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 twenty-six weeks ended March 28, 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 Ave. South
                               New York, NY 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.

<TABLE>
<CAPTION>

<S>                                                            <C>          <C>
         Common Stock, $.001 par value, as of May 1, 1999:     Class A:     5,625,838 Shares
                                                               Class B:     564,586 Shares
                                                               Class C:     399,000 Shares
</TABLE>


<PAGE>

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


Part I - Financial Information

<TABLE>
<CAPTION>
<S>                                                                             <C>    

Item 1. Financial Statements (unaudited):                                       Page

        Consolidated Condensed Balance Sheets as of March 28, 1999
           and July 26, 1998 (audited)                                             3

        Consolidated Statements of Operations and Comprehensive Income (Loss)
            for the thirteen and twenty-six weeks ended March 28, 1999
            and April 26, 1998                                                     4

        Consolidated Statements of Cash Flows for the twenty-six weeks ended
            March 28, 1999 and April 26, 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                                         15

Signatures                                                                        15

</TABLE>

                                       2
<PAGE>

PART I - FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS


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

<TABLE>
<CAPTION>

                                                                                       March 28,        July 26,
                                                                                         1999             1998
                                                                                     -------------    -------------
                                                                                     (unaudited)
<S>                                                                                  <C>              <C>    

ASSETS
Current assets:
    Cash and cash equivalents                                                             $ 6,058         $ 20,703
    Cash in escrow                                                                          1,594            6,819
    Accounts receivable, less allowance for doubtful
      accounts of $2,396 and $3,569, respectively                                         115,493          120,112
    Due from affiliates                                                                     6,442            1,313
    Inventories                                                                           170,094          168,493
    Deferred income taxes                                                                  17,032           17,322
    Other current assets                                                                   21,959           20,026
                                                                                     -------------    -------------
         Total current assets                                                             338,672          354,788
Property, plant and equipment, net                                                        411,191          430,150
Goodwill, net                                                                              99,788           94,865
Deferred income taxes                                                                      43,031           32,572
Other assets, net                                                                          29,010           31,436
                                                                                     -------------    -------------
TOTAL ASSETS                                                                            $ 921,692        $ 943,811
                                                                                     =============    =============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                                      $ 87,838         $ 78,013
   Accrued expenses                                                                        97,017          117,426
   Current maturities of long-term debt                                                     3,996            3,825
                                                                                     -------------    -------------
      Total current liabilities                                                           188,851          199,264
Long-term debt                                                                            627,899          619,143
Other liabilities                                                                          65,772           61,865
Deferred income taxes                                                                       5,429            4,771
                                                                                     -------------    -------------
      Total liabilities                                                                   887,951          885,043
Exchangeable preferred stock                                                               33,809           30,680
Minority interest in subsidiary                                                             1,224            3,020
Redeemable common stock                                                                     2,182            2,139
Stockholders' equity (deficit)                                                             (3,474)          22,929
                                                                                     =============    =============
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                              $ 921,692        $ 943,811
                                                                                     =============    =============

</TABLE>

                 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                Twenty-six Weeks Ended
                                              --------------------------------     --------------------------------
                                                 March 28,         April 26,          March 28,         April 26,
                                                   1999              1998               1999              1998
                                              --------------    --------------     --------------    --------------
<S>                                           <C>               <C>                <C>               <C>    

Net sales                                          $253,450          $115,525           $526,253          $181,541
Cost of goods sold                                  226,386           101,856            472,737           155,362
                                              --------------    --------------     --------------    --------------
     Gross profit                                    27,064            13,669             53,516            26,179
Selling, general and
  administrative expenses                            24,429            12,478             48,929            21,240
Other (income) expense, net                             271            (6,896)               510            (7,206)
                                              --------------    --------------     --------------    --------------
     Income from operations                           2,364             8,087              4,077            12,145
Interest expense, net                                16,172             6,928             32,649             9,995
                                              --------------    --------------     --------------    --------------
     Income (loss) before income taxes              (13,808)            1,159            (28,572)            2,150
 Income taxes provision (benefit)                    (5,228)              802            (10,818)            1,076
Minority interest in subsidiary's loss                 (519)           (1,425)            (1,248)           (1,425)
                                              --------------    --------------     --------------    --------------
     Net income (loss)                               (8,061)            1,782            (16,506)            2,499
Payment-in-kind dividends on
 exchangeable preferred stock                         1,208               573              2,365               573
                                              --------------    --------------     --------------    --------------
     Net income (loss) applicable to
       common stock                                $ (9,269)          $ 1,209           $(18,871)          $ 1,926
                                              ==============    ==============     ==============    ==============

Statements of comprehensive income (loss):
     Net income (loss)                             $ (8,061)          $ 1,782           $(16,506)          $ 2,499
     Other comprehensive income, net of income tax:
       Minimum pension liability adjustment            (454)                -                889                 -
       Foreign translation adjustment                   252                93                (11)               93
                                              --------------    --------------     --------------    --------------
                                                       (202)               93                878                93
                                              --------------    --------------     --------------    --------------
     Total comprehensive income (loss)             $ (8,263)          $ 1,875           $(15,628)          $ 2,592
                                              ==============    ==============     ==============    ==============

</TABLE>



                See notes to consolidated financial statements.



