================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-K

       [X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
                                       OR
       [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

             For the transition period from __________ to __________
                          Commission File No.: 333-643

                         TRUMP ATLANTIC CITY ASSOCIATES
              -----------------------------------------------------
             (Exact Name of Registrant as specified in its charter)

           New Jersey                                  22-3213714
  --------------------------------       ---------------------------------------
  (State or other jurisdiction           (I.R.S. Employer Identification Number)
 of incorporation or organization)                        08401
          2500 Boardwalk                               (Zip Code)
     Atlantic City, New Jersey                                                 
(Address of principal executive offices)

Registrant's telephone number, including area code: (609) 441-6060

                        TRUMP ATLANTIC CITY FUNDING, INC.
              -----------------------------------------------------
             (Exact Name of Registrant as specified in its charter)

            Delaware                                    22-3418939
 ----------------------------------      ---------------------------------------
   (State or other jurisdiction          (I.R.S. Employer Identification Number)
 of incorporation or organization)                        08401
         2500 Boardwalk                                (Zip Code)
    Atlantic City, New Jersey                                                 
(Address of principal executive offices)
Registrant's telephone number, including area code: (609) 441-6060


                      TRUMP ATLANTIC CITY FUNDING II, INC.
             ------------------------------------------------------
             (Exact Name of Registrant as specified in its charter)

           Delaware                                      22-3550202
 ----------------------------------      ---------------------------------------
   (State or other jurisdiction          (I.R.S. Employer Identification Number)
 of incorporation or organization)                       08401                 
        2500 Boardwalk                                (Zip Code)
   Atlantic City, New Jersey                                                 
(Address of principal executive offices)
Registrant's telephone number, including area code: (609) 441-6060

                      TRUMP ATLANTIC CITY FUNDING III, INC.
             ------------------------------------------------------
             (Exact Name of Registrant as specified in its charter)

          Delaware                                       22-3550203
 ----------------------------------      ---------------------------------------
   (State or other jurisdiction          (I.R.S. Employer Identification Number)
 of incorporation or organization)                       08401                 
        2500 Boardwalk                                (Zip Code)
   Atlantic City, New Jersey                                                 
(Address of principal executive offices)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (609) 441-6060
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None

     Indicate by check mark whether the Registrants (1) have 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
Registrants were required to file such reports), and (2) have 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 Registrants' 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 of Trump Atlantic City
Funding, Inc. held by non-affiliates as of March 30, 1999 was $0.

     The aggregate market value of the voting stock of Trump Atlantic City
Funding II, Inc. held by non-affiliates as of March 30, 1999 was $0. 

     The aggregate market value of the voting stock of Trump Atlantic City
Funding III, Inc. held by non-affiliates as of March 30, 1999 was $0.

     Indicate by check mark whether the Registrants have filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.  [X]  No [ ]

     As of March 30, 1999, there were 100 shares of Trump Atlantic City Funding,
Inc.'s Common Stock outstanding.

     As of March 30, 1999, there were 100 shares of Trump Atlantic City Funding
II, Inc.'s Common Stock outstanding.

     As of March 30, 1999, there were 100 shares of Trump Atlantic City Funding
III, Inc.'s Common Stock outstanding.

     Documents Incorporated by Reference--Not applicable.

================================================================================

<PAGE>

                                    FORM 10-K

                                TABLE OF CONTENTS
ITEM                                                                       PAGE
----                                                                       ----

PART I ..............................................................         1

   ITEM 1. BUSINESS .................................................         1
     General ........................................................         1
     Trump Plaza ....................................................         2
     The Taj Mahal ..................................................         6
     TCS ............................................................        10
     Trademark/Licensing ............................................        10
     Certain Indebtedness ...........................................        11
     Atlantic City Market ...........................................        11
     Competition ....................................................        13
     Gaming and Other Laws and Regulations ..........................        16

   ITEM 2. PROPERTIES ...............................................        22
     Trump Plaza ....................................................        22
     Taj Mahal ......................................................        24

   ITEM 3. LEGAL PROCEEDINGS ........................................        26

   ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ......        28

PART II .............................................................        29

   ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
            STOCKHOLDER MATTERS .....................................        29

   ITEM 6. SELECTED FINANCIAL DATA ..................................        29

   ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL
            CONDITIONS AND RESULTS OF OPERATIONS ....................        31

   ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
             MARKET RISK ............................................        37

   ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ..............        37 

   ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
            ACCOUNTING AND FINANCIAL DISCLOSURE .....................        37

PART III.............................................................        38

   ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT ......        38

   ITEM 11. EXECUTIVE COMPENSATION ..................................        43
     Employment Agreements ..........................................        45
     Compensation of Directors ......................................        47
     Compensation Committee Interlocks and Insider Participation ....        47

   ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
             AND MANAGEMENT .........................................        49

   ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ..........        50

PART IV .............................................................        52


                                      (i)
<PAGE>


   ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
             REPORTS ON FORM 8-K ....................................        52

IMPORTANT FACTORS RELATING TO FORWARD LOOKING STATEMENTS ............        58

SIGNATURES ..........................................................        59

   TRUMP ATLANTIC CITY ASSOCIATES ...................................        60

   TRUMP ATLANTIC CITY FUNDING, INC .................................        61

   TRUMP ATLANTIC CITY FUNDING II, INC ..............................        62

   TRUMP ATLANTIC CITY FUNDING III, INC .............................        63

INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES .....       F-1


                                      (ii)
<PAGE>


                                     PART I

ITEM 1. BUSINESS.

GENERAL

     Trump Atlantic City Associates ("Trump AC"), a New Jersey general
partnership, was formed under the name of Trump Plaza Holding Associates on
February 17, 1993. Trump Atlantic City Funding, Inc., a Delaware corporation
("Trump AC Funding"), was formed on January 30, 1996. Trump Atlantic City
Funding II, Inc. ("Funding II") and Trump Atlantic City Funding III, Inc.
("Funding III"), each a Delaware corporation, were formed on November 18, 1997.
Each of the Registrants are wholly owned subsidiaries of Trump Hotels & Casino
Resorts Holdings, L.P. ("THCR Holdings"), of which Trump Hotels & Casino
Resorts, Inc. ("THCR") is the general partner. THCR is the exclusive vehicle
through which Donald J. Trump ("Trump") engages in new gaming activities in both
emerging and established gaming jurisdictions. Trump AC owns and operates the
Trump Plaza Hotel and Casino ("Trump Plaza"), which also includes Trump World's
Fair, and the Trump Taj Mahal Casino Resort (the "Taj Mahal"), each located on
The Boardwalk in Atlantic City, New Jersey.

     o    TRUMP PLAZA. In May 1996, Trump AC completed an expansion program
          which further enhanced Trump Plaza's gaming space and hotel capacity
          (the "Trump Plaza Expansion") while maintaining its commitment to
          first class customer service. This strategy was designed to capitalize
          on Trump Plaza's reputation for excellence, as well as to meet both
          existing and anticipated demand for the increased number of rooms and
          infrastructure improvements that are currently being implemented to
          enhance further the "vacation destination appeal" of Atlantic City. As
          part of the Trump Plaza Expansion, Trump AC renovated and integrated
          into Trump Plaza a hotel adjacent to Trump Plaza's main tower ("Trump
          Plaza East") and renovated and integrated into Trump Plaza the former
          Trump Regency Hotel, located on The Boardwalk adjacent to the original
          Atlantic City Convention Center, which is next to Trump Plaza and is
          now known as Trump World's Fair. The renovations at Trump Plaza East
          were completed in February 1996 and at Trump World's Fair in May 1996.
          Trump Plaza has 138,295 square feet of gaming space, housing a total
          of approximately 4,162 slot machines and 103 table games, making Trump
          Plaza's casino the largest in Atlantic City (in terms of square
          footage). Trump Plaza's hotel capacity consists of 1,404 guest rooms,
          making Trump Plaza's guest room inventory one of the largest in
          Atlantic City.

     o    TAJ MAHAL. Management believes that the acquisition of the Taj Mahal
          on April 17, 1996 (the "Taj Acquisition") has strengthened Trump AC's
          position as a leader in the casino entertainment industry through its
          ownership of two successful land-based casino hotels on The Boardwalk.
          Furthermore, the Taj Acquisition has enhanced Trump AC's presence in
          the growing Atlantic City gaming market (the "Atlantic City Market").
          After giving effect to the Taj Acquisition and the Trump Plaza
          Expansion, Trump AC had acquired approximately one-quarter of Atlantic
          City's casino square footage, slot machines, table games and hotel
          room inventory. The combination of the Taj Mahal with Trump Plaza's
          operations has provided opportunities for operational efficiencies,
          economies of scale and benefits from the talent, expertise and
          experience of management at the operating entities. In July 1997,
          Trump AC completed an expansion plan at the Taj Mahal (the "Taj Mahal
          Expansion"), which included construction of a new bus terminal,
          expansion of parking facilities and expansion of casino floor space.

     o    THE "TRUMP" NAME. Trump AC capitalizes on the widespread recognition
          of the "Trump" name and its association with high quality amenities
          and first class service. To this end, Trump AC provides a broadly
          diversified gaming and entertainment experience consistent with the
          "Trump" name and reputation for quality.


                                       1
<PAGE>


         The following table profiles Trump AC's current casino and hotel
capacity:

                                TRUMP
                                PLAZA               TRUMP
                                 MAIN      TRUMP    WORLD'S
                               FACILITY  PLAZA EAST  FAIR   TAJ MAHAL   TOTAL
                               --------  ---------- ------- ---------   -----
Gaming square footage........    74,198   14,886    49,211   147,720    286,015
Slot machines................     2,124      402     1,636     4,152      8,314
Table games..................       103        0         0       211        314
Hotel rooms..................       555      349       500     1,250      2,654

     The Registrants operate in only one industry segment. See "Financial
Statements and Supplementary Data."

TRUMP PLAZA

         Management believes that Trump Plaza's Five Star Diamond Award from the
American Academy of Hospitality Sciences reflects the high quality amenities and
services that Trump Plaza provides to its casino patrons and hotel guests. These
amenities and services include a broad selection of dining choices, headline
entertainment, deluxe accommodations, tennis courts and swimming and health spa
facilities.

         Management believes that as a result of the Trump Plaza Expansion and
Trump Plaza's strategic location, Trump Plaza is one of the premier host
properties in Atlantic City. The Trump Plaza Expansion was completed in May 1996
and increased Trump Plaza's prime central frontage on The Boardwalk to nearly a
quarter of a mile. Management believes that the construction of the new
convention center and the tourist corridor linking the new convention center
with The Boardwalk enhances the desirability of Atlantic City generally and, as
a result of Trump Plaza's central location, benefits Trump Plaza in particular.
In addition, management has taken advantage of gaming regulatory changes that
allow casino space to be directly visible and accessible from The Boardwalk.
Trump Plaza's location on The Boardwalk at the end of the main highway into
Atlantic City makes it highly accessible for both "drive-in" and "walk-in"
patrons.

         As part of the Trump Plaza Expansion, Trump Plaza opened the Ocean View
Casino and Bar and a total of 349 rooms, including nine super suites, located at
Trump Plaza East, which is fully integrated into Trump Plaza. Trump Plaza East
has approximately 15,000 square feet of casino space. Trump Plaza also completed
construction of a new entranceway to Trump Plaza to provide easier access by car
to Trump Plaza.

         In May 1996, Trump AC completed the renovations and integration of
Trump World's Fair, located on The Boardwalk adjacent to the original Atlantic
City Convention Center, into Trump Plaza. Trump World's Fair contains 49,211
square feet of casino floor space, approximately 16,000 square feet of which is
directly accessible from The Boardwalk, and 500 hotel rooms, connected to Trump
Plaza's main tower by an enclosed walkway overlooking The Boardwalk.

         Management believes the increased hotel capacity as a result of the
Trump Plaza Expansion enables Trump Plaza to better meet demand and accommodate
its casino guests, as well as to host additional and larger conventions and
corporate meetings.


                                      2
<PAGE>


         The following table details Trump Plaza's current casino and hotel
capacity:

                                TRUMP                          TRUMP
                              PLAZA MAIN    TRUMP PLAZA       WORLD'S    
                               FACILITY       EAST             FAIR      TOTAL
                              ----------    -----------       -------    ------
Gaming square footage.......    74,198        14,886          49,211     138,295
Slot machines...............     2,124           402           1,636       4,162
Table games.................       103             0               0         103
Hotel rooms.................       555           349             500       1,404

         Trump Plaza's management team has launched a variety of initiatives
designed to increase the level of casino gaming activity generally at Trump
Plaza and to attract casino patrons who tend to wager more frequently than the
typical Atlantic City patron. These initiatives include targeted marketing and
advertising campaigns directed to select groups of customers in the Boston-New
York-Washington, D.C. corridor, and the introduction of new updated gaming
products.

         ATLANTIC CITY MARKETING STRATEGY

         Trump Plaza. Trump Plaza East has been integrated into Trump Plaza and
together the two are operated as a single casino hotel facility. Trump Plaza
presently intends to continue the marketing strategies it has found successful
in the past, including targeting lucrative high-end drive-in slot customers.
Management believes the additional hotel rooms and gaming facilities at Trump
Plaza East better enable Trump Plaza to accommodate the more profitable weekend
drive-in patron, who tends to wager more per play and per visit than the typical
walk-in or bus patron.

         Trump World's Fair. Trump World's Fair is seeking to attract the
"middle market" segment (primarily bus customers and Boardwalk pedestrian
traffic) by offering high value food and entertainment attractions in a festive
"World's Fair" atmosphere. The first floor of Trump World's Fair features a
Boardwalk level casino offering walk-in customers direct access from The
Boardwalk to 569 slot machines. In addition, Trump World's Fair contains a bus
terminal that has a dedicated escalator leading directly to a separate casino
entertainment area that contains a 500-seat buffet-style restaurant and a casino
with 508 slot machines. The bus terminal and dedicated casino facilities allow
Trump World's Fair to serve efficiently a high volume of bus customers. The
second floor of Trump World's Fair has approximately 559 slot machines along
with additional restaurants. Moreover, with its prime location adjoining the
original Atlantic City Convention Center and near the new Atlantic City
Convention Center, and its room base of 500 rooms and approximately 50,000
square feet of total gaming space, management believes that Trump World's Fair
is ideally suited to attract convention visitor traffic.

         TRUMP PLAZA BUSINESS STRATEGY

         General. A primary element of Trump Plaza's business strategy is to
seek to attract patrons who tend to wager more frequently and in larger
denominations than the typical Atlantic City gaming customer. Such high-end
players typically wager $5 or more per play in slots and $25 or more per play in
table games. In the fall of 1992, Trump Plaza Associates ("Plaza Associates"),
the owner and operator of Trump Plaza, decided to de-emphasize marketing efforts
directed at "high roller" patrons from the Far East, who tend to wager $50,000
or more per play in table games. Plaza Associates determined that the potential
benefit derived from these patrons did not outweigh the high costs associated
with attracting such players and the resultant volatility in the results of
operations of Trump Plaza. Revenues derived from high roller patrons have
declined since 1992, although management believes that such revenue loss has not
had a significant impact on profitability for the reasons discussed above. In
addition, this shift in marketing strategy has allowed Plaza Associates to focus
its efforts on attracting high-end players.

         Although considered one property, Trump Plaza and Trump World's Fair
have separate marketing identities. Trump Plaza caters to the mid to high level
segment while Trump World's Fair focuses on the "middle" market. Trump Plaza's
concentration of special events, entertainment, suites and variety of gourmet
restaurants define its presence and highly perceived image. The Trump Plaza's
suite product, high-end slot clubs and fine dining restaurants indicate Plaza
Associates' commitment to this segment of the market. While Trump Plaza


                                       3
<PAGE>


strives to accommodate the more lucrative drive-in patron, Trump World's Fair
offers a fun, relaxing experience which is extremely appealing to the bus rider.
A combination of lower slot denominations, including Atlantic City's largest
nickel lounge, lower table limits, sweepstakes, bus bingo programs, on-floor
tournaments and a premier buffet make this possible.

         "Comping" Strategy. In order to compete effectively with other Atlantic
City casino hotels, Plaza Associates offers complimentary drinks, meals, room
accommodations and/or travel arrangements to its patrons ("Complimentaries" or
"Comps"). Management monitors Trump Plaza's policy so as to provide
complimentaries primarily to patrons with a demonstrated propensity to wager at
Trump Plaza. A patron's propensity to wager is determined by a review of the
patron's prior gaming history at Trump Plaza as well as other gaming
establishments in Atlantic City. Each patron is analyzed to ensure that the
patron's gaming activity, net of any complimentaries, is profitable to Plaza
Associates.

         Entertainment. Trump Plaza offers headline entertainment as part of its
strategy to attract high-end and other patrons. Trump Plaza offers a variety of
headline entertainment throughout the year.

         Player Development/Casino Hosts. Plaza Associates currently employs
gaming representatives in New Jersey, Pennsylvania and other states, as well as
several international representatives, to promote Trump Plaza to prospective
gaming patrons. Player development personnel host special events, offer
incentives and contact patrons directly in an effort to attract high-end table
game patrons from the United States, Canada and South America. Trump Plaza's
casino hosts assist patrons on the casino floor, make room and dinner
reservations and provide general assistance. They also solicit Trump Card (the
frequent player slot card) sign-ups in order to increase Plaza Associates'
marketing base.

         Promotional Activities. The Trump Card constitutes a key element in
Trump Plaza's direct marketing program. Slot machine players are encouraged to
register for and utilize their personalized Trump Card to earn various
complimentaries based upon their level of play. The Trump Card is inserted
during play into a card reader attached to the slot machine for use in
computerized rating systems. Plaza Associates' computer systems record data
about the cardholders, including playing preferences, frequency and denomination
of play and the amount of gaming revenues produced.

         Trump Plaza designs promotional offers, conveyed via direct mail and
telemarketing, to patrons expected to provide revenues based upon their
historical gaming patterns. Such information is gathered on slot wagering by the
Trump Card and on table game wagering by the casino game supervisors.
Promotional activities include the mailing of vouchers for complimentary slot
play. Trump Plaza also utilizes a special events calendar (e.g., birthday
parties, sweepstakes and special competitions) to promote its gaming operations.

         Bus Program. Trump Plaza has a bus program, which transports
approximately 1,700 gaming patrons per day during the week and 2,400 per day on
the weekends. Trump Plaza's bus program offers incentives and discounts to
certain scheduled and chartered bus customers. Trump Plaza's Transportation
Facility (as defined) contains 13 bus bays and is connected by an enclosed
pedestrian walkway to Trump Plaza. The Transportation Facility provides patrons
with immediate access to the casino, and contains a comfortable lounge area for
patrons waiting for return buses. Trump World's Fair's bus terminal has a
dedicated escalator leading directly to a casino entertainment area complete
with an international buffet. Trump World's Fair's bus terminal provides patrons
with a spacious lounge area with a view of the Atlantic Ocean and The Boardwalk.
Trump World's Fair's bus program transports approximately 1,200 gaming patrons
per day during the week and 2,100 per day on weekends.

         Credit Policy. Historically, Trump Plaza has extended credit on a
discretionary basis to certain qualified patrons. For the years ended December
31, 1996, 1997 and 1998 credit play as a percentage of total dollars wagered was
approximately 17.4%, 18.9% and 22.4%, respectively. Trump Plaza bases credit
limits on each individual patron's creditworthiness, as determined by an
examination of the following criteria: (i) checking each patron's personal
checking account for current and average balances, (ii) performing a credit
check on each domestic patron and (iii) checking each patron's credit limits and
indebtedness at all casinos in the United States as well as many island casinos.
The above determination of a patron's continued creditworthiness is performed
for continuing patrons on a yearly basis or more frequently if Trump Plaza deems
a re-determination of credit worthiness is necessary. In addition, depositing of
markers is regulated by the State of New Jersey. Markers in


                                       4
<PAGE>


increments of $1,000 or less are deposited in a maximum of 7 days; markers of
increments of $1,001 to $5,000 are deposited in a maximum of 14 days; and
markers in increments of over $5,001 are deposited in a maximum of 45 days.
Markers may be deposited sooner at the request of patrons or at Trump Plaza's
discretion.

         FACILITIES AND AMENITIES

         Trump Plaza. The casino in Trump Plaza's main tower currently offers
103 table games and 2,124 slot machines. In addition to the casino, Trump
Plaza's main tower consists of a 31-story tower with 555 guest rooms, including
62 suites. Trump Plaza's main tower also offers 10 restaurants, a 750-seat
cabaret theater, four cocktail lounges, 28,000 square feet of convention,
ballroom and meeting room space, a swimming pool, tennis courts and a health
spa.

         The entry level of Trump Plaza's main tower includes a cocktail lounge,
three gift shops, a deli, a coffee shop, an ice cream parlor and a buffet. The
casino level houses the casino, a fast food restaurant, an exclusive slot lounge
for high-end patrons and an ocean view high-end slot area. An enclosed walkway
connects Trump Plaza at the casino level with the original Atlantic City
Convention Center and with Trump World's Fair.

         On February 16, 1996, Trump Plaza opened the approximately 15,000
square-foot Ocean View Casino and Bar and 249 of its 349 hotel rooms at Trump
Plaza East. Management opened the remaining rooms and suites at Trump Plaza East
in March 1996. The Ocean View Casino and Bar is the first gaming room in
Atlantic City to combine a casino, bar and entertainment area, and features a
70-foot long bar with 27 bar-top slot machines, live entertainment and a 58
square-foot video wall, complemented by six additional television sets along the
bar. With its high ceilings and windows overlooking the Atlantic Ocean and The
Boardwalk, Trump Plaza has created a new and exciting entertainment environment
for its casino patrons.

         Trump Plaza's guest rooms are located in two towers which afford most
guest rooms a view of the ocean. While rooms are of varying size, a typical
guest room consists of approximately 400 square feet. Trump Plaza's main tower
also features 16 one-bedroom suites, 28 two-bedroom suites and 18 "Super
Suites." The Super Suites are located on the top two floors of Trump Plaza's
main tower and offer luxurious accommodations and 24-hour butler and maid
service. The Super Suites and certain other suites are located on the "Club
Level" which requires guests to use a special elevator key for access, and
contains a lounge area that offers food and bar facilities.

         Trump Plaza's main tower is connected by an enclosed pedestrian walkway
to a 10-story parking garage, which can accommodate approximately 2,650 cars,
and contains 13 bus bays, a comfortable lounge, a gift shop and a waiting area
(the "Transportation Facility"). The Transportation Facility provides patrons
with immediate access to the casino, and is located directly off the Atlantic
City Expressway, the main highway into Atlantic City.

         In July 1994, Time Warner Entertainment Company, L.P. ("Time Warner")
opened its second largest Warner Brothers Studio Store occupying the entire
first floor of retail space on The Boardwalk at Trump Plaza East (approximately
17,000 square feet).

         Trump World's Fair. Trump World's Fair is connected to Trump Plaza's
main tower by an enclosed walkway overlooking The Boardwalk and adds an
additional 500 hotel rooms to Trump Plaza. In addition, Trump World's Fair is
outfitted with approximately 50,000 square feet of casino floor space housing
1,636 slot machines. In addition to the casino, Trump World's Fair features
three restaurants, including a state-of-the-art buffet, a cocktail lounge,
convention and ballroom and meeting room space. The enclosed walkway runs
through a portion of the original Atlantic City Convention Center, which is
located between Trump World's Fair and Trump Plaza's main tower. Plaza
Associates has acquired an easement with regard to this walkway through the
original Atlantic City Convention Center.

         Trump Plaza and Trump World's Fair are physically connected to the
original convention center. By the summer of 2001, the East Hall of this
convention center will undergo a $72 million renovation funded by the CRDA.
These improvements will convert the East Hall into a modern special events
venue, and will benefit both Trump Plaza and Trump World's Fair.


                                       5
<PAGE>


         EMPLOYEES AND LABOR RELATIONS

         Plaza Associates has approximately 4,800 employees of whom
approximately 1,500 are covered by collective bargaining agreements. The
collective bargaining agreement with Local No. 54 expires on September 15, 1999.
Management believes that its relationships with its employees are satisfactory.
Certain of Plaza Associates' employees must be licensed or registered under the
New Jersey Casino Control Act (the "Casino Control Act").

         HISTORICAL BACKGROUND

         The 1995 and 1996 Events. In connection with the initial public
offering (the "June 1995 Stock Offering") of 10 million shares of THCR Common
Stock, THCR Holdings repurchased and redeemed the $60 million aggregate
principal amount of 12 1/2% Pay-In-Kind Notes due 2003 (the "Plaza PIK Notes")
and the warrants to acquire an aggregate of $12 million in principal amount of
additional Plaza PIK Notes (the "Plaza PIK Note Warrants"). In addition, in
connection with the June 1995 Stock Offering and the offering by THCR Holdings
and its wholly owned finance subsidiary, Trump Hotels & Casino Resorts Funding,
Inc. ("THCR Funding"), of $155 million 15 1/2% Senior Secured Notes due 2005
(the "Senior Notes") (the "June 1995 Note Offering" and, together with the June
1995 Stock Offering, the "June 1995 Offerings"), Trump transferred, pursuant to
a contribution agreement, to THCR Holdings his ownership interests in Trump
Plaza Funding, Inc. ("Plaza Funding") and Trump AC. Upon the consummation of the
June 1995 Offerings, THCR Holdings owned Plaza Associates. In connection with
the Taj Acquisition, THCR Holdings became the owner of both Plaza Associates and
Trump Taj Mahal Associates ("Taj Associates"), the owner and operator of the Taj
Mahal, through its ownership interest in Trump AC. As part of the 1996
Offerings, Trump AC and its wholly owned finance subsidiary, Trump AC Funding,
issued the TAC I Notes (as defined).

         The 1997 Events. In December 1997, Trump AC and Funding II issued the
TAC II Notes and Trump AC and Funding III issued the TAC III Notes.

THE TAJ MAHAL

         The Taj Mahal ranked first among all Atlantic City casinos in terms of
total gaming revenues for the year ended December 31, 1998. The Taj Mahal
capitalizes on the widespread recognition and marquee status of the "Trump" name
and its association with high quality amenities and first-class service as
evidenced by its Five Star Diamond Award from the American Academy of
Hospitality Sciences. Management believes that the breadth and diversity of the
Taj Mahal's casino, entertainment and convention facilities and its status as a
"must see" attraction will enable the Taj Mahal to benefit from growth of the
Atlantic City market.

         In recent years, Taj Associates has completed construction of the Taj
Entertainment Complex (as defined), reconfigured and expanded the casino floor
to provide race simulcasting, poker wagering and keno, opened an Asian themed
table game area, opened the Bengal Club for mid-level slot players and increased
the number of poker tables and slot machines. The Taj Mahal's poker room is the
largest in Atlantic City, which management believes adds to its customers'
overall gaming experience. Taj Associates continually monitors operations to
adapt to and anticipate industry trends. From 1994 to mid-1997, the Taj Mahal
refurbished substantially all of its hotel guest rooms and corridors and
replaced all of its existing slot machines with new, more efficient machines
with bill acceptors. Moreover, to further attract high-end players, the Taj
Mahal opened the Dragon Room, an Asian themed table gaming area with 16 table
games, and the Sultan's Palace, a separate 5,900 square-foot high-end slot
lounge. In connection with the Sultan's Palace, the Taj Mahal opened the
relocated and expanded President's Club for high-end slot players.

         The Taj Mahal Expansion consisted of the construction of a new 14-bay
bus terminal, which was completed in December 1996, a 2,400 space expansion of
the existing self parking facilities, which was completed in May 1997, and an
approximately 7,000 square foot casino expansion with approximately 260 slot
machines with frontage on The Boardwalk, which was completed in July 1997. In
addition, to increase entertainment opportunities for customers, the Hard Rock
Cafe opened in November 1996, the All Star Cafe opened in March 1997 and the
Stage Deli of New York opened in October 1997. A Warner Brothers Studio Store
opened at the Taj Mahal in May 1997.


                                       6
<PAGE>


         The Taj Mahal is currently in the process of expanding the retail
shopping experience along the length of its parking garage promenade walkway
which immediately adjoins the Taj Mahal's main retail shopping area. The first
tenant, Starbucks, operated by Host International, Inc., opened in September
1996. Sbarro's, an Italian eatery, operated by Sbarro America Properties, Inc.,
opened in October 1998. Boardwalk Treats, Beka's Pastries and a Harley Davidson
retail merchandise outlet are expected to open in the early spring of 1999. A
Sunglass Hut, operated by Sunglass Hut International, opened in August 1998 in
another location also adjoining the Taj Mahal's main retail shopping area.

         In November 1998, the Taj Mahal entered into a development agreement
with the New Jersey Casino Reinvestment Development Authority (the "CRDA") for
the redevelopment of the road corridors and surrounding neighborhoods leading
from Route 30, one of its major access routes, and the Taj Mahal. The project,
which is expected to cost approximately $20.8 million, is scheduled to be
completed in phases through the summer of 2000 and will greatly enhance the Taj
Mahal's customer's experience and ease in reaching the Taj Mahal. The project
itself will greatly improve the road infrastructure and lighting, provide
extensive landscaping, involve the acquisition and demolishing of deteriorated
buildings and involve the completion of a new housing development.

