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

                                    Form 10-Q

(mark one)
          [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                 For the thirteen weeks ended December 26, 1999

                                       OR

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

                        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                             (I.R.S. Employer
incorporation or organization)                           Identification Number)

                              373 Park Avenue South
                          New York City, New York 10016
                                 (212) 779-7448
   (Address and telephone number of registrant's principal executive offices)

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

         Indicate the number of shares  outstanding of each of the  registrant's
classes of common stock, as of the latest practicable date.
         Common Stock, $.001 par value, as of February 1, 2000:
                                                      Class A:   562,583 Shares
                                                      Class B:   56,459 Shares
                                                      Class C:   39,900 Shares


                                       1

<PAGE>

                             SF HOLDINGS GROUP, INC.
                          QUARTERLY REPORT ON FORM 10-Q
                                TABLE OF CONTENTS


Part I - Financial Information


Item 1. Financial Statements (unaudited):                                  Page

        Consolidated Condensed Balance Sheets as of
            December 26, 1999 and September 26, 1999 (audited)               3

        Consolidated Statements of Operations and
            Comprehensive Income (Loss) for the thirteen weeks
            ended December 26, 1999 and December 27, 1998                    4

        Consolidated Statements of Cash Flows for the thirteen
            weeks ended December 26, 1999 and December 27, 1998              5

        Notes to Consolidated Financial Statements                           6


Item 2.  Management's Discussion and Analysis of Financial Condition
            and Results of Operations                                        8


Part II - Other Information


Item 6.  Exhibits and Reports on Form 8-K                                   13

Signatures                                                                  15


                                       2

<PAGE>


PART I - FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                             SF HOLDINGS GROUP, INC.
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                 (in thousands)

                                                                  December 26,    September 26,
                                                                     1999             1999 (1)
                                                               ---------------    --------------
                                                                 (unaudited)
ASSETS
Current assets:
<S>                                                                  <C>                <C>
    Cash and cash equivalents                                        $ 3,126            $ 4,180
    Accounts receivable, less allowance for doubtful
      accounts of $7,303 and $6,979, respectively                    128,631            136,629
    Due from affiliates                                                  754                538
    Inventories                                                      200,997            191,848
    Deferred income taxes                                             20,757             20,547
    Other current assets                                              21,727             26,473
                                                               --------------     --------------
         Total current assets                                        375,992            380,215
Property, plant and equipment, net                                   379,586            385,166
Goodwill, net                                                         97,369             98,176
Deferred income taxes                                                 40,512             38,424
Other assets, net                                                     35,009             35,229
                                                               --------------     --------------
                                                                   $ 928,468          $ 937,210
                                                               ==============     ==============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
   Accounts payable                                                 $ 81,440           $ 80,786
   Accrued expenses and other current liabilities                    110,018            112,700
   Current maturities of long-term debt                              275,089            276,845
                                                               --------------     --------------
      Total current liabilities                                      466,547            470,331
Long-term debt                                                       380,187            381,554
Other liabilities                                                     61,822             62,494
Deferred income taxes                                                  4,105              4,026
                                                               --------------     --------------
      Total liabilities                                              912,661            918,405
Exchangeable preferred stock                                          37,608             36,291
Minority interest in subsidiary                                        2,088              1,971
Redeemable common stock                                                2,234              2,217
Stockholders' deficit                                                (26,123)           (21,674)
                                                              ---------------     --------------
                                                                   $ 928,468          $ 937,210
                                                               ==============     ==============
</TABLE>

          (1) Restated, see Note 2 to consolidated financial statements

                 See notes to consolidated financial statements.