                                       4
<PAGE>

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

<TABLE>
<CAPTION>

                                                                            Twenty-six Weeks Ended
                                                                       ---------------------------------
                                                                         March 28,            April 26,
                                                                           1999                 1998
                                                                       -------------       -------------
<S>                                                                    <C>                 <C>    

Operating activities:                                                                       
 Net income (loss)                                                        $ (16,506)            $ 2,499
Adjustments to reconcile net  income (loss) to net cash
     used in operating activities:
   Depreciation and amortization                                             28,180               5,466
   Interest capitalized on debt                                               5,353               1,318
   Provision for doubtful accounts                                              162                  42
   Deferred income taxes                                                    (10,123)             (1,367)
   Gain on building and equipment dispositions                                 (170)             (9,613)
   Minority interest in subsidiary's loss                                    (1,248)             (1,425)
   Changes in assets and liabilities:
      Accounts receivable                                                       240                 215
      Due from affiliates                                                    (5,603)               (920)
      Inventories                                                               194               5,235
      Other current assets                                                     (317)               (353)
      Accounts payable and accrued expenses                                  12,409               5,344
      Other                                                                   3,971              (1,600)
                                                                       -------------       -------------
    Net cash provided by operating activities                                16,542               4,841
                                                                       -------------       -------------

Investing activities:
 Capital expenditures                                                       (26,799)             (5,110)
 Proceeds from business and equipment dispositions                            5,210              21,157
 Payments for business acquisitions                                               -            (101,901)
 Other                                                                            -               1,931
                                                                       -------------       -------------
   Net cash used in investing activities                                    (21,589)            (83,923)
                                                                       -------------       -------------

Financing activities:
 Net decrease in revolving credit borrowings                                 (1,670)             (4,349)
 Proceeds from long-term debt                                                     -              77,538
 Repayments of long-term debt                                                  (725)               (319)
 Proceeds from issuance of exchangeable preferred stock                           -              15,000
 Redemption of Fonda's common stock                                               -              (1,436)
 Debt issuance costs                                                              -              (3,507)
 Decrease in escrow cash                                                      3,870               1,403
 Other                                                                            -                 371
                                                                       -------------       -------------
   Net cash provided by financing activities                                  1,475              84,701
                                                                       -------------       -------------
Net increase (decrease) in cash                                              (3,572)              5,619
Cash and cash equivalents, beginning of period                                9,630               2,339
                                                                       -------------       -------------
Cash and cash equivalents, end of period                                    $ 6,058             $ 7,958
                                                                       =============       =============

Supplemental cash flow information:
 Cash paid during the period for:
   Interest                                                                 $26,220               $ 204
   Income taxes, net of refunds                                             $ 2,323               $ 169

</TABLE>


                 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 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. 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 July 26, 1998 and its  transition  report
on Form 10-Q for the nine week period ended September 27, 1998.

         On October 22,  1998,  the Board of  Directors of SF Holdings and Fonda
approved  a change in their  respective  fiscal  year ends from a  fifty-two  or
fifty-three week period which ends on the last Sunday in July to the same number
of weekly  periods  which end on the last  Sunday in  September.  The  nine-week
transition  period  ending  September  27,  1998 was not part of the fiscal year
ended  July 26,  1998 and will not be part of  Fiscal  1999,  which  will end on
September 26, 1999.

2.  CASH IN ESCROW

         Cash  received by  Sweetheart  as  proceeds  from the sale of assets is
restricted  to  qualified  capital  expenditures  under  Sweetheart's  indenture
agreement, and is held in escrow until utilized.

3.  INVENTORIES

         Inventories consist of the following (in thousands):

                                                March 28,         July 26,
                                                   1999             1998
                                               -------------    -------------

     Raw materials and supplies                    $ 48,154         $ 43,998
     Work-in-process                                  8,585            9,456
     Finished goods                                 113,355          115,039
                                               -------------    -------------
                                                  $ 170,094        $ 168,493
                                               =============    =============


4.  RELATED PARTY TRANSACTIONS

         In December  1998,  Fonda  entered  into an Exclusive  Manufacture  and
Supply  Agreement  (the  "Manufacture  and  Supply   Agreement")  with  Creative
Expressions  Group  ("CEG"),  an affiliate.  Pursuant to such  agreement,  Fonda
manufactures  and supplies  all of CEG's  requirements  for,  among other items,
disposable  paper  plates,  cups,  napkins  and  tablecovers.  Fonda  sells such
manufactured products to CEG in accordance with a formula based on cost. Also in
December 1998, Fonda purchased  certain  manufacturing  assets from CEG for $4.9
million and entered into  operating  leases,  whereby the Company  leases to CEG
certain  non-manufacturing  assets  for  annual  lease  income  of $.1  million.
Independent  appraisals  were  obtained to  determine  the  fairness of both the
purchase price and lease terms.  The Company  believes the terms on which it (i)
manufactures and supplies product for CEG, (ii) purchased  manufacturing  assets
from CEG, and (iii) leased



                                       6
<PAGE>

non-manufacturing assets to CEG are at least as favorable as those it could have
obtained from  unrelated  third  parties and were  negotiated on an arm's length
basis.

