart in connection with such sales are avoidable preferences. On April 12,
2002,  the parties  entered into a settlement  agreement,  pursuant to which the
complaint has been dismissed with  prejudice,  the effect of which does not have
any material adverse effect on Sweetheart.

         The Company is subject to legal proceedings and other claims arising in
the ordinary course of its business. The Company maintains insurance coverage of
types and in amounts  which it believes to be adequate and  believes  that it is
not presently a party to any litigation,  the outcome of which could  reasonably
be expected to have a material  adverse  effect on its  financial  condition  or
results of operations.

                                       9
<PAGE>
Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATION

         Forward-looking statements in this filing, including those in the Notes
to  Consolidated  Financial  Statements,  are made  pursuant  to the safe harbor
provisions  of the  Private  Securities  Litigation  Reform  Act of  1995.  Such
forward-looking  statements  are subject to risks and  uncertainties  and actual
results could differ materially.  Such risks and uncertainties  include, but are
not limited to, general  economic and business  conditions,  competitive  market
pricing,  increases in raw material costs,  energy costs and other manufacturing
costs, fluctuations in demand for products, potential equipment malfunctions and
pending litigation. For additional information, see the SF Holdings Group Inc.'s
("SF Holdings")  (the "Company")  annual report on Form 10-K for the most recent
fiscal year.


General

         SF  Holdings  was  formed  in  December  1997 and  conducts  all of its
operations through its subsidiary, Sweetheart Holdings Inc. ("Sweetheart"),  and
therefore  has no  significant  cash  flows or  operations  independent  of such
subsidiary.

         Sweetheart is a converter and marketer of disposable paper, plastic and
foam  foodservice,  consumer  and food  packaging  products.  The prices for raw
materials  fluctuate.  When raw material  prices  decrease,  selling prices have
historically  decreased.  The actual impact from raw materials  price changes is
affected by a number of factors  including the level of  inventories at the time
of a price change,  the specific timing and frequency of price changes,  and the
lead and lag time that  generally  accompanies  the  implementation  of both raw
materials and subsequent selling price changes.  In the event that raw materials
prices  decrease over a period of several  months,  Sweetheart may suffer margin
erosion on the sale of such inventory.

         Sweetheart's  business is seasonal with a majority of its net cash flow
from operations  realized  during the last six months of the fiscal year.  Sales
for such periods  reflect the high  seasonal  demands of the summer  months when
outdoor and away-from-home consumption increases. In the event that Sweetheart's
cash flow from operations is  insufficient to provide working capital  necessary
to fund its  requirements,  Sweetheart  will  need to borrow  under  its  senior
revolving  credit  facility  with Bank of America,  N.A or seek other sources of
capital.  Sweetheart  believes that funds available  under its senior  revolving
credit facility  together with cash generated from operations,  will be adequate
to provide for cash requirements for the next twelve months.


Recent Developments

         On January 25,  2002,  SF Holdings  refinanced a portion of its 12 3/4%
Senior Discount Notes due 2008 (the "SF Holdings  Discount  Notes") with a group
of  unaffiliated  investment  entities  (the  "Investor"),  whereby the Investor
purchased $103.2 million  (approximately  71%) of the aggregate principal amount
outstanding  of the SF Holdings  Discount  Notes  which had a carrying  value of
$89.6 million. SF Holdings and the Investor have amended,  effective January 25,
2002,  the  Indenture  governing  the SF Holdings  Discount  Notes to  eliminate
substantially  all of the  restrictive  covenants.  SF Holdings'  certificate of
incorporation  has also been  amended to conform  the terms of its  Exchangeable
Preferred  Stock to the amendments  made to the  Indenture.  SF Holdings and the
Investor  have also agreed to reduce the  aggregate  principal  amount of the SF
Holdings  Discount Notes held by the Investor to $55 million,  with an effective
cash interest rate of 14.26% (15.25% if interest is  paid-in-kind  through March
31,  2004) and extended  the  maturity  date to January 25,  2009.  Interest and
principal  under the SF  Holdings  Discount  Notes are  collateralized  by a 49%
interest in the capital stock of Sweetheart.

                                       10
<PAGE>
         Extraordinary  gain on debt  extinguishment  included  a gain of  $19.5
million  which was net of the  write-off of $2.1  million of deferred  financing
fees and $13.0 million of income tax expenses, resulting from the refinancing of
the SF Holdings Discount Notes.

         In  connection  with the above,  SF Holdings  issued to the  Investor a
warrant to purchase a 7% ownership  interest in SF Holdings (the "SF  Warrant").
The fair value of this SF Warrant at the date of  issuance  of $1.2  million was
recorded as paid-in capital with a corresponding reduction in the carrying value
of the SF Holdings Discount Notes, and will be amortized as additional  interest
expense over the term of the SF Holdings Discount Notes.

