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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
                             Thirty-Nine Weeks Ended
                                  June 25, 2000

              [ ] 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 August 1, 2000:
             Class A Common Stock, $0.001 par value - 562,583 shares
             Class B Common Stock, $0.001 par value - 56,459 shares
             Class C Common Stock, $0.001 par value - 39,900 shares



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<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1.  FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                                                 SF HOLDINGS GROUP, INC.
                                                 -----------------------
                                               CONSOLIDATED BALANCE SHEETS
                                               ---------------------------
                                            (In thousands, except share data)


                                                                               (Unaudited)
                                                                                June 25,            September 26,
                                                                                  2000                  1999*
                                                                            ------------------     ----------------
<S>                                                                         <C>                    <C>
                                     Assets
                                     ------
      Current assets:
         Cash and cash equivalents                                             $    8,479             $    4,180
         Receivables, less allowances of $4,241 and $6,979, respectively          149,752                136,629
         Due from affiliates                                                          533                    538
         Inventories                                                              219,530                191,848
         Deferred income taxes                                                     20,757                 20,547
         Other current assets                                                      22,422                 24,330
                                                                                ---------              ---------
                 Total current assets                                             421,473                378,072
                                                                                ---------              ---------

      Property, plant and equipment, net                                          270,768                387,309

      Goodwill, net                                                               106,772                 98,176
      Deferred income taxes                                                        38,474                 38,424
      Other assets                                                                 33,179                 35,229
                                                                                ---------              ---------

                 Total assets                                                  $  870,666             $  937,210
                                                                               ==========             ==========

                      Liabilities and Shareholders' Equity
                      ------------------------------------
      Current liabilities:
         Accounts payable                                                      $   97,365             $   80,786
         Accrued expenses and other current liabilities                           106,617                112,700
         Current portion of deferred gain on sale of assets                        10,276                      -
         Current portion of long-term debt                                         15,139                276,845
                                                                                ---------              ---------

                 Total current liabilities                                        229,397                470,331
                                                                                ---------              ---------

      Long-term debt                                                              460,736                381,554
      Deferred gain on sale of assets                                              96,516                      -
      Other liabilities                                                            61,233                 62,494
      Deferred income taxes                                                         4,105                  4,026
                                                                                ---------              ---------

                 Total liabilities                                                851,987                918,405
                                                                                ---------              ---------

      Shareholders' equity:
         Exchangeable preferred stock                                              40,358                 36,291
         Minority interest in subsidiary                                            3,154                  1,971
         Redeemable common stock                                                    2,268                  2,217
         Shareholders' deficit                                                    (27,101)               (21,674)
                                                                                ----------             ----------

                 Total liabilities and shareholders' equity                    $  870,666             $  937,210
                                                                               ==========             ==========


                      * Restated, see Note 2 of the Notes to Consolidated Financial Statements

                            See accompanying Notes to Consolidated Financial Statements.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                                           SF HOLDINGS GROUP, INC.
                                                           -----------------------

                                                   CONSOLIDATED STATEMENTS OF OPERATIONS
                                                   -------------------------------------

                                                   AND OTHER COMPREHENSIVE INCOME (LOSS)
                                                   -------------------------------------
                                                                (Unaudited)
                                                               (In thousands)


                                                           For the          For the           For the           For the
                                                          Thirteen         Thirteen         Thirty-nine       Thirty-nine
                                                         weeks ended      weeks ended       weeks ended       weeks ended
                                                        June 25, 2000    June 27, 1999*    June 25, 2000     June 27, 1999*
                                                       ---------------  ---------------   ---------------   ---------------
<S>                                                    <C>              <C>               <C>               <C>
Net sales                                                $   346,579      $   315,179       $   941,773       $   873,120
Cost of sales                                                291,358          267,262           799,064           761,007
                                                         -----------      -----------       -----------       -----------

     Gross profit                                             55,221           47,917           142,709           112,113

Selling, general and administrative expenses                  26,347           27,896            86,908            87,513
Other (income) expense, net                                      326             (170)           (1,238)              334
                                                         -----------      ------------      ------------      -----------

     Operating income                                         28,548           20,191            57,039            24,266

Interest expense, net of interest income of $147,
     $141, $414 and $543, respectively                        18,713           17,792            53,413            53,013
                                                         -----------      -----------       -----------       -----------
     Income (loss) before income tax expense
     (benefit), minority interest and extraordinary
     loss                                                      9,835            2,399             3,626           (28,747)

Income tax expense (benefit)                                   4,255            1,275             2,404           (10,573)

Minority interest in subsidiary's income (loss)                  837              434             1,183              (814)
                                                         -----------      -----------       -----------       ------------

     Net income (loss) before extraordinary loss               4,743              690                39           (17,360)
                                                         -----------      -----------       -----------       ------------
Extraordinary (loss) on debt extinguishment  (net of
     income tax benefit of $225 and $575 respectively)          (337)               -              (862)                -
                                                         ------------     -----------       ------------      -----------

     Net income (loss)                                         4,406              690              (823)          (17,360)
                                                         -----------      -----------       ------------      ------------
Payment-in-kind dividends on exchangeable
     preferred stock                                          (1,390)          (1,221)           (4,067)           (3,586)
                                                         ------------     ------------      ------------      ------------

     Net income (loss) applicable to common stock        $     3,016      $      (531)      $    (4,890)      $   (20,946)
                                                         ===========      ============      ============      ============

Other comprehensive income (loss), net of tax:
     Net income (loss)                                         4,406              690              (823)          (17,360)
     Foreign currency translation adjustment                    (148)             323              (266)              312
     Minimum pension liability adjustment                        (73)             627               (77)            1,516
                                                         ------------     -----------       ------------      -----------

Other comprehensive income (loss)                               (221)             950              (343)            1,828
                                                         ------------     -----------       ------------      -----------

     Comprehensive income (loss)                         $     4,185      $     1,640       $    (1,166)      $   (15,532)
                                                         ===========      ===========       ============      ============