                                       3
<PAGE>
<TABLE>
<CAPTION>

                             SF HOLDINGS GROUP, INC.
      CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
                                   (unaudited)
                                 (in thousands)

                                                                        Thirteen Weeks Ended
                                                              --------------------------------------
                                                                  December 26,        December 27,
                                                                      1999              1998 (1)
                                                              --------------------------------------
<S>                                                                   <C>                 <C>
Net sales                                                             $305,820            $289,731
Cost of goods sold                                                     260,279             258,259
                                                                  -------------      --------------
     Gross profit                                                       45,541              31,472

Selling, general and administrative expenses                            30,809              29,048
Other (income) expense, net                                              1,448                 220
                                                                  -------------      --------------
     Income from operations                                             13,284               2,204
Interest expense (net of interest income
 of $87 and $239)                                                       17,563              17,910
                                                                  -------------      --------------
     Loss before income taxes and minority interest                     (4,279)            (15,706)
Income taxes benefit                                                    (1,384)             (5,966)
Minority interest in subsidiary's income (loss)                            117                (803)
                                                                  -------------      --------------
     Net loss                                                           (3,012)             (8,937)
Payment-in-kind dividends on exchangeable preferred stock                1,317               1,157
                                                                  -------------      --------------
     Net loss applicable to common stock                              $ (4,329)           $(10,094)
                                                                  =============      ==============
Statements of comprehensive income (loss):
     Net loss                                                         $ (3,012)           $ (8,937)
     Other comprehensive income, net of income tax:
       Minimum pension liability adjustment                               (114)              1,343
       Foreign translation adjustment                                       11                (263)
                                                                  -------------      --------------
     Total comprehensive loss                                         $ (3,115)           $ (7,857)
                                                                  =============      ==============

</TABLE>

          (1) Restated, see Note 2 to consolidated financial statements

                 See notes to consolidated financial statements.


                                       4
<PAGE>
<TABLE>
<CAPTION>

                             SF HOLDINGS GROUP, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
                                 (in thousands)

                                                                            Thirteen Weeks Ended
                                                                  -------------------------------------
                                                                      December 26,       December 27,
                                                                          1999             1998 (1)
                                                                  -------------------------------------
Operating activities:
<S>                                                                        <C>               <C>
 Net income (loss)                                                      $ (3,012)         $ (8,937)
Adjustments  to  reconcile  net  income  (loss)  to net cash
     used in operating activities:
   Depreciation and amortization                                          13,963            13,890
   Interest capitalized on debt                                            3,020             2,664
   Provision for doubtful accounts                                         1,885               144
   Deferred income taxes                                                  (2,225)           (6,534)
   (Gain) loss on equipment dispositions                                      53              (112)
   Minority interest in subsidiary's loss                                    117              (803)
   Changes in assets and liabilities:
      Accounts receivable                                                  4,815             5,952
      Due from affiliates                                                   (224)              233
      Inventories                                                         (8,495)           15,142
      Other current assets                                                 1,380              (257)
      Accounts payable and accrued expenses                               (1,322)          (10,454)
      Other                                                                 (411)            3,431
                                                                    -------------     -------------
    Net cash provided by operating activities                              9,544            14,359
                                                                    -------------     -------------
Investing activities:
 Capital expenditures                                                     (4,479)          (10,772)
 Proceeds from equipment dispositions                                         93             3,131
                                                                    -------------     -------------
   Net cash used in investing activities                                  (4,386)           (7,641)
                                                                    -------------     -------------
Financing activities:
 Net decrease in revolving credit borrowings                              (5,836)           (5,130)
 Repayments of long-term debt                                               (376)           (5,581)
 Decrease in escrow cash                                                       -            (1,885)
                                                                    -------------     -------------
   Net cash used in financing activities                                  (6,212)          (12,596)
                                                                    -------------     -------------
Net decrease in cash                                                      (1,054)           (5,878)
Cash and cash equivalents, beginning of period                             4,180             9,898
                                                                    -------------     -------------
Cash and cash equivalents, end of period                                 $ 3,126           $ 4,020
                                                                    =============     =============
Supplemental cash flow information:
 Cash paid during the period for:
   Interest                                                              $ 3,197           $ 4,428
   Income taxes, net of refunds                                            $ (74)          $ 2,502
</TABLE>

          (1) Restated, see Note 2 to consolidated financial statements

                 See notes to consolidated financial statements.