         Pursuant  to an  agreement,  dated as of March 22, 2002 by and among SF
Holdings,  Dennis Mehiel,  the Company's  Chairman and Chief Executive  Officer,
American  Industrial  Partners  Management  Company,  Inc.,  American Industrial
Partners  Capital Fund L.P.  ("AIP") and the other  stockholders  of  Sweetheart
signatory  to  that  certain   Stockholders'   Agreement   (the   "Stockholders'
Agreement"),  dated as of March 12, 1998,  (together  with AIP and any permitted
transferee  of  shares  of  Class A common  stock  or  Class B  common  stock of
Sweetheart ("the Shares"), the "Original Stockholders"),  all of the outstanding
Shares not held by SF Holdings  (which  consisted  of 52% of the voting stock of
Sweetheart)  were  delivered to SF Holdings and  exchanged  for 96,000 shares of
Class C common stock of SF Holdings.  As a result,  SF Holdings  became the sole
beneficial  owner  of  100% of the  issued  and  outstanding  capital  stock  of
Sweetheart.  In addition and in connection therewith, the Stockholders Agreement
and related  stockholders'  right agreement were  terminated.  As a result,  the
excess of the fair  value of the  Class C common  stock  issued to the  Original
Stockholders  over the fair value of the  remaining  net assets  acquired  by SF
Holdings in the amount of $5.5 million has been recorded as goodwill.

         On March 25, 2002, Sweetheart entered into a supplemental  indenture to
the  Indenture  (the  "Indenture")  governing  its $110  million 10 1/2%  Senior
Subordinated Notes due 2003 (the "$110 Senior Subordinated  Notes") to amend the
definition of "Change of Control" in the Indenture to substitute  Dennis Mehiel,
the Company's Chairman and Chief Executive Officer,  for AIP and to make certain
other  conforming  changes.  Sweetheart  offered to pay $5.00 for each $1,000 in
principal  amount of the $110 Senior  Subordinated  Notes (the "Consent Fee") to
holders of the $110 Senior  Subordinated Notes who had properly  furnished,  and
not revoked,  their  consent on or prior to the  expiration  date of the consent
solicitation  (the "Consent  Solicitation").  As a result of the consummation of
the Consent  Solicitation,  the $110 Senior  Subordinated  Notes began to accrue
interest at 12% per annum as of March 1, 2002.  Sweetheart  paid the Consent Fee
to the holders of the $110 Senior  Subordinated Notes who consented prior to the
expiration of the Consent Solicitation. Such Consent Fee has been capitalized in
other  assets  and  is  being  amortized  over  the  term  of  the  $110  Senior
Subordinated Notes.

         On March 25,  2002,  pursuant to an Agreement  and Plan of Merger,  the
Fonda Group,  Inc.  ("Fonda") was merged (the "Merger") with and into Sweetheart
Cup Company  Inc.  ("Sweetheart  Cup"),  with  Sweetheart  Cup as the  surviving
entity. In connection with the Merger, all of the assets and operations of Fonda
were assigned to, and all  liabilities of Fonda were assumed by,  Sweetheart Cup
by operation of law and all of the  outstanding  shares of Fonda were cancelled.
Sweetheart  Cup is a wholly owned  subsidiary  of  Sweetheart  which is a wholly
owned subsidiary of SF Holdings.

         On March 25, 2002,  Sweetheart  refinanced its senior  revolving credit
facility with Bank of America,  N.A., as agent (the "Senior  Credit  Facility"),
which replaced each of Sweetheart Cup's and Fonda's existing domestic  revolving
credit and term loan facilities.  The Senior Credit Facility has a maturity date
of March 25, 2007;  however,  in the event that  Sweetheart has not  refinanced,
repaid or extended  the $110 Senior  Subordinated  Notes prior to March 1, 2003,
the Senior  Credit  Facility  shall  terminate on that date.  The Senior  Credit
Facility  allows  for a maximum  credit  borrowing  of $235  million  subject to
borrowing base  limitations and  satisfaction of other  conditions of borrowing.
The revolving  borrowings  have a maximum of the lesser of $235 million less the
balance of the term loans or $215 million.  The term loans have a maximum of $25
million and are payable monthly through March 2005.  Borrowings under the Senior
Credit Facility, at Sweetheart's election,  bear interest at either (i) a

                                       11
<PAGE>
bank's  base rate  revolving  loan  reference  rate plus 0.5% or (ii) LIBOR plus
2.5%. For the twenty-six weeks ended March 31, 2002, the weighted average annual
interest  rate for the  Senior  Credit  Facility  was 4.92%.  The Senior  Credit
Facility is  collateralized  by  Sweetheart's  receivables,  inventory,  general
intangibles and certain other assets. The fee for outstanding  letters of credit
is 2.00%  per annum and  there is a  commitment  fee of 0.375%  per annum on the
daily average  unused  amount of the  commitments.  As of March 31, 2002,  $52.5
million was available under the Senior Credit Facility.