                            * Restated, see Note 2 of the Notes to Consolidated Financial Statements

                                  See accompanying Notes to Consolidated Financial Statements.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                                   SF HOLDINGS GROUP, INC.
                                                   -----------------------
                                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                                            -------------------------------------
                                                         (Unaudited)
                                                        (In thousands)


                                                                        For the               For the
                                                                      Thirty-nine           Thirty-nine
                                                                      weeks ended           weeks ended
                                                                       June 25,               June 27,
                                                                         2000                  1999*
                                                                    ---------------       ---------------
<S>                                                                 <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES

     Net income (loss)                                                $      (823)          $   (17,360)
     Adjustments to reconcile net income (loss) to net cash
     provided by (used in) operating activities:
       Depreciation and amortization                                       40,405                42,771
       Interest capitalized on debt                                         8,831                 8,188
       Deferred income tax credit                                           1,857                (8,532)
       Gain on sale of assets                                              (4,109)                 (305)
       Minority interest in subsidiary                                      1,183                  (814)
     Changes in operating assets and liabilities:
       Receivables                                                        (12,549)              (13,953)
       Due from affiliates                                                     (5)               (3,257)
       Inventories                                                        (21,938)               (3,058)
       Other current assets                                                 2,499                  (156)
       Accounts payable and accrued expenses                                5,518                23,380
       Other, net                                                          (1,204)                5,974
                                                                      ------------          -----------
         Net cash provided by (used in) operating activities               19,665                32,878
                                                                      -----------           -----------

CASH FLOWS FROM INVESTING ACTIVITIES

     Additions to property, plant and equipment                           (20,745)              (29,154)
     Proceeds from sale of property, plant and equipment                  220,921                 6,171
     Payments for business acquired                                       (12,411)                   -
                                                                      ------------          -----------
         Net cash provided by (used in) investing activities              187,765               (22,983)
                                                                      -----------           ------------

CASH FLOWS FROM FINANCING ACTIVITIES

     Net borrowings (repayments) under credit facilities                   25,602                60,574
     Net borrowings (repayments) of other debt                           (228,733)              (80,910)
     Decrease in cash escrow                                                    -                 3,842
                                                                      -----------           -----------
         Net cash provided by (used in) financing activities             (203,131)              (16,494)
                                                                      ------------          ------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                                                                            4,299                (6,599)

CASH AND CASH EQUIVALENTS, beginning of period                              4,180                 9,898
                                                                      -----------           -----------

CASH AND CASH EQUIVALENTS, end of period                              $     8,479           $     3,299
                                                                      ===========           ===========


SUPPLEMENTAL CASH FLOW DISCLOSURES:
         Interest paid                                                $    39,375           $    28,481
                                                                      ===========           ===========

         Income taxes paid (refunded)                                 $     1,209           $    (6,514)
                                                                      ===========           ============
SUPPLEMENTAL NON-CASH INVESTING ACTIVITY:

         Note payable associated with business acquisition            $     2,914           $         -
                                                                      ===========           ===========

                      * Restated, see Note 2 of the Notes to Consolidated Financial Statements

                            See accompanying Notes to Consolidated Financial Statements

</TABLE>
<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 subsidiaries, Sweetheart Holdings Inc. ("Sweetheart")
and The Fonda Group, Inc. ("Fonda") (collectively, the "Company"), and therefore
has no significant cash flows independent of such subsidiaries.  The instruments
governing the indebtedness of Sweetheart and Fonda contain numerous  restrictive
covenants that restrict  Sweetheart and Fonda's ability to pay dividends or make
other  distributions  to SF Holdings or to each other. The Company believes that
the combined  operations of its subsidiaries  makes the Company one of the three
largest  converters and marketers of disposable  food service and food packaging
products in North America.

     The information  included in the foregoing interim  consolidated  financial
statements  of the Company  are  unaudited  but,  in the opinion of  management,
include 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  interim  periods  are not
necessarily indicative of results for the entire year. These condensed financial
statements should be read in conjunction with the Company's financial statements
and notes thereto  included in the Company's  annual report on Form 10-K for the
fiscal year ended  September 26, 1999.  Certain  prior period  amounts have been
reclassified to conform to current period presentation.

(2)  BUSINESS ACQUISITIONS

     On December 3, 1999, Creative Expressions Group, Inc. ("CEG"), an affiliate
of the Company in the disposable  party goods products  business,  became an 87%
owned  subsidiary of the Company  pursuant to a merger.  In connection  with the
merger,  87% of CEG's common stock was  exchanged  for 15,000  shares of Class B
Series 2 Preferred  Stock of the  Company.  On December 6, 1999,  pursuant to an
asset  purchase  agreement  entered  into on  November  21, 1999 (the "CEG Asset
Purchase  Agreement"),  Fonda purchased the intangible assets of CEG,  including
domestic and foreign trademarks,  patents, copyrights and customer lists for $16
million.  In  addition,  pursuant  to the CEG Asset  Purchase  Agreement,  Fonda
subsequently  purchased certain inventory and acquired other CEG assets for cash
and in exchange for  outstanding  trade  payables owed to Fonda by CEG for total
consideration of $25 million.  As a result of this  transaction,  Fonda markets,
manufactures  and distributes  disposable  party goods products  directly to the
specialty  (party)  channel of its consumer  market.  The  transaction  has been
accounted  for in a manner  similar to  pooling-of-interests.  The  accompanying
financial  statements  have been  restated for all periods  presented to include
CEG's balance sheet and results of operations.