         In December 1998,  Fonda  purchased  certain paper plate  manufacturing
assets from Sweetheart for $2.4 million.  In February 1999, Fonda entered into a
five year operating  lease with  Sweetheart,  whereby Fonda leases certain paper
cup manufacturing assets to Sweetheart with a net book value of $1.3 million for
annual lease  income of $.2 million.  Independent  appraisals  were  obtained to
determine the fairness of both the purchase  price and lease terms.  The Company
believes the terms on which Fonda purchased manufacturing assets from Sweetheart
and leases manufacturing assets to Sweetheart are at least as favorable as those
it could have obtained from  unrelated  third parties and were  negotiated on an
arm's  length  basis.  The  purchase  of assets  by Fonda  from  Sweetheart  was
eliminated in consolidation.


5.  CONTINGENCIES

         On January 11, 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.  The
court has decided that the Lily-Tulip,  Inc. Salary Retirement Plan (the "Plan")
was lawfully terminated.  Sweetheart is in the process of determining the amount
of total payouts for which the Plan is liable. The initial estimate of the total
termination  liability exceeds assets set aside in the Plan by approximately $17
million, which has been fully reserved. Sweetheart expects to fund such payments
within the next six months. On April 27, 1999, the plaintiffs  filed a motion in
U.S.  district  court  for  reconsideration  of the  court's  dismissal  without
appropriate relief, and a motion for attorney's fees with a request for delay in
determination  of  entitlement of such fees.  Management is currently  reviewing
these  motions to determine  what effect,  if any, they may have on the payments
referred  to  above.  See  Item 2 -  Management's  Discussion  and  Analysis  of
Financial Condition and Results of Operations -Liquidity and Capital Resources.

         A patent  infringement  action  seeking  injunctive  relief and damages
relating to  Sweetheart's  production and sale of certain paper plates  entitled
Fort James Corp. v. Sweetheart Cup Company Inc., was filed in the U.S.  District
Court for the Eastern  District of Wisconsin  on November  21, 1997.  Sweetheart
filed an  answer  to the  complaint  denying  liability  and  asserting  various
defenses and counterclaims.  Discovery  proceedings are in process.  The Company
does not believe  that the  ultimate  liability,  if any,  would have a material
adverse effect on Sweetheart's financial position or results of operations.



                                       7
<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 as defined by the Private  Securities  Litigation Reform Act of 1995.
These forward-looking  statements are based on management's current expectations
and involve a number of known and  unknown  risks and  uncertainties  that could
cause the actual  results,  performance  or  achievements  of the  Company to be
materially different from those anticipated in these forward-looking statements.
Such  risks and  uncertainties  include,  but are not  limited  to,  the  highly
competitive  nature of the  industry,  raw material  costs and  fluctuations  in
demand for the Company's  products due in part to general  economic and business
conditions.

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.
Debt instruments of Fonda and Sweetheart  restrict each subsidiary's  ability to
pay dividends or make other distributions to SF Holdings or each other.

         As a result of the change in Fonda's  fiscal year from the fifty-two or
fifty-three week period which ends on the last Sunday in July to the same number
of weekly  periods  which end on the last  Sunday in  September,  the  quarterly
comparisons for Fonda are between the thirteen and twenty-six week periods ended
March 28,  1999 (the "1999  Fonda  Thirteen  Week  Period"  and the "1999  Fonda
Twenty-six  Week Period") and the same number of weekly  periods ended April 26,
1998 (the "1998 Fonda Thirteen Week Period" and the "1998 Fonda  Twenty-six Week
Period").

         Fonda's sales and income from  operations  are  historically  lowest in
January and  February.  As a result,  the four week period in January  (which is
included in the 1999 Fonda  Thirteen  Week  Period)  historically  has had lower
sales  compared to the four week period in April  (which is included in the 1998
Fonda Thirteen Week Period). In the twenty-six week comparison,  the seasonality
effect is reduced as sales in the four week period in October (which is included
in the 1999 Fonda Twenty-six Week Period)  historically have not been materially
different  than those in the four week period in April (which is included in the
1998 Fonda Twenty-six Week Period).