         Extraordinary  gain  on  debt  extinguishment  included  a loss of $1.1
million,  net of the income  tax  benefit of $0.7  million,  resulting  from the
refinancing of the Senior Credit Facility.


Thirteen   Weeks  Ended   March  31,  2002   Compared  to  Thirteen  Weeks Ended
March 25, 2001 (Unaudited)

         Net sales  increased  $3.6 million,  or 1.2%, to $296.4 million for the
thirteen  weeks ended March 31, 2002 compared to $292.8 million for the thirteen
weeks ended March 25,  2001,  reflecting  a 4.5%  increase in sales volume and a
3.3% decrease in average  realized  sales price.  Sales  volumes  increased as a
result of incremental sales obtained from the acquisitions of an 80% interest in
Global Cup,  S.A. De C.V. and its  subsidiaries  ("Global") in April 2001 and of
substantially  all of the  property,  plant and  equipment,  intangible  and net
working capital of the consumer  division of Dopaco,  Inc.  ("Dopaco") in August
2001.  Average realized prices decreased as a result of lower raw material costs
and competitive pressures.

         Gross profit decreased $5.0 million, or 14.9%, to $28.6 million for the
thirteen  weeks ended March 31, 2002  compared to $33.6 million for the thirteen
weeks ended March 25, 2001. As a percentage of net sales, gross profit decreased
to 9.7% for the thirteen  weeks ended March 31, 2002 from 11.5% for the thirteen
weeks ended March 25, 2001.  The decrease in gross profit  reflects  lower fixed
costs absorption as Sweetheart's  inventory  production decreased from the prior
year.  In  addition,  gross  profit was  negatively  impacted  by lower  average
realized   sales  prices   reflecting   decreases  in  raw  material  costs  and
manufacturing inefficiencies related to Sweetheart's initiatives to rationalize,
consolidate and improve its manufacturing facilities.

         Selling, general and administrative expenses decreased $1.0 million, or
3.4%, to $28.8  million for the thirteen  weeks ended March 31, 2002 compared to
$29.8  million for the  thirteen  weeks ended March 25, 2001.  This  decrease is
primarily  due to  reductions  in variable  compensation  costs of $0.3 million,
promotional  advertising  expenses of $0.4  million and  information  technology
costs of $0.4  million.  These  favorable  changes were  partially  offset by an
increase in bad debt expense of $0.5 million due to recent  customer  bankruptcy
filings.

         Other income, net decreased $2.8 million, or 93.3%, to $0.2 million for
the  thirteen  weeks  ended  March 31,  2002  compared  to $3.0  million for the
thirteen  weeks ended March 25, 2001.  This  decrease is  primarily  due to $2.6
million of costs incurred in association with the rationalization, consolidation
and improvement of Sweetheart's manufacturing facilities.

         Operating income (loss) decreased $7.0 million, or 101.5%, to a loss of
$0.1 million for the thirteen  weeks ended March 31, 2002  compared to income of
$6.9  million for the thirteen  weeks ended March 25,  2001,  due to the reasons
stated above.

         Interest expense, net decreased $0.3 million, or 2.2%, to $13.1 million
for the thirteen  weeks ended March 31, 2002  compared to $13.4  million for the
thirteen  weeks ended March 25, 2001.  This  decrease is  attributable  to lower
interest  rates on higher  average  balances  which was partially  offset by the
increase  in coupon  interest on the $110  Senior  Subordinated  Notes which was
effective March 1, 2002.

         Income tax benefit  increased $2.6 million,  or 113.0%, to $4.9 million
in the  thirteen  weeks ended March 31,  2002  compared to $2.3  million for the
thirteen  weeks ended March 25, 2001 as a result of a

                                       12
<PAGE>
larger pre-tax loss. The effective  rates for the thirteen weeks ended March 31,
2002 and the thirteen weeks ended March 25, 2001 were 37% and 34%, respectively.

         Minority interest decreased $0.1 million,  or 50.0%, to $0.1 million in
the  thirteen  weeks  ended  March 31,  2002  compared  to $0.2  million for the
thirteen  weeks  ended  March  25,  2001 as a result  of  decrease  earnings  of
Sweetheart.

         Extraordinary gain on debt  extinguishment was $18.4 million net of the
income  taxes in the  thirteen  weeks ended March 31,  2002  resulting  from the
refinancing of the SF Holdings Discount Notes and the Senior Credit Facility.

         Net income (loss)  increased  $14.4  million,  or 351.2%,  to income of
$10.3 million for the thirteen  weeks ended March 31, 2002 compared to a loss of
$4.1  million for the thirteen  weeks ended March 25,  2001,  due to the reasons
stated above.


Twenty-six   Weeks   Ended   March  31,  2002 Compared to Twenty-six Weeks Ended
March 25, 2001 (Unaudited)

         Net sales  decreased  $2.1 million,  or 0.3%, to $617.2 million for the
twenty-six  weeks  ended  March 31,  2002  compared  to $619.3  million  for the
twenty-six  weeks ended March 25, 2001,  reflecting  a 2.1%  decrease in average
realized  sales price and a 1.8%  increase  in sales  volume.  Average  realized
prices  decreased  as a result  of lower  raw  material  costs  and  competitive
pressures.  Sales volumes  increased as a result of  incremental  sales obtained
from  Sweetheart's  acquisitions  of Global in April  2001 and  Dopaco in August
2001.