                                       5
<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.

2.  BUSINESS ACQUISITION

         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. 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.

3.  INVENTORIES

         Inventories consist of the following (in thousands):

                                                   December 26,    September 26,
                                                      1999             1999
                                                 --------------    ------------
     Raw materials and supplies                     $ 54,574        $  53,627
     Work-in-process                                   8,252            8,036
     Finished goods                                  138,171          130,185
                                                  ----------       ----------
                                                   $ 200,997        $ 191,848
                                                  ==========       ==========

                                       6

<PAGE>

4.  SEGMENTS

                                                     Thirteen weeks ended
                                                 December 26,      December 27,
                                                     1999              1998
                                                -------------      ------------
Net sales:
     Sweetheart                                     $ 214,216        $ 203,909
     Fonda                                             97,572           85,920
     Intersegment elimination                          (5,968)             (98)
                                                --------------    -------------
                                                    $ 305,820        $ 289,731
                                                ==============    =============
Income from operations, excluding other income:
     Sweetheart                                     $   8,837        $  (1,568)
     Fonda                                              5,900            4,036
     Corporate and eliminations                            (5)             (44)
                                                --------------    -------------
                                                    $  14,732        $   2,424
                                                ==============    =============


5.  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 has begun the
process of paying out the  termination  liability  and as of December  26, 1999,
Sweetheart  had  disbursed  $8.6 million in  termination  payments.  The initial
estimate of the total termination liability, less these payments, exceeds assets
set aside in the Plan by  approximately  $11.6  million,  which  amount has been
fully reserved by Sweetheart.

         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 period has
been extended to March 15, 2000.  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. The second payment of $1.0 million is due July 1, 2000.


                                       7
<PAGE>

         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 its  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.


                                       8
<PAGE>

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

         The  following  discussion  for the  Company  contains  forward-looking
statements which involve risks and  uncertainties.  The Company's actual results
or future  events  could  differ  materially  from  those  anticipated  in these
forward-looking  statements as a result of certain factors,  including,  but not
limited to, raw material costs, labor market conditions,  the highly competitive
nature  of  the  industry,   general  economic  and  business  conditions,   and
developments with respect to contingencies.

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.

         Sweetheart and Fonda are converters and marketers of disposable  paper,
plastic and foam food service and food packaging  products.  The prices for each
subsidiary's raw materials fluctuate. When raw material prices decrease, selling
prices have historically  decreased.  The actual impact on each company 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,
each company may suffer margin erosion on the sale of such inventory.

         Each of Fonda and Sweetheart's  business is seasonal with a majority of
its net cash flows from  operations  realized in the third and forth 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.

Recent Developments
         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. 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,  and financial
statements have been restated for all periods presented to include CEG's balance
sheet and results of operations.


                                       9
<PAGE>

        Results of Operations

                                                  Thirteen Weeks Ended
                                      -----------------------------------------
                                          December 26,            December 27,
                                             1999                    1998
                                      --------------------      ---------------
                                                  % of Net             % of Net
                                         Amount    Sales      Amount     Sales
                                      ------------------------------------------
                                                 (Dollars in millions)

Net sales                               $ 305.8     100.0%    $ 289.7    100.0%
Cost of goods sold                        260.3      85.1       258.3     89.1
                                      ---------- ---------  ---------- --------
   Gross profit                            45.5      14.9        31.5     10.9
Selling, general and
   administrative expenses                 30.8      10.1        29.0     10.0
Other (income) expense, net                 1.4       0.5         0.2      0.1
                                      ---------- ---------  ---------- --------
   Income from operations                  13.3       4.3         2.2      0.8
Interest expense, net                      17.6       5.7        17.9      6.2
                                      ---------- ---------  ---------- --------
   Income (loss) before taxes              (4.3)     (1.4)      (15.7)    (5.4)
Income tax (benefit) provision             (1.4)     (0.5)       (6.0)    (2.1)
Minority interest in subsidiary's
   loss                                     0.1         -        (0.8)    (0.3)
                                      ---------- ---------  ---------- --------
   Net income (loss)                     $ (3.0)     (1.0)%    $ (8.9)    (3.1)%
                                      ========== =========  ========== ========