         The investment in Sweetheart was  consummated on March 12, 1998 and was
accounted for as a purchase. As a result, the financial information with respect
to the 1998 thirteen week and twenty-six week periods  contained herein reflects
Sweetheart's  results of  operations  for the period March 12, 1998 to March 31,
1998.  For  more  information  regarding  Sweetheart's  results  of  operations,
reference is made to Sweetheart's annual report on Form 10-K for the fiscal year
ended September 27, 1998 and its quarterly  report on Form 10-Q for the thirteen
and twenty-six week periods ending March 28, 1999.

         Sweetheart and Fonda are converters and marketers of disposable  paper,
plastic and foam food  service  and food  packaging  products.  The price of the
Company's  primary raw  materials,  including SBS  paperboard and plastic resin,
historically fluctuates. These fluctuations are generally passed on to customers
through price increases or reductions.  However,  in the short term, the Company
is at risk of margin  erosion.  The severity of such margin  erosion  depends on
various factors  including  inventory levels at the time of a price change,  the
timing  and  frequency  of such  price  changes,  and the lead and lag time that
generally  accompanies the  implementation  of both raw materials and subsequent
selling price changes.

         Each of Fonda and  Sweetheart's  business is seasonal as away from home
consumption of disposable products increases in the late spring and summer. This
results  in  disproportionately  higher net income in the last six months of the
fiscal  year  as cost  absorption  improves  from a more  profitable  sales  and
production mix.

         In connection with the License Agreement, as described below, Fonda and
Creative  Expressions  Group  ("CEG"),  an affiliate,  entered into an Exclusive
Manufacture and Supply  Agreement in December 1998 (the  "Manufacture and Supply
Agreement").   Pursuant  to  the   Manufacture  and  Supply   Agreement,   Fonda
manufactures  and supplies  all of CEG's  requirements  for,  among other items,
disposable  paper  plates,  cups,  napkins  and  tablecovers.  




                                       8
<PAGE>

Fonda sells such manufactured products to CEG in accordance with a formula based
on cost, as defined in such agreement.  The Company believes that such agreement
will enable Fonda to increase the  utilization  of its  manufacturing  capacity.
Pursuant to the License  Agreement,  CEG has the right,  among other things,  to
distribute  certain  products  previously  distributed  by Fonda and in exchange
therefor,  Fonda  receives a royalty of 5% of CEG's cash flow as  determined  in
accordance with a formula specified in such agreement.

Recent Developments
         Fonda is engaged  in an  extensive  program  to  improve  manufacturing
efficiencies and upgrade production  capabilities,  which includes,  among other
things,  the full  implementation  of the Manufacture  and Supply  Agreement and
further  consolidation of its  manufacturing  operations (the "Fonda  Efficiency
Initiatives").  This  program  has and will  continue  to result in  incremental
expenses  arising  from  start-up,  training  and  other  related  expenses.  In
connection with the Fonda  Efficiency  Initiatives,  (i) in December 1998, Fonda
purchased  certain paper plate  manufacturing  assets from  Sweetheart  for $2.4
million and (ii) in February  1999,  Fonda  entered  into a five year  operating
lease whereby it leases certain paper cup manufacturing assets to Sweetheart.


Results of Operations

<TABLE>
<CAPTION>

                                        Thirteen Weeks Ended                          Twenty-six Weeks Ended
                              --------------------------------------------  ---------------------------------------------
                                March 28, 1999        April 26, 1998          March 28, 1999        April 26, 1998
                              -------------------   --------------------    -------------------   --------------------
<S>                           <C>         <C>       <C>           <C>       <C>        <C>        <C>        <C>

                                           % of                  % of                    % of                  % of
                                           Net                    Net                    Net                    Net
                                Amount    Sales       Amount     Sales       Amount     Sales       Amount     Sales
                              ----------- -------   ----------- --------    ----------  -------   ----------- --------
                                                                (Dollars in millions)
Net sales                        $ 253.5   100.0 %     $ 115.5    100.0 %     $ 526.3    100.0 %     $ 181.5    100.0 %
Cost of goods sold                 226.4    89.3         101.9     88.2         472.7     89.8         155.4     85.6
                              ----------- -------   ----------- --------    ----------  -------   ----------- --------
Gross profit                        27.1    10.7          13.7     11.8          53.5     10.2          26.2     14.4
Selling, general and
  administrative expenses           24.4     9.6          12.5     10.8          48.9      9.3          21.2     11.7
Other income, net                    0.3     0.1          (6.9)    (6.0)          0.5      0.1          (7.2)    (4.0)
                              ----------- -------   ----------- --------    ----------  -------   ----------- --------
Income from operations               2.4     0.9           8.1      7.0           4.1      0.8          12.1      6.7
Interest expense, net               16.2     6.4           6.9      6.0          32.6      6.2          10.0      5.5
                              ----------- -------   ----------- --------    ----------  -------   ----------- --------
Income (loss) before taxes         (13.8)   (5.4)          1.2      1.0         (28.6)    (5.4)          2.2      1.2
Income tax provision (benefit)      (5.2)   (2.1)          0.8      0.7         (10.8)    (2.1)          1.1      0.6
Minority interest                   (0.5)   (0.2)         (1.4)    (1.2)         (1.2)    (0.2)         (1.4)    (0.8)
                              ----------- -------   ----------- --------    ----------  -------   ----------- --------