         Gross profit decreased $3.1 million,  or 4.3%, to $69.0 million for the
twenty-six  weeks  ended  March  31,  2002  compared  to $72.1  million  for the
twenty-six  weeks ended March 25,  2001.  As a  percentage  of net sales,  gross
profit  decreased  to 11.2% for the  twenty-six  weeks ended March 31, 2002 from
11.6% for the  twenty-six  weeks ended  March 25,  2001.  The  decrease in gross
profit reflects a decrease in fixed costs  absorption as Sweetheart's  inventory
production  was down from prior year. In addition,  gross profit was  negatively
impacted by lower average realized sales prices reflecting decreases in material
cost and  manufacturing  inefficiencies  related to  Sweetheart's  consolidation
initiatives.

         Selling, general and administrative expenses decreased $0.9 million, or
1.5%, to $58.3 million for the twenty-six weeks ended March 31, 2002 compared to
$59.2 million for the  twenty-six  weeks ended March 25, 2001.  This decrease in
expense is primarily due to reductions  in variable  compensation  costs of $1.7
million  and  information  technology  costs of $0.3  million.  These  favorable
changes  were  partially  offset by an in increase  in bad debt  expense of $1.3
million due to recent customer bankruptcy filings.

         Other  income  decreased  $3.1  million,  or  48.4%,  to income of $3.3
million for the twenty-six weeks ended March 31, 2002 compared to income of $6.4
million  for the  twenty-six  weeks  ended  March 25,  2001.  This  decrease  is
primarily  due to $4.4  million  of  costs  incurred  in  association  with  the
rationalization,  consolidation  and improvement of  Sweetheart's  manufacturing
facilities which was partially offset by a $3.0 million gain associated with the
sale of Sweetheart's manufacturing facility in Manchester, New Hampshire.

         Operating income decreased $5.4 million,  or 28.0% to $13.9 million for
the  twenty-six  weeks ended March 31,  2002  compared to $19.3  million for the
twenty-six weeks ended March 25, 2001, due to the reasons stated above.

         Interest expense, net decreased $0.5 million, or 1.9%, to $26.3 million
for the twenty-six  weeks ended March 31, 2002 compared to $26.8 million for the
twenty-six  weeks ended March 25, 2001.  This decrease is  attributable to lower
interest  rates on higher  average  balances  which was partially  offset by the
increase  in coupon  interest on the $110  Senior  Subordinated  Notes which was
effective March 1, 2002.

                                       13
<PAGE>
         Income tax benefit increased $1.7 million, or 68.0%, to $4.2 million in
the  twenty-six  weeks  ended March 31,  2002  compared to $2.5  million for the
twenty-six  weeks ended March 25, 2001 as a result of a larger pre-tax loss. The
effective  rates for the thirteen  weeks ended March 31, 2002 and the twenty-six
weeks ended March 25, 2001 were 34% and 33%, respectively.

         Minority interest  decreased $0.2 million,  or 200.0%, to an expense of
$0.1 million in the twenty-six  weeks ended March 31, 2002 compared to income of
$0.1  million  for the  twenty-six  weeks  ended  March 25,  2001 as a result of
decrease earning of Sweetheart.

         Extraordinary gain on debt  extinguishment was $18.4 million net of the
income taxes in the  twenty-six  weeks ended March 31, 2002  resulting  from the
refinancing of the SF Holdings Discount Notes and the Senior Credit Facility.

         Net income (loss) increased $15.2 million,  or 304%, to income of $10.2
million for the twenty-six weeks ended March 31, 2002 compared to a loss of $5.0
million for the twenty-six weeks ended March 25, 2001, due to the reasons stated
above.


Liquidity And Capital Resources

         Historically,  the Company has relied on cash  generated by operations,
combined with amounts available under revolving credit borrowings in addition to
funds generated by asset sales to fund capital  expenditure  needs, debt service
requirements, payments in conjunction with lease commitments and working capital
needs.  In the  twenty-six  weeks ended March 31, 2002,  the Company  funded its
capital  expenditures  from a combination  of cash  generated  from  operations,
borrowings  from the revolving  credit  facility and funds  generated from asset
sales.  The Company expects to continue this method of funding for the remainder
of its Fiscal 2002 capital expenditures.

         Net cash provided by operating activities in the twenty-six weeks ended
March  31,  2002  was  $32.3  million  compared  to net cash  used in  operating
activities of $6.6 million in the  twenty-six  weeks ended March 25, 2001.  This
increase is primarily due to better  collection of  receivables,  a reduction in
inventories and improved accounts payable management.