     On  May  15,  2000,  Sweetheart  Cup  acquired  Sherwood  Industries,  Inc.
("Sherwood"), a manufacturer of paper cups, containers and cup making equipment.
Pursuant to a certain Stock  Purchase  Agreement  among  Sweetheart  Cup and the
stockholders  of  Sherwood,  Sweetheart  Cup  acquired  all  of the  issued  and
outstanding  capital  stock (the  "Sherwood  Acquisition")  of Sherwood  and its
subsidiaries for an aggregate  purchase price of $17.4 million,  subject to post
closing adjustments. As part of the purchase price, Sweetheart Cup issued to the
stockholders of Sherwood promissory notes due May 2005 in an aggregate principal
amount of $5.0 million and a present value of $2.9 million.  Sweetheart Cup also
assumed $9.3 million of Sherwood debt,  which was paid in full on June 15, 2000.
The  Sherwood  Acquisition  has  preliminarily  resulted  in  goodwill  of $11.0
million,  which is being  amortized  over 20  years.  The  acquisition  has been
accounted for using the purchase  method of accounting.  Amounts and allocations
of costs recorded may require  adjustment based upon  information  coming to the
attention of the Company that is not currently available.

<PAGE>

(3)  INVENTORIES

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

<TABLE>
                                         (Unaudited)
                                          June 25,           September 26,
                                            2000                  1999
                                       --------------       ---------------
<S>                                    <C>                  <C>
Raw materials and supplies               $   61,780            $   53,627
Finished products                           145,111               130,185
Work in progress                             12,639                 8,036
                                          ---------             ---------
          Total inventories              $  219,530            $  191,848
                                         ==========            ==========
</TABLE>

(4)  LONG-TERM DEBT

     Sweetheart  completed the following  transactions  in the current period to
refinance its short-term debt. On June 15, 2000,  Sweetheart's  revolving credit
facility was amended and  restated to extend the maturity of the $135.0  million
revolving credit facility,  subject to borrowing base limitations,  through June
15, 2005 and to add a term loan of $25.0  million that  requires  equal  monthly
installments  through June 2005.  Borrowings under the revolving credit facility
will now bear interest,  at the  Sweetheart's  election,  at a rate equal to (i)
LIBOR plus 2.00% or (ii) a bank's base rate plus 0.25%, plus certain other fees.
Borrowings under the term loan will bear interest, at Sweetheart's  election, at
a rate equal to (i) LIBOR plus 2.50% or (ii) a bank's base rate plus 0.50%, plus
certain other fees.  The proceeds from the term loan were used in part to redeem
Sweetheart's  Senior Secured Notes. The balance,  as of June 25, 2000, under the
U.S. Credit Facility was approximately $95.0 million.

     On June 15, 2000,  Sweetheart  funded the  redemption of its $190.0 million
Senior  Secured Notes due September 1, 2000 by  depositing  with the U.S.  Trust
Company of New York funds sufficient to redeem such notes.

     In conjunction with the Sherwood Acquisition,  Sweetheart Cup issued to the
stockholders of Sherwood subordinated promissory notes in an aggregate principal
amount  of $5.0  million  due May  2005.  The  present  value of these  notes as
recorded  is $2.9  million,  which will  accrete  interest  at an annual rate of
10.85% over the term of the notes.

(5)  DEFERRED GAIN ON SALE OF ASSETS

     In  connection  with  a  sale-leaseback  transaction,  on  June  15,  2000,
Sweetheart Cup and Sweetheart  Holdings Inc. sold certain  production  equipment
located in Owings Mills,  Maryland,  Chicago,  Illinois and Dallas,  Texas for a
fair market value of $212.3 million to several owner participants. 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"), Sweetheart Cup will lease such production equipment from State Street,
as owner trustee for several owner  participants,  through November 9, 2010. The
associated property,  plant and equipment was removed from the balance sheet and
a deferred  gain of $107.0  million was recorded and will be amortized  over the
term of the Lease.  Annual rental payments under the Lease will be approximately
$32.0 million.

<PAGE>

(6)  SEGMENTS

<TABLE>
<CAPTION>
                                                                                   (in thousands)
                                                            For the            For the          For the          For the
                                                           Thirteen           Thirteen        Thirty-nine      Thirty-nine
                                                         weeks ended        weeks ended       weeks ended      weeks ended
                                                           June 25,           June 27,          June 25,         June 27,
                                                             2000              1999              2000             1999
                                                       ---------------    ---------------   ---------------  ---------------
<S>                                                    <C>                <C>               <C>              <C>
Net Sales:
     Sweetheart                                         $    264,605       $    234,290      $    696,200     $    633,588
     Fonda                                                    89,702             85,348           265,337          245,163
     Intersegment elimination                                 (7,728)            (4,459)          (19,764)          (5,631)
                                                         ------------       ------------      ------------     ------------
               Total Sales                              $    346,579       $    315,179      $    941,773     $    873,120
                                                        ============       ============      ============     ============

Income from operations, excluding other income:
     Sweetheart                                         $     24,022       $     17,301      $     42,530     $     17,358
     Fonda                                                     4,768              2,998            13,297            7,666
     Corporate and eliminations                                   84               (278)              (26)            (424)
                                                         -----------        ------------      ------------     ------------
               Total income from operations             $     28,874       $     20,021      $     55,801     $     24,600
                                                        ============       ============      ============     ============
</TABLE>

(7)  EXTRAORDINARY LOSS

     In  conjunction  with the merger  between CEG and the Company  (see Note 2,
herein),  CEG retired its long-term debt. As a result, CEG charged $915,000,  or
$549,000 net of income tax benefit, to results of operations as an extraordinary
item. This amount represented the unamortized  deferred financing fees and other
expenses pertaining to such debt.

     During June 2000, in conjunction with the redemption of Sweetheart's Senior
Secured  Notes  and the  refinancing  of the U.S.  Credit  Facility,  Sweetheart
charged  approximately  $522,000,  or  approximately  $313,000 net of income tax
benefit,  to results of operations as an  extraordinary  item,  representing the
unamortized  deferred  financing  fees,  prepaid  interest and  redemption  fees
pertaining to such debt.