         THE TAJ MAHAL OPERATIONS

         General. The Taj Mahal currently has approximately 147,720 square feet
of gaming space, 211 table games and 4,152 slot machines, which includes an
approximately 12,000 square-foot poker, keno and race simulcasting room with 64
poker tables, which was added in 1993 and expanded in 1994. The casino's
offerings include blackjack, craps, roulette, baccarat, mini baccarat, sic-bo,
pai gow, pai gow poker, Caribbean stud poker, big six, mini big six, mini dice
and let it ride poker. In December 1995, the Taj Mahal opened an Asian themed
table game area which offers 16 popular Asian table games catering to the Taj
Mahal's growing Asian clientele. In May 1996, the Taj Mahal opened the Sultan's
Palace, a high-end slot lounge. In August 1996, the Taj Mahal opened the
relocated and expanded President's Club for high-end slot players in conjunction
with the Sultan's Palace.

         In December 1996, the Taj Mahal opened a new bus terminal with 14 bays.
In November 1996, the Hard Rock Cafe opened at the Taj Mahal adjacent to the
casino and The Boardwalk. In March 1997, the All Star Cafe opened at the Taj
Mahal. A Warner Brothers Studio Store opened in May 1997. An additional
simulcasting facility featuring horse racing was completed in June 1997.
Construction of an approximately 7,000 square-foot casino expansion with 260
slot machines, with Boardwalk frontage, was completed in July 1997. In October
1997, the Stage Deli of New York opened at the Taj Mahal. In addition, as a
special bonus to high-end players, the Taj Mahal offers three clubs for the
exclusive use of select customers: the Maharajah Club for high-end table game
players, the President's Club for high-end slot players and the Bengal Club for
other preferred slot players.

         The Taj Mahal currently consists of a 42-story hotel tower and
contiguous low-rise structure sited on approximately 30 acres of land. The Taj
Mahal has 1,250 guest rooms (including 242 suites), 19 dining and 12 beverage
locations, parking for approximately 6,950 cars, a 14-bay bus terminal and
approximately 65,000 square feet of ballroom, meeting room and pre-function area
space. In addition, the Taj Mahal features a 20,000 square-foot multi-purpose
entertainment complex known as the Xanadu Theater with seating capacity for
approximately 1,200 people which can be used as a theater, concert hall, boxing
arena or exhibition hall (the "Taj Entertainment Complex") and the Mark Etess
Arena, which comprises an approximately 63,000 square-foot exhibition hall and
entertainment facility. The Xanadu Theater and Mark Etess Arena have allowed the
Taj Mahal to offer longer running, more established productions that cater to
the tastes of the Taj Mahal's high-end international guests, and has afforded
the Taj Mahal more flexibility in the use of its facilities for sporting and
other headline programs. The Taj Mahal regularly engages well-known musicians
and entertainment personalities and will continue to emphasize weekend marquee
events such as Broadway revues, high visibility sporting events, international
festivals and contemporary concerts to maximize casino traffic and to maintain
the highest level of glamour and excitement at the Taj Mahal.

         Gaming Environment. The Taj Mahal's management continues to capitalize
on the Taj Mahal's status as one of the largest facilities in Atlantic City and
a "must see" attraction, while maintaining the attractiveness of the property
and providing a comfortable gaming experience. In 1994, the Taj Mahal completed
a major redecoration of the hotel lobby, a casino floor expansion and a
reconfiguration, as well as the addition of a new mid-level player


                                       7
<PAGE>


slot club. The casino floor expansion and reconfiguration accommodated the
addition of keno, poker tables and slot machines. In the period 1994 through
1996, the Taj Mahal substantially replaced all of its existing slot machines
with new, more efficient machines with bill acceptors. In addition, in June
1993, the Taj Mahal completed a 10,000 square-foot poker and simulcast area
(which was subsequently enlarged to 12,000 square feet), which features 64 poker
tables in the largest poker room in Atlantic City. For the year ended December
31, 1998, the Taj Mahal captured approximately 51.8% of the total Atlantic City
poker revenues. In 1996 and 1997 the Taj Mahal expanded its casino floor by
approximately 6,200 and 8,600 square feet, respectively. The 1997 expansion
accommodated casino space with Boardwalk frontage and a second horserace
simulcasting location.

         The Taj Mahal currently intends to reconfigure its casino floor,
subject to approval by the New Jersey Casino Control Commission (the "CCC") on
an ongoing basis, to accommodate changes in patron demand. Management
continuously monitors the configuration of the casino floor and the games it
offers to patrons with a view towards making changes and improvements. For
example, the Taj Mahal's casino floor has clear, large signs for the convenience
of patrons. Additionally, as new games have been approved by the CCC, management
has integrated such games to the extent it deems appropriate. In 1994, the Taj
Mahal introduced the newly-approved games of keno and Caribbean stud poker and,
in 1995, introduced the games of pai gow, pai gow poker and let it ride poker.
Progressive blackjack and mini dice were also added in 1996 and 1997,
respectively.

         "Comping" Strategy. In order to compete effectively with other casino
hotels, the Taj Mahal offers Complimentaries. Currently, the policy at the Taj
Mahal is to focus promotional activities, including Complimentaries, on middle
and upper middle market "drive in" patrons with a propensity to wager who visit
Atlantic City frequently and have proven to be the most profitable market
segment. Comping policy is determined by a patron's propensity to wager. A
patron's propensity to wager is determined by a review of the patron's prior
gaming history at the Taj Mahal as well as other gaming establishments in
Atlantic City. Each patron is analyzed to ensure that the patron's gaming
activity, net of any Complimentaries, is profitable to Taj Associates.
Additionally, as a result of increased regulatory flexibility, the Taj Mahal has
implemented a cash comping policy to high-end players in order to compete with
similar practices in Las Vegas and to attract international business.

         Entertainment. The Taj Mahal believes headline entertainment, as well
as other entertainment and revue shows, is an effective means of attracting and
retaining gaming patrons. The Xanadu Theater allows the Taj Mahal to offer
longer running, more established productions that cater to the tastes of the Taj
Mahal's high-end international guests. The Xanadu Theater, together with the
Mark Etess Arena (an approximately 63,000 square-foot exhibition hall facility),
afford the Taj Mahal more flexibility in the use of its larger entertainment
arena for sporting and other headline programs. The Taj Mahal regularly engages
well-known musicians and entertainment personalities and will continue to
emphasize weekend "marquee" events such as Broadway revues, high visibility
sporting events, festivals and contemporary concerts to maintain the highest
level of glamour and excitement. Mid-week uses for the facilities include
convention events and casino marketing sweepstakes.

         Player Development. The Taj Mahal employs sales representatives as a
means of attracting high-end slot and table gaming patrons to the property. The
Taj Mahal currently employs numerous gaming representatives in New Jersey, New
York and other states, as well as several international representatives, to host
special events, offer incentives and contact patrons directly in the United
States, Canada and South America. In addition, targeted marketing to
international clientele will be continued and expanded through new sales
representatives in Latin America, Mexico, Europe, the Far East and the Middle
East.

         The casino hosts assist patrons on the casino floor, make room and
dinner reservations and provide general assistance. They also solicit Trump Card
(a player identification card) sign-ups in order to increase the Taj Mahal's
marketing base.

         The Taj Mahal also plans to continue the development of its slot and
coin programs through direct mail and targeted marketing campaigns emphasizing
the high-end player. "Motorcoach Marketing," the Taj Mahal's customer bus-in
program, has been an important component of player development and will continue
to focus on tailoring its player base and maintaining a low-cost package.

         Promotional Activities. The Trump Card, a player identification card,
constitutes a key element in the Taj Mahal's direct marketing program. Both
table and slot machine players are encouraged to register for and utilize


                                       8
<PAGE>


their personalized Trump Card to earn various complimentaries and incentives
based on their level of play. The Trump Card is inserted during play into a card
reader attached to the table or slot machine for use in computerized rating
systems. These computer systems record data about the cardholder, including
playing preferences, frequency and denomination of play and the amount of gaming
revenues produced. Sales and management personnel are able to monitor the
identity and location of the cardholder and the frequency and denomination of
such cardholder's play. They can also use this information to provide attentive
service to the cardholder while the patron is on the casino floor.

         The Taj Mahal designs promotional offers, conveyed via direct mail and
telemarketing, to patrons expected to provide revenues based upon their
historical gaming patterns. Such information is gathered on slot wagering by the
Trump Card and on table game wagering by the casino games supervisor.
Promotional activities at the Taj Mahal include the mailing of vouchers for
complimentary slot and table game play and utilization of a special events
calendar (e.g., birthday parties, sweepstakes and special competitions) to
promote its gaming operations.

         The Taj Mahal conducts slot machine and table game tournaments in which
cash prizes are offered to a select group of players invited to participate in
the tournament based upon their tendency to play. Special events such as "Slot
Sweepstakes" and "bingo" are designed to increase mid-week business. Players at
these tournaments tend to play at their own expense during "off-hours" of the
tournament. At times, tournament players are also offered special dining and
entertainment privileges that encourage them to remain at the Taj Mahal.

         Credit Policy. Historically, the Taj Mahal has extended credit on a
discretionary basis to certain qualified patrons. For the years ended December
31, 1996, 1997 and 1998, the Taj Mahal's credit play as a percentage of total
dollars wagered was approximately 29.7%, 31.2% and 26.6%, respectively. The Taj
Mahal bases credit limits on each individual patron's creditworthiness, as
determined by an examination of the following criteria: (i) checking each
patron's personal checking account for current and average balances, (ii)
performing a credit check on each domestic patron and (iii) checking each
patron's credit limits and indebtedness at all casinos in the United States as
well as many island casinos. The above determination of a patron's continued
creditworthiness is performed for continuing patrons on a yearly basis or more
frequently if the Taj Mahal deems a re-determination of credit worthiness is
necessary. In addition, depositing of markers is regulated by the State of New
Jersey. Markers in increments of $1,000 or less are deposited in a maximum of 7
days; markers of increments of $1,001 to $5,000 are deposited in a maximum of 14
days; and markers in increments of over $5,001 are deposited in a maximum of 45
days. Markers may be deposited sooner at the request of patrons or at the Taj
Mahal's discretion.

         EMPLOYEES

         Taj Associates has approximately 4,500 full time equivalent employees
for the operation of the Taj Mahal, of whom approximately 1,900 employees are
covered by collective bargaining agreements. The collective bargaining agreement
with Local No. 54 expires on September 15, 1999. Management believes that its
relationships with its employees are satisfactory and that its staffing levels
are sufficient to provide superior service. Certain of Taj Associates' employees
must be licensed or registered under the Casino Control Act.

         TAJ ACQUISITION

         On April 17, 1996, a subsidiary of THCR was merged (the "Taj Merger")
with and into THCR Holding Corp., known prior to April 17, 1996 as Taj Mahal
Holding Corp. As a result of the Taj Merger and the related transactions
discussed below, THCR Holdings acquired Taj Associates. The Taj Acquisition
included, among other things:

(a)      the payment of an aggregate of approximately $31,181,000 in cash and
         the issuance of 323,423 shares of THCR Common Stock to the holders of
         THCR Holding Corp.'s Class A Common Stock, par value $.01 per share;

(b)      the contribution (i) by Trump to Trump AC of all of his direct and
         indirect ownership interests in Taj Associates, pursuant to the
         contribution agreement, dated as of April 17, 1996, among, Trump, Trump
         Casinos, Inc. ("TCI"), TM/GP Corporation, known after the Taj
         Acquisition as THCR/LP


                                       9
<PAGE>


         Corporation ("THCR/LP"), and THCR Holdings in exchange for a
         modification of Trump's limited partnership interest in THCR Holdings
         and (ii) by THCR to Trump AC of all of its direct ownership interests
         in Taj Associates acquired in the Taj Merger;

(c)      the public offerings by (i) THCR of 12,500,000 shares of THCR Common
         Stock (plus 750,000 shares of THCR issued in connection with the
         partial exercise of the underwriters' over-allotment option (together,
         the "1996 Stock Offering")), and (ii) Trump AC and Trump AC Funding of
         the TAC I Notes (collectively with the 1996 Stock Offering, the "1996
         Offerings");

(d)      the redemption, immediately prior to the Taj Merger, of the outstanding
         shares of THCR Holding Corp.'s Class B Common Stock, par value $.01 per
         share, in accordance with its terms, for $.50 per share;

(e)      the redemption of the  outstanding  11.35%  Mortgage  Bonds,  Series A,
         due 1999 issued by Trump Taj Mahal Funding, Inc. (the "Taj Bonds");

(f)      the retirement of the outstanding Plaza Funding's 10-7/8% First
         Mortgage Notes due 2001 (the "Plaza Notes");

(g)      the satisfaction of the indebtedness of Taj Associates under its loan
         agreement with National Westminster Bank USA ("Nat West");

(h)      the purchase of certain real  property used in the  operation of the
         Taj Mahal (the  "Specified  Parcels") that was leased from Taj
         Mahal Realty Corp. ("Realty Corp.");

(i)      the purchase of Trump Plaza East;

(j)      the payment to Bankers Trust Company ("Bankers Trust") to obtain
         releases of liens and guarantees that Bankers Trust had in connection
         with indebtedness owed by Trump to Bankers Trust; and

(k)      the  issuance  to Trump of  warrants  to  purchase  1,800,000  shares
         of THCR  Common  Stock  (the  "Trump Warrants").

TCS

         Trump Casino Services, L.L.C., a New Jersey limited liability company
("TCS"), was formed on June 27, 1996 for the purpose of reducing operating costs
by consolidating certain administrative functions of, and providing certain
services to, each of Plaza Associates and Taj Associates, the owner and operator
of Trump Plaza and the Taj Mahal, respectively. Trump AC and Trump Atlantic City
Corporation ("TACC"), a wholly owned subsidiary of Trump AC, own a 99% and 1%
interest, respectively, in TCS. In June 1996, the CCC granted TCS an initial
casino license which, in July 1997, was renewed through July 1998 and in July
1998 was renewed through July 1999. On July 8, 1996, TCS, Plaza Associates and
Taj Associates entered into an agreement (the "TCS Services Agreement") pursuant
to which TCS provides to each of Taj Associates and Plaza Associates certain
management, financial and other functions and services necessary and incidental
to the respective operation of each of their casino hotels. On October 23, 1996,
TCS, Plaza Associates, Taj Associates and Trump Castle Associates, L.P. ("Castle
Associates"), the owner and operator of Trump Marina Hotel Casino ("Trump
Marina"), entered into an Amended and Restated Services Agreement pursuant to
which TCS also provides those same functions and services to Castle Associates
in connection with the operation of Trump Marina. Trump Communications, L.L.C.
("Trump Communications"), a New Jersey limited liability company and a
subsidiary of TCS, was formed on January 31, 1997 for the purpose of reducing
operating costs by consolidating advertising functions of, and providing certain
services, to each of Plaza Associates, Taj Associates and Castle Associates.

TRADEMARK/LICENSING

         Subject to certain restrictions, THCR has the exclusive right to use
the "Trump" name and likeness in connection with gaming and related activities
pursuant to a trademark license agreement between Trump and


                                       10
<PAGE>


THCR (the "License Agreement"). Pursuant to the License Agreement, Trump granted
to THCR the world-wide right and license to use the names "Trump," "Donald
Trump" and "Donald J. Trump" (including variations thereon, the "Trump Names")
and related intellectual property rights (collectively, the "Marks") in
connection with casino and gaming activities and related services and products.
The License Agreement does not restrict or restrain Trump from the right to use
or further license the Trump Names in connection with services and products
other than casino services and products.

         The license is for a term of the later of: (i) June 2015; (ii) such
time as Trump and his affiliates no longer hold a 15% or greater voting interest
in THCR; or (iii) such time as Trump ceases to be employed or retained pursuant
to an employment, management, consulting or similar services agreement with
THCR. Upon expiration of the term of the license, Trump will grant THCR a
non-exclusive license for a reasonable period of transition on terms to be
mutually agreed upon between Trump and THCR. Trump's obligations under the
License Agreement are secured by a security agreement, pursuant to which Trump
granted THCR a first priority security interest in the Marks for use in
connection with casino services, as well as related hotel, bar and restaurant
services.

CERTAIN INDEBTEDNESS

         TAC I Notes. As a part of the Taj Acquisition, Trump AC and Trump AC
Funding issued in an underwritten offering $1,200,000,000 aggregate principal
amount of Mortgage Notes which mature on May 1, 2006 (the "TAC I Notes"). The
TAC I Notes include restrictive covenants prohibiting or limiting, among other
things, the sale of assets, the making of acquisitions and other investments,
capital expenditures, the incurrence of additional debt and liens and the
payment of dividends and distributions. Non-compliance could result in the
acceleration of such indebtedness.

         TAC II Notes. In December 1997, Trump AC and Funding II issued
$75,000,000 principal amount of the TAC II Notes which mature on May 1, 2006.
The TAC II Notes include restrictive covenants prohibiting or limiting, among
other things, the sale of assets, the making of acquisitions and other
investments, capital expenditures, the incurrence of additional debt and liens
and the payment of dividends and distributions. Non-compliance could result in
the acceleration of such indebtedness.

         TAC III Notes. In December 1997, Trump AC and Funding III issued
$25,000,000 principal amount of the TAC III Notes which mature on May 1, 2006.
The TAC III Notes include restrictive covenants prohibiting or limiting, among
other things, the sale of assets, the making of acquisitions and other
investments, capital expenditures, the incurrence of additional debt and liens
and the payment of dividends and distributions. Non-compliance could result in
the acceleration of such indebtedness.

         Plaza Notes. The Plaza Notes were retired in connection with the Taj
Acquisition. The Plaza Notes were issued by Plaza Funding, with Plaza Associates
providing a full and unconditional guaranty thereof. The Plaza Notes were
retired through repurchase and defeasance and Plaza Funding and Plaza Associates
were released from their obligations under all financial and negative covenants
and certain other provisions contained in the indenture under which the Plaza
Notes were issued (the "Plaza Note Indenture"), and the Plaza Note Security (as
defined in the Plaza Note Indenture) was released against the deposit of cash or
U.S. government obligations in an amount sufficient to effect the redemption on
June 15, 1998 of all of the Plaza Notes so defeased, at a redemption price of
105% of the principal amount thereof, together with accrued and unpaid interest
to such date. Additionally, Plaza Funding irrevocably instructed the Plaza Note
Trustee (as defined in the Plaza Note Indenture) to provide notice of such
redemption not less than 30 or more than 60 days prior to June 15, 1998.

         Other Indebtedness. In addition to the foregoing, Trump AC's long-term
indebtedness includes approximately $6.3 million of indebtedness, including, as
of December 31, 1998, approximately $1.3 million due under outstanding mortgage
notes described above.

ATLANTIC CITY MARKET

         The Atlantic City Market has demonstrated continued growth despite the
recent proliferation of new gaming venues across the country. The 12 casino
hotels in Atlantic City generated approximately $4.05 billion in gaming revenues
in 1998, an approximately 3.3% increase over 1997 gaming revenues of
approximately $3.91


                                       11
<PAGE>


billion. From 1992 to 1998, total gaming revenues in Atlantic City have
increased approximately 25.8%, while hotel rooms increased by 34.0% during that
period. Although total visitor volume to Atlantic City remained relatively
constant in 1998, the volume of bus customers increased to 9.9 million in 1998,
still representing a decline from 11.7 million in 1991. The volume of customers
traveling to Atlantic City has grown from 20.4 million in 1992 to 24.4 million
in 1998.

         Casino revenue growth in Atlantic City has lagged behind that of other
traditional gaming markets, principally Las Vegas, for the last five years.
Management believes that this relatively slower growth is primarily attributable
to two key factors. First, there were no significant additions to hotel capacity
in Atlantic City until 1996. Las Vegas visitor volumes have increased, in part,
due to the continued addition of new hotel capacity. Both markets have exhibited
a strong correlation between hotel room inventory and total casino revenues.
Secondly, the regulatory environment and infrastructure problems in Atlantic
City have made it more difficult and costly to operate. Total regulatory costs
and tax levies in New Jersey have exceeded those in Nevada since inception, and
there is generally a higher level of regulatory oversight in New Jersey than in
Nevada. The infrastructure problems, manifested by impaired accessibility of the
casinos, downtown Atlantic City congestion and the condition of the areas
surrounding the casinos have made Atlantic City less attractive to the gaming
customer.

         Total Atlantic City slot revenues increased 3.9% in 1998, continuing a
trend of increases over the past six years. From 1992 through 1998, slot revenue
growth in Atlantic City has averaged 5.6% per year. Total table game revenue
increased 2.1% in 1998, while table game revenue from 1992 to 1998 has increased
on average 1.0% per year. Management believes the slow growth in table revenue
is primarily attributable to two factors. First, the slot product has been
significantly improved over the last five years. Bill acceptors, new slot
machines, video poker and blackjack and other improvements have increased the
popularity of slot play among a wider universe of casino patrons. Casino
operators in Atlantic City have added slot machines in favor of table games due
to increased public acceptance of slot play and due to slot machines'
comparatively higher profitability as a result of lower labor and support costs.
Since 1992, the number of slot machines in Atlantic City has increased 58.8%,
while the number of table games has increased by 6.4%. Slot revenues increased
from 66% of total casino revenues in 1992 to 69.8% in 1998. The second reason
for historic slow growth in table revenue is that table game players are
typically higher end players and are more likely to be interested in overnight
stays and other amenities. During peak season and weekends, room availability in
Atlantic City is currently inadequate to meet demand, making it difficult for
casino operators to aggressively promote table play.

         The regulatory environment in Atlantic City has improved over the past
several years. Most significantly, 24-hour gaming has been approved, poker and
keno have been added and regulatory burdens have been reduced. In particular,
comprehensive amendments to New Jersey gaming laws were made in January 1995,
which have eliminated duplicative regulatory oversight and channeled a certain
portion of operator's funds through 2003 from regulatory support into uses of
the CRDA. Administrative costs of regulation will be reduced while increasing
funds will be available for new development in Atlantic City. In addition, in
1994, legislation was enacted which eliminated the requirement that a casino
consist of a "single room" in a casino hotel. A casino may now consist of "one
or more locations or rooms" approved by the CCC for casino gaming.

         Atlantic City's new convention center, with approximately 500,000
square feet of exhibit and pre-function space, 45 meeting rooms, food-service
facilities and a 1,600-car underground parking garage, is the largest exhibition
space between New York City and Washington, D.C. It is located at the base of
the Atlantic City Expressway and opened in May 1997. Atlantic City's old
convention center is located on The Boardwalk, physically connected to the Trump
Plaza and owned by the New Jersey Sports and Exposition Authority (the "NJSEA").
Its East Hall, which was completed in 1929 and is listed on the National
Register of Historic Places will, with funding approved by the CRDA in February
1999, undergo a $72 million renovation to be completed by the summer of 2001.
These improvements, while preserving the historic features of this landmark,
will convert it into a modern special events venue and will include new seating
for 10,000 to 14,000 in its main auditorium and new lighting, sound and
television-ready wiring systems. Construction will halt in both September 1999
and September 2000 to avoid disrupting the Miss America Pageant presentations
during those years.

         In addition to the planned casino expansions, major infrastructure
improvements have been completed. The CRDA oversaw the development of the $88
million "Grand Boulevard" corridor that links the new convention center with The
Boardwalk. The project was completed in early 1998. Furthermore, as set forth in
a November


                                       12
<PAGE>


1998 agreement with the CRDA, a $20.8 million beautification project is now in
progress for the five block Virginia and Maryland Avenue corridors which connect
the thirty acre Boardwalk site of the Taj Mahal to Absecon Boulevard (Route 30),
one of Atlantic City's principal access roadways. This comprehensive project
includes the repair, resurfacing and resignalizing of these roads and the
installation of new roadside lighting, the acquisition and demolition of
deteriorated structures on Virginia Avenue and, to a lesser extent, Maryland
Avenue, and the installation and maintenance of roadside landscaping on those
sites, the construction of a twenty-two unit subdivision of two-story, single
unit and duplex residences which will front on opposing sides of Virginia
Avenue, and the improvement of the exterior facades of selected Virginia Avenue
and other structures, with consents of the owners, to achieve a harmony and
continuity of design among closely proximate properties. Construction of the
roadway and housing elements of this project is expected to commence during or
about the summer of 1999.

         Management believes that these gaming regulatory reforms will serve to
permit future reductions in operating expenses of casinos in Atlantic City and
to increase the funds available for additional infrastructure development
through the CRDA. Due principally to an improved regulatory environment, general
improvement of economic conditions and high occupancy rates, significant
investment in the Atlantic City Market has been initiated and/or announced.
Management believes that these increases in hotel capacity, together with
infrastructure improvements, will be instrumental in stimulating future revenue
growth in the Atlantic City Market. See "--Competition."

COMPETITION

         Atlantic City. Competition in the Atlantic City Market is intense.
Trump Plaza, the Taj Mahal and Trump Marina (the "Atlantic City Properties")
compete with other casino hotels located in Atlantic City and with each other.
At present, there are 12 casino hotels located in Atlantic City, including the
Atlantic City Properties, all of which compete for patrons. In addition, there
are several sites on The Boardwalk and in the Marina District on which casino
hotels could be built in the future and various applications for casino licenses
have been filed and announcements with respect thereto made from time to time
(including a casino resort joint venture (the "Mirage Joint Venture") between
Mirage and the Boyd Gaming Corporation to be built in the Marina District which
will contain 1,200 rooms and is scheduled to be completed in the spring of 2002,
and a casino resort by MGM Grand, Inc. to be built on The Boardwalk after MGM
Grand, Inc. purchases the land chosen as the site for the casino resort).
Although management is not aware of any current construction on such sites by
third parties, infrastructure improvements in the area have begun. Mirage
intends to build a casino resort called LeJardin which will contain 3,500-4,000
rooms and will be linked to the resort created as a result of the Mirage Joint
Venture. Substantial new expansion and development activity has recently been
completed or has been announced in Atlantic City, including the expansion at
Harrah's, Hilton, Caesar's, Resorts, Tropicana and Bally's Wild West Casino,
which intensifies competitive pressures in the Atlantic City Market. While
management believes that the addition of hotel capacity would be beneficial to
the Atlantic City Market generally, there can be no assurance that such
expansion would not be materially disadvantageous to the Atlantic City
Properties. There also can be no assurance that the Atlantic City development
projects which are planned or are underway will be completed.

         Total Atlantic City gaming revenues have increased over the past five
years, although at varying rates. In 1993, nine casinos experienced increased
gaming revenues compared to 1992 (including the Taj Mahal), while three casinos
(including Trump Plaza) experienced decreased revenues. In 1994, ten casinos
experienced increased gaming revenues compared to 1993 (including the Taj
Mahal), while two casinos (including Trump Plaza) experienced decreased
revenues. During 1995, all 12 casinos experienced increased gaming revenues
compared to 1994. During 1996, six casinos (including Trump Plaza and the Taj
Mahal) experienced increased gaming revenues compared to 1995, while six casinos
experienced decreased revenues. In 1997, eight casinos (including Trump Plaza
and the Taj Mahal) experienced increased gaming revenues compared to 1996, while
four casinos experienced decreased revenues. In 1998, seven casinos experienced
increased gaming revenues compared to 1997 (including Trump Plaza), while five
casinos experienced decreased revenues (including the Taj Mahal).

         In 1992, the Atlantic City casino industry experienced an increase of
6.9% in gaming revenues per square foot from 1991. Gaming revenues per square
foot increased by 1.4% for 1993 (excluding poker and race simulcast rooms, which
were introduced for the first time in such year), compared to 1992. In 1994,
gaming revenues per square foot decreased 2.5% (or 4.5% including square footage
devoted to poker, keno and race simulcasting). The 1994 decline was due, in
part, to the increase in casino floor space in Atlantic City as a result of
expansion of a


                                       13
<PAGE>


number of casinos and to the severe weather conditions which affected the
Northeast during the winter of 1994. Between April 30, 1993 and December 31,
1995, many operators in Atlantic City expanded their facilities in anticipation
of and in connection with the June 1993 legalization of simulcasting and poker,
increasing total gaming square footage by approximately 181,200 square feet
(23.3%) of which approximately 136,200 square feet is currently devoted to
poker, keno and race simulcasting. During this same period, 172 poker tables and
5,500 slot machines were added. During 1996, a total of approximately 65,870
square feet of casino floor space was added, an increase of 47.2%, including
Trump World's Fair's 49,211 square feet. Slot machines increased by
approximately 1,911 units during 1996 and table games increased by approximately
44 units during 1996, of which Trump World's Fair accounted for 1,518 units and
16 units, respectively. During 1997, a total of approximately 51,870 square feet
of casino floor space was added. Slot machines increased by approximately 2,153
units and table games increased by approximately 82 units during 1997. During
1998, a total of approximately 38,350 square feet of casino floor space was
added. Slot machines increased by approximately 822 units and table games
decreased by approximately 71 units during 1998.