Thirteen Weeks Ended  December 26, 1999 (Fiscal 2000 First Quarter)  Compared to
December 27, 1998 (Fiscal 1999 First Quarter)
         Net sales  increased  $16.1 million,  or 5.6%, to $305.8 million in the
Fiscal 2000 First  Quarter,  due to net sales  increases at both  Sweetheart and
Fonda. The following  analysis includes $3.5 million of sales from Sweetheart to
Fonda and $2.5 million of sales from Fonda to Sweetheart,  which were eliminated
in  consolidation.  Sweetheart  results- Net sales increased  $10.3 million,  or
5.1%,  to $214.2  million in the Fiscal 2000 First  Quarter,  reflecting  a 3.3%
increase in sales volume and a 1.8%  increase in average  realized  sales price.
Net sales to institutional  foodservice  customers increased 5.8%,  reflecting a
3.8%  increase in sales  volume and a 2.0%  increase in average  realized  sales
price.  This increase is primarily the result of  Sweetheart's  focus on revenue
growth with key institutional foodservice customers. Net sales to food packaging
customers  decreased 1.2%, or $0.3 million,  reflecting a 1.4% decrease in sales
volume,  partially  offset by a 0.2% increase in average  realized  sales price.
This decrease is primarily  the result of lower demand by large  accounts in the
food packaging customer base due to market conditions.  Fonda results- Net sales
increased  $11.7  million,  or 13.6%,  to $97.6 million in the Fiscal 2000 First
Quarter.  This increase was primarily  due to  significant  increases in selling
prices of  paperboard  products;  increased  institutional  tissue  volume;  and
increased net sales in Fonda's  specialty party goods business.  Sales volume in
converting  operations  increased 15.9% in the institutional  market and 4.4% in
the consumer  market.  Average  selling prices  increased  12.2% in the consumer
market and decreased 2.1% in the  institutional  market. In the consumer market,
the increase in selling  prices was primarily  due to a significant  increase in
raw material  paperboard  prices which Fonda passed onto its  customers.  In the
institutional  market, the increased tissue volume was due to increased national
account  and  holiday  seasonal  sales.  The  increase  in net sales in  Fonda's
specialty  party goods  business  resulted  in a 24.2%  volume  increase  due to
millennium  celebrations as well as inventory  restocking for two customers that
had been experiencing financial difficulties. Such volume increase was partially
offset by a 11%  reduction  in  average  selling  prices.  In  addition,  volume
increases in all markets reflected  accelerated inventory purchases by customers
resulting from anticipated Year 2000 disruptions.

         Gross profit increased $14.1 million, or 44.7%, to $45.5 million in the
2000 First Fiscal Quarter.  As a percentage of net sales, gross profit increased
to 14.9% in the 2000 First  Fiscal  Quarter  from 10.9% in the 1999 First Fiscal
Quarter  primarily due to increased margins at Sweetheart and to a lesser extent
at Fonda. Sweetheart results- Gross profit increased $12.3 million, or 85.6%, to
$26.6  million in the Fiscal 2000 First  Quarter.  As a percentage of net sales,
gross profit increased to 12.4% in the Fiscal 2000 First Quarter from 7.0%. This
improvement is  attributable  to a shift in sales to a more  profitable  product
mix, improved  manufacturing  efficiencies and improved margins through customer
price initiatives.

                                       10
<PAGE>

Fonda results- Gross profit  increased $1.8 million,  or 10.4%, to $18.9 million
in the  Fiscal  2000  First  Quarter.  The  increase  was  primarily  due to the
realization of cost savings from the manufacturing consolidation of CEG, and, as
noted above,  increased net sales of specialty party goods  products,  increased
selling prices of paperboard  products,  and increased  volume of  institutional
tissue products.  As a percentage of net sales,  gross profit decreased to 19.4%
in the Fiscal 2000 First  Quarter  from 19.9% in the Fiscal 1999 First  Quarter.
The margin  compression was due to a change in sales mix as well as the time lag
between increased raw material costs and the increase in pricing to customers.