(8)  CONTINGENCIES

     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  initially  filed in state  court in Georgia in April 1987 and is  currently
pending in federal court. The remaining 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 ("ERISA"). The relief sought by plaintiffs was to have the plan
termination declared  ineffective.  In December 1994, the United States Court of
Appeals for the Eleventh  Circuit (the "Circuit  Court") ruled that the Plan was
lawfully  terminated  on  December  31,  1986.  Following  that  decision,   the
plaintiffs  sought a  rehearing  which  was  denied,  and  subsequently  filed a
petition for a writ of certiorari  with the United States Supreme  Court,  which
was also denied.  Following  remand,  in March 1996, the United States  District
Court for the Southern  District of Georgia  (the  "District  Court")  entered a
judgment   in  favor  of   Sweetheart.   Following   denial  of  a  motion   for
reconsideration, the plaintiffs, in April 1997, filed an appeal with the Circuit
Court. On May 21, 1998, the Circuit Court affirmed the judgment entered in favor
of Sweetheart. On June 10, 1998, the plaintiffs petitioned the Circuit Court for
a rehearing  of their appeal  which  petition  was denied on July 29,  1998.  In
October 1998,  plaintiffs  filed a Petition for Writ of Certiorari to the United
States  Supreme  Court,  which was denied in January 1999.  Sweetheart is in the
process of paying out the termination  liability and associated  expenses and as
of June 25, 2000,  had  disbursed  $9.6  million in  termination  payments.  The
initial  estimate of the total  termination  liability and associated  expenses,
less  payments,  exceeds  assets  set aside in the Plan by  approximately  $10.2
million, which amount has been fully reserved by Sweetheart.

<PAGE>

     On April 27, 1999, the plaintiffs  filed a motion in the District Court for
reconsideration of the court's dismissal without appropriate relief and a motion
for attorneys' fees with a request for delay in  determination of entitlement to
such fees.  On June 17, 1999,  the District  Court  deferred  these  motions and
ordered  discovery in connection  therewith.  Discovery  has been  completed and
Sweetheart is awaiting  further action by the plaintiffs.  Due to the complexity
involved in connection with the claims asserted in this case,  Sweetheart cannot
determine  at  present  with any  certainty  the  amount of  damages it would be
required  to pay should the  plaintiffs  prevail;  accordingly,  there can be no
assurance  that  such  amounts  would  not have a  material  adverse  effect  on
Sweetheart's financial position or results of operations.

     A patent infringement action seeking injunctive relief and damages relating
to Sweetheart's  production and sale of certain paper plates entitled Fort James
Corporation v.  Sweetheart  Cup Company Inc.,  Civil Action No.  97-C-1221,  was
filed in the United States District Court for the Eastern  District of Wisconsin
on  November  21,  1997.  During the fourth  quarter of Fiscal  1999,  mediation
resulted in a settlement of this action whereby Sweetheart agreed to pay damages
of $2.6 million.  This amount has been fully  reserved by  Sweetheart,  with the
first of two payments,  $1.6 million, made on September 30, 1999. As of June 29,
2000, all payments in conjunction with this settlement have been paid.

     On July 13,  1999,  Sweetheart  received  a letter  from the  Environmental
Protection Agency ("EPA")  identifying  Sweetheart,  among numerous others, as a
"potential  responsible party" under the Comprehensive  Environmental  Response,
Compensation  and  Liability Act of 1980,  as amended  ("CERCLA"),  at a site in
Baltimore,  Maryland.  The EPA letter states that it does not constitute a final
determination by EPA concerning the liability of Sweetheart or any other entity.
On December 20, 1999, Sweetheart received an information request letter from the
EPA,  pursuant  to CERCLA,  regarding a Container  Recycling  Superfund  Site in
Kansas City,  Kansas.  Sweetheart  denies liability and has no reason to believe
the  final  outcomes  will have a  material  effect  on  Sweetheart's  financial
condition or results of operations. However, no assurance can be given about the
ultimate   effect  on  Sweetheart,   if  any,  given  the  early  stage  of  the
investigations.

     The Company is also  involved in a number of legal  proceedings  arising in
the ordinary  course of  business,  none of which is expected to have a material
adverse effect on the Company's financial position or results of operations.


<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 the Company's  products,  potential equipment
malfunctions  and  pending  litigation.  For  additional  information,  see  the
Company's annual report on Form 10-K for the most recent fiscal year.

General

     SF Holdings  Group,  Inc. ("SF  Holdings")  conducts all of its  operations
through  its  principal   operating   subsidiaries,   Sweetheart  Holdings  Inc.
("Sweetheart") and The Fonda Group, Inc. ("Fonda") (collectively, the "Company")
and therefore has no significant cash flows independent of such subsidiaries.

     Each of Fonda and Sweetheart's  business is seasonal with a majority of its
net cash flows from operations  realized in the third and fourth quarters of the
fiscal year.  Sales of  paperboard  products  for such periods  reflect the high
seasonal   demands  of  the  summer  months  when  outdoor  and   away-from-home
consumption increases.  This results in disproportionately  higher net income in
the last six months of the fiscal  year as cost  absorption  improves  resulting
from a more  profitable  sales and production  mix. In addition,  Fonda's tissue
based and specialty party goods products experience  increased volume and a high
percentage of its net income in the first and fourth fiscal  quarters due to the
buildup of seasonal  business between Halloween and the Super Bowl. In the event
that Fonda's and/or  Sweetheart's  cash flow from  operations is insufficient to
provide  working  capital   necessary  to  fund  their   respective   production
requirements, Fonda and/or Sweetheart will need to borrow under their respective
credit  facilities  or seek  other  sources of  capital.  Although  the  Company
believes that funds  available under such credit  facilities  together with cash
generated  from  operations,  will be  adequate  to provide  for each  company's
respective  cash  requirements,  there can be no  assurance  that  such  capital
resources will be sufficient in the future.

