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

                                    FORM 10-K

(Mark One)

|X|  Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

For the year ended December 31, 1996

                                       OR

|_|  Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934

For the transition period from

Commission file number 33-56618

               NYLIFE SFD Holding Inc. as Master Administrator for
         NAFCO Auto Trust-1, NAFCO Auto Trust-2, and NAFCO Auto Trust-3
             (Exact name of registrant as specified in its charter)

          Delaware                                               13-3475905
 (State or other jurisdiction                                 (I.R.S. Employer
of incorporation or organization                             Identification No.)

  51 Madison Avenue, New York, New York                             10010
  -------------------------------------                             -----
(Address of principal executive offices)                          (Zip Code)

Registrant's telephone number, including area code  (212) 576-6456

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 by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best  of  the  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ x ]

     The aggregate  market value of the voting stock held by  non-affiliates  of
the Registrant. None.

<PAGE>
                                     PART I

Item 1. Business

     As of December 31, 1996,  NAFCO Auto Funding L.P. (The  "Partnership")  was
the  originator  of three  Auto Loan  Trusts  (the  "Trusts")  which had  issued
publicly  registered  securities.  The  Registrant for each of these trusts was,
respectively,  NAFCO Auto  Trust-1,  NAFCO Auto Trust- 2 and NAFCO Auto Trust-3.
NAFCO Auto Trust-1 was formed  pursuant to an Amended and  Restated  Pooling and
Servicing Agreement dated August 1, 1994. NAFCO Auto Trust-2 was formed pursuant
to an Amended and Restated  Pooling and Servicing  Agreement dated June 1, 1995.
NAFCO Auto  Trust-3  was formed  pursuant to Amended  and  Restated  Pooling and
Servicing  Agreement  dated October 1, 1995. On August 16, 1996, the partners of
the Partnership sold their partnership  interests in the Partnership.  Following
the sale,  NYLIFE SFD Holding Inc. as the Master  Administrator  for each of the
Trusts (in such capacity,  the "Master  Administrator"),  assumed responsibility
for filing all reports  pursuant to the  Securities and Exchange Act of 1934 and
accordingly is filing this report on behalf of each of the trusts.

     The assets of each of the Trusts consists of consumer  automobile loans and
certain  other  rights  and  properties  pertaining  thereto,  all as more fully
described in the Registration Statements with respect to such Trusts. The Trusts
do not engage in any business except as may be incidental to management of their
assets.

     NYLIFE SFD Holding  Inc. is  currently  discussing  certain  aspects of the
servicing  of the auto loans  with  Electronic  Data  Systems  Corporation,  the
servicer, in order to improve and maintain servicing functions. No determination
has been made that an Event of Servicer Termination,  as that term is defined in
the Pooling and Servicing Agreements,  has occurred,  and it is anticipated that
any necessary improvements will be effected.


Item 2. Properties

         None.

Item 3. Legal Proceedings

         None.

Item 4. Submission of Matters to a Vote of Security Holders.

         None.


(b)  Reports on Form 8-K

         None.

                                       2
<PAGE>


                                     PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.

         Not Applicable.

Item 6. Selected Financial Data.

         Not Applicable.

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
     of Operations.

         Not Applicable.

Item 8. Financial Statements and Supplemental Data.

         Not Applicable.

Item 9. Change in and Disagreements an Accounting and Financial Disclosure.

         Not Applicable.

                                       3
<PAGE>

                                    PART III

Item 10. Directors and Officers of the Registrant

         Not Applicable.

Item 11. Executive Compensation

         Not Applicable.

Item 12. Security Ownership of Certain Beneficial Owners and Management

         None.

Item 13. Certain Relationships and Related Transactions

         Not Applicable.

                                     PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

          1. Financial Statements - None.

          2.  All  schedules  for  which  provision  is made  in the  applicable
     accounting  regulations of the Securities and Exchange Commission have been
     omitted  since  either (1) the  information  required is  disclosed  in the
     financial  statements  and the notes  thereto;  (2) the  schedules  are not
     required  under  the  related  instructions;   or  (3)  the  schedules  are
     inapplicable.