Net income (loss)                 $ (8.1)   (3.2)%       $ 1.8      1.5 %     $ (16.5)    (3.1)%       $ 2.5      1.4 %
                              =========== =======   =========== ========    ==========  =======   =========== ========

</TABLE>


Thirteen  Weeks Ended March 28, 1999 Compared to Thirteen  Weeks Ended April 26,
1998
         Net  sales  increased  $137.9  million  to $253.5  million  in the 1999
thirteen week period.  The consolidation of Sweetheart in March 1998 resulted in
incremental  sales of  $146.8  million.  The 1998  Fonda  Thirteen  Week  Period
included  $4.3  million  of net  sales  of  tissue  mill  products  relating  to
operations  that were sold in March  1998.  Excluding  such  tissue  mill sales,
Fonda's net sales  decreased  $3.7 million due to the effects of  seasonality on
the quarterly comparison, partially offset by increased sales resulting from the
CEG Agreements. Sales volume in Fonda's converting operations increased 17.3% in
the consumer  market and decreased  1.5% in the  institutional  market.  Average
selling prices  decreased 18.9% in the consumer market and increased 6.0% in the
institutional market. The increased volume in the consumer market was due to the
increase in tissue  products sold to CEG in accordance  with the CEG Agreements.
Such  increase  more than offset the  reduction  in volume due to the effects of
seasonality  resulting from comparing the 1999 Fonda Thirteen Week Period (which
includes the four week period in January 1999) with the 1998 Fonda Thirteen Week
Period  (which  includes the four week period in April 1998).  The  reduction in
selling  prices in the consumer  market  reflects  cost savings from the License
Agreement  as well as savings  that Fonda is beginning to realize and expects to
realize more fully in future periods upon full



                                       9
<PAGE>

implementation  of the Manufacture and Supply  Agreement.  In the  institutional
market,  the  increase  in selling  prices and  reduction  in sales  volume were
primarily due to a change in sales mix, whereby the Company  emphasized the sale
of value added converted tissue products rather than commodity products.

         Gross  profit  increased  $13.4  million  to $27.1  million in the 1999
thirteen week period. The consolidation of Sweetheart resulted in an increase in
gross  profit of $15.7  million.  As a  percentage  of net sales,  gross  profit
decreased  from  11.8% in the 1998  thirteen  weeks to 10.7% in the 1999  period
primarily due to the effect of lower  margins at  Sweetheart  compared to Fonda.
However, Sweetheart's margin improved from 6.7% in the 1998 thirteen week period
to 9.7% in the 1999 period due to increased sales volumes and the cost reduction
initiatives  implemented  in the  latter  part of the 1998  fiscal  year.  Gross
margins in the 1999 Fonda  Thirteen  Week  Period  were  adversely  affected  by
reduced selling prices of consumer products,  described above, as well as excess
costs incurred in implementing the Fonda Efficiency  Initiatives.  Gross margins
are expected to improve in future periods upon full  implementation of the Fonda
Efficiency Initiatives, however, there can be no assurance that such will occur.

         Selling, general and administrative expenses increased $12.0 million to
$24.4 million in the 1999 thirteen week period.  An increase of $13.6 million of
such expenses resulted from the consolidation of Sweetheart.  As a percentage of
net sales, selling,  general and administrative expenses decreased from 10.8% in
the 1998  thirteen  week period to 9.6% in the 1999  period.  The  decrease as a
percentage  of net sales  was  partially  due to the  effects  of  consolidating
Sweetheart,  for which selling, general and administrative costs as a percentage
of net sales are historically  lower than at Fonda due to economies of scale. In
addition,  the percentage  reduction was also impacted at Fonda by the reduction
in selling  and  marketing  costs due to the License  Agreement,  as well as the
closure of an administrative office.

         Other  income,  net in the 1998  thirteen  week period  includes a $9.3
million pre-tax gain from the sale of Fonda's tissue mill  operations.  The gain
was partially offset by $2.1 million of charges at Sweetheart resulting from the
acquisition.

         Income  from  operations  was $2.4  million in the 1999  thirteen  week
period and $8.1  million  in the 1998  thirteen  week  period as a result of the
above.

         Interest expense,  net of interest income was $16.2 million in the 1999
thirteen  week period and $6.9 million in the 1998  thirteen  week  period.  The
increase was due to the  consolidation  of Sweetheart and the related  financing
thereof.

         The  effective  tax rate was 37.9% in the 1999 thirteen week period and
57.5% in the 1998 thirteen week period.  Both the 1999 and 1998 periods  reflect
certain  non-deductible  costs  relating to the investment in Sweetheart and the
related financing. As a result of the above and the addback of minority interest
representing 10% of Sweetheart's  historical loss, the net loss was $8.1 million
in the 1999 thirteen  week period  compared to net income of $1.9 million in the
1998 thirteen week period.