         Selling,  general and administrative expenses increased $1.8 million to
$30.8  million in the Fiscal 2000 First  Quarter.  As a percentage of net sales,
selling,  general and administrative expenses increased slightly to 10.1% in the
Fiscal 2000 First  Quarter from 10.0% in the Fiscal 1999 First  Quarter.  A $1.9
million  increase in such costs at Sweetheart was principally  attributable to a
$1.2 million  provision  for doubtful  accounts  resulting  from the  bankruptcy
filing of a customer,  annual wage increases and increased costs associated with
systems  development.  A $.1 million  decrease in such costs at Fonda was due to
Fiscal 1999 overhead cost saving  initiatives,  which was partially  offset by a
provision  for  doubtful  accounts  resulting  from the  filing of a  bankruptcy
petition by a CEG customer.

         Other  expense  was $1.4  million  in the  Fiscal  2000  First  Quarter
compared to $0.2 million in the Fiscal 1999 First  Quarter  primarily due to the
write-off of an unsecured  note  receivable  issued by  Sweetheart in connection
with the sale of its bakery business in Fiscal 1998.

         Income from operations  increased $11.1 million to $13.3 million in the
Fiscal 2000 First Quarter due to the reasons discussed above.

         Interest  expense,  net  decreased  $.3 million to $17.6 million in the
Fiscal 2000 First Quarter from $17.9  million in the Fiscal 1999 First  Quarter.
This decrease is  attributable to a decrease of $.7 million at Sweetheart due to
lower outstanding balances under its U. S. Credit Facility,  which was partially
offset due to the  increasing  balance of the  Company's 12 3/4% Senior  Secured
Discount Notes.

         The  effective  tax rate was 32.3% in the Fiscal  2000  First  Quarter,
which  reflects  certain  non-deductible  costs  relating to the  investment  in
Sweetheart and the related financing,  and 38% in the Fiscal 1999 First Quarter.
As a result of the above and the addback of minority  interest  representing 10%
of Sweetheart's  historical  loss and 13% of CEG's net income,  the net loss was
$3.0  million in the Fiscal 2000 First  Quarter  compared to $8.9 million in the
Fiscal 1999 First Quarter.

Liquidity and Capital Resources
         Historically,  the Company's subsidiaries have relied on cash flow from
operations,  sale of non-core assets and borrowings to finance their  respective
working capital requirements, capital expenditures and acquisitions.

         Net cash provided by operating  activities was $9.5 million in the 2000
First Fiscal Quarter compared to $14.4 million in the 1999 First Fiscal Quarter.
This decrease was primarily due to  management's  decision to build inventory at
Sweetheart and increased  working  capital  requirements at Fonda to support its
increase in net sales.  Such  decrease was  partially  offset by more  favorable
income from operating activities at both Sweetheart and Fonda.

         Capital expenditures were $4.5 million,  including $1.4 million for new
production  equipment at Sweetheart,  $1.5 million spent on growth and expansion
projects at  Sweetheart,  with the  remaining  consisting  primarily  of routine
capital improvements.

         In  January  2000,  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 and $40.2
million at December 26, 1999 and September 26, 1999, respectively.

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<PAGE>

         Fonda's  revolving  credit  facility,  which matures on March 31, 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 December 26, 1999,
there was $25.8 million  outstanding  and $22.1 million was the maximum  advance
available based upon eligible collateral.

         Sweetheart's  revolving  credit facility allows up to $135.0 million in
borrowings,  subject to borrowing base limitations (the "U.S. Credit Facility").
Borrowings  under the U.S.  Credit  Facility  mature on  August 1,  2000;  as of
December 26, 1999,  $41.8 million was available  under such  facility.  Although
Sweetheart  intends to refinance this debt,  there can be no assurances  that it
will be able to obtain such  refinancing on terms and  conditions  acceptable to
the Company.