         The Atlantic City Properties also compete, or will compete, with
facilities in the northeastern and mid-Atlantic regions of the United States at
which casino gaming or other forms of wagering are currently, or in the future
may be, authorized. To a lesser extent, the Atlantic City Properties face
competition from gaming facilities nationwide, including land-based, cruise
line, riverboat and dockside casinos located in Colorado, Illinois, Indiana,
Iowa, Louisiana, Mississippi, Missouri, Nevada, South Dakota, Ontario (Windsor
and Niagara Falls), the Bahamas, Puerto Rico and other locations inside and
outside the United States, and from other forms of legalized gaming in New
Jersey and in its surrounding states such as lotteries, horse racing (including
off-track betting), jai alai, bingo and dog racing, and from illegal wagering of
various types. New or expanded operations by other persons can be expected to
increase competition and could result in the saturation of certain gaming
markets. In September 1995, New York introduced a keno lottery game, which is
played on video terminals that have been set up in approximately 1,800 bars,
restaurants and bowling alleys across the state. Bay Cruises is operating a
gambling cruise ship where patrons are taken from a pier in Sheepshead Bay in
Brooklyn, New York to international waters to gamble. In September 1997, another
gambling cruise ship was launched off the coast of Montauk, New York. On April
24, 1998 Freeport Casino Cruises began operating a gambling ship in Long Island,
New York. Manhattan Cruises, a company offering gambling cruises departing from
Manhattan, New York City since January 28, 1998, suspended operations in early
May 1998, but has announced plans to resume operations shortly. Other companies
(including South Shore Cruise Lines and Circle Line) are currently seeking
permission to operate similar cruises in the New York City area. On December 5,
1997, the mayor of New York City proposed the construction of a casino on
Governors Island, located in the middle of New York Harbor; however, the
proposal would require an amendment to the New York State Constitution and the
sale of the island to New York by the federal government. In Delaware, a total
of approximately 2,600 slot machines were installed at three horse racetracks in
1996. Initial legislation allowed a maximum of 1,000 slot machines at each of
the three racetracks. In 1998, the Delaware legislature approved a bill which
would more than double the number of slot machines allowed at the three
racetracks. At the end of 1998, there was a total of approximately 3,000 slot
machines installed and the additional approved machines have become operational
during the first quarter of 1999. West Virginia also permits slot machines at
racetracks, and track owners in several other states, including Maryland and
Pennsylvania, are seeking to do the same. In December 1996, the temporary Casino
Niagara opened in Niagara Falls, Ontario. Ontario officials expect that
two-thirds of Casino Niagara's patrons will come from the United States,
predominantly from western New York. In February 1998, the Ontario Casino
Commission designated a consortium whose principal investor is Hyatt Hotels
Corporation as the preferred developer of the permanent Casino Niagara.
Moreover, the Atlantic City Properties may also face competition from various
forms of internet gambling.

         In addition to competing with other casino hotels in Atlantic City and
elsewhere, by virtue of their proximity to each other and the common aspects of
certain of their respective marketing efforts, including the common use of the
"Trump" name, the Atlantic City Properties compete directly with each other for
gaming patrons.

         Other Competition. In addition, the Atlantic City Properties and the
Indiana Riverboat face competition from casino facilities in a number of states
operated by federally recognized Native American tribes. Pursuant to the Indian
Gaming Regulatory Act ("IGRA"), which was passed by Congress in 1988, any state
which permits casino-style gaming (even if only for limited charity purposes) is
required to negotiate gaming compacts with


                                       14
<PAGE>


federally recognized Native American tribes. Under IGRA, Native American tribes
enjoy comparative freedom from regulation and taxation of gaming operations,
which provides them with an advantage over their competitors, including the
Atlantic City Properties and the Indiana Riverboat. In March 1996, the United
States Supreme Court struck down a provision of IGRA which allowed Native
American tribes to sue states in federal court for failing to negotiate gaming
compacts in good faith. Management cannot predict the impact of this decision on
the ability of Native American tribes to negotiate compacts with states.

         In 1991, the Mashantucket Pequot Nation opened Foxwoods, a casino
facility in Ledyard, Connecticut, located in the far eastern portion of such
state, an approximately three-hour drive from New York City and an approximately
two and one- half hour drive from Boston, which currently offers 24-hour gaming
and contains approximately 6,000 slot machines. An expansion at Foxwoods,
completed in April 1998, includes additional hotel rooms, restaurants and retail
stores. A high-speed ferry operates seasonally between New York City and
Foxwoods. The Mashantucket Pequot Nation has also announced plans for a
high-speed train linking Foxwoods to the interstate highway and an airport
outside Providence, Rhode Island. In addition, in October 1996, the Mohegan
Nation opened the Mohegan Sun Resort in Uncasville, Connecticut, located 10
miles from Foxwoods. Developed by Sun International Hotels, Ltd., the Mohegan
Sun Resort has 3,000 slot machines. The Mohegan Nation has announced plans for
an expansion of the casino facilities and the construction of a hotel,
convention center and entertainment center to be completed in the fall of 2001.
In addition, the Eastern Pequots are seeking formal recognition as a Native
American tribe for the purpose of opening a casino in the North Stonington area.
There can be no assurance that any continued expansion of gaming operations of
the Mashantucket Pequot Nation, the gaming operations of the Mohegan Nation or
the commencement of gaming operations by the Eastern Pequots would not have a
materially adverse impact on the operations of the Atlantic City Properties.

         A group in Cumberland County, New Jersey calling itself the "Nanticoke
Lenni Lenape" tribe has filed a notice of intent with the Bureau of Indian
Affairs seeking formal federal recognition as a Native American tribe. In March
1998, the Oklahoma-based Lenape/Delaware Indian Nation, which originated in New
Jersey and already has federal recognition, filed a lawsuit against the city of
Wildwood claiming that the city is built on ancestral land. The city of
Wildwood, which has supported the plan to build a casino, has entered settlement
negotiations, offering to deed municipal land to the tribe. The plan, which is
opposed by the State of New Jersey, required state and federal approval. In
early 1999, however, the Delaware Indian Nation's lawsuit was dismissed. In July
1993, the Oneida Nation opened a casino featuring 24-hour table gaming and
electronic gaming systems, but without slot machines, near Syracuse, New York.
The Oneida Nation opened a hotel in October 1997 that included expanded gaming
facilities, and has constructed a golf course and convention center.
Representatives of the St. Regis Mohawk Nation signed a gaming compact with New
York State officials for the opening of a casino, without slot machines, in the
northern portion of the state close to the Canadian border. The St. Regis
Mohawks have also announced their intent to open a casino at the Monticello Race
Track in the Catskill Mountains region of New York; however, any Native American
gaming operation in the Catskills is subject to the approval of the Governor of
New York. The Seneca Nation plans to negotiate with New York State to open a
casino in Western New York; however, the proposed casino would be subject to the
purchase of additional property that is declared reservation territory by the
federal government. The Narragansett Nation of Rhode Island, which has federal
recognition, is seeking to open a casino in Rhode Island. The Aquinnah Wampanoag
Tribe is seeking to open a casino in Massachusetts. Other Native American
nations are seeking federal recognition, land and negotiation of gaming compacts
in New York, Pennsylvania, Connecticut and other states near Atlantic City.

         State Legislation. Legislation permitting other forms of casino gaming
has been proposed, from time to time, in various states, including those
bordering New Jersey. Six states have presently legalized riverboat gambling
while others are considering its approval, including New York and Pennsylvania.
Several states are considering or have approved large scale land-based casinos.
Additionally, since 1993, the gaming space in Las Vegas has expanded
significantly, with additional capacity planned and currently under
construction. The operations of the Atlantic City Properties could be adversely
affected by such competition, particularly if casino gaming were permitted in
jurisdictions near or elsewhere in New Jersey or in other states in the
Northeast. In December 1993, the Rhode Island Lottery Commission approved the
addition of slot machine games on video terminals at Lincoln Greyhound Park and
Newport Jai Alai, where poker and blackjack have been offered for over two
years. Currently, casino gaming, other than Native American gaming, is not
allowed in other areas of New Jersey or in Connecticut, New York or
Pennsylvania. On November 17, 1995, a proposal to allow casino gaming in
Bridgeport, Connecticut was voted down by that state's Senate. On June 18, 1998,
the New York State Senate and


                                       15
<PAGE>


General Assembly failed to enact a constitutional amendment to legalize casino
gambling in certain areas of New York State, effectively postponing any
referendum to authorize such a constitutional amendment until not earlier than
November 2001. To the extent that legalized gaming becomes more prevalent in New
Jersey or other jurisdictions near Atlantic City, competition would intensify.
In particular, proposals have been introduced to legalize gaming in other
locations, including Philadelphia, Pennsylvania. In February 1999, the
Pennsylvania State General Assembly approved a bill allowing in May 1999 a
non-binding public referendum on a variety of legalized gaming issues including
riverboats, video poker in taverns and slot machines at racetracks, but the
Pennsylvania State Senate failed to enact the General Assembly Bill. In
addition, legislation has from time to time been introduced in the New Jersey
State Legislature relating to types of statewide legalized gaming, such as video
games with small wagers. To date, no such legislation, which may require a state
constitutional amendment, has been enacted. Management is unable to predict
whether any such legislation, in New Jersey, Indiana, Illinois or elsewhere,
will be enacted or whether, if passed, it would have a material adverse impact
on the Atlantic City Properties.

GAMING AND OTHER LAWS AND REGULATIONS

         The following is only a summary of the applicable provisions of the
Casino Control Act and certain other laws and regulations. It does not purport
to be a full description thereof and is qualified in its entirety by reference
to the Casino Control Act and such other laws and regulations. Unless otherwise
indicated, all references to "Trump Plaza" include (a) Trump Plaza's main tower,
including Trump Plaza East and (b) Trump World's Fair.

         New Jersey Gaming Regulations

         In general, the Casino Control Act and its implementing regulations
contain detailed provisions concerning, among other things, the granting and
renewal of casino licenses; the suitability of the approved hotel facility and
the amount of authorized casino space and gaming units permitted therein; the
qualification of natural persons and entities related to the casino licensee;
the licensing of certain employees and vendors of casino licensees; the rules of
the games; the selling and redeeming of gaming chips; the granting and duration
of credit and the enforceability of gaming debts; management control procedures,
accounting and cash control methods and reports to gaming agencies; the security
standards; the manufacture and distribution of gaming equipment; the
simulcasting of horse races by casino licensees; equal employment opportunities
for employees of casino operators, contractors of casino facilities and others;
and advertising, entertainment and alcoholic beverages.

         Casino Control Commission. The ownership and operation of casino/hotel
facilities in Atlantic City are the subject of strict state regulation under the
Casino Control Act. The CCC is empowered to regulate a wide spectrum of gaming
and non-gaming related activities and to approve the form of ownership and
financial structure of not only a casino licensee, but also its entity
qualifiers and intermediary and holding companies and any other related entity
required to be qualified ("CCC Regulations").

         Operating Licenses. In June 1995, the CCC renewed Taj Associates'
license to operate the Taj Mahal through March 1999, renewed Castle Associates'
license to operate Trump Marina through May 1999, and renewed Plaza Associates'
license to operate Trump Plaza through June 1999. In May 1996, the CCC granted
Plaza Associates a license to operate Trump World's Fair through May 1997, and
in December 1996, the CCC approved Plaza Associates' application to operate
Trump Plaza and Trump World's Fair under one casino license through May 1999. In
June 1996, the CCC granted TCS a casino license through July 1997, which license
has been renewed annually through July 1999. Timely applications have been filed
for renewal of the Plaza Associates, Taj Associates, Castle Associates and TCS
casino licenses, and a petition has been filed with the CCC seeking
consolidation of the hearings on the casino license renewals. It is anticipated
that the CCC will act favorably on the petition seeking consolidation of the
license renewal hearings, and extend the casino licenses allowing for a
consolidated hearing on the license renewals to be conducted in June 1999.

         Casino License. No casino hotel facility may operate unless the
appropriate license and approvals are obtained from the CCC, which has broad
discretion with regard to the issuance, renewal, revocation and suspension of
such licenses and approvals, which are non-transferable. The qualification
criteria with respect to the holder of a casino license include its financial
stability, integrity and responsibility; the integrity and adequacy of


                                       16
<PAGE>


its financial resources which bear any relation to the casino project; its good
character, honesty and integrity; and the sufficiency of its business ability
and casino experience to establish the likelihood of a successful, efficient
casino operation. The casino licenses currently held by Plaza Associates, Taj
Associates and Castle Associates are renewable for periods of up to four years
and the license held by TCS is renewable for a period of up to one year. The CCC
may reopen licensing hearings at any time, and must reopen a licensing hearing
at the request of the Division of Gaming Enforcement (the "Division").

         Each casino license, except the TCS license, entitles the holder to
operate one casino. Further, no person may be the holder of a casino license if
the holding of such license will result in undue economic concentration in
Atlantic City casino operations by that person. On May 17, 1995, the CCC adopted
a regulation defining the criteria for determining undue economic concentration
which outlines the content of existing CCC precedent with respect to the
subject. In its May 18, 1995 declaratory rulings with respect to Plaza
Associates' petition, the CCC, among other things, determined that Plaza
Associates' operation of Trump World's Fair casino space would not result in
undue economic concentration in Atlantic City casino operations.

         To be considered financially stable, a licensee must demonstrate the
following ability: to pay winning wagers when due; to achieve an annual gross
operating profit; to pay all local, state and federal taxes when due; to make
necessary capital and maintenance expenditures to insure that it has a superior
first-class facility; and to pay, exchange, refinance or extend debts which will
mature or become due and payable during the license term.

         In the event a licensee fails to demonstrate financial stability, the
CCC may take such action as it deems necessary to fulfill the purposes of the
Casino Control Act and protect the public interest, including: issuing
conditional licenses, approvals or determinations; establishing an appropriate
cure period; imposing reporting requirements; placing restrictions on the
transfer of cash or the assumption of liabilities; requiring reasonable reserves
or trust accounts; denying licensure; or appointing a conservator. See
"--Conservatorship."

         Management believes that it has adequate financial resources to meet
the financial stability requirements under the Casino Control Act for the
foreseeable future.

         Pursuant to the Casino Control Act, CCC Regulations and precedent, no
entity may hold a casino license unless each officer, director, principal
employee, person who directly or indirectly holds any beneficial interest or
ownership in the licensee, each person who in the opinion of the CCC has the
ability to control or elect a majority of the board of directors of the licensee
(other than a banking or other licensed lending institution which makes a loan
or holds a mortgage or other lien acquired in the ordinary course of business)
and any lender, underwriter, agent or employee of the licensee or other person
whom the CCC may consider appropriate, obtains and maintains qualification
approval from the CCC. Qualification approval means that such person must, but
for residence, individually meet the qualification requirements as a casino key
employee.

         Control Persons. An entity qualifier or intermediary or holding
company, such as Trump AC, Trump AC Holding, Plaza Funding or TACC is required
to register with the CCC and meet the same basic standards for approval as a
casino licensee; provided, however, that the CCC, with the concurrence of the
Director of the Division, may waive compliance by a publicly-traded corporate
holding company with the requirement that an officer, director, lender,
underwriter, agent or employee thereof, or person directly or indirectly holding
a beneficial interest or ownership of the securities thereof, individually
qualify for approval under casino key employee standards so long as the CCC and
the Director of the Division are, and remain, satisfied that such officer,
director, lender, underwriter, agent or employee is not significantly involved
in the activities of the casino licensee, or that such security holder does not
have the ability to control the publicly-traded corporate holding company or
elect one or more of its directors. Persons holding five percent or more of the
equity securities of such holding company are presumed to have the ability to
control the company or elect one or more of its directors and will, unless this
presumption is rebutted, be required to individually qualify. Equity securities
are defined as any voting stock or any security similar to or convertible into
or carrying a right to acquire any security having a direct or indirect
participation in the profits of the issuer.

         Financial Sources. The CCC may require all financial backers,
investors, mortgagees, bond holders and holders of notes or other evidence of
indebtedness, either in effect or proposed, which bear any relation to any
casino project, including holders of publicly-traded securities of an entity
which holds a casino license or is an


                                       17
<PAGE>


entity qualifier, subsidiary or holding company of a casino licensee (a
"Regulated Company"), to qualify as financial sources. In the past, the CCC has
waived the qualification requirement for holders of less than 15% of an issue of
publicly-traded mortgage bonds so long as the bonds remained widely distributed
and freely traded in the public market and the holder has no ability to control
the casino licensee. The CCC may require holders of less than 15% of a series of
debt to qualify as financial sources even if not active in the management of the
issuer or casino licensee.

         Institutional Investors. An institutional investor ("Institutional
Investor") is defined by the Casino Control Act as any retirement fund
administered by a public agency for the exclusive benefit of federal, state or
local public employees; any investment company registered under the Investment
Company Act of 1940, as amended; any collective investment trust organized by
banks under Part Nine of the Rules of the Comptroller of the Currency; any
closed end investment trust; any chartered or licensed life insurance company or
property and casualty insurance company; any banking and other chartered or
licensed lending institution; any investment advisor registered under the
Investment Advisers Act of 1940, as amended; and such other persons as the CCC
may determine for reasons consistent with the policies of the Casino Control
Act.

         An Institutional Investor may be granted a waiver by the CCC from
financial source or other qualification requirements applicable to a holder of
publicly-traded securities, in the absence of a prima facie showing by the
Division that there is any cause to believe that the holder may be found
unqualified, on the basis of CCC findings that: (i) its holdings were purchased
for investment purposes only and, upon request by the CCC, it files a certified
statement to the effect that it has no intention of influencing or affecting the
affairs of the issuer, the casino licensee or its holding or intermediary
companies; provided, however, that the Institutional Investor will be permitted
to vote on matters put to the vote of the outstanding security holders; and (ii)
if (x) the securities are debt securities of a casino licensee's holding or
intermediary companies or another subsidiary company of the casino licensee's
holding or intermediary companies which is related in any way to the financing
of the casino licensee and represent either (A) 20% or less of the total
outstanding debt of the company or (B) 50% or less of any issue of outstanding
debt of the company, (y) the securities are equity securities and represent less
than 10% of the equity securities of a casino licensee's holding or intermediary
companies or (z) the securities so held exceed such percentages, upon a showing
of good cause. There can be no assurance, however, that the CCC will make such
findings or grant such waiver and, in any event, an Institutional Investor may
be required to produce for the CCC or the Antitrust Division of the Department
of Justice upon request, any document or information which bears any relation to
such debt or equity securities.

         Generally, the CCC requires each institutional holder seeking waiver of
qualification to execute a certification to the effect that (i) the holder has
reviewed the definition of Institutional Investor under the Casino Control Act
and believes that it meets the definition of Institutional Investor; (ii) the
holder purchased the securities for investment purposes only and holds them in
the ordinary course of business; (iii) the holder has no involvement in the
business activities of and no intention of influencing or affecting, the affairs
of the issuer, the casino licensee or any affiliate; and (iv) if the holder
subsequently determines to influence or affect the affairs of the issuer, the
casino licensee or any affiliate, it shall provide not less than 30 days' prior
notice of such intent and shall file with the CCC an application for
qualification before taking any such action. If an Institutional Investor
changes its investment intent, or if the CCC finds reasonable cause to believe
that it may be found unqualified, the Institutional Investor may take no action
with respect to the security holdings, other than to divest itself of such
holdings, until it has applied for interim casino authorization and has executed
a trust agreement pursuant to such an application. See "--Interim Casino
Authorization."

         Ownership and Transfer of Securities. The Casino Control Act imposes
certain restrictions upon the issuance, ownership and transfer of securities of
a Regulated Company and defines the term "security" to include instruments which
evidence a direct or indirect beneficial ownership or creditor interest in a
Regulated Company including, but not limited to, mortgages, debentures, security
agreements, notes and warrants. Trump AC, Trump AC Funding, Funding II and
Funding III are deemed to be Regulated Companies, and instruments evidencing a
beneficial ownership or creditor interest therein, including a partnership
interest, are deemed to be the securities of a Regulated Company.

         If the CCC finds that a holder of such securities is not qualified
under the Casino Control Act, it has the right to take any remedial action it
may deem appropriate, including the right to force divestiture by such


                                       18
<PAGE>


disqualified holder of such securities. In the event that certain disqualified
holders fail to divest themselves of such securities, the CCC has the power to
revoke or suspend the casino license affiliated with the Regulated Company which
issued the securities. If a holder is found unqualified, it is unlawful for the
holder (i) to exercise, directly or through any trustee or nominee, any right
conferred by such securities or (ii) to receive any dividends or interest upon
such securities or any remuneration, in any form, from its affiliated casino
licensee for services rendered or otherwise.

         With respect to non-publicly-traded securities, the Casino Control Act
and CCC regulations require that the corporate charter or partnership agreement
of a Regulated Company establish a right in the CCC of prior approval with
regard to transfers of securities, shares and other interests and an absolute
right in the Regulated Company to repurchase at the market price or the purchase
price, whichever is the lesser, any such security, share or other interest in
the event that the CCC disapproves a transfer. With respect to publicly-traded
securities, such corporate charter or partnership agreement is required to
establish that any such securities of the entity are held subject to the
condition that, if a holder thereof is found to be disqualified by the CCC, such
holder shall dispose of such securities.

         Under the terms of the indentures which govern the TAC I Notes (the
"TAC I Note Indenture"), the TAC II Notes (the "TAC II Note Indenture") and the
TAC III Notes (the "TAC III Note Indenture"), if a holder of such securities
does not qualify under the Casino Control Act when required to do so, such
holder must dispose of its interest in such securities, and Trump AC, Trump AC
Funding, Funding II and Funding III may redeem the securities at the lesser of
the outstanding amount or fair market value.

         Interim Casino Authorization. Interim casino authorization is a process
which permits a person who enters into a contract to obtain property relating to
a casino operation or who obtains publicly-traded securities relating to a
casino licensee to close on the contract or own the securities until plenary
licensure or qualification. During the period of interim casino authorization,
the property relating to the casino operation or the securities is held in
trust.

         Whenever any person enters into a contract to transfer any property
which relates to an ongoing casino operation, including a security of the casino
licensee or a holding or intermediary company or entity qualifier, under
circumstances which would require that the transferee obtain licensure or be
qualified under the Casino Control Act, and that person is not already licensed
or qualified, the transferee is required to apply for interim casino
authorization. Furthermore, except as set forth below with respect to publicly
traded securities, the closing or settlement date in the contract at issue may
not be earlier that the 121st day after the submission of a complete application
for licensure or qualification together with a fully executed trust agreement in
a form approved by the CCC. If, after the report of the Division and a hearing
by the CCC, the CCC grants interim authorization, the property will be subject
to a trust. If the CCC denies interim authorization, the contract may not close
or settle until the CCC makes a determination on the qualifications of the
applicant. If the CCC denies qualification, the contract will be terminated for
all purposes and there will be no liability on the part of the transferor.

         If, as the result of a transfer of publicly-traded securities of a
licensee, a holding or intermediary company or entity qualifier of a licensee,
or a financing entity of a licensee, any person is required to qualify under the
Casino Control Act, the person is required to file an application for licensure
or qualification within 30 days after the CCC determines that qualification is
required or declines to waive qualification. The application must include a
fully executed trust agreement in a form approved by the CCC or, in the
alternative, within 120 days after the CCC determines that qualification is
required, the person whose qualification is required must divest such securities
as the CCC may require to order to remove the need to qualify.

         The CCC may grant interim casino authorization where it finds by clear
and convincing evidence that: (i) statements of compliance have been issued
pursuant to the Casino Control Act; (ii) the casino hotel is an approved hotel
in accordance with the Casino Control Act; (iii) the trustee satisfies
qualification criteria applicable to key casino employees, except for residency;
and (iv) interim operation will best serve the interests of the public.

         When the CCC finds the applicant qualified, the trust will terminate.
If the CCC denies qualification to a person who has received interim casino
authorization, the trustee is required to endeavor, and is authorized, to sell,


                                       19
<PAGE>


assign, convey or otherwise dispose of the property subject to the trust to such
persons who are licensed or qualified or shall themselves obtain interim casino
authorization.

         Where a holder of publicly-traded securities is required, in applying
for qualification as a financial source or qualifier, to transfer such
securities to a trust in application for interim casino authorization and the
CCC thereafter orders that the trust become operative: (i) during the time the
trust is operative, the holder may not participate in the earnings of the casino
hotel or receive any return on its investment or debt security holdings; and
(ii) after disposition, if any, of the securities by the trustee, proceeds
distributed to the unqualified holder may not exceed the lower of their actual
cost to the unqualified holder or their value calculated as if the investment
had been made on the date the trust became operative.

         Approved Hotel Facilities. The CCC may permit an existing licensee to
increase its casino space if the licensee agrees to add a prescribed number of
qualifying sleeping units within two years after the commencement of gaming
operations in the additional casino space. However, if the casino licensee does
not fulfill such agreement due to conditions within its control, the licensee
will be required to close the additional casino space, or any portion thereof
that the CCC determines should be closed.

         Persons who are parties to the lease for an approved hotel building or
who have an agreement to lease a building which may in the judgment of the CCC
become an approved hotel building are required to hold a casino license unless
the CCC, with the concurrence of the Attorney General of the State of New
Jersey, determines that such persons do not have the ability to exercise
significant control over the building or the operation of the casino therein.

         Unless otherwise determined by the CCC, agreements to lease an approved
hotel building or the land under the building must be for a durational term
exceeding 30 years, must concern 100% of the entire approved hotel building or
the land upon which it is located and must include a buy-out provision
conferring upon the lessee the absolute right to purchase the lessor's entire
interest for a fixed sum in the event that the lessor is found by the CCC to be
unsuitable.

         Agreement for Management of Casino. Each party to an agreement for the
management of a casino is required to hold a casino license, and the party who
is to manage the casino must own at least 10% of all the outstanding equity
securities of the casino licensee. Such an agreement shall: (i) provide for the
complete management of the casino; (ii) provide for the unrestricted power to
direct the casino operations; and (iii) provide for a term long enough to ensure
the reasonable continuity, stability and independence and management of the
casino.

         License Fees. The CCC is authorized to establish annual fees for the
renewal of casino licenses. The renewal fee is based upon the cost of
maintaining control and regulatory activities prescribed by the Casino Control
Act, and may not be less than $200,000 for a four-year casino license.
Additionally, casino licensees are subject to potential assessments to fund any
annual operating deficits incurred by the CCC or the Division. There is also an
annual license fee of $500 for each slot machine maintained for use or in use in
any casino.

         Gross Revenue Tax. Each casino licensee is also required to pay an
annual tax of 8% on its gross casino revenues. For the years ended December 31,
1996, 1997 and 1998, Plaza Associates' gross revenue tax was approximately $29.8
million, $30.1 million and $30.2 million, respectively, and its license,
investigation and other fees and assessments totaled approximately $4.4 million,
$6.0 million and $5.2 million, respectively. For the years ended December 31,
1996, 1997 and 1998, Taj Associates' gross revenue tax was approximately $40.7
million, $41.7 million and $41.1 million, respectively, and its license,
investigation and other fees and assessments totaled approximately $5.0 million,
$3.9 million and $4.4 million, respectively.

         Investment Alternative Tax Obligations. An investment alternative tax
imposed on the gross casino revenues of each licensee in the amount of 2.5% is
due and payable on the last day of April following the end of the calendar year.
A licensee is obligated to pay the investment alternative tax for a period of 30
years. Estimated payments of the investment alternative tax obligation must be
made quarterly in an amount equal to 1.25% of estimated gross revenues for the
preceding three-month period. Investment tax credits may be obtained by making
qualified investments or by the purchase of bonds issued by the CRDA (the "CRDA
Bonds"). CRDA Bonds may


                                       20
<PAGE>


have terms as long as 50 years and bear interest at below market rates,
resulting in a value lower than the face value of such CRDA Bonds.

         For the first ten years of its tax obligation, the licensee is entitled
to an investment tax credit against the investment alternative tax in an amount
equal to twice the purchase price of the CRDA Bonds issued to the licensee.
Thereafter, the licensee (i) is entitled to an investment tax credit in an
amount equal to twice the purchase price of such CRDA Bonds or twice the amount
of its investments authorized in lieu of such bond investments or made in
projects designated as eligible by the CRDA and (ii) has the option of entering
into a contract with the CRDA to have its tax credit comprised of direct
investments in approved eligible projects which may not comprise more than 50%
of its eligible tax credit in any one year.

         From the monies made available to the CRDA, the CRDA was required to
set aside $175 million for investment in hotel development projects in Atlantic
City undertaken by a licensee which result in the construction or rehabilitation
of at least 200 hotel rooms. These monies were used to fund up to 27% of the
cost to casino licensees of expanding their hotel facilities to provide
additional hotel rooms, a portion of which has been required to be available
with respect to the new Atlantic City Convention Center.

         Minimum Casino Parking Charges. Since July 1, 1993, each casino
licensee has been required to pay the New Jersey State Treasurer a $1.50 charge
for every use of a parking space for the purpose of parking motor vehicles in a
parking facility owned or leased by a casino licensee or by any person on behalf
of a casino licensee. This amount is paid into a special fund established and
held by the New Jersey State Treasurer for the exclusive use of the CRDA. Plaza
Associates and Taj Associates currently charge their parking patrons $2.00 in
order to make their required payments to the New Jersey State Treasurer and
cover related expenses. Amounts in the special fund will be expended by the CRDA
for eligible projects in the corridor region of Atlantic City related to
improving the highways, roads, infrastructure, traffic regulation and public
safety of Atlantic City or otherwise necessary or useful to the economic
development and redevelopment of Atlantic City in this regard.

         Atlantic City Fund. On each October 31 during the years 1996 through
2003, each casino licensee shall pay into an account established in the CRDA and
known as the Atlantic City Fund, its proportional share of an amount related to
the amount by which annual operating expenses of the CCC and the Division are
less than a certain fixed sum. Additionally, a portion of the investment
alternative tax obligation of each casino licensee for the years 1994 through
1998 allocated for projects in northern New Jersey shall be paid into and
credited to the Atlantic City Fund. Amounts in the Atlantic City Fund will be
expended by the CRDA for economic development projects of a revenue producing
nature that foster the redevelopment of Atlantic City other than the
construction and renovation of casino hotels.