Twenty-six  Weeks Ended March 28, 1999 Compared to Twenty-six  Weeks Ended April
26, 1998
         Net  sales  increased  $344.7  million  to $526.3  million  in the 1999
twenty-six week period.  The  consolidation of Sweetheart in March 1998 resulted
in incremental  sales of $349.5 million.  The 1998 Fonda  Twenty-six Week Period
included  $8.6  million  of net  sales  of  tissue  mill  products  relating  to
operations that were sold in March 1998.  Excluding such tissue mill sales,  net
sales  increased $3.8 million due primarily to the effects of the CEG Agreements
and, to a lesser  extent,  the effects of  seasonality  on the  twenty-six  week
comparison. Sales volume in Fonda's converting operations increased 24.5% in the
consumer market and decreased 1.5% in the institutional market.  Average selling
prices  decreased  16.5%  in the  consumer  market  and  increased  5.6%  in the
institutional market. The increased volume in the consumer market was due to the
increase in tissue  products  sold to CEG in  accordance  with the CEG Agreement
and, to a lesser extent, the effects of seasonality resulting from comparing the
1999 Fonda  Twenty-six  Week  Period  (which  includes  the four week  period in
October 1998) with the 1998 Fonda  Twenty-six  Week Period  (which  includes the
four week period in April 1998). The reduction in selling prices in the consumer
market reflects cost savings from the License Agreement as well as savings that



                                       10
<PAGE>

Fonda is  beginning  to realize  and  expects  to  realize  more fully in future
periods upon full implementation of the Manufacture and Supply Agreement. In the
institutional  market,  the  increase in selling  prices and  reduction in sales
volume  were  primarily  due to a  change  in sales  mix,  whereby  the  Company
emphasized  the  sale of value  added  converted  tissue  products  rather  than
commodity products.

         Gross  profit  increased  $27.3  million  to $53.5  million in the 1999
twenty-six week period. The consolidation of Sweetheart  resulted in an increase
in gross profit of $30.1  million.  As a percentage  of net sales,  gross profit
decreased  from 14.4% in the 1998  twenty-six  weeks to 10.2% in the 1999 period
primarily due to the effect of lower  margins at  Sweetheart  compared to Fonda.
However, Sweetheart's margin improved from 6.7% in the 1998 thirteen week period
to 8.3% in the 1999 period due to increased sales volumes and the cost reduction
initiatives  implemented  in the  latter  part of the 1998  fiscal  year.  Gross
margins in the 1999 Fonda  Twenty-six  Week  Period were  adversely  affected by
reduced selling prices of consumer products,  described above, as well as excess
costs incurred in implementing the Fonda Efficiency  Initiatives.  Gross margins
are expected to improve in future periods upon full  implementation of the Fonda
Efficiency Initiatives, however, there can be no assurance that such will occur.

         Selling, general and administrative expenses increased $27.7 million to
$48.9 million in the 1999 twenty-six  week period.  An increase of $29.5 million
of such expenses resulted from the consolidation of Sweetheart.  As a percentage
of net sales, selling,  general and administrative expenses decreased from 10.8%
in the 1998  twenty-six  week period to 9.3% in the 1999 twenty-six week period.
The decrease as a percentage  of net sales was  partially  due to the effects of
consolidating Sweetheart, for which selling, general and administrative costs as
a percentage of net sales are historically  lower than at Fonda due to economies
of scale.  In addition,  the percentage  reduction was also impacted at Fonda by
the reduction in selling and marketing  costs due to the License  Agreement,  as
well as the closure of an administrative office.

         Other income in the 1998 twenty-six week period includes a $9.3 million
pre-tax  gain from the sale of  Fonda's  tissue  mill  operations.  The gain was
partially  offset by $2.1 million of charges at  Sweetheart  resulting  from the
acquisition.

         Income from  operations  was $4.1 million in the 1999  twenty-six  week
period and $12.1 million in the 1998  twenty-six  week period as a result of the
above.

         Interest expense,  net of interest income was $32.6 million in the 1999
twenty-six week period and $10.0 million in the 1998 twenty-six week period. The
increase was due to the  consolidation  of Sweetheart and the related  financing
thereof.

         The effective tax rate was 37.9% in the 1999 twenty-six week period and
50% in the 1998 twenty-six  week period.  Both the 1999 and 1998 periods reflect
certain  non-deductible  costs  relating to the investment in Sweetheart and the
related financing. As a result of the above and the addback of minority interest
representing 10% of Sweetheart's historical loss, the net loss was $16.5 million
in the 1999 twenty-six week period compared to net income of $2.5 million in the
1998 twenty-six week period.

Liquidity and Capital Resources
         Historically,  the Company's subsidiaries have relied on cash flow from
operations  and  borrowings  to  finance  their   respective   working   capital
requirements, capital expenditures and acquisitions. In addition, Sweetheart has
been funding a majority of its capital expenditures from the sale of assets.