          3. Trustee's Reports.



                                       4
<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, thereunto duly authorized.



                                   NAFCO AUTO TRUST-1

                                   By:  NYLIFE SFD Holding Inc.

                                   By: /s/ Kevin M. Micucci
                                       ---------------------------
                                   Name: Kevin M. Micucci
                                   Title:President and Director of
                                         NYLIFE SFD Holding Inc.
                                   Date: March 31, 1997

                                   NAFCO AUTO TRUST-2

                                   By: NYLIFE SFD Holding Inc.

                                   By:    /s/Kevin M. Micucci
                                          -------------------
                                   Name:  Kevin M. Micucci
                                   Title: President and Director of
                                          NYLIFE SFD Holding Inc.
                                   Date:  March 31, 1997


                                   NAFCO AUTO TRUST-3

                                   By: NYLIFE SFD Holding Inc.

                                   By:    /s/Kevin M. Micucci
                                          -------------------
                                   Name:  Kevin M. Micucci
                                   Title: President and Director of
                                          NYLIFE SFD Holding Inc.
                                   Date:  March 31, 1997


     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant by the appropriate officers and directors of the Master Administrator
and in the capacities and on the dates indicated.


                                       5
<PAGE>

<TABLE>
<CAPTION>

Signature                             Title                                        Date
---------                             -----                                        ----
<S>                           <C>                                               <C>
                              President and Director of
/s/ Kevin M. Micucci          NYLIFE SFD Holding Inc.                           March 31, 1997
--------------------
Kevin M. Micucci

/s/ Jay S. Calhoun            Vice President and Treasurer of                   March 31, 1997
------------------               NYLIFE SFD Holding Inc.
Jay S. Calhoun

/s/ Jefferson C. Boyce        Director of NYLIFE SFD Holding Inc.               March 31, 1997
----------------------
Jefferson C. Boyce

/s/ Scott J. Drath            Vice President and Controller of Finance          March 31, 1997
------------------               and  Director of NYLIFE SFD Holding Inc.
Scott J. Drath
                              Vice President of Adminstration and
/s/ Robert Ziegler            Secretary of NYLIFE SFD Holding Inc.              March 31, 1997
------------------
Robert Ziegler
                              Vice President of Investment and
/s/Jean E. Hoystadt           Director of NYLIFE SFD Holding Inc.               March 31, 1997
-------------------
Jean E. Hoystadt

/s/ Richard W. Zuccaro        Vice President of NYLIFE SFD Holding Inc.         March 31, 1997
----------------------
Richard W. Zuccaro
</TABLE>

<PAGE>


                               INDEX TO EXHIBITS

Exhibit No.                  Description

99.1        Trust - 1
            Master Administrator Report dated November 20, 1996 for the Due
            Period beginning August 1, 1996 and ending October 31, 1996, (ii)
            Servicer Report for the period beginning November 1, 1996 through
            November 30, 1996, (iii) Servicer Report for the period beginning
            December 1, 1996 through December 31, 1996.

99.2        Trust - 2
            Master Administrator Report dated November 20, 1996 for the Due
            Period beginning October 1, 1996 and ending October 31, 1996, (ii)
            Master Administrator Report dated December 20, 1996 for the Due
            Period beginning November 1, 1996 through November 30, 1996, (iii)
            Master Administrator Report dated January 21, 1997 for the Due
            Period beginning December 1, 1996 through December 31, 1996.

99.3        Trust - 3
            Master Administrator Report dated November 20, 1996 for the Due
            Period beginning October 1, 1996 and ending October 31, 1996, (ii)
            Master Administrator Report dated December 20, 1996 for the Due
            Period beginning November 1, 1996 through November 30, 1996, (iii)
            Master Administrator Report dated January 21, 1997 for the Due
            Period beginning December 1, 1996 through December 31, 1996.