         Conservatorship. If, at any time, it is determined that Plaza
Associates, Trump AC, Trump AC Funding, Funding II, Funding III, Taj Associates
or any other entity qualifier has violated the Casino Control Act or that any of
such entities cannot meet the qualification requirements of the Casino Control
Act, such entity could be subject to fines or the suspension or revocation of
its license or qualification. If a casino license is suspended for a period in
excess of 120 days or is revoked, or if the CCC fails or refuses to renew such
casino license, the CCC could appoint a conservator to operate and dispose of
such licensee's casino hotel facilities. A conservator would be vested with
title to all property of such licensee relating to the casino and the approved
hotel subject to valid liens and/or encumbrances. The conservator would be
required to act under the direct supervision of the CCC and would be charged
with the duty of conserving, preserving and, if permitted, continuing the
operation of the casino hotel. During the period of the conservatorship, a
former or suspended casino licensee is entitled to a fair rate of return out of
net earnings, if any, on the property retained by the conservator. The CCC may
also discontinue any conservatorship action and direct the conservator to take
such steps as are necessary to effect an orderly transfer of the property of a
former or suspended casino licensee.

         Qualification of Employees. Certain employees of Plaza Associates, Taj
Associates and TCS must be licensed by or registered with the CCC, depending on
the nature of the position held. Casino employees are subject to more stringent
requirements than non-casino employees and must meet applicable standards
pertaining to financial stability, integrity and responsibility, good character,
honesty and integrity, business ability and casino experience and New Jersey
residency. These requirements have resulted in significant competition among
Atlantic City casino operators for the services of qualified employees.


                                       21
<PAGE>


         Gaming Credit. Plaza Associates' and Taj Associates' casino games are
conducted on a credit as well as cash basis. Gaming debts arising in Atlantic
City in accordance with applicable regulations are enforceable in the courts of
the State of New Jersey. The extension of gaming credit is subject to
regulations that detail procedures which casinos must follow when granting
gaming credit and recording counter checks which have been exchanged, redeemed
or consolidated.

         Control Procedures. Gaming at the Atlantic City Properties is conducted
by trained and supervised personnel. Plaza Associates and Taj Associates employ
extensive security and internal controls. Security checks are made to determine,
among other matters, that job applicants for key positions have had no criminal
history or associations. Security controls utilized by the surveillance
department include closed circuit video camera to monitor the casino floor and
money counting areas. The count of moneys from gaming also is observed daily by
representatives of the CCC.

         OTHER LAWS AND REGULATIONS

         The United States Department of the Treasury (the "Treasury") has
adopted regulations pursuant to which a casino is required to file a report of
each deposit, withdrawal, exchange of currency, gambling tokens or chips, or
other payments or transfers by, through or to such casino which involves a
transaction in currency of more than $10,000 per patron, per gaming day (a
"Currency Transaction Report"). Such reports are required to be made on forms
prescribed by the Secretary of the Treasury and are filed with the Commissioner
of the Internal Revenue Service (the "Service"). In addition, Plaza Associates
and Taj Associates are required to maintain detailed records (including the
names, addresses, social security numbers and other information with respect to
its gaming customers) dealing with, among other items, the deposit and
withdrawal of funds and the maintenance of a line of credit.

         In the past, the Service had taken the position that gaming winnings
from table games by nonresident aliens were subject to a 30% withholding tax.
The Service, however, subsequently adopted a practice of not collecting such
tax. Recently enacted legislation exempts from withholding tax table game
winnings by nonresident aliens, unless the Secretary of the Treasury determines
by regulation that such collections have become administratively feasible.

         From 1992 through 1995, the Service conducted an audit of Currency
Transaction Reports filed by Taj Associates for the period from April 2, 1990
through December 31, 1991. The Treasury has received a report detailing the
audit as well as the response of Taj Associates. As a result of Taj Associates'
audit, the Treasury has notified Taj Associates that it failed to timely file
Currency Transaction Reports in connection with certain currency transactions.
In December 1997, Taj Associates paid a fine of $477,000 in connection with 106
of these violations.

         Plaza Associates and Taj Associates have adopted the following internal
control procedures to increase compliance with these Treasury regulations: (i)
computer exception reporting; (ii) establishment of a committee to review
Currency Transaction Report transactions and reporting which consists of
executives from the Casino Operations, Marketing and Administration Departments;
(iii) internal audit testing of compliance with the Treasury regulations; (iv)
training for all new and existing employees in compliance with the Treasury
regulations; and (v) a self-disciplinary program for employee violations of the
policy.

         Trump AC is subject to other federal, state and local regulations and,
on a periodic basis, must obtain various licenses and permits, including those
required to sell alcoholic beverages in the State of New Jersey as well as in
other jurisdictions. Management believes all required licenses and permits
necessary to conduct the business of Trump AC has been obtained for operations
in New Jersey.

ITEM 2. PROPERTIES.

TRUMP PLAZA

         Plaza Associates owns and leases several parcels of land in and around
Atlantic City, New Jersey, each of which is used in connection with the
operation of Trump Plaza and each of which is subject to the liens of the


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<PAGE>


mortgages associated with the TAC I Notes, the TAC II Notes and the TAC III
Notes (collectively, the "Plaza Mortgages") and certain other liens.

         Plaza Casino Parcel. Trump Plaza's main tower is located on The
Boardwalk in Atlantic City, New Jersey, next to the Atlantic City Convention
Center. It occupies the entire city block (approximately 2.38 acres) bounded by
The Boardwalk, Mississippi Avenue, Pacific Avenue and Columbia Place (the "Plaza
Casino Parcel").

         The Plaza Casino Parcel consists of four tracts of land, three of which
are currently owned by Plaza Associates and one of which is leased by Plaza
Hotel Management Company ("PHMC") to Plaza Associates pursuant to a
non-renewable ground lease, which expires on December 31, 2078 (the "PHMC
Lease"). The land which is subject to the PHMC Lease is referred to as the
"Plaza Leasehold Tract." Seashore Four Associates ("Seashore Four") and Trump
Seashore Associates ("Trump Seashore") had leased to Plaza Associates two of the
tracts which are now owned by Plaza Associates. Trump Seashore and Seashore Four
are 100% beneficially owned by Trump and are, therefore, affiliates of THCR.
Plaza Associates purchased the tract from Seashore Four in January 1997 and the
tract from Trump Seashore in September 1996 for $10.1 million and $14.5 million,
respectively.

         The PHMC Lease is a "net lease" pursuant to which Plaza Associates, in
addition to the payment of fixed rent, is responsible for all costs and expenses
with respect to the use, operation and ownership of the Plaza Leasehold Tract
and the improvements now, or which may in the future be, located thereon,
including, but not limited to, all maintenance and repair costs, insurance
premiums, real estate taxes, assessments and utility charges. The improvements
located on the Plaza Leasehold Tract are owned by Plaza Associates during the
term of the PHMC Lease, and upon the expiration of the term of the PHMC Lease
(for whatever reason), ownership of such improvements will vest in PHMC. The
PHMC Lease also contains an option pursuant to which Plaza Associates may
purchase the Plaza Leasehold Tract at certain times during the term of such PHMC
Lease under certain circumstances.

         Trump Plaza East. In connection with the Taj Acquisition, Plaza
Associates exercised its option to purchase certain of the fee and leasehold
interests comprising Trump Plaza East for a purchase price of $28.0 million.
During the year ended December 31, 1996, Plaza Associates incurred approximately
$1.1 million, in expenses associated with its lease of Trump Plaza East. Plaza
Associates currently leases a portion of the land which comprises Trump Plaza
East from an unrelated third party.

         In September 1993, Trump (as predecessor in interest to Plaza
Associates under the lease for Trump Plaza East) entered into a sublease with
Time Warner (the "Time Warner Sublease") pursuant to which Time Warner subleased
the entire first floor of retail space for a new Warner Brothers Studio Store
which opened in July 1994. Time Warner renovated the premises in connection with
opening of the Warner Brothers Studio Store. The lease term is for ten years and
gives Time Warner the option to renew for two additional 5-year terms. Time
Warner is required to pay percentage rent monthly in an amount equal to (i) 7.5%
of gross annual sales up to $15.0 million and (ii) 10% of gross annual sales in
excess of $15 million. The terms of the Time Warner Sublease give Time Warner
the right to terminate the sublease if (i) gross annual sales are less than $5.0
million for year two or less than $5.0 million as adjusted by CPI for years
three through nine; and (ii) Trump Plaza ceases to operate as a first class
hotel.

         Trump World's Fair. Pursuant to the option to purchase Trump World's
Fair, on June 12, 1995, using proceeds from the June 1995 Offerings, Plaza
Associates acquired title to Trump World's Fair. Further, pursuant to an
easement agreement with the NJSEA, Plaza Associates has an exclusive easement
over, in and through the portions of the original Atlantic City Convention
Center used as the pedestrian walkway connecting Trump Plaza's main tower and
Trump World's Fair. The easement is for a 25-year term and may be renewed at the
option of Plaza Associates for one additional 25-year period. In consideration
of the granting of the easement, Plaza Associates must pay to NJSEA the sum of
$2.0 million annually, such annual payment to be adjusted every five years to
reflect changes in the consumer price index. Plaza Associates has the right to
terminate the easement agreement at any time upon six months' notice to NJSEA in
consideration of a termination payment of $1,000,000. See "Business--Gaming and
Other Laws and Regulations--New Jersey Gaming Regulations--Approved Hotel
Facilities."


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<PAGE>


         Parking Parcels. Plaza Associates owns a parcel of land (the "Plaza
Garage Parcel") located across the street from the Plaza Casino Parcel and along
Pacific Avenue in a portion of the block bound by Pacific Avenue, Mississippi
Avenue, Atlantic Avenue and Missouri Avenue. Plaza Associates has constructed
the Transportation Facility on the Plaza Garage Parcel. An enclosed pedestrian
walkway from the parking garage accesses Trump Plaza at the casino level.
Parking at the parking garage is available to Trump Plaza's guests, as well as
to the general public.

         Plaza Associates leases, pursuant to the PHMC Lease, a parcel of land
located on the northwest corner of the intersection of Mississippi and Pacific
Avenues consisting of approximately 11,800 square feet ("Additional Parcel 1")
and owns another parcel on Mississippi Avenue adjacent to Additional Parcel 1
consisting of approximately 5,750 square feet.

         Plaza Associates also owns five parcels of land, aggregating
approximately 43,300 square feet, and subleases one parcel consisting of
approximately 3,125 square feet. All of such parcels are contiguous and are
located along Atlantic Avenue, in the same block as the Plaza Garage Parcel.
They are used for signage and surface parking and are not encumbered by any
mortgage liens other than that of the Plaza Mortgages.

         Warehouse Parcel. Plaza Associates owns a warehouse and office facility
located in Egg Harbor Township, New Jersey, containing approximately 64,000
square feet of space (the "Egg Harbor Parcel"). The Egg Harbor Parcel is
encumbered by a first mortgage having an outstanding principal balance, as of
December 31, 1998, of approximately $1.3 million and is encumbered by the Plaza
Mortgages. This facility is currently being utilized by TCS.

         Superior Mortgages. The liens securing the indebtedness on the Plaza
Garage Parcel, the Egg Harbor Parcel and liens securing indebtedness on certain
parking facilities are each senior to the liens of the Plaza Mortgages. The
principal amount currently secured by such mortgages is, in the aggregate,
approximately $3.2 million.

         Plaza Associates has financed or leased and from time to time will
finance or lease its acquisition of furniture, fixtures and equipment. The lien
in favor of any such lender or lessor may be superior to the liens of the Plaza
Mortgages.

TAJ MAHAL

         Taj Associates currently owns the parcels of land which are used in
connection with the operation of the Taj Mahal. Each of these parcels is
encumbered by the mortgages securing the TAC I Notes, the TAC II Notes and the
TAC III Notes.

         The Casino Parcel. The land comprising the Taj Mahal site consists of
approximately 30 acres, bounded by The Boardwalk to the south, vacated former
States Avenue to the east, Pennsylvania Avenue to the west and Pacific Avenue to
the north. The Taj Mahal was opened to the public on April 2, 1990.

         Taj Entertainment Complex. In connection with the Taj Acquisition, Taj
Associates purchased the Taj Entertainment Complex from Realty Corp. The Taj
Entertainment Complex is a 20,000-square-foot multipurpose entertainment complex
known as the Xanadu Theater with seating capacity for approximately 1,200
people, which can be used as a theater, concert hall, boxing arena or exhibition
hall.

         Steel Pier. In connection with the Taj Acquisition, Taj Associates
purchased the approximately 3.6 acre pier and related property located across
The Boardwalk from the Taj Mahal (the "Steel Pier") from Realty Corp. Taj
Associates initially proposed a concept to improve the Steel Pier, the estimated
cost of which improvements was $30 million. Such concept was approved by the New
Jersey Department of Environment Protection ("NJDEP"), the agency which
administers the Coastal Area Facilities Review Act ("CAFRA"). A condition
imposed on Taj Associates' CAFRA permit initially required that Taj Associates
begin construction of certain improvements on the Steel Pier by October 1992,
which improvements were to be completed within 18 months of commencement. In
March 1993, Taj Associates obtained a modification of its CAFRA permit providing
for the extensions of the required commencement and completion dates of the
improvements to the Steel Pier for one year


                                       24
<PAGE>


based upon an interim use of the Steel Pier for an amusement park. Taj
Associates received additional one-year extensions of the required commencement
and completion dates of the improvements of the Steel Pier based upon the same
interim use of the Steel Pier as an amusement park pursuant to a sublease ("Pier
Sublease") with an amusement park operator. The Pier Sublease terminates on
December 31, 1999 unless extended.

         Office and Warehouse Space. Taj Associates owns an office building
located on South Pennsylvania Avenue adjacent to the Taj Mahal. In addition, Taj
Associates, in April 1991, purchased for approximately $1.7 million certain
facilities of Castle Associates which are presently leased to commercial tenants
and used for office space and vehicle maintenance facilities. In connection with
the Taj Acquisition, Taj Associates purchased from Realty Corp. a warehouse
complex of approximately 34,500 square feet. This warehouse complex is expected
to be sold to the CRDA as part of the location of a new neighborhood housing
development to be completed as part of the redevelopment of the road corridors
and adjoining neighborhoods to the Taj Mahal.

         Taj Associates has entered into a lease with Trump-Equitable Company
for the lease of office space in Trump Tower in New York City, which Taj
Associates uses as a marketing office. The monthly payments under the lease had
been $1,000, and the premises were leased at such rent for four months in 1992,
the full twelve months in 1993 and 1994 and eight months in 1995. On September
1, 1995, the lease was renewed for a term of five years with an option for Taj
Associates to cancel the lease on September 1 of each year, upon six months'
notice and payment of six months' rent. Under the renewed lease, the monthly
payments are $2,285.

         Parking. The Taj Mahal provides parking for approximately 6,950 cars of
which 6,725 spaces are located in indoor parking garages and 225 surface spaces
are located on land purchased from Realty Corp. in connection with the Taj
Acquisition. In addition, Taj Associates entered into a lease agreement with
South Jersey Transportation Authority for employee parking facilities.

         Themed Restaurants and Retail Shopping. Hard Rock Cafe International
(N.J.), Inc. ("Hard Rock") has entered into a fifteen-year lease (the "Hard Rock
Cafe Lease") with Taj Associates for the lease of space at the Taj Mahal for a
Hard Rock Cafe. The basic rent under the Hard Rock Cafe Lease is $750,000 per
year, paid in equal monthly installments, for the first 10 years of the lease
term, and will be $825,000 per year, paid in equal monthly installments, for the
remaining 5 years of the lease term. In addition, Hard Rock will pay percentage
rent in an amount equal to 10% of Hard Rock's annual gross sales in excess of
$10,000,000. Hard Rock has the right to terminate the Hard Rock Cafe Lease on
the tenth anniversary thereof and also has the option to extend the term of the
lease for an additional five-year period at an annual basic rent of $907,500
during such renewal term. The Hard Rock Cafe opened in November 1996.

         All Star Cafe, Inc. ("All Star") has entered into a twenty-year lease
(the "All Star Cafe Lease") with Taj Associates for the lease of space at the
Taj Mahal for an All Star Cafe. The basic rent under the All Star Cafe Lease is
$1.0 million per year, paid in equal monthly installments. In addition, All Star
will pay percentage rent in an amount equal to the difference, if any, between
(i) 8% of All Star's gross sales made during each calendar month during the
first lease year, 9% of All Star's gross sales made during each calendar month
during the second lease year and 10% of All Star's gross sales made during each
calendar month during the third through the twentieth lease years, and (ii)
one-twelfth of the annual basic rent. The All Star Cafe opened in March 1997.

         Stage Deli of Atlantic City, Inc. ("Stage Deli") has entered into a
ten-year and five-month lease commencing July 7, 1997 (the "Stage Deli Lease")
with Taj Associates for the lease of space at the Taj Mahal for a Stage Deli of
New York restaurant. Stage Deli has an option to renew the Stage Deli Lease for
an additional five-year term. Commencing September 1, 1998 the Stage Deli Lease
was amended to eliminate the basic rent provisions and provide for monthly
percentage rents of 8% or 10% of gross monthly sales based on actual average
sales volumes as defined in the Stage Deli Lease.

         Time Warner has entered into a ten-year lease (the "Time Warner Taj
Lease") with Taj Associates for the lease of space at the Taj Mahal for a Warner
Brothers Studio Store. Time Warner has an option to renew the Time Warner Taj
Lease for two additional five-year terms. Time Warner pays percentage rent
monthly in an amount equal to (i) 7.5% of gross annual sales up to $5.0 million
and (ii) 10% sales of gross annual sales in excess of $5.0 million. No minimum
or "base" rent is payable under the Time Warner Taj Lease. The terms of the
lease give Time Warner the right to terminate the lease if (i) gross annual
sales are less than $2.5 million for the second year


                                       25
<PAGE>


of the lease or less than $2.5 million as adjusted by CPI for the third through
ninth years of the lease; and (ii) the Taj Mahal ceases to operate as a first
class hotel. The Warner Brothers Studio Store opened in May 1997.

         The Taj Mahal is currently in the process of expanding the retail
shopping experience along the length of its parking garage promenade walkway
which immediately adjoins the Taj Mahal's main retail shopping area. The first
tenant, Starbucks, operated by Host International, Inc., opened in September
1996. Sbarro's, an Italian eatery, operated by Sbarro America Properties, Inc.,
opened in October 1998. Boardwalk Treats, Beka's Pastries and a Harley Davidson
retail merchandise outlet are expected to open in the early spring of 1999. A
Sunglass Hut, operated by Sunglass Hut International, opened in August 1998 in
another location also adjoining the Taj Mahal's main retail shopping area.

ITEM 3. LEGAL PROCEEDINGS.

         General. Trump AC, its partners, certain members of its former
executive committee, and certain of its employees, have been involved in various
legal proceedings. Such persons and entities are vigorously defending the
allegations against them and intend to contest vigorously any future
proceedings. In general, Trump AC has agreed to indemnify such persons against
any and all losses, claims, damages, expenses (including reasonable costs,
disbursements and counsel fees) and liabilities (including amounts paid or
incurred in satisfaction of settlements, judgments, fines and penalties)
incurred by them in said legal proceedings.

         Plaza Associates. The CRDA, as required, set aside certain funds for
investment in hotel development projects in Atlantic City undertaken by casino
licensees which result in the construction or rehabilitation of at least 200
hotel rooms. These investments are to fund up to 27% of the cost to casino
licensees of such projects. In June 1993, Plaza Associates made application for
such funding to the CRDA with respect to its proposed construction of the Trump
Plaza East facilities, demolition of a certain structure adjacent thereto,
development of an appurtenant public park, roadway and parking area and
acquisition of the entire project site. The CRDA, in rulings through January 10,
1995, approved the hotel development project and, with respect to same and
pursuant to a credit agreement between them, reserved to Plaza Associates the
right to take investment tax credits up to approximately $14.2 million. Plaza
Associates has, except for three small parcels discussed below, acquired the
site and constructed and presently operates and maintains the proposed hotel
tower, public park, roadway and parking area.

         As part of its approval and on the basis of its powers of eminent
domain, the CRDA, during 1994, initiated certain condemnation proceedings in the
Superior Court of New Jersey, Atlantic County, to acquire five small parcels of
land within the project site. Plaza Associates has since acquired two of the
parcels and proceedings with respect to those parcels have been concluded. The
court, in a July 20, 1998 opinion, directed entry of judgments dismissing the
CRDA actions with respect to the remaining three parcels, which, if acquired,
would be included in the public park and parking area of the project on the
basis of the court's determination that the CRDA had failed to establish that a
valid primarily public purpose justified acquisition of the parcels. Written
orders of dismissal were entered by the court on July 28, 1998. The right of the
CRDA to appeal these judgments expired on September 11, 1998. The judgments were
not appealed.

         Additionally, with respect to the two parcels to be included in the
public park portion of the project, the CRDA, by a separate motion, sought an
order that Plaza Associates' application and credit agreement be deemed amended
to terminate the CRDA obligation to acquire the two parcels and to enable the
CRDA to abandon the condemnation proceedings with respect to these two parcels.
This motion was opposed by Plaza Associates. By order dated April 1, 1998, the
Court denied the motion but granted the CRDA leave to amend its pleadings by a
filing within 14 days from the date thereof formally asserting a claim for
specific performance of the alleged agreement. The CRDA did not file any such
amended pleading within this permitted time period.

         Also, the defendants in two of the condemnation proceedings filed a
separate joint complaint in the New Jersey Superior Court alleging, among other
claims, that the CRDA and Plaza Associates were wrongfully attempting to deprive
them of property rights in violation of their constitutional and civil rights.
Coking, et al. v. Casino Reinvestment Development Authority, et al., Docket No.
ATL-L-2555-97. CRDA's motion for summary judgment on the complaint and Plaza
Associates' motion to dismiss it for failure to state a claim were granted by
the New Jersey Superior Court on October 24, 1997 and November 11, 1997.


                                       26
<PAGE>


         Other Litigation. On March 13, 1997, THCR filed a lawsuit in the United
States District Court, District of New Jersey, against Mirage, the State of New
Jersey ("State"), the New Jersey Department of Transportation ("NJDOT"), the
South Jersey Transportation Authority ("SJTA"), the CRDA, the New Jersey
Transportation Trust Fund Authority and others. THCR was seeking declaratory and
injunctive relief to recognize and prevent violations by the defendants of the
casino clause of the New Jersey State Constitution and various federal
securities and environmental laws relating to proposed infrastructure
improvements in the Atlantic City marina area. While this action was pending,
defendants State and CRDA then filed an action in the New Jersey State Court
seeking declaration of the claim relating to the casino clause of the New Jersey
State Constitution. On May 1, 1997, the United States District Court dismissed
the federal claims and ruled that the State constitutional claims should be
pursued in State Court. On April 2, 1998, the United States Court of Appeals for
the Third Circuit affirmed the dismissal and THCR's petition to the Third
Circuit for a rehearing was denied. On May 14, 1997 the State Court granted
judgment in favor of the State and CRDA. On March 20, 1998, the Appellate
Division affirmed. THCR intends to seek review in the State Supreme Court, which
heard argument on January 21, 1999.

         On June 26, 1997, THCR filed an action against NJDOT, SJTA, Mirage and
others, in the Superior Court of New Jersey, Chancery Division, Atlantic County
(the "Chancery Division Action"). THCR is seeking to declare unlawful and enjoin
certain actions and omissions of the defendants arising out of and relating to a
certain Road Development Agreement dated as of January 10, 1997, by and among
NJDOT, SJTA and Mirage (the "Road Development Agreement") and the public funding
of a certain road and tunnel project to be constructed in Atlantic City, as
further described in the Road Development Agreement. THCR moved to consolidate
this action with other previously filed related actions. Defendants opposed
THCR's motion to consolidate the Chancery Division Action, initially moved to
dismiss this action on procedural grounds and subsequently moved to dismiss this
action on substantive grounds. On October 20, 1997, the Chancery Court denied
the defendants' motion to dismiss this action on procedural grounds, but granted
the motion to dismiss this action on substantive grounds. This decision is
currently being appealed.

         On June 26, 1997, THCR also filed an action, in lieu of prerogative
writs, against the CRDA, in the Superior Court of New Jersey, Law Division,
Atlantic County, seeking review of the CRDA's April 15, 1997 approval of funding
($120 million principal amount plus interest) for the road and tunnel project
discussed above, a declaratory judgment that the said project is not eligible
for such CRDA funding, and an injunction prohibiting the CRDA from contributing
such funding to the said project. Defendants moved to dismiss this action on
procedural grounds and also sought to transfer this action to New Jersey's
Appellate Division. On October 3, 1997, the New Jersey Superior Court
transferred this action to the Appellate Division where it is currently pending.

         On September 9, 1997, Mirage filed a complaint against Trump, THCR and
Hilton Hotels Corporation, in the United States District Court for the Southern
District of New York. The complaint seeks damages for alleged violations of
antitrust laws, tortious interference with prospective economic advantage and
tortious inducement of a breach of fiduciary duties arising out of activities
purportedly engaged in by defendants in furtherance of an alleged conspiracy to
impede Mirage's efforts to build a casino resort in the Marina district of
Atlantic City, New Jersey. Among other things, Mirage contends that the
defendants filed several frivolous lawsuits and funded others that challenge the
proposed state funding mechanisms for the construction of a proposed roadway and
tunnel that would be paid for chiefly through government funds and which would
link the Atlantic City Expressway with the site of Mirage's proposed new casino
resort. On November 10, 1997, THCR and Trump moved to dismiss the complaint. On
December 18, 1998, the Court denied the Motion to dismiss brought by Trump and
THCR.

         On August 14, 1996, certain stockholders of THCR filed two derivative
actions in the Court of Chancery in Delaware (Civil Action Nos. 15148 and 15160)
(the "Delaware Cases") against each of the members of the Board of Directors of
THCR, THCR, THCR Holdings, Castle Associates and Trump Casinos II, Inc.
("TCI-II"). The plaintiffs claim that the directors of THCR breached their
fiduciary duties in connection with its acquisition of Castle Associates (the
"Castle Acquisition") by purchasing these interests at an excessive price in a
self-dealing transaction. The complaint sought to enjoin the transaction, and
also sought damages and an accounting. The injunction was never pursued. These
plaintiffs served a notice of dismissal in the Delaware cases on December 29,
1997. The Court of Chancery has not yet ordered the Delaware cases dismissed.

         On October 16, 1996, a stockholder of THCR filed a derivative action in
the United States District Court, Southern District of New York (96 Civ. 7820)
against each member of the Board of Directors of THCR, THCR,


                                       27
<PAGE>


THCR Holdings, Castle Associates, TCI, TCI-II, TCHI and Salomon Brothers, Inc
("Salomon"). The plaintiff claims that certain of the defendants breached their
fiduciary duties and engaged in ultra vires acts in connection with the Castle
Acquisition and that Salomon was negligent in the issuance of its fairness
opinion with respect to the Castle Acquisition. The plaintiff also alleges
violations of the federal securities laws for alleged omissions and
misrepresentations in THCR's proxies, and that Trump, TCI-II and TCHI breached
the acquisition agreement by supplying THCR with untrue information for
inclusion in the proxy statement delivered to THCR's stockholders in connection
with the Castle Acquisition. The plaintiff seeks removal of the directors of
THCR, and injunction, rescission and damages.

         The Delaware cases were amended and refiled in the Southern District of
New York and consolidated with the federal action for all purposes, including
pretrial proceedings and trial. On or about January 17, 1997, the plaintiffs
filed their Consolidated Amended Derivative Complaint (the "First Amended
Complaint"), reflecting the consolidation. On or about March 24, 1997, the
plaintiffs filed their Second Consolidated Amended Derivative Complaint (the
"Second Amended Complaint"). In addition to the allegations made in the First
Amended Complaint, the Second Amended Complaint claims that certain of the
defendants breached their fiduciary duties and wasted corporate assets in
connection with the previously contemplated transaction with Colony Capital,
Inc. ("Colony Capital"). The Second Amended Complaint also includes claims
against Colony Capital for aiding and abetting certain of those violations. In
addition to the relief sought in the First Amended Complaint, the Second Amended
Complaint sought to enjoin the previously contemplated transaction with Colony
Capital or, if it was effectuated, to rescind it. On March 27, 1997, THCR and
Colony Capital mutually agreed to end negotiations with respect to such
transaction. On June 26, 1997, plaintiffs served their Third Consolidated
Amended Derivative Complaint (the "Third Amended Complaint"), which omitted the
claims against Colony Capital. THCR and the other defendants in the action moved
to dismiss the Third Amended Complaint on August 5, 1997. The plaintiffs opposed
the defendants' motions to dismiss the Third Amended Complaint by response dated
October 24, 1997. The defendants' reply was served December 9, 1997.

         Various legal proceedings are now pending against Trump AC. Trump AC
considers all such proceedings to be ordinary litigation incident to the
character of its business. Trump AC believes that the resolution of these
claims, to the extent not covered by insurance, will not, individually or in the
aggregate, have a material adverse effect on the financial condition or results
of operations of Trump AC.