         Net cash  provided by  operating  activities  in 1999  twenty-six  week
period was $16.5 million  compared to $4.3 million in the 1998  twenty-six  week
period.  Sweetheart  provided $15.7 million in the 1999 period compared to a use
of $2.9  million in the 1998  period.  Excluding  the  effects of  consolidating
Sweetheart, the reduction in cash provided by operations is primarily due to the
buildup in amounts due from affiliates  resulting from the implementation of the
CEG Agreements. In March 1999, CEG's second largest customer,  representing over
10% of CEG's  net  sales  during  its  1998  fiscal  year,  filed a  Chapter  11
bankruptcy  petition.  As a result,  and for other  reasons,  Fonda  intends  to
reevaluate the adequacy of its affiliate reserves.


                                       11
<PAGE>

         Capital  expenditures  were $26.8 million,  including  $11.6 million at
Sweetheart for new production equipment,  $4.4 million at Sweetheart relating to
its Canadian operations and $8.7 million at Fonda for converting equipment.  See
Note 4 of Notes to Financial  Statements.  The remainder of capital expenditures
was primarily for routine capital improvements.

         None of SF  Holdings,  Fonda or  Sweetheart  anticipates  any  material
capital  expenditures  in the next twelve months other than those funded through
asset sales and available cash from the respective subsidiaries.  SF Holdings is
a holding  company and does not  anticipate  any material cash needs in the next
twelve months.  As of March 28, 1999,  dividends on the  Exchangeable  Preferred
have been paid by the issuance of additional shares of Exchangeable Preferred.

         Fonda's  revolving  credit  facility,  as  amended,  provides up to $50
million  borrowing  capacity,  is  collateralized  by  accounts  receivable  and
inventories,  certain  general  intangibles  and  the  proceeds  on the  sale of
accounts  receivable and inventory.  The maturity date of such facility has been
extended  to  September  1,  2001.  At March 28,  1999,  there was $3.8  million
outstanding  and $33.2  million was the  maximum  advance  available  based upon
eligible  collateral.  At March 28, 1999,  borrowings were available at a bank's
prime rate plus .25% or at LIBOR plus 2.25%.

         Sweetheart's  revolving  credit  facility,  as  amended,  provides  for
borrowings  in an amount of up to $135.0  million,  subject  to  borrowing  base
limitations (the "Sweetheart U.S. Credit Facility"). As of March 28, 1999, $12.5
million is available.  Borrowings under the Sweetheart U.S. Credit Facility bear
interest,  at Sweetheart's  election,  at a rate equal to LIBOR plus 2.25%, or a
bank's base rate plus 1.00%. A Canadian subsidiary of Sweetheart has a term loan
and revolving credit facility  agreement which provides for a term loan facility
of up to Cdn $10.0  million and a revolving  credit  facility of up to Cdn $10.0
million (the  "Sweetheart  Canadian Credit Facility and with the Sweetheart U.S.
Credit Facility, the "Sweetheart Credit Facilities").  As of March 28, 1999, Cdn
$2.8 million  (approximately  $1.9 million) was available  under such  facility.
Borrowings  under the Sweetheart  Canadian  Credit  Facility bear interest at an
index rate plus 2.25% with respect to the revolving  credit  borrowings,  and an
index rate plus 2.50% with respect to the term loan borrowings.

         Sweetheart's  Senior Secured Notes and its U.S.  Credit Facility mature
in September 2000, and August 2000,  respectively.  Although the Company intends
to refinance this debt, there can be no assurance that it will be able to obtain
such refinancing on acceptable terms and conditions.

         Fonda has reinvested  amounts in excess of $10 million from the sale of
its tissue mill,  within the required  time period,  as specified in  accordance
with the asset sale covenant under the indenture governing Fonda's Notes.

         During the 1999  twenty-six  week  period,  the  Company  did not incur
material costs for compliance with environmental law and regulations.

         In January 1999, Sweetheart was notified that the United States Supreme
Court had 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.  The court decided that the Lily-Tulip Salary Retirement
Plan (the  "Plan")  was  lawfully  terminated.  Sweetheart  is in the process of
determining  the  amount of total  payouts  for which  the Plan is  liable.  The
initial estimate of the total termination  liability exceeds assets set aside in
the Plan by approximately  $17 million,  which amount has been fully reserved by
Sweetheart. Sweetheart expects to fund such payments within the next six months.
On April 27, 1999,  the  plaintiffs  filed a motion in U.S.  district  court for
reconsideration  of the court's  dismissal  without  appropriate  relief,  and a
motion  for  attorney's  fees  with a  request  for  delay in  determination  of
entitlement  of such fees.  Management is currently  reviewing  these motions to
determine what effect,  if any, they may have on the payments referred to above.
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 the Sweetheart  will achieve its operating plan and have the necessary cash
to make these payments.  Failure by Sweetheart to make such payments will have a
material adverse effect on Sweetheart and its financial condition.