Thirteen  Weeks  Ended June 25, 2000  Compared to Thirteen  Weeks Ended June 27,
1999 (Unaudited)

     Net sales  increased  $31.4  million,  or 10.0%,  to $346.6 million for the
thirteen weeks ended June 25, 2000 due to net sales increases at both Sweetheart
and Fonda. The following analysis includes $4.9 million of sales from Sweetheart
to Fonda  and $2.8  million  of sales  from  Fonda  to  Sweetheart,  which  were
eliminated in consolidation.

Sweetheart Results:

     Net sales  increased  $30.3  million,  or 12.9%,  to $264.6 million for the
thirteen  weeks ended June 25, 2000 compared to $234.3  million for the thirteen
weeks ended June 27, 1999, reflecting a 7.3% increase in sales volume and a 5.6%
increase in average realized sales price. Net sales to institutional foodservice
customers increased 12.9%, reflecting a 6.7% increase in sales volume and a 6.2%
increase in average realized sales price.  This increase is primarily the result
of  Sweetheart's  focus on revenue  growth  with key  institutional  foodservice
customers,  peak seasonal  demand and customer price  initiatives.  Net sales to
food packaging  customers  increased  3.5%,  reflecting a 1.4% increase in sales
volume and a 2.1%  increase  in average  realized  sales  price.  This growth is
primarily  the  result of  increased  seasonal  demand by large  food  packaging
accounts and increased pricing  resulting from raw material cost increases.  Net
sales to consumer  customers  increased 119.1% as a result of Sweetheart's focus
on expanding into the consumer market.

<PAGE>

Fonda Results:

     Net  sales  increased  $4.4  million,  or 5.1%,  to $89.7  million  for the
thirteen  weeks ended June 25, 2000  compared to $85.3  million for the thirteen
weeks ended June 27,  1999,  reflecting  an 11.2%  increase in average  realized
sales price and a 6.1%  decrease in sales  volume.  The increase in net sales is
primarily  due  to  increased   average   realized  sales  prices  in  both  the
institutional  and consumer  markets,  partially  offset by lower volumes in the
consumer market. Net sales to institutional customers increased 5.4%, reflecting
a 0.1%  increase in sales volume and a 5.3% increase in average  realized  sales
price.  The increase is primarily the result of higher  pricing  reflecting  raw
material  cost  increases.  Net  sales to  consumer  customers  increased  4.9%,
reflecting a 15.1% increase in average realized sales price and a 10.2% decrease
in sales volume. This increase resulted primarily from higher pricing reflecting
raw material cost increases, partially offset by decreased volume as a result of
competitive market conditions and lower sales to certain customers  experiencing
financial difficulties.

     Gross profit  increased  $7.3 million,  or 15.2%,  to $55.2 million for the
thirteen  weeks ended June 25, 2000. As a percentage of net sales,  gross profit
increased to 15.9% for the thirteen  weeks ended June 25, 2000 from 15.2% in the
thirteen weeks ended June 27, 1999 primarily due to increased margins at Fonda.

Sweetheart Results:

     Gross profit  increased  $4.7 million,  or 13.9%,  to $38.4 million for the
thirteen  weeks ended June 25, 2000  compared to $33.7  million for the thirteen
weeks ended June 27, 1999. As a percentage of net sales,  gross profit increased
to 14.5% for the thirteen  weeks ended June 25, 2000 from 14.4% for the thirteen
weeks ended June 27, 1999. This  improvement is attributable to a shift in sales
towards a more  profitable  product mix in combination  with  increased  volume,
improved manufacturing  efficiencies and improved margins through customer price
initiatives, partially offset by increased raw material costs.

Fonda Results:

     Gross profit  increased  $2.4 million,  or 16.2%,  to $17.0 million for the
thirteen  weeks ended June 25, 2000  compared to $14.6  million for the thirteen
weeks ended June 27,  1999.  This  increase  is  primarily  attributable  to the
Fonda's   completion  of  its   consolidation   and   manufacturing   efficiency
initiatives, which began in the prior fiscal year. As a percentage of net sales,
gross  profit was 18.9% for the thirteen  weeks ended June 25, 2000  compared to
17.1% for the thirteen weeks ended June 27, 1999.

     Selling,  general and administrative  expenses  decreased $1.5 million,  or
5.6%,  to $26.3  million for the thirteen  weeks ended June 25, 2000 compared to
$27.9  million  for the  thirteen  weeks  ended June 27,  1999.  A $2.2  million
decrease  in such costs at  Sweetheart  was  principally  attributable  to lower
spending  in the  areas of legal  and  information  technology.  A $0.6  million
increase in such costs at Fonda was  principally  attributable to higher selling
expenses  in  conjunction  with  increased  sales  and  additional  depreciation
expenses related to computer system upgrades.

     Other (income) expense  decreased $0.5 million,  to expense of $0.3 million
for the  thirteen  weeks ended June 25, 2000  compared to income of $0.2 million
for the thirteen  weeks ended June 27, 1999.  This  decrease was  primarily  the
result of a restructuring  reserve in connection with the planned  November 2000
closing  of  Fonda's  Maspeth,  New York  facility,  which  will  result  in the
elimination of approximately 130 positions.

     Operating income increased $8.4 million,  to $28.6 million for the thirteen
weeks ended June 25, 2000 compared to $20.2 million for the thirteen weeks ended
June 27, 1999, due to the reasons stated above.

     Interest  expense,  net  increased  $0.9  million to $18.7  million for the
thirteen  weeks ended June 25, 2000  compared to $17.8  million for the thirteen
weeks ended June 27, 1999.  During the  quarter,  Sweetheart's  acceleration  of
interest expense in conjunction with the redemption of the Senior Secured Notes,
as well as higher interest rates led to this increase. This was partially offset
by lower interest expense at Fonda due primarily to the reduction of capitalized
interest related to debt extinguished during the consolidation and lower average
outstanding balances at both Fonda and Sweetheart.

<PAGE>

     Net income (loss) increased $3.7 million,  to $4.4 million for the thirteen
weeks ended June 25,  2000  compared to a $0.7  million for the  thirteen  weeks
ended June 27, 1999, due to the reasons stated above.