         From time to time, Plaza Associates and Taj Associates may be involved
in routine administrative proceedings involving alleged violations of certain
provisions of the Casino Control Act. However, management believes that the
final outcome of these proceedings will not, either individually or in the
aggregate, have a material adverse effect on Plaza Associates or Taj Associates
or on the ability of Plaza Associates or Taj Associates to otherwise retain or
renew any casino or other licenses required under the Casino Control Act for the
operation of Trump Plaza and the Taj Mahal.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         No matters were submitted by the Registrants to their security holders
for a vote during the fourth quarter of 1998.


                                       28
<PAGE>


                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         Trump AC. THCR Holdings has beneficially owned 100% of the partnership
interests in Trump AC since June 12, 1995.

         Trump AC Funding. Trump AC has owned 100% of the common stock of Trump
AC Funding since its formation on January 30, 1996. There is no established
trading market for Trump AC Funding's common stock.

         Funding II. Trump AC has owned 100% of the common stock of Funding II
since its formation on November 18, 1997. There is no established trading market
for Funding II's common stock.

         Funding III. Trump AC has owned 100% of the common stock of Funding III
since its formation on November 18, 1997. There is no established trading market
for Funding III's common stock.

ITEM 6. SELECTED FINANCIAL DATA.

         The following table sets forth certain historical consolidated
financial information of Trump AC for each of the five years ended December 31,
1994 through 1998 (see Notes 1 and 2 below).


                                       29
<PAGE>


         All financial information should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," and the consolidated and condensed financial statements and the
related notes thereto included elsewhere in this Form 10-K.

<TABLE>
<CAPTION>
                                                                     YEARS ENDED DECEMBER 31,
                                                   ----------------------------------------------------------------
STATEMENT OF OPERATIONS DATA:                         1994         1995        1996          1997           1998
                                                   ---------    ---------   ----------     ---------     ----------
                                                                      (dollars in thousands)
<S>                                                <C>            <C>         <C>          <C>           <C>
REVENUES:

    Gaming..................................       $ 261,451    $ 298,073   $  752,228    $  889,116     $  888,518
    Other...................................          66,869       74,182      190,995       231,235        220,725
                                                   ---------    ---------   ----------    ----------     ----------
        Gross revenues......................         328,320      372,255      943,223     1,120,351      1,109,243
    Promotional allowances..................          33,257       45,077      113,743       138,085        130,151
                                                   ---------    ---------   ----------    ----------     ----------

        Net revenues........................         295,063      327,178      829,480       982,266        979,092
                                                   ---------    ---------   ----------    ----------     ----------

COSTS AND EXPENSES:

    Gaming..................................         139,540      164,396      453,841       555,457        545,204
    Other...................................          23,380       21,261       54,613        65,462         66,180
    General and administrative..............          73,075       65,521      147,464       168,143        168,183
    Depreciation and amortization...........          15,653       16,213       60,870        66,018         61,536
    Preopening..............................              --           --        4,145            --             --
                                                   ---------    ---------   ----------    ----------     ----------

        Total costs and expenses............         251,648      267,391      720,933       855,080        841,103
                                                   ---------    ---------   ---------     ---------      ---------

Income from operations......................          43,415       59,787      108,547       127,186        137,989
Interest expense, net.......................        (48,219)     (43,261)    (112,122)     (141,249)      (149,070)
Other non-operating (expense) income (a)....         (4,931)      (5,743)       14,194            --             --
Extraordinary loss(b).......................              --      (9,250)     (59,132)            --             --
Benefit for income taxes....................             865           --           --            --             --
                                                   ---------    ---------   ----------     ---------     ----------

Net income (loss)...........................       $ (8,870)    $   1,533   $ (48,513)    $ (14,063)     $ (11,081)
                                                   ========     =========   ==========    ==========     ========== 

BALANCE SHEET DATA (AT END OF PERIOD):
    Cash and cash equivalents...............       $  11,144    $  15,937   $   71,320    $  114,879     $   80,954
    Property and equipment, net.............         298,354      425,262    1,456,267     1,460,050      1,432,965
    Total assets............................         375,643      480,024    1,659,006     1,739,073      1,688,606
    Total long-term debt, net of
        current maturities .................         403,214      332,721    1,207,795     1,300,027      1,299,217
    Total capital (deficit).................       $(63,580)    $ 110,812   $  331,858    $  327,939     $  272,759
</TABLE>

------------------

Note 1:   On June 12, 1995, as part of the June 1995 Offerings, THCR
            issued $140 million of THCR Common Stock and contributed the
            proceeds from such offering to THCR Holdings, the beneficial
            owner of 100% of Trump AC, for an approximately 60% general
            partnership interest in THCR Holdings.

Note 2:  On April 17, 1996, as part of the Taj Acquisition, THCR
            acquired Taj Associates. In connection with the Taj Acquisition,
            Taj Associates became a wholly owned subsidiary of Trump AC.
            Therefore, the financial data as of December 31, 1996, 1997 and
            1998 reflect the Taj Acquisition and includes the operations of
            Taj Associates for the period from the date of acquisition
            (April 17, 1996) through December 31, 1996.

(a)      Other non-operating expense for the years ended December 31,
            1994 and 1995 includes $4.9 million and $3.7 million,
            respectively, of real estate taxes and leasing costs associated
            with Trump Plaza East. Other non-operating expense for the year
            ended December 31, 1995 also includes $2.0 million in costs
            associated with Trump World's Fair. Other non-operating income
            for the year ended December 31, 1996 includes $15.0 million
            license fee revenue.

(b)      The extraordinary loss of $9.25 million for the year ended
            December 31, 1995 relates to the redemption of the Plaza PIK
            Notes and Plaza PIK Note Warrants and the write-off of related
            unamortized deferred financing costs. The extraordinary loss for
            the year ended December 31, 1996 of $59.1 million relates to the
            redemption of the Plaza Notes and the Plaza PIK Note Warrants
            and the write-off of unamortized deferred financing costs.


                                       30
<PAGE>


ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
        OF OPERATIONS

CAPITAL RESOURCES AND LIQUIDITY

         Cash flows from operating activities are Trump AC's principal source of
liquidity. Trump AC expects to have sufficient liquidity to meet its
obligations. Cash flow is managed based upon the seasonality of the operations.
Any excess cash flow achieved from operations during peak periods is utilized to
subsidize non-peak periods when necessary.

         The indentures under which the TAC Notes were issued restrict the
ability of Trump AC and its subsidiaries to make distributions or pay dividends,
as the case may be, unless certain financial ratios are achieved. In addition,
the ability of Plaza Associates and Taj Associates to make payments of dividends
or distributions (except for payment of interest) through Trump AC to THCR
Holdings may be restricted by the CCC.

         Capital expenditures for Trump AC were $54.8 million and $20.9 million
for the years ended December 31, 1997 and 1998, respectively. Capital
expenditures for improvements to Trump Plaza's existing facilities were $13.3
million and $12.0 million for the years ended December 31, 1997 and 1998,
respectively. In addition, in 1997, Plaza Associates exercised its option to
purchase from Seashore Four Associates, an entity beneficially owned by Donald
J. Trump, one of the parcels of land underlying Trump Plaza's main tower,
pursuant to the terms of a lease, the payments under which were terminated upon
the exercise of such option. The purchase price and associated closing costs
were $10.1 million. In 1996 and 1997 Plaza Associates purchased related property
for $24.6 million with capital contributed by THCR Holdings. This amount which
was originally recorded as contributed capital was reclassified as "Advances to
Affiliates" during the second quarter of 1998. Also, in April and May of 1996
THCR Holdings contributed $19.5 million of capital to Plaza Associates for
improvements related to Trump World's Fair. This amount, which was originally
recorded as contributed capital, was reclassified as "Advances to Affiliates" in
October 1998.

         Capital expenditures attributable to the Taj Mahal were $40.8 million
and $8.5 million for the years ended December 31, 1997 and 1998, respectively.
Capital expenditures for improvements to existing facilities were approximately
$7.6 million and $8.5 million for the years ended December 31, 1997 and 1998,
respectively. Capital expenditures attributable to the expansion of the facility
were approximately $33.2 million for the year ended December 31, 1997.

         The expansion at the Taj Mahal (the "Taj Mahal Expansion") consisted of
the construction of a new 14-bay bus terminal which was completed in December
1996, a 2,400 space expansion of the existing self parking facilities, which was
completed in May 1997, and an approximate 7,000 square foot casino expansion
with 260 slot machines which was completed in July 1997. The total costs of the
Taj Mahal Expansion including amounts expended in 1996 and 1997 were
approximately $43.5 million and have been funded principally out of cash from
operations.

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1997

         The financial information presented below reflects the results of
operations of Trump AC. Because Trump AC has no business operations other than
its interest in Plaza Associates and Taj Associates its results of operations
are not discussed below. Taj Associates was acquired on April 17, 1996.


                                       31
<PAGE>


         The following tables include selected data of Plaza Associates and Taj
Associates (since date of acquisition) for the years ended December 31, 1996 and
1997:

<TABLE>
<CAPTION>
                                                                        YEAR ENDED DECEMBER 31,
                                           ----------------------------------------------------------------------------------
                                               1996         1997          1996           1997          1996         1997
                                              PLAZA        PLAZA           TAJ            TAJ          TOTAL        TOTAL
                                            ASSOCIATES   ASSOCIATES   ASSOCIATES(1)    ASSOCIATES     TRUMP AC     TRUMP AC
                                           ----------------------------------------------------------------------------------
                                                                             (IN MILLIONS)
<S>                                          <C>           <C>          <C>            <C>           <C>           <C>
Revenues:
    Gaming.............................      $ 368.9       $ 370.7      $   383.3       $  518.4     $  752.2      $   889.1
    Other..............................        105.7         108.0           85.3          123.2        191.0          231.2
                                              ------       -------        -------        -------      -------       -------- 
    Gross Revenues.....................        474.6         478.7          468.6          641.6        943.2        1,120.3
    Less: Promotional Allowances.......         65.6          64.4           48.1           73.7        113.7          138.1
                                              ------       -------        -------        -------      -------       -------- 
                                                                                                                
    Net Revenues.......................        409.0         414.3          420.5          567.9        829.5          982.2
                                              ------       -------        -------        -------      -------       --------
Costs & Expenses:                                                                                                
                                                                                                                 
    Gaming.............................        223.9         233.8          230.0          321.6        453.9          555.5
    Pre-opening........................          4.1            --             --             --          4.1             --
    General & Administrative...........         83.3          80.2           64.2           88.0        147.5          168.1
    Depreciation & Amortization........         23.0          24.4           37.8           41.4         60.9           66.0
    Other..............................         28.4          32.0           26.2           33.5         54.6           65.5
                                              ------       -------        -------        -------      -------       -------- 
    Total Costs and Expenses...........        362.7         370.4          358.2          484.5        721.0          855.1
                                              ------       -------        -------        -------      -------       -------- 
                                                                                                                 
Income from Operations.................         46.3          43.9           62.3           83.4        108.5          127.1
                                              ------       -------        -------        -------      -------       -------- 
                                                                                                                 
    Non-Operating Income...............          4.9            .6           10.7            1.1         16.6            2.9
    Interest Expense...................        (47.1)        (48.6)         (67.4)         (94.7)      (114.5)        (144.1)
                                              ------       -------        -------        -------      -------       -------- 
                                                                                                                 
    Total Non-Operating Expense........        (42.2)        (48.0)         (56.7)         (93.6)       (97.9)        (141.2)
                                              ------       -------        -------        -------      -------       -------- 
                                                                                                                 
    Income (loss) before extraordinary                                                                           
    loss...............................          4.1         (4.1)            5.6          (10.2)        10.6          (14.1)
    Extraordinary Loss.................        (59.1)           --            --             --        (59.1)             --
                                               ------       ------         -------        -------      -------       -------- 
                                                                                                                
    Net (Loss) Income..................       $(55.0)      $ (4.1)        $   5.6        $ (10.2)     $ (48.5)      $  (14.1)
                                              ======       =======        =======        =======      =======       ======== 
                                                                                                               
</TABLE>

                                       32
<PAGE>
<TABLE>
<CAPTION>
                                                                        YEAR ENDED DECEMBER 31,
                                           ----------------------------------------------------------------------------------
                                               1996         1997          1996           1997         1996         1997
                                              PLAZA        PLAZA           TAJ            TAJ         TOTAL        TOTAL
                                            ASSOCIATES   ASSOCIATES   ASSOCIATES(1)   ASSOCIATES     TRUMP AC     TRUMP AC
                                           ----------------------------------------------------------------------------------
<S>                                          <C>          <C>          <C>             <C>           <C>          <C>
                                                                             (IN MILLIONS)

Table Game Revenues....................      $  104.1     $   96.4     $  161.9        $   202.7     $  266.0     $  299.1
Incr (Decr) over Prior Period..........                   $  (7.7)                     $    40.8                  $   33.1
Table Game Drop........................      $  686.9     $  654.4     $  942.5        $ 1,279.1     $1,629.4     $1,933.5
Incr (Decr) over Prior Period..........                   $ (32.5)                     $   336.6                  $  304.1
Table Win Percentage...................         15.2%        14.7%        17.2%            15.9%        16.3%        15.5%
Incr (Decr) over Prior Period..........                    (.5)pts                      (1.3)pts                   (.8)pts
Number of Table Games..................           127          117          167              155          294          272
Incr (Decr) over Prior Period..........                       (10)                          (12)                      (22)
                                                                                                                
Slot Revenues..........................      $  264.8     $  274.3     $  206.2        $   297.4     $  471.0     $  571.7
Incr (Decr) over Prior Period..........                   $    9.5                     $    91.2                  $  100.7
Slot Handle............................      $3,179.8     $3,381.1     $2,510.3        $ 3,583.7     $5,690.1     $6,964.8
Incr (Decr) over Prior Period..........                   $  201.3                     $ 1,073.4                  $1,274.7
Slot Win Percentage....................          8.3%         8.1%         8.2%             8.3%         8.3%         8.2%
Incr (Decr) over Prior Period..........                    (.2)pts                         .1pts                   (.1)pts
Number of Slot Machines................         3,629        4,083        3,799            4,136        7,428        8,219
Incr (Decr) over Prior Period..........                        454                           337                       791
                                                                                                                
Poker Revenues.........................            --           --     $   13.1        $    16.0     $   13.1     $   16.0
Incr (Decr) over Prior Period..........                         --                          $2.9                      $2.9
Number of Poker Tables.................            --           --           64               63           64           63
Incr (Decr) over Prior Period..........                         --                           (1)                       (1)
                                                                                                                
Other Gaming Revenues..................            --           --     $    2.1        $     2.3     $    2.1     $    2.3
Incr (Decr) over Prior Period..........                         --                     $     0.2                  $    0.2
                                                                                                                
Total Gaming Revenues..................      $  368.9     $  370.7     $  383.3        $   518.4     $  752.2     $  889.1
Incr (Decr) over Prior Period..........                   $    1.8                     $   135.1                  $  136.9
                                                                                                                
Number of Guest Rooms..................         1,180        1,404        1,250            1,250        2,430        2,654
Occupancy Rate.........................         89.9%        87.4%        93.2%            91.7%        91.3%        89.4%
Average Daily Rate (Room Revenue)......      $  93.44     $  81.68     $ 106.26        $  107.72     $  99.04     $  94.26
</TABLE>

-----------
(1) Since date of acquisition April 17, 1996.    

         Gaming revenues are the primary source of Trump AC's revenues.

         Table games revenues represent the amount retained by Trump AC from
amounts wagered at table games. The table win percentage tends to be fairly
constant over the long term, but may vary significantly in the short term, due
to large wagers by "high rollers". The Atlantic City industry table win
percentages were 15.4% and 15.0% for the years December 31, 1996 and 1997,
respectively.

         During the second quarter of 1997, Trump AC revised its estimates of
the useful lives of buildings, building improvements, and furniture and fixtures
which were acquired in 1996. Buildings and building improvements were
reevaluated to have a new forty year life and furniture and fixtures were
determined to have a


                                       33
<PAGE>


seven year life. Trump AC believes these changes more appropriately reflect the
timing of the economic benefits to be received from these assets during their
estimated useful lives. For the year ended December 31, 1997, the net effect of
applying these new lives was to increase net income by $6.0 million.

         Non-operating income for the year ended December 31, 1996 included a
one-time $15.0 million non-refundable licensing fee resulting from an agreement
with Atlantic Jersey Thermal Systems, Inc.

         The extraordinary loss of $59.1 million for the year ended December 31,
1996 relates to the redemption of the Plaza Notes and the write-off of
unamortized deferred financing costs on April 17, 1996.

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1998

         The financial information presented below reflects the results of
operations of Trump AC. Because Trump AC has no business operations other than
its interest in Plaza Associates and Taj Associates its results of operations
are not discussed below.

         The following table includes selected data of Plaza Associates and Taj
Associates for the years ended December 31, 1997 and 1998:

<TABLE>
<CAPTION>
                                                                       YEAR ENDED DECEMBER 31,
                                           ---------------------------------------------------------------------------------
                                               1997         1998          1997          1998         1997         1998
                                              PLAZA        PLAZA          TAJ           TAJ         TOTAL         TOTAL
                                            ASSOCIATES   ASSOCIATES    ASSOCIATES    ASSOCIATES    TRUMP AC     TRUMP AC
                                           ---------------------------------------------------------------------------------
                                                                            (in millions)
<S>                                         <C>         <C>             <C>          <C>            <C>           <C>
Revenues:
    Gaming..........................        $ 370.7      $ 374.5       $  518.4      $  514.0       $  889.1      $  888.5
    Other...........................          108.0        101.6          123.2         119.1          231.2         220.7
                                            -------      -------       --------      --------       --------      -------- 
    Gross Revenues..................          478.7        476.1          641.6         633.1        1,120.3       1,109.2
    Less: Promotional Allowances....           64.4         63.4           73.7          66.7          138.1         130.1
                                            -------      -------       --------      --------       --------      -------- 
                                                                                                  
    Net Revenues....................          414.3        412.7          567.9         566.4          982.2         979.1
                                            -------      -------       --------      --------       --------      -------- 
                                                                                                  
Costs & Expenses:                                                                                 
    Gaming..........................          233.8        228.8          321.6         316.4          555.5         545.2
    General & Administrative........           80.2         79.1           88.0          89.2          168.1         168.2
    Depreciation & Amortization.....           24.4         24.7           41.4          36.4           66.0          61.5
    Other...........................           32.0         32.4           33.5          33.8           65.5          66.2
                                            -------      -------       --------      --------       --------      -------- 
    Total Costs and Expenses........          370.4        365.0          484.5         475.8          855.1         841.1
                                            -------      -------       --------      --------       --------      -------- 
                                                                                                  
Income from Operations..............           43.9         47.7           83.4          90.6          127.1         138.0
                                            -------      -------       --------      --------       --------      -------- 

    Non-Operating Income............             .6          1.4            1.1           2.4            2.9           5.5
    Interest Expense................          (48.6)       (47.7)         (94.7)        (94.1)        (144.1)       (154.6)
                                            -------      -------       --------      --------       --------      -------- 

    Total Non-Operating Expense.....          (48.0)       (46.3)         (93.6)        (91.7)        (141.2)       (149.1)
                                            -------      -------       --------      --------       --------      -------- 
    Net Income/(loss)...............        $  (4.1)     $   1.4       $  (10.2)     $   (1.1)      $  (14.1)     $  (11.1)
                                            =======      =======       ========      =========      ========      ========
</TABLE>


                                       34
<PAGE>
<TABLE>
<CAPTION>
                                                                       YEAR ENDED DECEMBER 31,
                                           ---------------------------------------------------------------------------------
                                               1997         1998          1997          1998         1997         1998
                                              PLAZA        PLAZA          TAJ           TAJ         TOTAL         TOTAL
                                            ASSOCIATES   ASSOCIATES    ASSOCIATES    ASSOCIATES    TRUMP AC     TRUMP AC
                                           ---------------------------------------------------------------------------------
                                                                            (in millions)
<S>                                          <C>          <C>          <C>            <C>          <C>          <C>
Table Game Revenues....................      $    96.4    $   102.4    $   202.7      $   198.6    $   299.1    $   301.0
Incr (Decr) over Prior Period..........                   $     6.0                   $   (4.1)                 $     1.9
Table Game Drop........................      $   654.4    $   643.0    $ 1,279.1      $ 1,204.8    $ 1,933.5    $ 1,847.8
Incr (Decr) over Prior Period..........                   $  (11.4)                   $  (74.3)                 $  (85.7)
Table Win Percentage...................          14.7%        15.9%        15.9%          16.5%        15.5%        16.3%
Incr (Decr) over Prior Period..........                      1.2pts                      0.6pts                    0.8pts
Number of Table Games..................            117          108          155            147          272          255
Incr (Decr) over Prior Period..........                         (9)                         (8)                      (17)

Slot Revenues..........................      $   274.3    $   272.1    $   297.4      $   295.0    $   571.7    $   567.1
Incr (Decr) over Prior Period..........                   $   (2.2)                   $   (2.4)                 $   (4.6)
Slot Handle............................      $ 3,381.1    $ 3,366.8    $ 3,583.7      $ 3,623.7    $ 6,964.8    $ 6,990.5
Incr (Decr) over Prior Period..........                   $  (14.3)                   $    40.0                 $    25.7
Slot Win Percentage....................           8.1%         8.1%         8.3%           8.1%         8.2%         8.1%
Incr (Decr) over Prior Period..........                        0pts                    (0.2)pts                  (0.1)pts
Number of Slot Machines................          4,083        4,144        4,136          4,152        8,219        8,296
Incr (Decr) over Prior Period..........                          61                          16                        77

Poker Revenues.........................             --           --    $    16.0      $    17.6    $    16.0    $    17.6
Incr (Decr) over Prior Period..........                                               $     1.6                 $     1.6
Number of Poker Tables.................             --           --           63             64           63           64
Incr (Decr) over Prior Period..........                                                       1                         1

Other Gaming Revenues..................             --           --    $     2.3      $     2.8    $     2.3    $     2.8
Incr (Decr) over Prior Period..........                                               $     0.5                 $     0.5

Total Gaming Revenues..................      $   370.7    $   374.5    $   518.4      $   514.0    $   889.1    $   888.5
Incr (Decr) over Prior Period..........                        $3.8                   $   (4.4)                 $   (0.6)

Number of Guest Rooms..................          1,404        1,404        1,250          1,250        2,654        2,654
Occupancy Rate.........................          87.4%        86.4%        91.7%          92.0%        89.4%        89.0%
Average Daily Rate (Room Revenue)......      $   81.68    $   79.78    $  107.72      $   99.50    $   94.26    $   89.38
</TABLE>

------------

         Gaming revenues are the primary source of Trump AC's revenues. The year
over year decrease in gaming revenues was due primarily to Taj Associates' first
quarter results in 1997 which included an unusual approximately $8 million
dollar table game win from one premium player, a decline in high-end
international table game players due to Asian economic conditions and the
decline in slot revenues at both the Taj Mahal and Trump Plaza as the result of
an increased competitive marketplace. Table games revenues represent the amount
retained by Trump AC from amounts wagered at table games. The table win
percentage tends to be fairly constant over the long term, but may vary
significantly in the short term, due to large wagers by "high rollers". The
Atlantic City industry table win percentages were 15.0% and 15.3% for the years
ended December 31, 1997 and 1998, respectively. The year over year decrease in
slot revenues at both the Taj Mahal and Trump Plaza was primarily due to
increased competitiveness in the marketplace.


                                       35
<PAGE>


         Gaming costs and expenses decreased $10.3 million or 1.9% from the
comparable period in 1997. This decrease primarily represents marketing and
promotional costs.

         During 1998, self-insurance reserves decreased due to an internally
focused aggressive policy where potential lawsuits are challenged immediately.
Additionally, a more aggressive litigation policy was pursued to deter present
and future frivolous lawsuits. Trump AC also retained an outside consultant to
comprehensively review certain claims and to assist Trump AC in establishing the
estimated reserves at December 31, 1998.

         During the second quarter of 1997, Trump AC revised its estimates of
the useful lives of buildings, building improvements, furniture and fixtures
which were acquired in 1996. Buildings and building improvements were
re-evaluated to have a forty year life and furniture and fixtures were
determined to have a seven year life. Trump AC believes these changes more
appropriately reflect the timing of the economic benefits to be received from
these assets during their estimated useful lives. For the years ended December
31, 1997 and 1998, the net effect of applying these new lives was to increase
net income by $6.0 million and $7.7 million, respectively.

YEAR 2000

         Trump AC has assessed the Year 2000 issue and has begun implementing a
plan to insure its systems are year 2000 compliant. Analysis has been made of
Trump AC's various customer support and internal administration system with
appropriate modifications having been made or underway. Testing the
modifications is expected to be completed during 1999. Trump AC is approximately
80% complete in its modifications.

         Trump AC believes that the issues for concern are predominantly
software related versus hardware related. Further, Trump AC relies upon third
party suppliers for support of property, plant and equipment, such as
communications equipment, elevators and fire safety systems. Contact has been
made with all significant system suppliers and Trump AC is at various stages of
assessment, negotiation and implementation. When necessary, contracts have been
issued to update these systems so as to insure year 2000 compliance. The cost of
addressing the year 2000 issue is not expected to be material as modifications
are being made with existing systems personnel and no significant expectations
for new hardware or software are expected. Any additional costs will be funded
out of operations. However, Trump AC will continually be assessing the situation
and considering whether a contingency plan is necessary as the millennium
approaches.

         This Year 2000 disclosure constitutes Year 2000 readiness disclosure
within the meaning of the Year 2000 Information and Readiness Disclosure Act.

         If Trump AC did not assess the year 2000 issue and provide for its
compliance, it would be forced to convert to manual systems to carry on its
business. Since Trump AC expects to be fully year 2000 compliant, it does not
feel that a contingency plan is necessary at this time.

IMPACT OF NEW ACCOUNTING STANDARDS

         Trump AC has assessed the impact of newly issued accounting standards
expected to go into effect during 1999 in accordance with Staff Accounting
Bulletin No. 74 and, where applicable, disclosures have been provided in the
financial statements. Additionally, Trump AC has also reviewed the impact of
accounting standards which went into effect during 1998 and, where applicable,
Trump AC has provided the required disclosures.

SEASONALITY

         The gaming industry in Atlantic City is seasonal, with the heaviest
activity occurring during the period from May through September. Consequently,
Trump AC's operating results during the two quarters ending in March and
December would not likely be as profitable as the two quarters ending in June
and September.

INFLATION

         There was no significant impact on operations as a result of inflation
during 1996, 1997 or 1998.


                                       36
<PAGE>


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         Management has reviewed the disclosure requirements for Item 7A and,
based upon Trump AC, Trump AC Funding, Funding II and Funding III's current
capital structure, scope of operations and financial statement structure,
management believes that such disclosure is not warranted at this time. Since
conditions may change, Trump AC, Trump AC Funding, Funding II and Funding III
will periodically review its compliance with this disclosure requirement to the
extent applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         An index to financial statements and required financial statement
schedules is set forth in Item 14.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

         None.


                                       37
<PAGE>


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

         MANAGEMENT OF TRUMP AC, TRUMP AC FUNDING, FUNDING II AND FUNDING III

         THCR is the general partner of THCR Holdings. As the sole general
partner of THCR Holdings, THCR generally has the exclusive rights,
responsibilities and discretion in the management and control of THCR Holdings.
THCR Holdings owns 100% of Trump AC, directly and through its ownership of Trump
AC Holding. Trump AC Funding, Funding II and Funding III are wholly owned
subsidiaries of Trump AC. Trump AC and TACC are the general partners of Plaza
Associates and Taj Associates. The Board of Directors of each of Trump AC
Funding, Funding II and Funding III consists of Messrs. Trump, Nicholas L.
Ribis, Robert M. Pickus, Wallace B. Askins and Don M. Thomas. The TAC I Note
Indenture, the TAC II Note Indenture and the TAC III Note Indenture each
requires that two directors of Trump AC Funding, Funding II and Funding III be
persons who would qualify as "Independent Directors" as such term is defined by
the rules of the American Stock Exchange, Inc. ("Amex") (the "Independent
Directors"). The Amex rules define "independent directors" as those who are not
officers of the company, are neither related to its officers nor represent
concentrated family holdings of its shares and who, in view of the company's
board of directors, are free of any relationship that would interfere with the
exercise of independent judgment.

         Set forth below are the names, ages, positions and offices held with
Trump AC, Trump AC Funding, Funding II and Funding III and a brief account of
the business experience during the past five years of each member of the board
of directors of Trump AC Funding, Funding II and Funding III and of the
executive officers of Trump AC, Trump AC Funding, Funding II and Funding III.