         Net cash used in investing  activities  in the  twenty-six  weeks ended
March 31,  2002 was $8.5  million  compared to $19.0  million in the  twenty-six
weeks ended March 25, 2001.  This  decrease is  primarily  due to the receipt of
proceeds  from  the  sale  of the  Manchester,  New  Hampshire  facility  in the
twenty-six weeks ended March 31, 2002 and the purchase of  substantially  all of
the  property,  plant and  equipment,  intangibles  and net  working  capital of
Springprint  Medallion, a division of Marcal Paper Mills, Inc. in the twenty-six
weeks ended March 25, 2001.

         Net cash used in financing  activities  in the  twenty-six  weeks ended
March 31,  2002 was $29.7  million  compared to net cash  provided by  financing
activities of $28.3 million in the twenty-six  weeks ended March 25, 2001.  This
change is primarily due to the reduction of the Senior Credit Facility balances,
the proceeds  received from the sale of the Manchester,  New Hampshire  facility
and cash generated from operations.

         Working capital  decreased $35.7 million to $218.5 million at March 31,
2002 from $254.2  million at September  30, 2001.  This  decrease  resulted from
current assets decreasing $33.5 million, primarily due to improved collection of
receivables and management of inventories.

         Capital expenditures for the twenty-six weeks ended March 31, 2002 were
$13.8 million compared to $12.7 million for the twenty-six weeks ended March 25,
2001. Capital expenditures in the twenty-six weeks ended March 31, 2002 included
$6.1 million for new  production  equipment;  $4.2

                                       14
<PAGE>
million  associated  with  the  implementation  of  Sweetheart's   consolidation
program;  $2.7 million for facility  improvements and $0.8 million primarily for
routine capital improvements.

         On March 25, 2002,  Sweetheart  refinanced  its Senior Credit  Facility
with Bank of America,  N.A., as agent,  which  replaced  each of Sweetheart  and
Fonda's existing domestic revolving credit and term loan facilities.  The Senior
Credit  Facility has a maturity  date of March 25, 2007;  however,  in the event
that  Sweetheart  has  not  refinanced,  repaid  or  extended  the  $110  Senior
Subordinated  Notes prior to March 1, 2003,  the Senior  Credit  Facility  shall
terminate on that date. The Senior Credit  Facility  allows for a maximum credit
borrowing of $235 million subject to borrowing base limitations and satisfaction
of other conditions of borrowing. The revolving borrowings have a maximum of the
lesser of $235 million less the balance of the term loans or $215  million.  The
term loans have a maximum of $25 million and are payable  monthly  through March
2005.  Borrowings  under the Senior Credit Facility,  at Sweetheart's  election,
bear interest at either (i) a bank's base rate  revolving  loan  reference  rate
plus 0.5% or (ii) LIBOR plus 2.5%.  For the  twenty-six  weeks  ended  March 31,
2002, the weighted  average annual  interest rate for the Senior Credit Facility
was  4.92%.  The  Senior  Credit  Facility  is  collateralized  by  Sweetheart's
receivables,  inventory,  general  intangibles and certain other assets. The fee
for  outstanding  letters of credit is 2.00% per annum and there is a commitment
fee of 0.375% per annum on the daily average  unused amount of the  commitments.
As of March 31,  2002,  $52.5  million  was  available  under the Senior  Credit
Facility.

         Sweetheart's  Canadian subsidiary has a credit agreement (the "Canadian
Credit  Facility")  which provides for a term loan and a credit  facility with a
maximum  credit  borrowing of Cdn $30 million  (approximately  US $18.8 million)
subject to borrowing base  limitations and  satisfaction of other  conditions of
borrowing.  The term borrowings are payable quarterly through May 2004. Both the
revolving credit and term loan borrowings have a final maturity date of June 15,
2004.  The Canadian  Credit  Facility is secured by all existing and  thereafter
acquired real and personal tangible assets of Sweetheart's  Canadian  subsidiary
and net  proceeds  on the sale of any of the  foregoing.  Borrowings  under  the
Canadian  Credit Facility bear interest at an index rate plus 1.75% with respect
to the  revolving  credit  facility and an index rate plus 2.00% with respect to
the term loan borrowings.  As of March 31, 2002, Cdn $2.3 million (approximately
US $1.4  million) was available  under the revolving  facility and the term loan
balance was Cdn $13.4 million (approximately US $8.4 million) under the Canadian
Credit Facility.

         In  connection  with a  sale-leaseback  transaction,  on June 15, 2000,
Sweetheart  Cup, and Sweetheart  sold certain  production  equipment  located in
Owings Mills,  Maryland,  Chicago,  Illinois and Dallas,  Texas to several owner
participants for a fair market value of $212.3 million.