Thirty-nine  Weeks Ended June 25, 2000 Compared to Thirty-nine  Weeks Ended June
27, 1999 (Unaudited)

     Net sales  increased  $68.7  million,  or 7.9%,  to $941.8  million for the
thirty-nine  weeks  ended  June 25,  2000  due to net  sales  increases  at both
Sweetheart  and Fonda.  The following  analysis  includes $11.5 million of sales
from  Sweetheart  to Fonda and $8.3  million of sales from Fonda to  Sweetheart,
which were eliminated in consolidation.

Sweetheart Results:

     Net sales  increased  $62.6  million,  or 9.9%,  to $696.2  million for the
thirty-nine  weeks  ended  June 25,  2000  compared  to $633.6  million  for the
thirty-nine  weeks  ended June 27,  1999,  reflecting  a 6.6%  increase in sales
volume  and a 3.2%  increase  in  average  realized  sales  price.  Net sales to
institutional  foodservice  customers increased 9.4%, reflecting a 5.9% increase
in sales  volume and a 3.5%  increase  in average  realized  sales  price.  This
increase is primarily the result of  Sweetheart's  focus on revenue  growth with
key  institutional  foodservice  customers and customer price  initiatives.  Net
sales to food packaging customers increased 1.4%,  reflecting a 0.4% increase in
sales volume and 1.0% increase in average  realized sales price.  This growth is
primarily the result of increased  demand by large food  packaging  accounts and
increased  pricing  resulting  from raw material  cost  increases.  Net sales to
consumer  customers  increased  264.1%  as a  result  of  Sweetheart's  focus on
expanding into the consumer market.

Fonda Results:

     Net sales  increased  $20.2  million,  or 8.2%,  to $265.3  million for the
thirty-nine  weeks  ended  June 25,  2000  compared  to $245.1  million  for the
thirty-nine  weeks  ended June 27,  1999,  reflecting  a 1.2%  decrease in sales
volume and a 9.4%  increase in average  realized  sales price.  This increase is
primarily due to increased  average realized sales prices in the consumer market
and increased  volume in the  institutional  market driven by seasonal sales and
key  customer  growth.  Net sales to  institutional  customers  increased  8.9%,
reflecting  a 7.1%  increase  in sales  volume as a result of  Fonda's  focus on
revenue growth with key institutional customers, coupled with a 1.8% increase in
average realized sales price, reflecting increased prices from raw material cost
increases.  Net sales to consumer customers  increased 7.8%,  reflecting a 14.2%
increase in average realized sales price, partially offset by a 6.4% decrease in
sales volume.  This increase resulted  primarily from higher pricing  reflecting
raw material cost increases, partially offset by decreased volume as a result of
competitive market conditions and lower sales to certain customers  experiencing
financial difficulties.

     Gross profit  increased $30.6 million,  or 27.3%, to $142.7 million for the
thirty-nine  weeks ended June 25,  2000.  As a  percentage  of net sales,  gross
profit  increased  to 15.2% in the  thirty-nine  weeks  ended June 25, 2000 from
12.8% for the  thirty-nine  weeks ended June 27, 1999 primarily due to increased
margins at Sweetheart.

Sweetheart Results:

     Gross profit  increased  $26.4 million,  or 39.4%, to $93.6 million for the
thirty-nine  weeks  ended  June  25,  2000  compared  to $67.1  million  for the
thirty-nine  weeks ended June 27,  1999.  As a  percentage  of net sales,  gross
profit  increased  to 13.4% for the  thirty-nine  weeks ended June 25, 2000 from
10.6% for the  thirty-nine  weeks  ended  June 27,  1999.  This  improvement  is
attributable to a shift in sales to a more profitable product mix in combination
with increased volume, improved manufacturing  efficiencies and improved margins
through customer price initiatives.

Fonda Results:

     Gross profit  increased  $4.3  million,  or 9.5%,  to $49.8 million for the
thirty-nine  weeks  ended  June  25,  2000  compared  to $45.5  million  for the
thirty-nine  weeks ended June 27, 1999. This increase is primarily  attributable
to the Fonda's  completion of its  consolidation  and  manufacturing  efficiency
initiatives, which began in the prior fiscal year. As a percentage of net sales,
gross profit  increased to

<PAGE>

18.8%  for the  thirty-nine  weeks  ended  June  25,  2000  from  18.6%  for the
thirty-nine weeks ended June 27, 1999.

         Selling, general and administrative expenses decreased $0.6 million, or
0.7% to $86.9 million for the thirty-nine  weeks ended June 25, 2000 compared to
$87.5  million for the  thirty-nine  weeks ended June 27,  1999.  A $1.3 million
decrease at Fonda,  attributable  to savings  resulting  from the  consolidation
effort and  Sweetheart's  lower  spending in the areas of legal and  information
technology is partially offset by increased bad debt resulting from a Sweetheart
customer's bankruptcy filing.

     Other (income)  expense  increased $1.5 million,  to income of $1.2 million
for the  thirty-nine  weeks ended June 25,  2000  compared to an expense of $0.3
million  for the  thirty-nine  weeks  ended June 27,  1999.  This  increase  was
primarily the result of  Sweetheart's  realization  of a gain from the sale of a
warehouse facility and the amortization of deferred gain in conjunction with the
sale-leaseback transaction, partially offset by the following; (i) the write-off
of an unsecured  note  receivable  by Sweetheart  issued in connection  with the
Fiscal 1998 sale of the bakery  business  (ii) a  restructuring  reserve for the
discontinuation of Sweetheart's centralized machine shop operation which will be
phased out during the  remainder of Fiscal 2000  including  the  elimination  of
approximately 65 positions and (iii) a restructuring  reserve in connection with
the planned November 2000 closing of Fonda's Maspeth,  New York facility,  which
will result in the elimination of approximately 130 positions.