         Sweetheart  has a credit  facility which provides 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 December 26, 1999, Cdn $4.0 million  (approximately $2.7
million) was available under such facility.

         Sweetheart's Senior Secured Notes mature on September 1, 2000. 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.

         During  the  Fiscal  2000  First  Quarter,  the  Company  did not incur
material costs for compliance with environmental law and regulations.

         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
extended to March 15, 2000.  Sweetheart  has begun the process of paying out the
termination liability and as of December 26, 1999, Sweetheart had disbursed $8.6
million in termination  payments.  The initial estimate of the total termination
liability,  less  these  payments,  exceeds  assets  set  aside  in the  Plan by
approximately $11.6 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 its 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 the Company
agreed to pay damages of $2.6  million.  This amount has been fully  reserved by
the Company, with the first of two payments, $1.6 million, made on September 30,
1999. The second payment of $1.0 million is due July 1, 2000.

         The  Company  believes  that  cash  generated  by each of  Fonda's  and
Sweetheart's  operations,  combined with amounts  available under its respective
credit facilities as well as 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  and  working  capital  needs,
including  Sweetheart's   termination   liabilities  under  the  Plan,  for  the
foreseeable future.

Year 2000
         As of February 1, 2000,  the Company has no  knowledge  of any material
issues  relating to Year 2000  malfunctions  that could have a material  adverse
effect on either  Sweetheart  or  Fonda's  financial  condition  or

                                       12
<PAGE>

results  of  operations.  Sweetheart  and  Fonda  are Year  2000  ready and will
continue to monitor all Year 2000 related issues.

Net Operating Loss Carryforwards
         As of September 26, 1999,  Sweetheart had approximately $214 million of
net operating  loss  carryforwards  ("NOLs")  which expire at various dates from
2004  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. Although the Company expects that sufficient taxable income will be
generated in the future to realize these NOLs,  there can be no assurance future
taxable income will be generated to utilize such NOLs.


PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits:

         Exhibits 2.1 through 10.8 are  incorporated  herein by reference to the
         exhibit with the  corresponding  number filed as part of the  Company's
         Registration  Statement on Form S-4, as amended  (File No.  333-50683).
         Exhibits 10.9 through 10.18 are incorporated herein by reference to the
         exhibit with the  corresponding  number filed as part of the  Company's
         Registration  Statement on Form S-4, as amended  (File No.  333-51563).
         Exhibit 10.19 is  incorporated  herein by reference to the exhibit with
         the  corresponding  number filed as part of the Company's Form 10-K for
         the year ended September 26, 1999.

     Exhibit #                Description of Exhibit
     ---------                ----------------------

        2.1        Investment  Agreement,  dated as of December 29, 1997,  among
                   the  Stockholders  of Sweetheart  Holdings Inc.  ("Sweetheart
                   Holdings"),  Creative  Expressions Group, Inc. ("CEG") and SF
                   Holdings Group, Inc. ("SF Holdings").
        3.1        Restated Certificate of Incorporation of the Company.
        3.2        By-laws of the Company.
        4.1        Indenture,  dated as of March 12,  1998,  between SF Holdings
                   and The Bank of New York.
        4.2        Form of 12 3/4% Series A and Series B Senior Secured Discount
                   Notes,  dated as of March 12, 1998 (incorporated by reference
                   to Exhibit 4.1).
        4.3        Registration  Rights  Agreement,  dated as of March 12, 1998,
                   among SF Holdings,  Bear,  Stearns & Co. Inc. and SBC Warburg
                   Dillon Read Inc. (the "Initial Purchasers").
        4.4        Registration  Rights  Agreement,  dated as of March 20, 1998,
                   between the Company,  American Industrial Partners Management
                   Company, Inc. ("AIPM") and Bear, Stearns & Co., Inc.
        4.5        Form of Certificate of Exchangeable Preferred Stock.
        4.6        Form of  Indenture  between  the  Company and The Bank of New
                   York  governing the 133/4%  Subordinated  Notes due March 15,
                   2009.
        4.7        Paragraph A of Article Fourth of the Restated  Certificate of
                   Incorporation  of the Company  (incorporated  by reference to
                   Exhibit 3.1).
       10.1        Stockholders'  Rights Agreement,  dated as of March 12, 1998,
                   among SF  Holdings  and the  persons  listed  on  Schedule  I
                   thereto.
       10.2        Stockholders'  Agreement,  dated as of March 12, 1998,  among
                   Sweetheart   Holdings,   SF   Holdings   and   the   Original
                   Stockholders.
       10.3        Stockholders Agreement,  dated as of March 12, 1998, among SF
                   Holdings and the Initial Purchasers.
       10.4        Pledge  Agreement,  dated as of March 12,  1998,  between  SF
                   Holdings and the Bank of New York.
       10.5        Tax Sharing  Agreement,  dated as of March 12, 1998, among SF
                   Holdings and The Fonda Group, Inc. ("Fonda").