         Pursuant  to a lease  dated as of June 1,  2000 (the  "Lease")  between
Sweetheart Cup and State Street Bank and Trust Company of Connecticut,  National
Association ("State Street"),  as trustee,  Sweetheart Cup leases the production
equipment  sold in connection  with the  sale-leaseback  transaction  from State
Street as owner  trustee for several  owner  participants,  through  November 9,
2010.  Sweetheart  Cup  has  the  option  to  renew  the  Lease  for up to  four
consecutive renewal terms of two years each.  Sweetheart Cup also has the option
to purchase such equipment for fair market value either at the conclusion of the
Lease term or November 21, 2006.  Sweetheart's  obligations  under the Lease are
collateralized  by  substantially  all  of  Sweetheart's  property,   plant  and
equipment owned as of June 15, 2000. The Lease contains various covenants, which
prohibit, or limit, among other things, dividend payments, equity repurchases or
redemption, the incurrence of additional indebtedness and certain other business
activities.  Sweetheart is accounting for the  sale-leaseback  transaction as an
operating  lease,  expensing the $32.0 million  annualized  rental  payments and
removing  the  property,  plant and  equipment  sold from its balance  sheet.  A
deferred  gain of  $107.0  million  was  realized  from  this  sale and is being

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<PAGE>
amortized over 125 months,  which is the term of the Lease.  The taxable gain in
the amount of $147.8  million has allowed  Sweetheart  to utilize a  substantial
portion of its net operating loss carryforwards.

         Sweetheart Cup is the obligor and Sweetheart the guarantor with respect
to the $110 Senior Subordinated Notes.  Interest on the $110 Senior Subordinated
Notes is  payable  semi-annually  in arrears  on March 1 and  September  1. As a
result  of the  consummation  of  the  Consent  Solicitation,  the  $110  Senior
Subordinated  Notes  began to  accrue  interest  at 12% per annum as of March 1,
2002. The $110 Senior Subordinated Notes are subject to redemption at the option
of  Sweetheart,  in whole or in part,  at the  redemption  price  (expressed  as
percentages of the principal  amount),  plus accrued  interest to the redemption
date,  at a call  premium  of  100%.  The $110  Senior  Subordinated  Notes  are
Subordinated  in right of payment to the prior payment in full of all borrowings
under the Senior Credit Facility, all obligations under the Lease, and all other
indebtedness  not  otherwise  prohibited.  The $110  Senior  Subordinated  Notes
contain various covenants which prohibit,  or limit,  among other things,  asset
sales, change of control,  dividend payments,  equity repurchases or redemption,
the incurrence of additional  indebtedness,  the issuance of disqualified stock,
certain  transactions  with  affiliates,  the creation of  additional  liens and
certain other business activities.

         In Fiscal  1997,  Sweetheart  issued  $120  million of 9-1/2%  Series A
Senior Subordinated Notes due 2007 (the "$120 Senior  Subordinated  Notes") with
interest  payable  semi-annually.  Payment  of the  principal  and  interest  is
subordinate in right to payment of the Senior Credit  Facility.  Sweetheart may,
at its  election,  redeem the $120 Senior  Subordinated  Notes at any time after
March 1, 2002 at a redemption price equal to a percentage  (104.750% after March
1,  2002 and  declining  in annual  steps to 100%  after  March 1,  2005) of the
principal  amount thereof plus accrued  interest.  The $120 Senior  Subordinated
Notes  provide  that upon the  occurrence  of a change of  control  (as  defined
therein),  the holders thereof will have the option to require the redemption of
the $120 Senior  Subordinated  Notes at a redemption  price equal to 101% of the
principal amount thereof plus accrued interest.

         On  January  25,  2002,  SF  Holdings  refinanced  a portion  of its SF
Holdings  Discount Notes with a group of unaffiliated  investment  entities (the
"Investor"),  whereby the Investor purchased $103.2 million  (approximately 71%)
of the aggregate  principal amount outstanding of the SF Holdings Discount Notes
which had a carrying value of $89.6  million.  SF Holdings and the Investor have
amended,  effective  January 25, 2002,  the Indenture  governing the SF Holdings
Discount Notes to eliminate  substantially all of the restrictive covenants.  SF
Holdings'  certificate  of  incorporation  has also been  amended to conform the
terms of SF Holdings' Exchangeable Preferred Stock to the amendments made to the
Indenture. SF Holdings and the Investor have also agreed to reduce the aggregate
principal  amount of the SF Holdings  Discount Notes held by the Investor to $55
million,  with an effective  cash interest rate of 14.26% (15.25% if interest is
paid in kind through  March 31, 2004) and extended the maturity  date to January
25,  2009.  Interest  and  principal  under the SF Holdings  Discount  Notes are
collateralized by a 49% interest in the capital stock of Sweetheart. SF Holdings
expensed $2.1 million in deferred financing fees as a result of the refinancing.

         In  connection  with the above,  SF Holdings  issued to the  Investor a
warrant to purchase a 7% ownership  interest in SF Holdings (the "SF  Warrant").
The fair value of this SF Warrant at the date of  issuance  of $1.2  million was
recorded as paid-in capital with a corresponding reduction in the carrying value
of the SF Holdings Discount Notes, and will be amortized as additional  interest
expense over the term of the SF Holdings Discount Notes.