     Operating  income  increased  $32.8  million,  to  $57.0  million  for  the
thirty-nine  weeks ended June 25, 2000  compared  to  operating  income of $24.3
million for the thirty-nine weeks ended June 27, 1999, due to the reasons stated
above.

     Interest expense,  net increased $0.4 million, or 0.7% to $53.4 million for
the  thirty-nine  weeks  ended June 25, 2000  compared to $53.0  million for the
thirty-nine weeks ended June 27, 1999. This is due primarily to the acceleration
of interest  expense in conjunction  with the redemption of Sweetheart's  Senior
Secured  Notes,  as well as higher  interest  rates,  partially  offset by lower
outstanding balances, under Sweetheart's credit facilities.

     Net income (loss)  increased  $16.6 million,  to a net loss of $0.8 million
for the  thirty-nine  weeks ended June 25, 2000  compared to a $17.4 million net
loss for the  thirty-nine  weeks ended June 27, 1999,  due to the reasons stated
above.

Liquidity and Capital Resources

     Historically,  the  Company's  subsidiaries  have  relied on cash flow from
operations,  the  sale of  non-core  assets  and  borrowings  to  finance  their
respective working capital requirements,  capital expenditures and acquisitions.
The  Company  expects to continue  this  method of funding for its 2000  capital
expenditures.

     Net cash provided by operating  activities decreased $13.1 million to $19.7
million in the  thirty-nine  weeks ended June 25, 2000 compared to $32.8 million
in the  thirty-nine  weeks ended June 27,  1999.  This is  primarily  due to (i)
Sweetheart  management's  decision to build inventories and increased  inventory
levels in conjunction  with the Sherwood  Acquisition,  (ii) increased  accounts
payable  relating to inventories at Sweetheart,  partially  offset by (iii) more
favorable income from operating activities at both Sweetheart and Fonda.

     Capital  expenditures  for the  thirty-nine  weeks ended June 25, 2000 were
$20.7 million compared to $29.2 million for the thirty-nine weeks ended June 27,
1999. Capital expenditures in the thirty-nine weeks ended June 25, 2000 included
$12.0 million for new production  equipment and $1.8 million spent on growth and
expansion  projects at Sweetheart,  with the remaining  consisting  primarily of
routine capital improvements.

<PAGE>

     In  January  2000,  the  outstanding  balances  on CEG's  revolving  credit
facility,  12% senior subordinated notes and junior subordinated notes were paid
in full.  Outstanding  balances on such debt totaled  $22.0 million at September
26, 1999.

     Fonda's  revolving  credit  facility,  which matures on September 30, 2001,
provides up to $55 million  borrowing  capacity,  is  collateralized by eligible
accounts  receivable  and  inventories,  certain  general  intangibles  and  the
proceeds on the sale of accounts  receivable  and  inventory.  At June 25, 2000,
there was $33.6 million  outstanding  and $21.1 million was the maximum  advance
available based upon eligible collateral.

     On  May  15,  2000,  Sweetheart  Cup  acquired  Sherwood  Industries,  Inc.
("Sherwood"), a manufacturer of paper cups, containers and cup making equipment.
Pursuant to a certain Stock  Purchase  Agreement  among  Sweetheart  Cup and the
stockholders  of  Sherwood,  Sweetheart  Cup  acquired  all  of the  issued  and
outstanding  capital  stock (the  "Sherwood  Acquisition")  of Sherwood  and its
subsidiaries for an aggregate  purchase price of $17.4 million,  subject to post
closing adjustments. As part of the purchase price, Sweetheart Cup issued to the
stockholders of Sherwood promissory notes due May 2005 in an aggregate principal
amount of $5.0 million and a present value of $2.9 million.  Sweetheart Cup also
assumed $9.3 million of Sherwood debt, which was paid in full on June 15, 2000.

     In  connection  with  a  sale-leaseback  transaction,  on  June  15,  2000,
Sweetheart Cup and Sweetheart  Holdings Inc. sold certain  production  equipment
located in Owings Mills,  Maryland,  Chicago,  Illinois and Dallas,  Texas for a
fair market value of $212.3 million to several owner participants.  The proceeds
from this sale were used in part to redeem the Senior Secured Notes,  repay debt
in  connection  with  the  Sherwood  Acquisition  and  repay  a  portion  of the
outstanding balance under the U.S. Credit Facility.

     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"),   Sweetheart  Cup  will  lease  such  production
equipment  from State Street,  as owner trustee for several owner  participants,
through  November 9, 2010.  Sweetheart Cup may renew the Lease at its option for
up to four  consecutive  renewal  terms of two years each.  Sweetheart  may also
purchase such  equipment  for fair market value either at the  conclusion of the
Lease term or November  21, 2006,  at its option.  Sweetheart's  obligations  in
connection  with  the  Lease  are  collateralized  by  substantially  all of its
property, plant and equipment owned as of June 15, 2000.

     Sweetheart  is  accounting  for this  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 will be amortized  over the term
of the lease.  The taxable gain will allow  Sweetheart  to utilize a substantial
portion of its net operating loss carryforward.

     On June 15, 2000, the  Sweetheart's  revolving  credit  facility (the "U.S.
Credit  Facility")  was amended and  restated to extend the maturity of the $135
million  revolving  credit  facility,  subject to  borrowing  base  limitations,
through June 15, 2005 and to add a term loan of $25 million that requires  equal
monthly  installments through June 2005. Both the term loan and revolving credit
facility  have an  accelerated  maturity  date of  July  1,  2003 if the  Senior
Subordinated Notes due September 1, 2003 are not refinanced before June 1, 2003.
Borrowings  under the revolving  credit facility will now bear interest,  at the
Sweetheart's  election, at a rate equal to (i) LIBOR plus 2.00% or (ii) a bank's
base rate plus 0.25%,  plus certain other fees.  Borrowings  under the term loan
will bear interest,  at the Sweetheart's  election, at a rate equal to (i) LIBOR
plus 2.50% or (ii) a bank's base rate plus 0.50%,  plus certain other fees.  The
credit facility is  collateralized  by the inventories and receivables  with the
term loan  portion  of the credit  facility  further  collateralized  by certain
production  equipment.  As of June 25, 2000,  $60.9 million was available  under
such facility.