                                       13

<PAGE>

       10.6        Second Restated Management  Services  Agreement,  dated as of
                   March 12, 1998,  among  Sweetheart  Holdings,  Sweetheart Cup
                   Company Inc. ("Sweetheart Cup"), American Industrial Partners
                   Management Company, Inc. ("AIPM") and SF Holdings.
       10.7        Amendment  No.  1  to  Second  Restated  Management  Services
                   Agreement,  dated  as of March  12,  1998,  among  Sweetheart
                   Holdings, Sweetheart Cup, AIPM and SF Holdings.
       10.8        Assignment  and Assumption  Agreement,  dated as of March 12,
                   1998, between SF Holdings and Fonda.
       10.9        Stockholders  Agreement,  dated as of March 20, 1998, between
                   the Company and Bear, Stearns & Co., Inc.
       10.10       Executive  Retention  Pay  Agreement,  dated as of October 1,
                   1997, between Sweetheart Holdings and Daniel M. Carson.
       10.11       Executive  Retention  Pay  Agreement,  dated as of October 1,
                   1997, between Sweetheart Holdings and William H. Haas.
       10.12       Executive  Retention  Pay  Agreement,  dated as of October 1,
                   1997, between Sweetheart Holdings and James R. Mullen.
       10.13       Special  Incentive  Agreement  between  Sweetheart  Holdings,
                   Sweetheart Cup and William H. Haas dated November 18, 1996.
       10.14       Special  Incentive  Agreement  between  Sweetheart  Holdings,
                   Sweetheart Cup and Daniel M. Carson dated November 18, 1996.
       10.15       Special  Incentive  Agreement  between  Sweetheart  Holdings,
                   Sweetheart Cup and James R. Mullen dated November 18, 1996.
       10.16       Employee  Relocation  Agreement between Sweetheart  Holdings,
                   Sweetheart Cup and James R. Mullen dated December 19, 1997.
       10.17       Employee  Relocation  Agreement between Sweetheart  Holdings,
                   Sweetheart Cup and Daniel M. Carson dated December 19, 1997.
       10.18       Employee  Relocation  Agreement between Sweetheart  Holdings,
                   Sweetheart Cup and William H. Haas dated December 19, 1997.
       10.19       Asset Purchase Agreement dated as of December 6, 1999 between
                   Creative Expressions Group, Inc. and Fonda.
       16.1        Letter regarding change in certifying accountant.
       27.1   *    Financial Data Schedule.

      ----------------
      *  filed herein.

(b) No reports  were filed on Form 8-K during the  quarter  ended  December  26,
1999.


                                       14
<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, thereto duly authorized.

      Date:  February 9, 2000

                                        SF HOLDINGS GROUP, INC.


                                        By: /s/ HANS H. HEINSEN
                                           -----------------------------------
                                                Hans H. Heinsen
                                        Senior Vice President, Chief Financial
                                        Officer and Treasurer (Principal
                                        Financial And Accounting Officer)


                                       15