         Donald J. Trump--Trump, 52 years old, has been Chairman of the Board of
THCR and THCR Funding since their formation in 1995. Trump was a 50%
shareholder, Chairman of the Board of Directors, President and Treasurer of
Trump Plaza GP and the managing general partner of Plaza Associates prior to
June 1993. Trump was Chairman of the Executive Committee and President of Plaza
Associates from May 1986 to May 1992 and was a general partner of Plaza
Associates until June 1993. Trump has been a director of Trump AC Holding since
February 1993 and was President of Trump AC Holding from February 1993 until
December 1997. Trump was a partner in Trump AC from February 1993 until June
1995. Trump has been Chairman of the Board of Directors of Trump AC Funding
since its formation in January 1996 and the Chairman of the Board of Directors
of Funding II and Funding III since their formation in November 1997. Trump has
been Chairman of the Board of Directors of THCR Holding Corp. and THCR/LP since
October 1991; President and Treasurer of THCR Holding Corp. since March 4, 1991;
Chairman of the Board of Directors, President and Treasurer of TCI since June
1988; Chairman of the Executive Committee of Taj Associates from June 1988 to
October 1991; and President and sole Director of Realty Corp. since May 1986.
Trump has been the sole director of TACC since March 1991. Trump was President
and Treasurer of TACC from March 1991 until December 1997. Trump has been the
sole director of Trump Indiana since its formation. Trump has been Chairman of
the Board of Partner Representatives of Castle Associates, the partnership that
owns Trump Marina, since May 1992; and was Chairman of the Executive Committee
of Castle Associates from June 1985 to May 1992. Trump is the Chairman of the
Board of Directors of Castle Funding, and served as President and Treasurer of
Castle Funding until April 1998. Trump is the Chairman of the Board and
Treasurer of TCHI. Trump is the President, Treasurer, sole director and sole
shareholder of TCI-II. Trump has been a Director of THCR Enterprises, Inc., a
Delaware corporation ("THCR Enterprises"), since its formation in January 1997.
Trump is also the President of The Trump Organization, which has been in the
business, through its affiliates and subsidiaries, of acquiring, developing and
managing real estate properties for more than the past five years. Trump was a
member of the Board of Directors of Alexander's Inc. from 1987 to March 1992.

         Nicholas L. Ribis--Mr. Ribis, 54 years old, has been President, Chief
Executive Officer and a director of THCR and THCR Funding and Chief Executive
Officer of THCR Holdings since their formation in 1995. Mr. Ribis has been the
Chief Executive Officer of Plaza Associates since February 1991, was President
from April 1994 to February 1995, was a member of the Executive Committee of
Plaza Associates from April 1991 to May 29, 1992 and was a director and Vice
President of Trump Plaza GP from May 1992 until June 1993. Mr. Ribis served as
Vice President of Trump AC Holding from February 1995 until December 1997. Mr.
Ribis has served as President of Trump AC Holding since December 1997. Mr. Ribis
has


                                       38
<PAGE>


served as a director of Trump AC Holding since June 1993. Mr. Ribis has been
Chief Executive Officer, President and a director of Trump AC Funding since its
formation in January 1996 and Chief Executive Officer, President and a director
of Funding II and Funding III since their formation in November 1997. Mr. Ribis
served as Vice President of TACC until December 1997. Mr. Ribis has served as
the President of TACC since December 1997. Mr. Ribis has been the President and
Chief Executive Officer of Trump Indiana since its formation. Mr. Ribis has been
a Director of THCR/LP and THCR Holding Corp. since October 1991 and was Vice
President of THCR/LP and THCR Holding Corp. until June 1995; Chief Executive
Officer of Taj Associates since February 1991; Vice President of TCI since
February 1991 and Secretary of TCI since September 1991; Director of Realty
Corp. since October 1991; and a member of the Executive Committee of Taj
Associates from April 1991 to October 1991. Mr. Ribis has served as Vice
President of THCR/LP and THCR Holding Corp. since February 1998. He has also
been Chief Executive Officer of Castle Associates since March 1991 and President
of Castle Associates until April 1998; member of the Executive Committee of
Castle Associates from April 1991 to May 1992; member of the Board of Partner
Representatives of Castle Associates since May 1992; and has served as the Vice
President and Assistant Secretary of TCHI since December 1993 and January 1991,
respectively, until April 1998. Mr. Ribis is now a director of TCHI. Since April
1998, Mr. Ribis has served as President and Chief Executive Officer of TCHI and
Castle Funding. Mr. Ribis has served as Vice President of TCI-II since December
1993 and had served as Secretary of TCI-II from November 1991 to May 1992. Mr.
Ribis has been Vice President of Trump Corp. since September 1991. Mr. Ribis has
been the President and a director of THCR Enterprises since January 1997. From
January 1993 to January 1995 Mr. Ribis served as the Chairman of the Casino
Association of New Jersey and has been a member of the Board of Trustees of the
CRDA since October 1993. From January 1980 to January 1991, Mr. Ribis was Senior
Partner in, and from February 1991 to December 1995, was Counsel to the law firm
of Ribis, Graham & Curtin (now practicing as Graham, Curtin & Sheridan, A
Professional Association), which serves as New Jersey legal counsel to all of
the above-named companies and certain of their affiliated entities.

         Robert M. Pickus--Mr. Pickus, 44 years old, has been Executive Vice
President, General Counsel and Secretary of THCR since its formation in 1995. He
has also been the Executive Vice President of Corporate and Legal Affairs of
Plaza Associates since February 1995. From December 1993 to February 1995, Mr.
Pickus was the Senior Vice President and General Counsel of Plaza Associates.
Mr. Pickus served as the Assistant Secretary of Trump AC Holding from April 1994
until February 1998. Since February 1998, Mr. Pickus has served as the Secretary
of Trump AC Holding. Mr. Pickus has been Secretary and a director of Trump AC
Funding since its formation in January 1996 and Secretary and a director of
Funding II and Funding III since their formation in November 1997. Mr. Pickus
has been the Executive Vice President and Secretary of Trump Indiana since its
inception. Mr. Pickus has been the Executive Vice President of Corporate and
Legal Affairs of Taj Associates since February 1995, and a Director of THCR
Holding Corp. and THCR/LP since November 1995. He was the Senior Vice President
and Secretary of Castle Funding from June 1988 to December 1993 and General
Counsel of Castle Associates from June 1985 to December 1993. Mr. Pickus has
served as the Secretary of Castle Funding since April 1998. Mr. Pickus served as
the Assistant Secretary of TACC until February 1998. Since February 1998, Mr.
Pickus has served as the Secretary of TACC. Mr. Pickus was also Secretary of
TCHI from October 1991 until December 1993. Mr. Pickus is a director of TCHI,
and has served as the Assistant Secretary of TCHI from February 1998 until April
1998. Since April 1998, Mr. Pickus has served as the Secretary of TCHI. Mr.
Pickus has been the Executive Vice President of Corporate and Legal Affairs of
Castle Associates since February 1995, Secretary of Castle Associates since
February 1996 and a member of the Board of Partner Representatives of Castle
Associates since October 1995. Mr. Pickus is currently the Secretary of THCR
Holding Corp., has been the Vice President, Secretary and Director of THCR
Enterprises since January 1997 and has been Executive Vice President of TCS
since its inception and its President since November 1998. He has been admitted
to practice law in the states of New York and New Jersey since 1980, and in the
Commonwealth of Pennsylvania since 1981.

         R. Bruce McKee--Mr. McKee, 53 years old, has served as general manager
of Trump Kansas City LLC since January 1999, served as the Senior Vice President
of Corporate Finance of THCR, Trump AC Funding and TACC from June 1997 until
September 1998. Mr. McKee served as Chief Financial Officer of THCR from June
1997 until September 1998. Mr. McKee has served as the Senior Vice President of
Corporate Finance of Funding II and Funding III since December 1997. Mr. McKee
served as President and Chief Operating Officer of Castle Associates from
October 1996 until June 1997. Mr. McKee was acting Chief Operating Officer of
Taj Associates from October 1995 through October 1996, Senior Vice President,
Finance of Taj Associates from July 1993 through October 1996 and Vice
President, Finance of Taj Associates from September 1990 through June 1993.


                                       39
<PAGE>


Mr. McKee has been the Assistant Treasurer of THCR/LP, Realty Corp. and TCI
since September 1991. Mr. McKee served as the Assistant Treasurer of THCR
Holding Corp. from September 1991 until February 1998. Previously, Mr. McKee was
Vice President of Finance of Elsinore Shore Associates, the owner and operator
of the Atlantis Casino Hotel Atlantic City, from April 1984 to September 1990
and Treasurer of Elsinore Finance Corp., Elsinore of Atlantic City and Elsub
Corp. from June 1986 to September 1990. The Atlantis Casino Hotel now
constitutes the portion of Trump Plaza known as Trump World's Fair.

         Francis X. McCarthy, Jr.--Mr. McCarthy, 46 years old, has served as
Executive Vice President of Corporate Finance and Chief Financial Officer of
THCR, THCR Holdings and THCR Funding since September 1998. Mr. McCarthy has been
the Chief Financial Officer of Trump AC, Trump AC Funding, Funding II and
Funding III since September 1998. Mr. McCarthy has been the Executive Vice
President of Finance of TCS since October 1996. Mr. McCarthy was Vice President
of Finance and Accounting of Trump Plaza GP from October 1992 until June 1993,
Senior Vice President of Finance and Administration of Plaza Associates from
August 1990 to June 1994 and Executive Vice President of Finance and
Administration of Plaza Associates from June 1994 to October 1996. Mr. McCarthy
previously served in a variety of financial positions for Greate Bay Hotel and
Casino, Inc. from June 1980 through August 1990.

         John P. Burke--Mr. Burke, 51 years old, served as the Senior Vice
President of Corporate Finance of THCR from January 1996 until June 1997. Mr.
Burke served as the Senior Vice President of THCR, THCR Holdings and THCR
Funding from June 1997 to January 1999. Mr. Burke has served as Executive Vice
President of THCR, THCR Holdings and THCR Funding since January 1999. Mr. Burke
has been the Corporate Treasurer of THCR, THCR Holdings and THCR Funding since
their formation in 1995. He has also been Corporate Treasurer of Plaza
Associates and Taj Associates since October 1991. Mr. Burke has been the
Treasurer of Trump Indiana since its formation. Mr. Burke has been Treasurer of
Trump AC Funding since its formation in January 1996 and Treasurer of Funding II
and Funding III since their formation in November 1997. Mr. Burke has been
Treasurer of TACC since February 1998. Mr. Burke was a Director of THCR/LP and
THCR Holding Corp. from October 1991 to April 1996 and was Vice President of
THCR/LP until June 1995. Mr. Burke has served as the Assistant Treasurer of THCR
Holding Corp. and THCR/LP since February 1998. Mr. Burke has been the Corporate
Treasurer of Castle Associates since October 1991, the Vice President of Castle
Associates, Castle Funding, TCI-II and TCHI since December 1993, Assistant
Treasurer of TCHI since April 1998, Treasurer of Castle Funding since April
1998, a member of the Board of Partner Representatives of Castle Associates
since March 1997 and the Vice President-Finance of The Trump Organization since
September 1990. Mr. Burke was an Executive Vice President and Chief
Administrative Officer of Imperial Corporation of America from April 1989
through September 1990. Mr. Burke has been the Vice President and Treasurer of
THCR Enterprises since January 1997.

         Wallace B. Askins--Mr. Askins, 68 years old, has been a director of
THCR and THCR Funding since June 1995. He has also been a director of Trump AC
Holding since April 11, 1994, and was a partner representative of the Board of
Partner Representatives of Castle Associates from May 1992 to June 1995. Mr.
Askins has been a director of Trump AC Funding since April 1996 and a director
of Funding II and Funding III since December 1997. Mr. Askins served as a
director of TCI-II from May 1992 to December 1993. From June 1984 to November
1992, Mr. Askins served as Executive Vice President, Chief Financial Officer and
as a director of Armco Inc. Mr. Askins also serves as a director of
EnviroSource, Inc.

         Don M. Thomas--Mr. Thomas, 68 years old, has been a director of THCR
and THCR Funding since June 1995. Mr. Thomas has been a director of Trump AC
Funding since April 1996 and a director of Funding II and Funding III since
December 1997. He has also been the Senior Vice President of Corporate Affairs
of the Pepsi-Cola Bottling Co. of New York since January 1985. Mr. Thomas was
the acting Chairman, and a Commissioner, of the CRDA from 1985 through 1987, and
a Commissioner of the CCC from 1980 through 1984 during a portion of which time
Mr. Thomas served as acting Chairman of the CCC. Mr. Thomas was a director of
Trump Plaza GP until June 1993 and has been a director of Trump AC Holding since
June 1993. Mr. Thomas is an attorney licensed to practice law in the State of
New York.

         All of the persons listed above are citizens of the United States and
have been qualified or licensed by the CCC.


                                       40
<PAGE>


         MANAGEMENT OF TRUMP PLAZA

         Trump AC is the managing general partner of Plaza Associates. Trump AC
Holding is the managing general partner of Trump AC. The Board of Directors of
Trump AC Holding consists of Messrs. Trump, Ribis, Wallace B. Askins and Don M.
Thomas.

         Set forth below are the names, ages, positions and offices held with
Plaza Associates and a brief account of the business experience during the past
five years of each of the executive officers of Plaza Associates other than
those who are also directors or executive officers of Trump AC, Trump AC
Funding, Funding II or Funding III.

         Barry J. Cregan--Mr. Cregan, 44 years old, had been Chief Operating
Officer of Plaza Associates since September 19, 1994 and President since March
1995. Mr. Cregan's employment was terminated in September 1998. Mr. Cregan was
Vice President of Trump AC Holding from February 1995 through September 1998.
Prior to accepting these positions at Trump Plaza, Mr. Cregan was President of
The Plaza Hotel in New York for approximately three years. Prior to joining The
Plaza Hotel, he was Vice President of Hotel Operations at Trump Marina. In
addition, Mr. Cregan has worked for Hilton and Hyatt in executive capacities as
well as working in Las Vegas and Atlantic City in executive capacities.

         Fred A. Buro--Mr. Buro, 42 years old, has been General Manager of Plaza
Associates since September 1998. Mr. Buro served as Executive Vice President of
Marketing of Plaza Associates from May 1994 to September 1998. Mr. Buro
previously served as the President of Casino Resources, Inc., a casino
marketing, management and development organization from 1991 through 1994. Prior
to that, Mr. Buro served from 1984 through 1991 as the President of a
professional services consulting firm.

         Robert Schaffhauser--Mr. Schaffhauser, 52 years old, is a Certified
Public Accountant, and has been Executive Vice President of Finance of Plaza
Associates since September 1998. Mr. Schaffhauser served in a similar capacity
at Trump Marina from January of 1994 through October of 1996. From November of
1996 through August of 1998, Mr. Schaffhauser was associated with THCR as a
consultant. Mr. Schaffhauser also served as the Senior Vice President of Finance
and Administration for Greate Bay Hotel and Casino Corporation from 1989 through
1992.

         James A. Rigot--Mr. Rigot, 47 years old, had been Executive Vice
President of Casino Operations of Plaza Associates since November 1994. Mr.
Rigot's employment was terminated in January 1999. Mr. Rigot served as Vice
President of Casino Operations of Tropicana Casino and Entertainment Resort from
July 1989 through November 1994. From January 1989 through July 1989, Mr. Rigot
was Assistant Casino Manager of Resorts Casino Hotel.

         All of the persons listed above are citizens of the United States and
are licensed by the CCC.

         MANAGEMENT OF THE TAJ MAHAL

         Set forth below are the names, ages, positions and offices held with
Taj Associates and a brief account of the business experience during the past
five years of each of the executive officers and certain key employees of Taj
Associates other than those who are also directors or executive officers of
Trump AC, Trump AC Funding, Funding II or Funding III.

         Rodolfo E. Prieto--Mr. Prieto, 55 years old, has been Chief Operating
Officer of Taj Associates since October 1996. Mr. Prieto has been Vice President
of Trump AC Holding since February 1998. From December 1995 to October 1996, Mr.
Prieto was the Executive Vice President, Operations of Taj Associates. Prior to
joining the Taj Mahal, Mr. Prieto was Executive Vice President and Chief
Operating Officer for Elsinore Corporation from May 1995 to November 1995;
Executive Vice President in charge of the development of the Mojave Valley
Resort for Elsinore Corporation from December 1994 to April 1995 and Executive
Vice President and Assistant General Manager for the Tropicana Resort and Casino
from September 1986 to November 1994.

         Larry W. Clark--Mr. Clark, 54 years old, has been Executive Vice
President, Casino Operations of Taj Associates since November 1991, Senior Vice
President, Casino Operations of Taj Associates from May 1991 to


                                       41
<PAGE>


November 1991, and Vice President, Casino Administration of Taj Associates from
April 1991 to May 1991 and from January 1990 to November 1990. Prior to joining
the Taj Mahal, Mr. Clark was Vice President, Casino Operations of the Dunes
Hotel & Country Club from November 1990 to April 1991 and Director of Casino
Marketing and Vice President, Casino Operations of the Showboat Hotel & Casino
from November 1988 to January 1990.

         Walter Kohlross--Mr. Kohlross, 57 years old, has been Senior Vice
President, Food & Beverage of Taj Associates since June 1992, Vice President
International Marketing of Taj Associates from June 1993 through October 1995,
Vice President, Hotel Operations of Taj Associates from June 1991 to June 1992,
and was Vice President, Food & Beverage of Taj Associates from 1988 to June
1991. Prior to joining Taj Associates, Mr. Kohlross was food and beverage
director of Resorts International from 1985 to 1988.

         Nicholas J. Niglio--Mr. Niglio, 52 years old, has been Executive Vice
President, International Marketing of Taj Associates since May 1996. From
November 1995 to May 1996, Mr. Niglio was Senior Vice President, Casino
Marketing of Taj Associates. From February 1995 to October 1995, Mr. Niglio was
Vice President, International Marketing of Taj Associates. Prior to joining Taj
Associates, Mr. Niglio was Executive Vice President of International
Marketing/Player Development for Castle Associates from 1993 until 1995. Prior
to that, Mr. Niglio served as Senior Vice President, Marketing of Caesar's World
Marketing Corporation from 1991 until 1993.

         Patrick J. O'Malley--Mr. O'Malley, 44 years old, has been the Executive
Vice President of Finance of Taj Associates since October 1996. Prior to joining
the Taj Mahal, Mr. O'Malley was the Executive Vice President of Hotel Operations
of Plaza Associates from September 1995 to October 1996. Prior to joining Trump
Plaza, from September 1994 until September 1995, Mr. O'Malley was President of
The Plaza Hotel in New York City. From December 1989 until September 1994, Mr.
O'Malley was the Vice President of Finance of The Plaza Hotel in New York City.
Prior to joining The Plaza Hotel in New York City, from 1986 to 1989, Mr.
O'Malley was a Regional Financial Controller for the Four Seasons Hotel and
Resorts, Ltd. From 1979 to 1986, Mr. O'Malley worked in the Middle East and
Europe as Hotel Controller for Marriott International Hotels.

         Loretta I. Viscount--Ms. Viscount, 39 years old, has been Assistant
Secretary of Trump AC Holding since February 1998, Vice President of Legal
Affairs of Taj Associates since January 1997, Executive Director of Legal
Affairs for Taj Associates from May 1996 to January 1997; and Executive Director
of Legal Affairs for Castle Associates from September 1987 to May 1996. Prior to
that, Ms. Viscount served as in-house counsel to the Claridge Hotel and Casino
and had been engaged in the private practice of law since 1982.

         All of the persons listed above are citizens of the United States and
are licensed by the CCC.

         Rodolfo E. Prieto was an Executive Vice President and the Chief
Operating Officer for Elsinore Corporation when it filed a petition for
reorganization under Chapter 11 of the Bankruptcy Code on October 31, 1995.
Elsinore Corporation filed a plan of reorganization on February 28, 1996, which
became effective on February 28, 1997.

         MANAGEMENT OF TCS

         Set forth below are the names, ages, positions and offices held with
TCS and a brief account of the business experience during the past five years of
each of the executive officers of TCS, other than those who are directors and
officers of Trump AC or Trump AC Funding.

         Joseph A. Fusco--Mr. Fusco, 54 years old, has been Executive Vice
President for Government Relations & Regulatory Affairs of THCR since June 1996
and of TCS since July 1996. From August 1985 to June 1996, he practiced law as a
partner in various Atlantic City law firms specializing in New Jersey casino
regulatory, commercial and administrative law matters, most recently from
January 1994 to June 1996 as a partner in the law firm of Sterns & Weinroth. Mr.
Fusco previously served as Atlantic County Prosecutor, a Gubernatorial
appointment, from April 1981 to July 1985 and as Special Counsel for Licensing
for the CCC from the inception of that agency in September 1977 to March 1981.
He has been admitted to practice law in the State of New Jersey since 1969.


                                       42
<PAGE>


         Kevin S. Smith--Mr. Smith, 42 years old, has been the Vice President of
Corporate Litigation of TCS since October 1996. Mr. Smith was the Vice
President, General Counsel of Plaza Associates from February 1995 to October
1996. Mr. Smith was previously associated with Cooper Perskie April Niedelman
Wagenheim & Levenson, an Atlantic City law firm specializing in trial
litigation. From 1989 until February 1992, Mr. Smith handled criminal trial
litigation for the State of New Jersey, Department of Public Defender, assigned
to the Cape May and Atlantic County Conflict Unit.

         All of the persons listed above are citizens of the United States and
are licensed by the CCC.

ITEM 11. EXECUTIVE COMPENSATION

         Plaza Associates and Taj Associates do not offer their executive
officers stock option or stock appreciation right plans, long-term incentive
plans or defined benefit pension plans.

         The following table sets forth compensation paid or accrued during the
years ended December 31, 1998, 1997 and 1996 to the Chairman of the Board of
Trump AC Holding, the Chief Executive Officer of Plaza Associates and Taj
Associates, each of the four most highly compensated executive officers of Plaza
Associates and Taj Associates whose salary and bonuses exceeded $100,000 for the
year ended December 31, 1998.


                                       43
<PAGE>
<TABLE>
<CAPTION>
                                            SUMMARY COMPENSATION TABLE

                     NAME AND                          YEAR           SALARY            BONUS       OTHER ANNUAL      ALL OTHER
                PRINCIPAL POSITION                     ----           ------            -----      COMPENSATION(1)   COMPENSATION
               --------------------                                    ANNUAL COMPENSATION         ---------------   ------------
                                                                       -------------------
<S>                                                    <C>          <C>               <C>              <C>            <C>
Donald J. Trump..................................      1998         $        --       $      --             --        $       --
Chairman of the Board, President & Treasurer of        1997                  --              --             --                --    
Trump AC Holding                                       1996                  --              --             --         1,031,000(2)
Nicholas L. Ribis................................      1998         $ 1,103,988       $      --        $    --        $    2,640(3)
Chief Executive Officer of Plaza Associates and        1997           1,098,076              --             --             2,613(3)
Taj Associates                                         1996             998,250              --             --             1,188(3)
Barry J. Cregan(4)...............................      1998         $   654,363       $      --        $    --        $    2,088(3)
Former President and Chief Operating Officer of        1997             766,632              --             --             4,000(3)
Plaza Associates                                       1996             744,813          28,500             --             4,737(3)
Rudolfo Prieto...................................      1998         $   589,612       $ 100,000        $    --        $    4,800(3)
President and Chief Operating Officer of Taj           1997             459,116              --             --             4,000(3)
Associates                                             1996             316,106              --             --             3,800(3)
Larry Clark......................................      1998         $   370,493       $ 125,000        $    --        $    4,800(3)
Executive V.P. Casino Operations of Taj Associates     1997             340,538         235,476             --             4,000(3)
                                                       1996             309,400         109,700             --             3,800(3)
Nicholas L. Niglio...............................      1998         $   365,744       $ 178,058        $    --        $    4,800(3)
Senior V.P. Casino Marketing of Taj Associates         1997             332,515         287,563             --             4,000(3)
                                                       1996             278,984         186,916             --             3,800(3)
Fred A. Buro.....................................      1998         $   339,852       $      --        $    --        $    4,310(3)
General Manager of Plaza Associates                    1997             294,586              --             --             3,958(3)
                                                       1996             233,887          32,000             --             3,958(3)
</TABLE>

-----------

(1) Represents the dollar value of annual compensation not properly
    categorized as salary or bonus, including amounts reimbursed for income
    taxes and directors' fees. Following Commission rules, perquisites and
    other personal benefits are not included in this table if the aggregate
    amount of that compensation is the lesser of either $50,000 or 10% of
    the total of salary and bonus for that officer.

(2) The amounts listed represent (i) amounts paid by Plaza Associates to
    Trump Plaza Management Corp. ("TPM"), a corporation beneficially owned
    by Trump, for services provided under a services agreement (the "TPM
    Services Agreement") and (ii) amounts paid pursuant to the Taj Services
    Agreement. In addition, Trump was reimbursed $483,000 in 1996, for
    expenses incurred pursuant to the TPM Services Agreement and the Taj
    Services Agreement. The TPM Services Agreement and the Taj Services
    Agreement both expired in 1996. Trump is not an employee of Plaza
    Associates or Taj Associates.

(3) Represents vested and unvested contributions made by Plaza Associates,
    Taj Associates and/or TCS under the Trump Plaza Hotel and Casino
    Retirement Savings Plan, the Trump Taj Mahal Retirement Savings Plan
    and Trump Casino Services Retirement Savings Plan, respectively. Funds
    accumulated for an employee under these plans consisting of a certain
    percentage of the employee's compensation plus the employer matching
    contributions equaling 50% of the participant's contributions, are
    retained until termination of employment, attainment of age 59 1/2 or
    financial hardship, at which time the employee may withdraw his or her
    vested funds.

(4) Mr. Cregan terminated his employment in September 1998.


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<PAGE>


EMPLOYMENT AGREEMENTS

         As a result of the June 1995 Offerings, THCR and THCR Holdings entered
into a revised employment agreement with Mr. Ribis (the "Ribis THCR Agreement"),
pursuant to which he agreed to serve as President and Chief Executive Officer of
THCR and Chief Executive Officer of THCR Holdings. The term of the Ribis THCR
Agreement is five years. Under the Ribis THCR Agreement, Mr. Ribis's annual
salary is $1,996,500. Mr. Ribis's annual salary is paid in equal parts by THCR,
Plaza Associates, Taj Associates and Castle Associates. In the event Mr. Ribis's
employment is terminated by THCR other than for "cause" or if he incurs a
"constructive termination without cause," Mr. Ribis will receive a severance
payment equal to one year's base salary, and the phantom stock units and options
will become fully vested. The Ribis THCR Agreement defines (a) "cause" as Mr.
Ribis's (i) conviction of certain crimes, (ii) gross negligence or willful
misconduct in carrying out his duties, (iii) revocation of his casino key
employee license or (iv) material breach of the agreement, and (b) "constructive
termination without cause" as the termination of Mr. Ribis's employment at his
initiative following the occurrence of certain events, including (i) a reduction
in compensation, (ii) failure to elect Mr. Ribis as Chief Executive Officer of
THCR, (iii) failure to elect Mr. Ribis a director of THCR or (iv) a material
diminution of his duties. The phantom stock units will also automatically vest
upon the death or disability of Mr. Ribis. The Ribis THCR Agreement also
provides for up to an aggregate of $2.0 million of loans to Mr. Ribis to be used
by him to pay his income tax liability in connection with stock options, phantom
stock units and stock bonus awards, which loans will be forgiven, including both
principal and interest, in the event of a "change of control." The Ribis THCR
Agreement defines "change of control" as the occurrence of any of the following
events: (i) any person (other than THCR Holdings, Trump or an affiliate of
either) becomes a beneficial owner of 50% or more of the voting stock of THCR,
(ii) the majority of the Board of Directors of THCR consists of individuals that
were not directors on June 12, 1995 (the "June 12 Directors"), provided,
however, that any person who becomes a director subsequent to June 12, 1995,
shall be considered a June 12 Director if his election or nomination was
supported by three-quarters of the June 12 Directors, (iii) THCR adopts and
implements a plan of liquidation or (iv) all or substantially all of the assets
or business of THCR are disposed of in a sale or business combination in which
shareholders of THCR would not beneficially own the same proportion of voting
stock of the successor entity. The Ribis THCR Agreement also provides certain
demand and piggyback registration rights for THCR Common Stock issued pursuant
to the foregoing. Pursuant to the Ribis THCR Agreement, Mr. Ribis has agreed
that upon termination of his employment other than for "cause" or following a
"change of control," he would not engage in any activity competitive with THCR
for a period of up to one year.

         Mr. Ribis had an employment agreement with Taj Associates pursuant to
which Mr. Ribis acted as Chief Executive Officer of Taj Associates. This
agreement has been terminated in connection with the Taj Acquisition and the
Castle Acquisition and now Mr. Ribis is compensated for his services to Taj
Associates under the Ribis THCR Agreement.

         Plaza Associates had an employment agreement with Barry J. Cregan (the
"Cregan Agreement") pursuant to which Mr. Cregan acted as President and Chief
Operating Officer of Plaza Associates. The Cregan Agreement, which expired on
December 31, 1997, provided for an annual base salary of $750,000. Pursuant to
the Cregan Agreement, Mr. Cregan devoted all of his professional time to Plaza
Associates. Subsequent to the expiration of the Cregan Agreement, Mr. Cregan
continued to act as President and Chief Operating Officer of Plaza Associates
until his employment was terminated in September 1998.

         Plaza Associates had an employment agreement with James A. Rigot (the
"Rigot Agreement") pursuant to which Mr. Rigot acted as Executive Vice President
of Casino Operations of Plaza Associates. The Rigot Agreement provided for an
annual base salary of $300,000. Pursuant to the Rigot Agreement, Mr. Rigot
devoted all of his professional time to Plaza Associates. Mr. Rigot terminated
his employment in January 1999.