<PAGE>

     Sweetheart  also has a credit  facility  providing for a term loan of up to
Cdn $10.0 million and revolving credit of up to Cdn $10.0 million that expire on
June 15, 2001.  As of June 25, 2000,  Cdn $4.2  million  (approximately  US $2.8
million) was  available  under such  facility.  Although the Company  intends to
refinance this debt, there can be no assurances that the Company will be able to
obtain such refinancing on terms and conditions acceptable to the Company.

     On June 15, 2000,  Sweetheart  issued a redemption notice to the holders of
its Senior  Secured  Notes due  September  1,  2000.  In  connection  therewith,
Sweetheart  deposited  $190.0 million plus accrued  interest with the U.S. Trust
Company  of New York and as of August 1,  2000,  substantially  all of the notes
have been redeemed.

     These  transactions  set forth above are expected to increase  Sweetheart's
annual net income by approximately $8.0 million. This increase will be comprised
of (i) decreased  interest expense and (ii) increased other income,  as the gain
from the asset sale is amortized over the lease term,  partially offset by (iii)
decreased  gross  profit,  as increased  rent  expense will exceed  depreciation
expense, and (iv) increased income tax expenses.

     In January  1999,  the  United  States  Supreme  Court  denied  plaintiffs'
Petition for Writ of  Certiorari in the matter of Aldridge v.  Lily-Tulip,  Inc.
Salary Retirement Plan Benefits Committee and Fort Howard Cup Corporation, Civil
Action No. CV 187-084.  The court decided that the Plan was lawfully terminated.
On April 27,  1999,  the  Plaintiffs  filed a motion in the  District  Court for
reconsideration of the court's dismissal without appropriate relief and a motion
for attorneys' fees with a request for delay in  determination of entitlement to
such fees.  On June 17, 1999,  the District  Court  deferred  these  motions and
ordered  discovery  in  connection  therewith.  The  discovery  process has been
completed  and  Sweetheart  is  awaiting   further  action  by  the  plaintiffs.
Sweetheart  is in the  process  of  paying  out the  termination  liability  and
associated  expenses  and as of June 25,  2000,  had  disbursed  $9.6 million in
termination  payments.  The initial estimate of the total termination  liability
and associated expenses, less payments,  exceeds assets set aside in the Plan by
approximately $10.2 million, which amount has been fully reserved by Sweetheart.
The remaining payments are expected to be paid during Fiscal 2000.  Sweetheart's
operating  plan  contemplates  that cash  generated  by  operations  and amounts
available under  Sweetheart's  credit  facilities will be sufficient to make the
required  payments under the Plan when due.  However,  there can be no assurance
that  Sweetheart  will achieve its operating plan and have the necessary cash to
make these  payments.  Failure by Sweetheart to make such payments  could have a
material adverse effect on the Company and its financial condition.

     A patent infringement action seeking injunctive relief and damages relating
to Sweetheart's  production and sale of certain paper plates entitled Fort James
Corporation v.  Sweetheart  Cup Company Inc.,  Civil Action No.  97-C-1221,  was
filed in the United States District Court for the Eastern  District of Wisconsin
on  November  21,  1997.  During the fourth  quarter of Fiscal  1999,  mediation
resulted in a settlement of this action whereby Sweetheart agreed to pay damages
of $2.6 million.  This amount has been fully  reserved by  Sweetheart,  with the
first of two payments,  $1.6 million, made on September 30, 1999. As of June 29,
2000, all payments in conjunction with this settlement have been paid.

     The  Company   believes  that  cash   generated  by  each  of  Fonda's  and
Sweetheart's  operations,  combined with amounts  available under its respective
credit  facilities  in addition to funds  generated by asset sales by Sweetheart
should be sufficient to fund each of Fonda's and Sweetheart's respective capital
expenditures  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.

<PAGE>

Net Operating Loss Carryforwards

     As of September 26, 1999,  Sweetheart had approximately $214 million of net
operating loss  carryforwards  ("NOLs") for federal  income tax purposes,  which
expire at  various  dates  through  2019.  Fonda has $1.9  million  of state net
operating loss  carryforwards,  which expire at various dates from 2003 to 2020.
For federal  income tax purposes,  Fonda's net operating  losses will be carried
back to Fiscal 1998.

     A  taxable  gain  was  realized  from  the  June  15,  2000  sale-leaseback
transaction, which will allow Sweetheart to utilize a substantial portion of its
NOLs.  Although  the Company  expects  that  sufficient  taxable  income will be
generated in the future to realize the remainder of these NOLs,  there can be no
assurance  that future taxable income will be generated to utilize the remaining
NOLs.

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         NONE

<PAGE>

                         PART II - OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS

     A patent infringement action seeking injunctive relief and damages relating
to Sweetheart's  production and sale of certain paper plates entitled Fort James
Corporation v.  Sweetheart  Cup Company Inc.,  Civil Action No.  97-C-1221,  was
filed in the United States District Court for the Eastern  District of Wisconsin
on  November  21,  1997.  During the fourth  quarter of Fiscal  1999,  mediation
resulted in a settlement of this action whereby Sweetheart agreed to pay damages
of $2.6 million.  This amount has been fully  reserved by  Sweetheart,  with the
first of two payments,  $1.6 million, made on September 30, 1999. As of June 29,
2000, all payments in conjunction with this settlement have been paid.

     The Company is also  involved in a number of legal  proceedings  arising in
the ordinary  course of  business,  none of which is expected to have a material
adverse effect on the Company's financial position or results of operations.

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibits:

              27.0 Financial Data Schedule

         (b) Reports on Form 8-K:

              No reports on Form 8-K were filed during the thirteen
              weeks ended June 25, 2000.

<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: August 1, 2000             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)