         On March 12, 1998, SF Holdings  issued units  consisting of $30 million
of 13 3/4%  Exchangeable  Preferred Stock due March 13, 2009 (the  "Exchangeable
Preferred")  and 11,100  shares of Class C common  stock.  Until March 12, 2003,
cumulative  dividends on the  Exchangeable  Preferred are paid quarterly,  at SF
Holdings'  option,  subject  to certain  restrictions,  either in cash or by the
issuance of additional shares of Exchangeable Preferred.  Thereafter,  dividends
will be payable in cash, subject to certain  exceptions.  The

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<PAGE>
fair value of such Class C common  stock ($0.9  million) at the date of issuance
was recorded as common stock and paid-in capital with a corresponding  reduction
in the carrying value of the Exchangeable  Preferred.  The resulting discount is
being  amortized as additional  preferred  stock  dividends over the term of the
Exchangeable  Preferred.  The  Exchangeable  Preferred  is  exchangeable  at  SF
Holdings' option into 13 3/4% subordinated notes due March 15, 2009.

         As of December 12, 2001, all cumulative  dividends on the  Exchangeable
Preferred  have been paid by the issuance of additional  shares of  Exchangeable
Preferred.  The value of the Exchangeable Preferred, was $51.7 million and $48.2
million  as of  March  31,  2002  and  September  30,  2001,  respectively.  The
Exchangeable  Preferred  is not  entitled to any vote,  except as required in SF
Holdings' certificate of incorporation and by law.

         On March 12, 1998, SF Holdings  authorized  100,000 shares of Preferred
Stock  Class B, $.001 par value.  On March 12,  1998,  15,000  shares of Class B
Series 1 preferred stock,  $.001 par value,  were issued to Creative  Expression
Group, Inc. ("CEG") in consideration for a $15 million  investment.  On December
3,  1999,  15,000  shares of Class B Series 2  preferred  stock  were  issued in
connection with the merger with CEG in consideration  for 87% of shares of CEG's
common stock with a liquidation value of $15 million.

         The Class B Series 1 and Series 2 preferred  stock are not  entitled to
receive  dividends.  The  holder  of  Class B Series  1  preferred  stock is not
entitled to any vote, except as otherwise  provided by law. The holders of Class
B Series 2 preferred  stock are  entitled to one vote for each share held in all
matters  voted  on by the  stockholders.  Each  series  of  preferred  stock  is
convertible,  at any time,  into  133,494  shares of Class A Common Stock and is
required to be redeemed on March 13, 2010,  provided funds are legally available
for such purposes.

         Pursuant to the terms of the instruments  governing the indebtedness of
the  Company,  the  Company  is  subject to  certain  affirmative  and  negative
covenants customarily  contained in agreements of this type, including,  without
limitations  covenants  that  restrict,  subject  to  specified  exceptions  (i)
mergers,  consolidations,  asset  sales or changes in  capital  structure,  (ii)
creation or acquisition of subsidiaries, (iii) purchase or redemption of capital
stock or  declaration or payment of dividends or  distributions  on such capital
stock, (iv) incurrence of additional  indebtedness,  (v) investment  activities,
(vi)  granting  or  incurrence  of liens to  secure  other  indebtedness,  (vii)
prepayment or modification of the terms of subordinated indebtedness, and (viii)
engaging in transactions with affiliates.

         During  Fiscal  2001,  Sweetheart  experienced  a casualty  loss at its
Somerville,  Massachusetts  facility.  Sweetheart carries business  interruption
insurance  and has filed a claim with the insurance  company.  Settlement of the
recovery amount is to be determined.

         A lawsuit entitled Aldridge v. Lily-Tulip,  Inc. Salary Retirement Plan
Benefits Committee and Fort Howard Cup Corporation, Civil Action No. CV 187-084,
was filed in state  court in Georgia in April 1987 and later  removed to federal
court. The Plaintiffs claimed,  among other things,  that Sweetheart  wrongfully
terminated the Lily Tulip, Inc. Salary Retirement Plan (the "Plan") in violation
of the Employee  Retirement Income Security Act of 1974, as amended.  The relief
sought by Plaintiffs was to have the Plan termination declared ineffective.  The
United States Court of Appeals for the Eleventh  Circuit (the  "Circuit  Court")
ruled that the Plan was lawfully  terminated on December 31, 1986,  and judgment
was entered  dismissing  the case in March 1996.  The Circuit Court affirmed the
judgment entered in favor of Sweetheart. Plaintiffs filed a petition for writ of
certiorari to the United States Supreme Court, which was denied in January 1999.
Sweetheart  expects  to  complete  paying  out  the  termination  liability  and
associated expenses in connection with the Plan termination by June 30, 2002. As
of March 31, 2002,  Sweetheart disbursed $19.6 million in termination  payments.
The estimate of the total termination  liability and associated  expenses,  less
payments, exceeds the assets set aside in the Plan by $0.1 million, which amount
has been fully reserved by Sweetheart.