                                       12
<PAGE>

         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
         Many of  Sweetheart's  and  Fonda's  computer  systems may be unable to
process dates beyond  December 31, 1999. This could result in system failures or
miscalculations  which  could have a material  adverse  effect on the  Company's
business,  financial condition or results of operations.  Each of Sweetheart and
Fonda has  implemented a Year 2000 compliance  program  intended to identify the
programs  and  infrastructures  that could be  effected  by Year 2000 issues and
resolve the problems that were identified on a timely basis.

         Fonda has completed the  assessment  phase,  in which it has identified
potential  Year  2000  issues,  including  those  with  respect  to  information
technology  systems,  technology embedded within equipment Fonda uses as well as
equipment that interfaces  with vendors and other third parties.  Fonda has also
completed the upgrade of its hardware and software systems which run most of its
data  processing  and  financial   reporting   software   applications  and  has
consolidated  certain  of its  in-house  developed  computer  systems  into  the
upgraded  systems.  In  addition,   Fonda  has  upgraded  its  telephone,   data
communication  and network  systems to ensure that they are Year 2000 compliant.
Embedded  logic in  manufacturing  equipment is all being  tested and  upgraded.
Contingency plans are being developed for equipment that cannot be upgraded. The
embedded  logic project is expected to be completed by October 1999. EDI trading
partners and other key business  partners have been contacted to ensure that key
business  transactions will be Year 2000 compliant.  Contingency plans are being
developed to work with trading partners or to replace  suppliers who cannot meet
Fonda's compliance deadlines.. Furthermore, in the event Fonda is unable to meet
certain key operational dates, the Company believes its systems that are already
Year  2000  compliant,  as well as  temporary  solutions  to  systems  that  are
currently in place,  and manual  procedures would allow Fonda to ship product to
customers and engage in other critical business functions.

         Sweetheart  has  completed  the  assessment  phase,  in  which  it  has
identified  potential  Year 2000 issues with respect to  information  technology
systems,  as well as equipment that  interfaces  with vendors and third parties,
and  developed a  compliance  project for its  hardware,  operating  systems and
application systems. Sweetheart has completed its hardware and operating systems
conversion.  With respect to the application  phase,  Sweetheart is compliant in
its  planning,   order  management,   manufacturing  and  warehousing   systems.
Financial, corporate and in-house developed systems are scheduled for compliance
by July  1999.  Sweetheart  has  completed  its  internal  assessment  phase for
technology  embedded  within  equipment and is awaiting  responses  from certain
vendors.   Sweetheart  believes  a  significant  portion  of  its  manufacturing
equipment is not affected by Year 2000 issues due to its operations  use, or was
compliant when purchased.  Sweetheart has or is in the process of contacting key
vendors and business partners,  to ensure that key business transactions will be
Year 2000  compliant.  Furthermore,  in the event  Sweetheart  is unable to meet
certain key operational  dates,  Sweetheart  believes its already compliant Year
2000  systems  for  planning,  order  management,  manufacturing  and  warehouse
management,  together  with  manual  systems,  would  allow  Sweetheart  to ship
products to customers and engage in other critical business functions.

         As of May 1,  1999,  Sweetheart  and Fonda  estimate  the total cost of
their   respective   Year  2000  program  at  $2.7  million  and  $3.2  million,
respectively.  Sweetheart has spent $2.2 million as of March 28, 1999, including
$1.0 million in the twenty-six  weeks ended March 28, 1999. Fonda has spent $2.6
million as of March 28,  1999,  including  $1.4  million in the 1999  twenty-six
weeks.  Expenditures  have been,  and are expected to be, funded from cash flows
from the respective company's operations,  available cash, borrowings under each
company's  respective  credit facility,  or by lease.  However,  there can be no
assurance  that  Sweetheart or Fonda will identify all Year 2000 issues in their
computer  systems in advance  of their  occurrence  or that they will be able to
successfully  remedy all problems that are discovered.  Failure by Sweetheart or
Fonda  and/or their  significant  vendors and  customers  to complete  Year 2000
compliance  programs in a timely manner could have a material  adverse effect on
the  Company's  business,  financial  condition  and results of  operations.  In
addition,  the revenue stream and financial  stability of existing customers may
be adversely  impacted by Year 2000 problems which could cause  fluctuations  in
the Company's revenues and operating profitability.


                                       13
<PAGE>

Net Operating Loss Carryforwards
         As of September 27, 1998,  Sweetheart had approximately $202 million of
net operating loss carryforwards  ("NOLs") which expire at various dates through
2018.  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.




                                       14
<PAGE>

PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)        Exhibits:
           --------

       27.1        Financial Data Schedule.



(b) No reports  on Form 8-K were filed in the  thirteen  weeks  ended  March 28,
    1999.





                                   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:  May 12, 1999

                                      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