         Plaza Associates has an employment agreement with Fred Buro (the "Buro
Agreement") pursuant to which Mr. Buro acts as Executive Vice President of
Marketing of Plaza Associates. The Buro Agreement, which expires on May 11,
2000, provides for an annual base salary of $300,000, with any bonus and
increases in salary provided in Plaza Associates' sole and absolute discretion,
however, at no time shall such salary be less than $300,000. Pursuant to the
Buro Agreement, Mr. Buro devotes all of his professional time to Plaza
Associates. In the event that Plaza Associates terminates the Buro Agreement (i)
because Mr. Buro's CCC license is terminated or (ii) because Mr. Buro has
committed an act constituting Cause (defined as a breach by Mr. Buro of any
provision of


                                       45
<PAGE>


the Buro Agreement or any employee conduct rules, an act of dishonesty, the
deliberate and intentional refusal by Mr. Buro to perform his duties under the
Buro Agreement, certain disabilities or death), Plaza Associates shall pay to
Mr. Buro all compensation earned to the date of such termination. In the event
that Plaza Associates terminates the Buro Agreement for any other reason, Plaza
Associates shall offer to pay Mr. Buro an amount equal to twelve months of Mr.
Buro's then current salary, which offer, if accepted, will constitute complete
satisfaction of all obligations and liabilities arising out of the Buro
Agreement. So long as Plaza Associates continues to pay Mr. Buro's salary
pursuant to the Buro Agreement, Mr. Buro shall not accept employment, either as
an employee, consultant or independent contractor, for or on behalf of any other
casino hotel located in Atlantic City, New Jersey.

         The Rigot Agreement and the Buro Agreement provide for discretionary
bonuses. Factors considered by Plaza Associates in the awarding of all
discretionary bonuses generally are the attainment by Plaza Associates of
budgeted or forecasted goals and the individual's perceived contribution to the
attainment of such goals.

         TCS has an employment agreement with Kevin S. Smith, Esq. (the "Smith
Agreement") pursuant to which Mr. Smith acts as the Vice President of Corporate
Litigation & Risk Management of TCS. The Smith Agreement, which expires on
December 31, 2000, provides for a bonus of $25,000 upon signing and an annual
base salary of $160,000, with any bonus and increases in salary provided in
TCS's sole and absolute discretion. Pursuant to the Smith Agreement, Mr. Smith
devotes all of his professional time to TCS. In the event that TCS terminates
the Smith Agreement because Mr. Smith has committed an act constituting Cause
(defined as the denial or revocation of Mr. Smith's CCC license, conviction of a
disqualifying crime, breach of trust, certain disabilities or death), TCS shall
pay to Mr. Smith all compensation earned to the date of such termination.

         Taj Associates has an employment agreement with Rodolfo E. Prieto (the
"Prieto Agreement") pursuant to which he serves as President and Chief Operating
Officer of Taj Associates. The Prieto Agreement, which expires December 31,
2000, provides for a bonus of $100,000 upon signing, an annual salary of
$550,000 through July 1998, $600,000 through July 1999, and $650,000 through
expiration, and, in addition, an annual bonus at the sole discretion of Taj
Associates. Pursuant to the Prieto Agreement, Mr. Prieto has agreed that in the
event the agreement is terminated by him, he would not solicit or contact,
directly or through any other casino in Atlantic City, any customers whom he
developed during his employment with Taj Associates for a period of one year.

         Taj Associates has an agreement with Patrick O'Malley (the "O'Malley
Agreement") pursuant to which Mr. O'Malley serves as Executive Vice President of
Finance and Accounting of Taj Associates. The O'Malley Agreement, which expires
on October 13, 1999, provides for an annual base salary of $250,000 per year and
an annual bonus at the sole discretion of Taj Associates. In the event Taj
Associates terminates the O'Malley Agreement because Mr. O'Malley's casino
license is revoked, terminated and/or suspended for more than 30 days or for
Cause (defined as a breach by Mr. O'Malley of the material provisions of the
O'Malley Agreement or an act of dishonesty), Taj Associates is required to pay
Mr. O'Malley an amount equal to his salary earned to the date of such
termination. In the event Mr. O'Malley terminates the O'Malley Agreement for
Good Cause (defined as the assignment to Mr. O'Malley, without his consent, of
any duties inconsistent with the position of Executive Vice President of Finance
and Accounting, a demotion or change in Mr. O'Malley's title or office, any
removal from his position or a change in control of Taj Associates, except in
connection with the termination of Mr. O'Malley's employment upon revocation of
his casino key employee license, death or disability), or if Taj Associates
terminates the O'Malley Agreement without Cause, Taj Associates shall pay Mr.
O'Malley all compensation, reimbursements and benefits provided for under the
O'Malley Agreement (i) due on the date of such termination and (ii) payable from
such date of termination through the expiration date of the O'Malley Agreement,
which amount shall not be less than one year annual base salary then payable,
and any bonuses accrued to such date of termination. Upon termination of the
O'Malley Agreement, Mr. O'Malley will not accept employment, either as an
employee, consultant or independent contractor, for or on behalf of any other
casino hotel located within a 300-mile radius of Atlantic City, New Jersey.

         Taj Associates has an employment agreement with Larry W. Clark (the
"Clark Agreement") pursuant to which he serves as Executive Vice President,
Casino Operations of Taj Associates. The Clark Agreement, which expires on June
30, 2001, provides for a bonus of $50,000, net of taxes, upon signing, an annual
salary of $350,000 and, in addition, a minimum guaranteed bonus of at least
$125,000 per annum. Pursuant to the Clark Agreement, Mr. Clark has agreed that
in the event the agreement is terminated by him for any reason or by Taj
Associates for


                                       46
<PAGE>


cause, he would not engage in employment for or on behalf of any other casino
hotel located in Atlantic City for a period of one year.

         Taj Associates has an employment agreement with Nicholas J. Niglio (the
"Niglio Agreement") pursuant to which he serves as Executive Vice President,
International Marketing of Taj Associates. The Niglio Agreement, which expires
on June 30, 2001, provides for a bonus of $100,000, net of taxes, upon signing,
an annual salary of $350,000 and, in addition, a minimum guaranteed bonus of
$100,000, net of taxes. Pursuant to the Niglio Agreement, Mr. Niglio has agreed
that upon termination of his employment he would not solicit or contact,
directly or through any other casino in Atlantic City, any customers whom he had
developed during his employment with Taj Associates for a period of one year.

         Taj Associates may terminate the employment agreements of Messrs.
Clark, Prieto and Niglio in its sole discretion, without cause. If Mr. Clark's
employment agreement is terminated without cause, Taj Associates would be
obligated to pay Mr. Clark the greater of one year's salary or his salary for
the number of months remaining in the agreement, each at his then current
salary. If Mr. Prieto's agreement is terminated without cause, Taj Associates
would be obligated to pay Mr. Prieto for the number of months remaining in the
agreement plus expenses to move to Nevada. If Mr. Niglio's employment agreement
is terminated without cause, Taj Associates would be obligated to pay Mr. Niglio
the lesser of twelve month's salary or his salary for the number of months
remaining in the agreement, each at his then current salary. Taj Associates may
also terminate the Clark Agreement, the Prieto Agreement and the Niglio
Agreement (a) in the event that the CCC license of Mr. Clark, Mr. Prieto or Mr.
Niglio, respectively, is revoked or terminated or (b) for "cause," which is
defined in each of the agreements as (i) a material breach of the agreement or
of any employee conduct rules, (ii) dishonesty, (iii) intentional refusal to
perform duties or to properly perform them upon notice, (iv) alcohol or drug
abuse or (v) disability or death.

         The Prieto Agreement and the O'Malley Agreement provide for
discretionary bonuses. Factors considered by Taj Associates in the awarding of
all discretionary bonuses generally are the attainment by Taj Associates of
budgeted or forecasted goals and the individual's perceived contribution to the
attainment of such goals.

COMPENSATION OF DIRECTORS

         All of the directors of Trump AC Funding, Funding II and Funding III
currently serve as an officer or on the Board of Directors of THCR and receive
no additional compensation for their service with Trump AC Funding, Funding II,
and Funding III. Directors of THCR who are also employees or consultants of THCR
and its affiliates receive no directors' fees. Non-employee directors are paid
an annual directors' fee of $50,000, plus $2,000 per meeting attended plus
reasonable out-of-pocket expenses incurred in attending these meetings.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

         In general, the compensation of executive officers of Plaza Associates
and Taj Associates is determined by Trump AC's managing general partner, Trump
AC Holding. No officer or employee of Trump AC Holding, other than Messrs. Trump
and Ribis who serve on the Board of Directors of Trump AC Holding, participated
in the deliberations concerning executive compensation.

         Taj Acquisition. On April 17, 1996, a subsidiary of THCR was merged
with and into THCR Holding Corp. and each outstanding share of THCR Holding
Corp.'s Class A Common Stock, which in the aggregate represented 50% of the
economic interest in Taj Associates, was converted into the right to receive, at
each holder's election, either (a) $30 in cash or (b) that number of shares of
THCR Common Stock having a market value equal to $30. Trump held the remaining
50% interest in Taj Associates and contributed such interest in Taj Associates
to Trump AC in exchange for limited partnership interests in THCR Holdings. The
outstanding shares of THCR Holding Corp.'s Class C Common Stock all of which
were held by Trump, were canceled in connection with the Taj Acquisition. In
addition, Trump received the Trump Warrants. See "Business--The Taj Mahal--Taj
Acquisition."

         Certain Related Party Transactions--Plaza Associates. Seashore Four was
the fee owner of a parcel of land constituting a portion of the Plaza Casino
Parcel, which it leased to Plaza Associates. Plaza Associates


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<PAGE>


recorded rental expenses of approximately $1.0 million in 1996 concerning rent
owed to Seashore Four. In January 1997, Plaza Associates exercised the option to
purchase the land under the lease with Seashore Four for $10 million.

         Trump Seashore was the fee owner of a parcel of land constituting a
portion of the Plaza Casino Parcel, which it leased to Plaza Associates. Plaza
Associates made rental payments to Trump Seashore of approximately $1.0 million
in 1996. In September 1996, Plaza Associates exercised the option to purchase
the land under the lease with Trump Seashore for $14.5 million.

         On June 24, 1993, in connection with the 1993 refinancing of Trump
Plaza, (i) Trump transferred title to Trump Plaza East to Missouri Boardwalk,
Inc. ("MBI"), a wholly owned subsidiary of Midlantic National Bank
("Midlantic"), in exchange for a reduction in indebtedness to Midlantic, (ii)
MBI leased Trump Plaza East to Trump (the "Trump Plaza East Lease") for a term
of five years, which would have expired on June 30, 1998, during which time
Trump would have been obligated to pay MBI $260,000 per month in lease payments
and (iii) Plaza Associates acquired an option to purchase Trump Plaza East. In
October 1993, Plaza Associates assumed the Trump Plaza East Lease and related
expenses. On April 17, 1996, in connection with the Taj Acquisition, Plaza
Associates purchased Trump Plaza East and the Trump Plaza East Lease, and
related obligations were terminated.

         Certain Related Party Transactions--Taj Associates. Taj Associates has
a lease with Trump-Equitable Company, for the lease of office space in The Trump
Tower in New York City, which Taj Associates uses as a marketing office. On
September 1, 1995, the lease was renewed for a term of five years with an option
for Taj Associates to cancel the lease on September 1 of each year, upon six
months' notice and payment of six months' rent. Under the renewed lease, the
monthly payments are $2,285.

         From October 4, 1991 until April 17, 1996, Taj Associates leased the
Specified Parcels from Realty Corp., consisting of land adjacent to the site of
the Taj Mahal, which is used primarily for a bus terminal, surface parking and
the Taj Entertainment Complex, as well as the Steel Pier and a warehouse
complex. During 1993, 1994 and 1995, lease obligations to Realty Corp. for these
facilities were approximately $3.3 million per year. On April 17, 1996, in
connection with the Taj Acquisition, Taj Associates purchased the Specified
Parcels from Realty Corp. and the lease and related obligations were terminated.

         On October 4, 1991, Taj Associates entered into a guarantee with First
Fidelity Bank, National Association (now known as First Union National Bank)
("First Fidelity") of the performance by Realty Corp. of its obligations under a
loan of approximately $78 million owing to First Fidelity (the "First Fidelity
Loan"), which loan was secured by a mortgage on the Specified Parcels. Such
guarantee was limited to any deficiency in the amount owed under the First
Fidelity Loan when due, up to a maximum of $30 million. In connection with the
purchase of the Specified Parcels, Realty Corp.'s obligations to First Fidelity
under the First Fidelity Loan were satisfied and First Fidelity, among other
things, released Taj Associates from the guarantee.

         Taj Associates and Trump were parties to the Taj Services Agreement,
which became effective in April 1991, and which provided that Trump would render
to Taj Associates marketing, advertising, promotional and related services with
respect to the business operations of Taj Associates through December 31, 1999.
In consideration for the services to be rendered, Taj Associates paid an annual
fee (the "Annual Fee") equal to 1% of Taj Associates' earnings before interest,
taxes and depreciation less capital expenditures for such year, with a minimum
base fee of $500,000 per annum. During the period from January 1, 1996 to April
17, 1996, Trump earned approximately $0.4 million in respect of the Annual Fee,
including amounts paid to a third party pursuant to an assignment agreement. In
addition, during the period from January 1, 1996 to April 17, 1996, Taj
Associates reimbursed Trump $148,000, for expenses pursuant to the Taj Services
Agreement. Taj Associates agreed to indemnify Trump from and against any
licensing fees arising out of his performance of the Taj Services Agreement, and
against any liability arising out of his performance of the Taj Services
Agreement, other than that due to his gross negligence or willful misconduct.
The Taj Services Agreement was terminated upon consummation of the Taj
Acquisition on April 17, 1996.

         On April 1, 1991, in connection with the Taj Services Agreement, Taj
Associates and Trump entered into an Amended and Restated License Agreement (the
"Taj License Agreement") which amended and restated an


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<PAGE>


earlier license agreement between the parties. Pursuant to the Taj License
Agreement, Taj Associates had the non-exclusive right to use the name and
likeness of Trump, and the exclusive right to use the name and related marks and
designs of the Taj Mahal (collectively, the "Taj Marks"), in its advertising,
marketing and promotional activities through December 31, 1999. Upon
consummation of the Taj Acquisition, the Taj License Agreement was terminated
and the Taj Marks were licensed to THCR under the License Agreement.

         Other Relationships. The Commission requires registrants to disclose
the existence of any other corporation in which both (i) an executive officer of
the registrant serves on the board of directors and/or compensation committee,
and (ii) a director of the registrant serves as an executive officer. Messrs.
Ribis, Pickus and Burke, executive officers of THCR, have served on the boards
of directors of other entities in which members of the Board of Directors of
THCR (namely, Messrs. Trump and Ribis) served and continue to serve as executive
officers. Management believes that such relationships have not affected the
compensation decisions made by the Board of Directors of THCR in the last fiscal
year.

         Trump is the sole director of TACC, a general partner of Plaza
Associates, of which Messrs. Trump, Ribis and Pickus are executive officers.
Messrs. Trump and Ribis also serve on the Board of Directors of Trump AC
Holding, of which Messrs. Trump, Ribis and Burke are also executive officers.
Trump is not compensated by such entities for serving as an executive officer,
however, he has entered into a personal services agreement with Plaza Associates
and THCR. Messrs. Ribis and Burke are not compensated by the foregoing entities,
however, they are compensated by Plaza Associates for their service as executive
officers.

         Messrs. Ribis, Pickus and Burke serve on the Board of Directors of THCR
Holding Corp., which held, prior to April 17, 1996, an indirect equity interest
in Taj Associates, of which Mr. Trump is an executive officer. Such persons also
serve on the Board of Directors of THCR/LP, the former managing general partner
of Taj Associates, of which Messrs. Trump and Ribis are executive officers. See
"--Employment Agreements."

         Mr. Ribis also serves on the Board of Directors of Realty Corp., which,
prior to the Taj Acquisition, leased certain real property to Taj Associates, of
which Trump is an executive officer. Trump, however, does not receive any
compensation for serving as an executive officer of Realty Corp.

         Messrs. Ribis, Pickus and Burke are members of the Board of Partner
Representatives of Castle Associates and members of the Board of Directors of
TCHI, the general partner of Castle Associates of which Messrs. Ribis, Pickus
and Burke are executive officers. In addition, Trump is the sole director and an
officer of Castle Funding. Messrs. Ribis, Pickus and Burke received no
compensation from these entities other than from Castle Associates for their
services as executive officers. Trump is not compensated by these entities other
than pursuant to the Castle Services Agreement.

         Messrs. Trump and Ribis serve on the Board of Directors of THCR, of
which Trump is Chairman of the Board. Messrs. Ribis, Pickus and Burke are
executive officers of THCR and are compensated for their services by THCR.

         John Barry, Trump's brother-in-law, is a partner of Tompkins, McGuire,
Wachenfeld & Barry, a New Jersey law firm which provides, from time to time,
legal services to Plaza Associates and Taj Associates.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         Trump AC Funding. Through its ownership of 100% of Trump AC and Trump
AC Holding, THCR Holdings has owned 100% of Trump AC Funding's common stock
since its formation on January 30, 1996.

         Funding II. Through its ownership of 100% of Trump AC and Trump AC
Holding, THCR Holdings has owned 100% of Funding II's common stock since its
formation on November 18, 1997.

         Funding III. Through its ownership of 100% of Trump AC and Trump AC
Holding, THCR Holdings has owned 100% of Funding II's common stock since its
formation on November 18, 1997.


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<PAGE>


         Trump AC. Through its ownership of 100% of Trump AC Holding, THCR
Holdings currently beneficially owns 100% of Trump AC.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         Affiliate party transactions are governed by the provisions of the TAC
I Note Indenture, the TAC II Note Indenture and the TAC III Note Indenture which
provisions generally require that such transactions be on terms as favorable as
would be obtainable from an unaffiliated party, and require the approval of a
majority of the independent directors of Trump AC Funding, Funding II or Funding
III, as applicable.

         Trump, Ribis and certain affiliates have engaged in certain related
party transactions with respect to THCR and its subsidiaries. See "Executive
Compensation--Compensation Committee Interlocks and Insider
Participation--Certain Related Party Transactions--Plaza Associates," "--Taj
Associates" and "--Other Relationships."

         Plaza Associates and Taj Associates have joint insurance coverage with
Castle Associates and other entities affiliated with Trump, for which the annual
premiums paid by Plaza Associates and Taj Associates were approximately $3.9
million for the year ended December 31, 1998.

         Plaza Associates leased portions of its Egg Harbor Parcel to Castle
Associates. Lease payments by Castle Associates to Plaza Associates totaled
$5,000 in 1996. Castle Associates did not make any lease payments to Plaza
Associates in 1997.

         Indemnification Agreements. In addition to the indemnification
provisions in THCR's and its subsidiaries' employment agreements (see "Executive
Compensation--Employment Agreements"), certain former and current directors of
Plaza Funding entered into separate indemnification agreements in May 1992 and
June 1993 with Plaza Associates pursuant to which such persons are afforded the
full benefits of the indemnification provisions of the partnership agreement
governing Plaza Associates. Plaza Associates also entered into an
indemnification trust agreement in November 1992 with Midlantic (the
"Indemnification Trustee") pursuant to which the sum of $100,000 was deposited
by Plaza Associates with the Indemnification Trustee for the benefit of the
directors of Plaza Funding and certain former directors of Trump Plaza GP to
provide a source for indemnification for such persons if Plaza Associates, Plaza
Funding or Trump Plaza GP, as the case may be, fails to immediately honor a
demand for indemnification by such persons. The indemnification agreements with
the directors of Plaza Funding and directors of Trump Plaza GP were amended in
June 1993 to provide, among other things, that Plaza Associates would (i) not
terminate, amend or modify certain agreements in a manner which may adversely
affect the rights or interests of such directors unless an additional sum of
$600,000 was first deposited with the Indemnification Trustee, and (ii) maintain
directors' and officers' insurance covering such persons during the ten-year
term (subject to extension) of the indemnification agreements; provided,
however, that if such insurance would not be available on a commercially
practicable basis, Plaza Associates could, in lieu of obtaining such insurance,
annually deposit an amount in a trust fund equal to $500,000 for the benefit of
such directors; provided further that deposits relating to the failure to obtain
such insurance shall not exceed $2.5 million. Such directors are covered by
directors' and officers' insurance maintained by Plaza Associates. In June 1993,
an additional sum of $600,000 was deposited with the Indemnification Trustee for
the benefit of the directors of Plaza Funding and certain former directors of
Trump Plaza GP.

         In connection with the Taj Acquisition, Trump AC has agreed to provide
to the former officers and Directors of THCR Holding Corp. and THCR/LP (the "Taj
Indemnified Parties"), including Messrs. Ribis, Pickus and Burke,
indemnification as provided in the THCR's Amended and Restated Certificate of
Incorporation and Amended and Restated By-Laws until April 17, 2002. In
addition, THCR agreed, and agreed to cause THCR Holding Corp. and THCR/LP to
agree, that until April 17, 2002, unless otherwise required by law, the
Certificate of Incorporation and By-Laws of THCR Holding Corp. and THCR/LP shall
not be amended, repealed or modified to reduce or limit the rights of indemnity
afforded to the former directors, officers and employees of THCR Holding Corp.
and THCR/LP or the ability of THCR Holding Corp. or THCR/LP to indemnify such
persons, nor to hinder, delay or make more difficult the exercise of such rights
of indemnity or the ability to indemnify. In addition, Trump AC has also agreed
to purchase and maintain in effect, until April 17, 2002, directors' and
officers' liability insurance policies covering the Taj Indemnified Parties on
terms no less favorable than the terms of the then


                                       50
<PAGE>


current insurance policies' coverage or, if such directors' and officers'
liability insurance is unavailable for an amount no greater than 150% of the
premium paid by THCR Holding Corp. (on an annualized basis) for directors' and
officers' liability insurance during the period from January 1, 1996, to April
17, 1996, Trump AC has agreed to obtain as much insurance as can be obtained for
a premium not in excess (on an annualized basis) of such amount.


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<PAGE>


                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

          (a) FINANCIAL STATEMENTS. See the index immediately following the
              signature page.

          (b) REPORTS ON FORM 8-K.

         The Registrants did not file any reports on Form 8-K during the quarter
ended December 31, 1998.

          (c) EXHIBITS.

3.1.1(19)    Certificate of Incorporation of Trump Atlantic City Funding, Inc.
             (formerly THCR Atlantic City  Funding, Inc.).

3.1.2(19)    Certificate of Amendment of Certificate of Incorporation of Trump
             Atlantic City Funding, Inc. (formerly THCR Atlantic City
             Funding, Inc.).

3.2(19)      By-Laws of Trump Atlantic City Funding, Inc. (formerly THCR
             Atlantic City Funding, Inc.).

3.3-3.7      Intentionally omitted.

3.8.1(5)     Partnership Agreement of Trump Atlantic City Associates (formerly
             Trump Plaza Holding Associates).

3.8.2(5)     Amendment No. 1 to the Partnership Agreement of Trump Atlantic
             City Associates (formerly Trump Plaza Holding Associates).

3.8.3(12)    Amendment No. 2 to the Partnership Agreement of Trump Atlantic
             City Associates (formerly Trump Plaza Holding Associates).

3.8.4(20)    Amended and Restated Partnership Agreement of Trump Atlantic
             City Associates.

3.9.1(4)     Agreement and Plan of Merger between TP/GP Corp. and Trump Plaza
             Funding, Inc.

3.9.2(19)    Form of Second Amended and Restated Agreement of Limited 
             Partnership of Trump Hotels & Casino Resorts Holdings, L.P.

3.10(25)     Certificate of Incorporation of Trump Atlantic City
             Funding II, Inc.

3.11(25)     By-Laws of Trump Atlantic City Funding II, Inc.

3.12(24)     Certificate of Incorporation of Trump Atlantic City Funding
             III, Inc.

3.13(24)     By-Laws of Trump Atlantic City Funding III, Inc.

3.14(26)     Certificate of Incorporation of Trump Atlantic City Corporation,
             as amended.

3.15(26)     By-Laws of Trump Atlantic City Corporation.

3.16(25)     Certificate of Formation of Trump Casino Services, L.L.C.

3.17(25)     Operating Agreement of Trump Casino Services, L.L.C.

3.18(25)     Certificate of Formation of Trump Communications, L.L.C.

3.19(25)     Operating Agreement of Trump Communications, L.L.C.

3.20(26)     Third Amended and Restated Partnership Agreement of Trump
             Plaza Associates, dated April 17, 1996, by and between Trump
             Atlantic City Associates, Trump Plaza Funding, Inc. and Trump Taj
             Mahal Corporation (now known as Trump Atlantic City Corporation).

3.21(26)     Second Amended and Restated Partnership Agreement of
             Trump Taj Mahal Associates, dated April 17, 1996, by and
             between Trump Atlantic City Associates, TM/GP Corporation
             (now known as THCR/LP Corporation), Trump Taj Mahal
             Corporation (now known as Trump Atlantic City
             Corporation) and Trump Taj Mahal, Inc. (now known as
             Trump Casinos, Inc.).

4.1(5)       Mortgage Note Indenture, among Trump Plaza Funding, Inc.,
             as issuer, Trump Plaza Associates, as guarantor, and
             First Bank National Association, as trustee.

4.2(5)       Indenture of Mortgage, between Trump Plaza Associates, as
             mortgagor, and Trump Plaza Funding, Inc., as mortgagee.

4.3(5)       Assignment Agreement between Trump Plaza Funding, Inc. and
             First Bank National Association, as trustee.

4.4(5)       Assignment of Operating Assets from Trump Plaza Associates
             to Trump Plaza Funding, Inc.

4.5(5)       Assignment of Leases and Rents from Trump Plaza Associates to
             Trump Plaza Funding, Inc.

4.6(5)       Indenture of Mortgage between Trump Plaza Associates and First
             Bank National Association, as trustee.


                                       52
<PAGE>


4.7(5)       Assignment of Leases and Rents from Trump Plaza Associates to
             First Bank National Association, as trustee.

4.8(5)       Assignment of Operating Assets from Trump Plaza Associates to
             First Bank National Association, as trustee.

4.9(5)       Trump Plaza Associates Note to Trump Plaza Funding, Inc.

4.10(5)      Mortgage Note Certificate (included in Exhibit 4.1).

4.11(5)      Pledge Agreement of Trump Plaza Funding, Inc., in favor and for
             the benefit of First Bank National Association, as trustee.

4.12-4.18    Intentionally omitted.

4.19.6(20)   Pledge Agreement, dated April 17, 1996, from Trump
             Atlantic City Associates, as pledgor, to First Bank
             National Association, as Senior Note Trustee.

4.26.1(20)   Indenture, among Trump Atlantic City Associates and Trump
             Atlantic City Funding, Inc., as issuers, Trump Plaza
             Associates, Trump Taj Mahal Associates and The Trump Taj
             Mahal Corporation, as guarantors, and First Bank National
             Association, as trustee.

4.27.1(20)   First Mortgage Note Certificate (included in Exhibit 4.26.1).

4.28.1(20)   Indenture of Mortgage and Security Agreement, among Trump
             Taj Mahal Associates, as mortgagor, and First Bank
             National Association, as collateral agent, as mortgagee.

4.28.2(20)   Indenture of Mortgage and Security Agreement, among Trump
             Plaza Associates, as mortgagor, and First Bank National
             Association, as collateral agent, as mortgagee.

4.29.1(20)   Assignment of Leases and Rents, among Trump Taj Mahal
             Associates, as assignor, and First Bank National
             Association, as collateral agent, as mortgagee.

4.29.2(20)   Assignment of Leases and Rents, among Trump Plaza
             Associates, as assignor, and First Bank National
             Association, as collateral agent, as mortgagee.

4.30.1(20)   Collateral Agency Agreement, among First Bank National
             Association, as collateral agent, and First Bank National
             Association, as trustee, Trump Atlantic City Associates,
             Trump Atlantic City Funding, Inc., the other secured
             parties signatory thereto and the guarantors under the
             First Mortgage Note Indenture.

4.31(26)     Indenture, dated as of December 10, 1997, by and among
             Trump Atlantic City Associates and Trump Atlantic City
             Funding II, Inc., as issuers, Trump Atlantic City
             Corporation, Trump Casino Services, L.L.C., Trump
             Communications, L.L.C., Trump Plaza Associates and Trump
             Taj Mahal Associates, as guarantors, and U.S. Bank
             National Association, as trustee.

4.32(25)     Registration Rights Agreement, dated as of December 10,
             1997, by and among Trump Atlantic City Associates and
             Trump Atlantic City Funding II, as issuers, Trump
             Atlantic City Corporation, Trump Casino Services, L.L.C.,
             Trump Communications, L.L.C., Trump Plaza Associates and
             Trump Taj Mahal Associates, as guarantors, and Donaldson,
             Lufkin & Jenrette Securities Corporation, as initial
             purchaser.

4.33(27)     Indenture, dated as of December 10, 1997, by and among
             Trump Atlantic City Associates and Trump Atlantic City
             Funding III, Inc., as issuers, Trump Atlantic City
             Corporation, Trump Casino Services, L.L.C., Trump
             Communications, L.L.C., Trump Plaza Associates and Trump
             Taj Mahal Associates, as guarantors, and U.S. Bank
             National Association, as trustee.