                                       17
<PAGE>
         On November 29, 2001, the  liquidating  trustee of Ace Baking  Company,
Limited   Partnership,   filed  a  Complaint  for  Avoidance  of  Transfers  and
Disallowance or Subordination of Claims against  Sweetheart in the United States
Bankruptcy  Court Eastern  District of  Wisconsin.  The  Complaint,  among other
things, seeks to avoid a portion of the consideration paid by Ace Baking Company
to  Sweetheart,  as a  fraudulent  transfer,  in  connection  with  the  sale by
Sweetheart of its bakery  business to Ace Baking in November  1997. In addition,
the trustee  alleges  that  certain  subsequent  payments  made by Ace Baking to
Sweetheart in connection with such sales are avoidable preferences. On April 12,
2002,  the parties  entered into a settlement  agreement,  pursuant to which the
complaint has been dismissed with  prejudice,  the effect of which does not have
any material adverse effect on Sweetheart.

         The Company is subject to legal proceedings and other claims arising in
the ordinary course of its business. The Company maintains insurance coverage of
types and in amounts  which it believes to be adequate and  believes  that it is
not presently a party to any litigation,  the outcome of which could  reasonably
be expected to have a material  adverse  effect on its  financial  condition  or
results of operations.

         The Company  believes that cash generated by  Sweetheart's  operations,
combined with amounts  available under the Senior Credit Facility in addition to
funds generated by asset sales should be sufficient to fund Sweetheart's capital
expenditure needs, debt service requirements, payments in conjunction with lease
commitments  and  working  capital  needs,  including  Sweetheart's  termination
liabilities under the Plan in the next twelve months.

         The Company  continues to contemplate  various  strategic options which
may  include  a  restructuring  of its  business  debt  and  capital  structure,
including,  among other things,  the public sale or private placement of debt or
equity   securities   of  the  Company  or  its   subsidiaries,   joint  venture
transactions,  new borrowings,  the  refinancing of the Company's  existing debt
agreements,  open market  purchases,  tender  offers or  exchange  offers of the
Company's outstanding  securities.  There can be no assurances that any of these
strategic options will be consummated.


Net Operating Loss Carryforwards

         As of September 30, 2001,  Sweetheart had  approximately $28 million of
net operating loss ("NOL") carryforwards for federal income tax purposes,  which
expire in 2018.  Although Sweetheart expects that sufficient taxable income will
be generated in the future to realize these NOLs, there can be no assurance that
future taxable income will be generated to utilize such NOLs.


Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Sweetheart  is  exposed  to  market  risk  in the  ordinary  course  of
business,  which consists  primarily of interest rate risk  associated  with its
variable rate debt. All borrowing  under the Senior Credit Facility and Canadian
Credit  Facility,  each of which contains a revolving and term credit  facility,
bear interest at a variable rate.  Borrowings  under the Senior Credit Facility,
at  Sweetheart's  election,  bear  interest  at  either  (i) a bank's  base rate
revolving  loan  reference  rate plus 0.5% or (ii) LIBOR  plus 2.5%.  Borrowings
under the Canadian  Credit  Facility  bear  interest at an index rate plus 1.75%
with respect to the  revolving  credit  borrowings  and an index rate plus 2.00%
with respect to the term loan borrowings.  As of March 31, 2002, the outstanding
indebtedness  under the  Senior  Credit  Facility  was  $166.6  million  and the
Canadian  Credit  Facility was $15.0  million in U.S.  dollars.  As of March 31,
2002,  $52.5 million was available under the Senior Credit Facility and Cdn $2.3
million  (approximately  US $1.4 million) was available  under  Canadian  Credit
Facility.  Based upon these  amounts,  the  annual  net income  would  change by
approximately  $1.1 million for each one percentage point change in the interest
rates  applicable  to the  variable  rate  debt.  The level of the  exposure  to
interest rate  movements may fluctuate  significantly  as a result of changes in
the amount of indebtedness outstanding under the revolving credit facilities.

                                       18
<PAGE>
                           PART II - OTHER INFORMATION


Item 6.  EXHIBITS AND REPORTS ON FORM 8-K


         (a)   Exhibits:

               None

         (b)   Reports on Form 8-K:

               A report on Form 8-K was filed on  February 1, 2002 under  Item 5
               and Item 7.

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<PAGE>

                                   SIGNATURES



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, its duly authorized officer and principal financial officer.



                                     SF HOLDINGS GROUP, INC.
                                     (registrant)

Date:  May 10, 2002                  By:  /s/ Hans H. Heinsen
       ------------                       -------------------
                                     Hans H. Heinsen
                                     Senior Vice President,
                                     Chief Financial Officer and Treasurer
                                     (Principal Financial and Accounting Officer
                                     and Duly Authorized Officer)

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