4.34(24)     Registration Rights Agreement, dated as of December 10,
             1997, by and among Trump Atlantic City Associates and
             Trump Atlantic City Funding III, as issuers, Trump
             Atlantic City Corporation, Trump Casino Services, L.L.C.,
             Trump Communications, L.L.C., Trump Plaza Associates and
             Trump Taj Mahal Associates, as guarantors, and Donaldson,
             Lufkin & Jenrette Securities Corporation, as initial
             purchaser.

4.35(25)     Indenture of Mortgage and Security Agreement by Trump Plaza
             Associates as mortgagor and U.S. Bank National Association
             (as Collateral Agent) as mortgagee.

4.36(25)     Indenture of Mortgage and Security Agreement by Trump Taj
             Mahal Associates as mortgagor and U.S. Bank National Association
             (as Collateral Agent) as mortgagee.

4.37(25)     Assignment of Leases and Rents by Trump Plaza Associates as
             assignor and U.S. Bank National Association (as Collateral
             Agent) as assignee.

4.38(25)     Assignment of Leases and Rents by Trump Taj Mahal Associates
             as assignor and U.S. Bank National Association (as Collateral
             Agent) as assignee.

4.39(25)     Debtors' Consent by Trump Atlantic City Associates, Trump
             Atlantic City Funding II, Inc., Trump Atlantic City Corporation,
             Trump Plaza Associates, Trump Taj Mahal Associates, Trump
             Casino Services, L.L.C. and Trump Communications, L.L.C.


                                       53
<PAGE>


4.40(24)     Debtors' Consent by Trump Atlantic City Associates, Trump Atlantic
             City Funding III, Inc., Trump Atlantic City Corporation, Trump
             Plaza Associates, Trump Taj Mahal Associates, Trump
             Casino Services, L.L.C. and Trump Communications, L.L.C.

10.1-10.6    Intentionally omitted.

10.7(7)      Employment Agreement between Trump Plaza Associates and
             Barry Cregan.

10.8-10.27   Intentionally omitted.

10.28(2)     Option Agreement, dated as of February 2, 1993, between Donald
             J. Trump and Trump Plaza Associates.

10.29        Intentionally omitted.

10.30(3)     Amended and Restated Services Agreement between Trump Plaza
             Associates and Trump Plaza Management Corp.

10.31-10.32  Intentionally omitted.

10.33(4)     Mortgage from Donald J. Trump, as nominee, to Albert Rothenberg
             and Robert Rothenberg, dated October 3, 1983.

10.34(4)     Mortgage made by Harrah's Associates to Adeline Bordonaro,
             dated January 28, 1986.

10.35.1(4)   Mortgage from Trump Plaza Associates to The Mutual Benefit Life
             Insurance Company, dated October 5, 1990.

10.35.2(4)   Collateral Assignment of Leases from Trump Plaza
             Associates to The Mutual Benefit Life Insurance Company,
             dated October 5, 1990.

10.36-10.37  Intentionally omitted.

10.38(11)    Employment Agreement between Trump Hotels & Casino Resorts
             Holdings, L.P. and Nicholas L. Ribis (with exhibits).

10.39.2(6)   Severance Agreement between Trump Plaza Associates and
             Robert M. Pickus.

10.39.4(18)  Employment Agreement between Robert M. Pickus and Trump
             Hotels & Casino Resorts, Inc.

10.40(9)     Employment Contract, dated as of February 7, 1995, between
             Trump Plaza Associates and Kevin S. Smith.

10.41(9)     Employment Agreement between Trump Plaza Associates and
             James A. Rigot.

10.42(9)     Option and Right of First Offer Agreement between Trump Plaza
             Associates and Missouri Boardwalk Inc., dated June 24, 1993.

10.43(9)     Lease between Donald J. Trump and Missouri Boardwalk Inc.,
             dated June 24, 1993.

10.44(9)     Sublease between Donald J. Trump and Missouri Boardwalk Inc.,
             dated June 24, 1993.

10.45(8)     Employment Agreement, dated August 1, 1994, between R. Bruce
             McKee and Trump Taj Mahal Associates.

10.46(11)    Executive Agreement among Donald J. Trump, Trump Hotels & Casino
             Resorts, Inc. and Trump Hotels & Casino Resorts Holdings, L.P.

10.47-10.49  Intentionally omitted.

10.50(10)    Acquisition Agreement, dated April 27, 1995, between Trump
             Oceanview, Inc. and The New Jersey Sports and Exposition Authority.

10.51-10.55  Intentionally omitted.

10.56(10)    Agreement of Sublease between Donald J. Trump and Time Warner
             Entertainment Company, L.P., as amended.

10.57-10.62  Intentionally omitted.

10.63.2(20)  Third Amended and Restated Partnership Agreement of Trump
             Plaza Associates.

10.65.1(21)  Services Agreement, dated as of July 8, 1996, among Trump Plaza
             Associates, Trump Taj Mahal Associates and Trump Casino
             Services, L.L.C.

10.65.2(22)  Amended and Restated Service Agreement, dated as of October 23,
             1996, by and among Trump Plaza Associates, Trump Taj Mahal
             Associates, Trump's Castle Associates, L.P. and Trump Casino
             Services, L.L.C.

10.66(21)    Thermal Energy Service Agreement, dated as of June 30, 1996, by
             and between Atlantic Jersey Thermal Systems, Inc. and Trump Taj
             Mahal Associates.

10.67(22)    Thermal Energy Service Agreement, dated as of September 26, 1996,
             by and between Atlantic Jersey Thermal Systems, Inc. and Trump
             Plaza Associates.

10.68(8)     Employment Agreement, dated December 10, 1993, between Larry
             W. Clark and Trump Taj Mahal Associates.

10.69(8)     Employment Agreement, dated August 1, 1994, between Walter F.
             Kohlross and Trump Taj Mahal Associates.


                                       54
<PAGE>


10.70(10)    Lease Agreement between Trump's Castle Associates and Trump Taj
             Mahal Associates, dated as of December 16, 1994.

10.71(13)    Employment Agreement, extended and modified, dated October 10,
             1995, between Larry W. Clark and Trump Taj Mahal Associates.

10.71.1(26)  Second Amendment to Employment Agreement dated May 27, 1997,
             between Larry W. Clark and Trump Taj Mahal Associates.

10.72(15)    Employment Agreement, dated October 25, 1995, between Rodolfo E.
             Prieto and Trump Taj Mahal  Associates.

10.73(23)    Employment Agreement, dated October 14, 1996, between Trump Taj
             Mahal Associates and Patrick J. O'Malley.

10.74(23)    Employment Agreement, dated May 3, 1996, between Trump Taj Mahal
             Associates and Loretta I. Viscount.

10.75        Intentionally omitted.

21           List of Subsidiaries of the Registrants.

27.1         Financial Data Schedule of Trump Atlantic City Associates

27.2         Financial Data Schedule for Trump Atlantic City Funding, Inc.

27.3         Financial Data Schedule for Trump Atlantic City Funding II, Inc.

27.4         Financial Data Schedule for Trump Atlantic City Funding III, Inc.
-----------

(1)      Incorporated herein by reference to the identically numbered Exhibit to
         the Quarterly Report on Form 10-Q of Trump Plaza Funding, Inc., Trump
         Plaza Associates and Trump Plaza Holding Associates for the quarter
         ended September 30, 1992.

(2)      Incorporated herein by reference to the identically numbered Exhibit in
         the Annual Report on Form 10-K of Trump Plaza Funding, Inc. for the
         year ended December 31, 1992.

(3)      Previously filed in the Registration Statement on Form S-1,
         Registration No. 33-58608, of Trump Atlantic City Associates (formerly
         Trump Plaza Holding Associates).

(4)      Incorporated herein by reference to the identically numbered Exhibit in
         the Registration Statement on Form S-1, Registration No. 33-58602, of
         Trump Plaza Funding, Inc. and Trump Plaza Associates.

(5)      Incorporated herein by reference to the identically numbered Exhibit in
         the Registration Statement on Form S-1, Registration No. 33-58608, of
         Trump Atlantic City Associates (formerly Trump Plaza Holding
         Associates).

(6)      Incorporated herein by reference to the identically numbered Exhibit in
         the Annual Report on Form 10-K of Trump Plaza Funding, Inc. and Trump
         Atlantic City Associates (formerly Trump Plaza Holding Associates) for
         the year ended December 31, 1993.

(7)      Incorporated herein by reference to the identically numbered Exhibit in
         the Quarterly Report on Form 10-Q of Trump Plaza Funding, Inc. and
         Trump Atlantic City Associates (formerly Trump Plaza Holding
         Associates) for the quarter ended September 30, 1994.

(8)      Incorporated herein by reference to the Exhibit in the Quarterly Report
         on Form 10-Q of Trump Taj Mahal Funding, Inc. and Trump Taj Mahal
         Associates for the quarter ended September 30, 1994.

(9)      Incorporated herein by reference to the identically numbered Exhibit in
         the Annual Report on Form 10-K of Trump Plaza Funding, Inc. and Trump
         Atlantic City Associates (formerly Trump Plaza Holding Associates) for
         the year ended December 31, 1994.

(10)     Incorporated herein by reference to the Exhibit in the Annual Report on
         Form 10-K of Trump Taj Mahal Funding, Inc. and Trump Taj Mahal
         Associates for the year ended December 31, 1994.


                                       55
<PAGE>


(11)     Incorporated herein by reference to the identically numbered Exhibit in
         the Quarterly Report on Form 10-Q of Trump Hotels & Casino Resorts,
         Inc., Trump Hotels & Casino Resorts Holdings, L.P. and Trump Hotels &
         Casino Resorts Funding, Inc. for the quarter ended June 30, 1995.

(12)     Incorporated herein by reference to the identically numbered Exhibit to
         the Quarterly Report on Form 10-Q of Trump Plaza Funding, Inc., Trump
         Plaza Associates and Trump Atlantic Associates (formerly Trump Plaza
         Holding Associates) for the quarter ended June 30, 1995.

(13)     Incorporated herein by reference to the Exhibit in the Quarterly Report
         on Form 10-Q of Trump Taj Mahal Funding, Inc. and for the quarter ended
         September 30, 1995.

(14)     Incorporated herein by reference to the identically numbered Exhibit in
         the Annual Report on Form 10-K of Trump Plaza Funding, Inc. and Trump
         Plaza Associates for the year ended December 31, 1995.

(15)     Incorporated herein by reference to the Exhibit in the Annual Report on
         Form 10-K of Taj Mahal Holding Corp. for the year ended December 31,
         1995.

(16)     Incorporated herein by reference to the identically numbered Exhibit in
         the Current Report on Form 8-K of Trump Hotels & Casino Resorts, Inc.,
         dated January 10, 1996.

(17)     Incorporated herein by reference to the identically numbered Exhibit in
         the Current Report on Form 8-K of Trump Hotels & Casino Resorts, Inc.
         dated February 1, 1996.

(18)     Incorporated herein by reference to the identically numbered Exhibit to
         the Registration Statement on Form S-4, Registration No. 333-153, of
         Trump Hotels & Casino Resorts, Inc.

(19)     Previously filed in Registration Statement on Form S-1, Registration
         No. 333-643, of Trump Atlantic City Associates, Trump Atlantic City
         Funding, Inc. and Trump Plaza Associates.

(20)     Incorporated herein by reference to the identically numbered Exhibit to
         the Quarterly Report on Form 10-Q of Trump Atlantic city Associates and
         Trump Atlantic City Funding, Inc. for the quarter ended March 31, 1996.

(21)     Incorporated herein by reference to the identically numbered Exhibit to
         the Quarterly Report on Form 10-Q of Trump Atlantic City Associates and
         Trump Atlantic City Funding, Inc. for the quarter ended June 31, 1996.

(22)     Incorporated herein by reference to the identically numbered Exhibit to
         the Quarterly Report on Form 10-Q of Trump Atlantic City Associates and
         Trump Atlantic City Funding, Inc. for the quarter ended September 31,
         1996.

(23)     Incorporated herein by reference to the identically numbered Exhibit to
         the Annual Report on Form 10-K of Trump Atlantic City Associates and
         Trump Atlantic City Funding, Inc. for the year ended December 31, 1996.

(24)     Incorporated herein by reference to the identically numbered Exhibit to
         the Registration Statement on Form S-4, Registration No. 333-43975, of
         Trump Atlantic City Associates and Trump Atlantic City Funding III,
         Inc.

(25)     Incorporated herein by reference to the identically numbered Exhibit to
         the Registration Statement on Form S-4, Registration No. 333-43979, of
         Trump Atlantic City Associates and Trump Atlantic City Funding II, Inc.

(26)     Incorporated herein by reference to the identically numbered Exhibit in
         Amendment No. 1 to Registration Statement on Form S-4, Registration No.
         333-43979, of Trump Atlantic City Associates and Trump Atlantic City
         Funding II, Inc.


                                       56
<PAGE>


(27)     Incorporated herein by reference to the identically numbered Exhibit to
         the Annual Report on Form 10-K of Trump Atlantic City Associates, Trump
         Atlantic City Funding, Inc., Trump Atlantic City Funding II, Inc. and
         Trump Atlantic City Funding III, Inc. for the year ended December 31,
         1997.

             (d) Financial Statement Schedules.

         See "Financial Statements and Supplementary Date--Index to Financial
Statements and Financial Statement Schedule" for a list of the financial
statement schedule included in this Annual Report.


                                       57
<PAGE>


            IMPORTANT FACTORS RELATING TO FORWARD-LOOKING STATEMENTS

         The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements so long as those statements are
identified as forward-looking and are accompanied by meaningful cautionary
statements identifying important factors that could cause actual results to
differ materially from those projected in such statements. In connection with
certain forward-looking statements contained in this Annual Report on Form 10-K
and those that may be made in the future by or on behalf of the Registrants, the
Registrants note that there are various factors that could cause actual results
to differ materially from those set forth in any such forward-looking
statements. The forward-looking statements contained in this Annual Report were
prepared by management and are qualified by, and subject to, significant
business, economic, competitive, regulatory and other uncertainties and
contingencies, all of which are difficult or impossible to predict and many of
which are beyond the control of the Registrants. Accordingly, there can be no
assurance that the forward-looking statements contained in this Annual Report
will be realized or that actual results will not be significantly higher or
lower. The statements have not been audited by, examined by, compiled by or
subjected to agreed-upon procedures by independent accountants, and no
third-party has independently verified or reviewed such statements. Readers of
this Annual Report should consider these facts in evaluating the information
contained herein. In addition, the business and operations of the Registrants
are subject to substantial risks which increase the uncertainty inherent in the
forward-looking statements contained in this Annual Report. The inclusion of the
forward-looking statements contained in this Annual Report should not be
regarded as a representation by the Registrants or any other person that the
forward-looking statements contained in this Annual Report will be achieved. In
light of the foregoing, readers of this Annual Report are cautioned not to place
undue reliance on the forward-looking statements contained herein.


                                       58
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, each registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                          TRUMP ATLANTIC CITY ASSOCIATES
                                          By: Trump Atlantic City Holding, Inc.,
                                          its general partner

                                          /s/ NICHOLAS L. RIBIS
                                          --------------------------------------
                                          By: Nicholas L. Ribis
                                          Title: President
                                          Date: March 30, 1999


                                          TRUMP ATLANTIC CITY FUNDING, INC.

                                          /s/ NICHOLAS L. RIBIS
                                          --------------------------------------
                                          By: Nicholas L. Ribis
                                          Title: Chief Executive Officer and
                                                  President
                                          Date: March 30, 1999


                                          TRUMP ATLANTIC CiTY FUNDING II, INC.

                                          /s/ NICHOLAS L. RIBIS
                                          --------------------------------------
                                          By: Nicholas L. Ribis
                                          Title: Chief Executive Officer and
                                                  President
                                          Date: March 30, 1999


                                           TRUMP ATLANTIC CITY FUNDING III, INC.

                                           /s/ NICHOLAS L. RIBIS
                                           -------------------------------------
                                           By: Nicholas L. Ribis
                                           Title: Chief Executive Officer and
                                                   President
                                           Date: March 30, 1999


                                       59
<PAGE>


         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 and in the capacities and on the dates indicated:

TRUMP ATLANTIC CITY ASSOCIATES

By:  Trump Atlantic City Holding, Inc.,
     its general partner

<TABLE>
<CAPTION>

                      SIGNATURES                                TITLE                       DATE
                      ----------                                -----                       ----
<S>                                                    <C>                               <C>                        
By:             /s/ DONALD J. TRUMP                    Chairman of the Board of          March 30, 1999
   ----------------------------------------------       Directors (principal
                   Donald J. Trump                      executive officer)
                                                       

By:          /s/ FRANCIS X. MCCARTHY, JR.              Chief Financial Officer           March 30, 1999
   ----------------------------------------------       (principal financial and
               Francis X. McCarthy, Jr.                 accounting officer)
                                                       

By:              /s/ NICHOLAS L. RIBIS                 Director                          March 30, 1999
   ----------------------------------------------
                  Nicholas L. Ribis

By:              /s/ WALLACE B. ASKINS                 Director                          March 30, 1999
   ----------------------------------------------
                  Wallace B. Askins

By:                /s/ DON M. THOMAS                   Director                          March 30, 1999
   ----------------------------------------------
                    Don M. Thomas
</TABLE>

                                       60
<PAGE>


         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 and in the capacities and on the dates indicated:

 TRUMP ATLANTIC CITY FUNDING, INC.


<TABLE>
<CAPTION>
                      SIGNATURES                                   TITLE                         DATE
                      ----------                                   -----                         ----- 
<S>                                                    <C>                              <C>
By:               /s/ DONALD J. TRUMP                  Chairman of the Board of         March 30, 1999
   ----------------------------------------------       Directors (principal
                   Donald J. Trump                      executive officer)
                                                       

By:          /s/ FRANCIS X. MCCARTHY, JR.              Chief Financial Officer          March 30, 1999
   ----------------------------------------------       (principal financial and
               Francis X. McCarthy, Jr.                 accounting officer)           
                                                       

By:              /s/ NICHOLAS L. RIBIS                 Director                         March 30, 1999
   ----------------------------------------------
                  Nicholas L. Ribis

By:              /s/ WALLACE B. ASKINS                 Director                         March 30, 1999
   ----------------------------------------------
                  Wallace B. Askins

By:                /s/ DON M. THOMAS                   Director                         March 30, 1999
   ----------------------------------------------
                    Don M. Thomas
</TABLE>

                                       61
<PAGE>


         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 and in the capacities and on the dates indicated:

TRUMP ATLANTIC CITY FUNDING II, INC.

<TABLE>
<CAPTION>
                      SIGNATURES                                  TITLE                          DATE
                      ----------                                  -----                          ----
<S>                                                    <C>                                    <C>                     
By:               /s/ DONALD J. TRUMP                  Chairman of the Board of               March 30, 1999
   ----------------------------------------------       Directors (principal
                   Donald J. Trump                      executive officer)
                                                       

By:          /s/ FRANCIS X. MCCARTHY, JR.              Chief Financial Officer                March 30, 1999
   ----------------------------------------------       (principal financial and 
               Francis X. McCarthy, Jr.                 accounting officer)         
                                                       

By:              /s/ NICHOLAS L. RIBIS                 Director                               March 30, 1999
   ----------------------------------------------
                  Nicholas L. Ribis

By:              /s/ WALLACE B. ASKINS                 Director                               March 30, 1999
   ----------------------------------------------
                  Wallace B. Askins

By:                /s/ DON M. THOMAS                   Director                               March 30, 1999
   ----------------------------------------------
                    Don M. Thomas
</TABLE>

                                       62
<PAGE>


         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 and in the capacities and on the dates indicated:

 TRUMP ATLANTIC CITY FUNDING III, INC.


<TABLE>
<CAPTION>
                      SIGNATURES                              TITLE                             DATE
                      ----------                              -----                             ----  
<S>                                                    <C>                                 <C>                    
By:               /s/ DONALD J. TRUMP                  Chairman of the Board of            March 30, 1999
   ----------------------------------------------       Directors (principal
                   Donald J. Trump                      executive officer)
                                                       

By:          /s/ FRANCIS X. MCCARTHY, JR.              Chief Financial Officer             March 30, 1999
   ----------------------------------------------       (principal financial and
               Francis X. McCarthy, Jr.                 accounting officer)
                                                       

By:              /s/ NICHOLAS L. RIBIS                 Director                            March 30, 1999
   ----------------------------------------------
                  Nicholas L. Ribis

By:              /s/ WALLACE B. ASKINS                 Director                            March 30, 1999
   ----------------------------------------------
                  Wallace B. Askins

By:                /s/ DON M. THOMAS                   Director                            March 30, 1999
   ----------------------------------------------
                    Don M. Thomas

</TABLE>
                                       63
<PAGE>


         SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 BY REGISTRANTS WHICH HAVE
NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT.

         The Registrants have not sent (and do not intend to send) an annual
report to security holders covering the Registrants' last fiscal year and have
not sent (and do not intend to send) a proxy statement, form of proxy or other
proxy soliciting materials to security holders.


                                       64
<PAGE>


         INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

<TABLE>
<CAPTION>
                                                                                                  PAGE
                                                                                                  ----
<S>                                                                                               <C>
Trump Atlantic City Associates and Subsidiaries
    Report of Independent Public Accountants.................................................      F-2
Consolidated Balance Sheets as of December 31, 1997 and 1998.................................      F-3
Consolidated Statements of Operations for the years ended December 31, 1996, 1997                  
    and 1998.................................................................................      F-4
Consolidated Statements of Capital for the years ended December 31, 1996, 1997 and                 
    1998.....................................................................................      F-5
Consolidated Statements of Cash Flows for the years ended December 31, 1996, 1997                  
    and 1998.................................................................................      F-6
Notes to Consolidated Financial Statements...................................................      F-8
Financial Statement Schedule                                                                       
    Report of Independent Public Accountants.................................................      S-1
    Schedule II--Valuation and Qualifying Accounts for the Years Ended December 31,                
       1996, 1997 and 1998...................................................................      S-2
                                                                                             
</TABLE>

                                      F-1
<PAGE>


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Trump Atlantic City Associates and Subsidiaries:

         We have audited the accompanying consolidated balance sheets of Trump
Atlantic City Associates (a New Jersey general partnership) and Subsidiaries as
of December 31, 1997 and 1998, and the related consolidated statements of
operations, capital and cash flows for each of the three years in the period
ended December 31, 1998. These financial statements are the responsibility of
the management of Trump Atlantic City Associates and Subsidiaries. Our
responsibility is to express an opinion on these financial statements based on
our audits.

         We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Trump Atlantic City
Associates and Subsidiaries as of December 31, 1997 and 1998, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1998, in conformity with generally accepted accounting
principles.

                               ARTHUR ANDERSEN LLP

Roseland, New Jersey
February 2, 1999


                                      F-2
<PAGE>

<TABLE>
<CAPTION>
                                      TRUMP ATLANTIC CITY ASSOCIATES
                                             AND SUBSIDIARIES
                                        CONSOLIDATED BALANCE SHEETS
                                        DECEMBER 31, 1997 AND 1998
                                              (IN THOUSANDS)

                                                                                       1997             1998
                                                                                    -----------      -----------
<S>                                                                                 <C>              <C> 
                                   ASSETS
CURRENT ASSETS:
  Cash and cash equivalents.....................................................    $   114,879     $    80,954
  Trade receivables, net of allowances for doubtful accounts
      of $17,095 and $25,701, respectively (Note 2).............................         47,417          50,796
  Accounts receivable, other (Note 5)...........................................          9,061           9,990
  Inventories...................................................................          9,880           9,183
  Prepaid expenses and other current assets.....................................          7,319           7,438
  Due from affiliates, net (Note 7).............................................         21,880          35,031
                                                                                   ------------     -----------
      Total current assets......................................................        210,436         193,392
                                                                                   ------------     -----------
PROPERTY AND EQUIPMENT (Notes 2, 5 and 7):
  Land and land improvements....................................................        171,364         172,433
  Buildings and building improvements...........................................      1,334,794       1,343,324
  Furniture, fixtures and equipment.............................................        217,623         229,927
  Leasehold improvements........................................................          2,404           2,404
  Construction in progress......................................................          1,404          13,382
                                                                                   ------------     -----------
                                                                                      1,727,589       1,761,470
  Less--Accumulated depreciation and amortization...............................       (267,539)       (328,505)
                                                                                   ------------     -----------
    Net property and equipment..................................................      1,460,050       1,432,965
                                                                                   ------------     -----------
OTHER ASSETS:
   Deferred bond issuance costs, net of accumulated amortization of $11,613 and
        $18,206, respectively (Note 3)..........................................          36,842          30,644
   Other assets.................................................................          31,745          31,605
                                                                                    ------------     -----------
      Total other assets........................................................          68,587          62,249
                                                                                    ------------     -----------
      Total assets..............................................................    $  1,739,073     $ 1,688,606
                                                                                    ============     ===========
                             LIABILITIES AND CAPITAL

CURRENT LIABILITIES:
   Current maturities of long-term debt (Note 3)................................    $      6,964     $     3,482
   Accounts payable.............................................................          23,392          32,632
   Accrued payroll..............................................................          17,759          18,842
   Self-insurance reserves (Note 5).............................................          10,508           8,470
   Accrued interest payable (Note 3)............................................          23,850          24,375
   Other accrued expenses.......................................................          14,908          14,439
   Other current liabilities....................................................           6,911           8,833
                                                                                     -----------     -----------
      Total current liabilities.................................................         104,292         111,073
                                                                                     -----------     -----------
NON-CURRENT LIABILITIES:                                                          
   Long-term debt, net of current maturities (Note 3)...........................       1,300,027       1,299,217
   Other long-term liabilities..................................................           6,815           5,557
                                                                                     -----------     -----------
      Total non-current liabilities.............................................       1,306,842       1,304,774
                                                                                     -----------    ------------
      Total liabilities.........................................................       1,411,134       1,415,847
                                                                                     -----------    ------------
COMMITMENTS AND CONTINGENCIES (Note 5):                                           
CAPITAL:                                                                          
   Partners' capital............................................................         373,790         329,691
   Accumulated deficit..........................................................         (45,851)        (56,932)
                                                                                     -----------     -----------
      Total capital.............................................................         327,939         272,759
                                                                                     -----------     -----------
      Total liabilities and capital.............................................      $1,739,073      $1,688,606
                                                                                     ===========     ===========
</TABLE>

                 The accompanying notes are an integral part of
                    these consolidated financial statements.


                                      F-3
<PAGE>

<TABLE>
<CAPTION>
                                       TRUMP ATLANTIC CITY ASSOCIATES
                                              AND SUBSIDIARIES
                                    CONSOLIDATED STATEMENTS OF OPERATIONS
                            FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998
                                               (IN THOUSANDS)

                                                                      1996             1997             1998
                                                                  ------------      ------------     ----------  
<S>                                                               <C>               <C>              <C> 
REVENUES:
Gaming........................................................    $ 752,228         $  889,116        $   888,518
Rooms.........................................................       68,214             81,619             77,060
Food and beverage.............................................       98,635            114,597            110,932
Other.........................................................       24,146             35,019             32,733
                                                                  ---------         ----------        -----------
    Gross revenues............................................      943,223          1,120,351          1,109,243
Less-Promotional allowances...................................      113,743            138,085            130,151
                                                                  ---------         ----------        -----------
    Net revenues..............................................      829,480            982,266            979,092
                                                                  ---------         ----------        -----------
COSTS AND EXPENSES:                                                                                
Gaming........................................................      453,841            555,457            545,204
Rooms.........................................................       22,690             28,229             27,988
Food and beverage.............................................       31,923             37,233             38,192
General and administrative....................................      147,464            168,143            168,183
Depreciation and amortization.................................       60,870             66,018             61,536
Preopening....................................................        4,145                 --                 --
                                                                  ---------         ----------        -----------
                                                                    720,933            855,080            841,103
                                                                  ---------       ------------        -----------
    Income from operations....................................      108,547            127,186            137,989
                                                                  ---------         ----------        -----------
                                                                                                   
NON-OPERATING INCOME (EXPENSE):                                                                    
                                                                                                   
Interest income...............................................        2,339              2,891              5,508
Interest expense (Note 3).....................................     (114,461)          (144,140)          (154,578)
Non-operating income (Note 4).................................       14,194                 --                 --
                                                                  ---------         ----------        -----------
    Non-operating expense, net................................      (97,928)          (141,249)          (149,070)
                                                                  ---------         ----------        -----------
Income (loss) before extraordinary loss.......................       10,619            (14,063)           (11,081)
Extraordinary loss............................................      (59,132)                --                 --
                                                                  ---------         ----------        -----------
Net loss......................................................    $ (48,513)        $  (14,063)       $   (11,081)
                                                                  =========         ==========        ===========
                                                                                             
</TABLE>

                 The accompanying notes are an integral part of
                    these consolidated financial statements.


                                      F-4
<PAGE>

<TABLE>
<CAPTION>
                                 TRUMP ATLANTIC CITY ASSOCIATES
                                        AND SUBSIDIARIES
                               CONSOLIDATED STATEMENTS OF CAPITAL
                      FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998
                                         (IN THOUSANDS)
       
                                                                                    RETAINED
                                                                                    EARNINGS/
                                                                       PARTNERS'   (ACCUMULATED
                                                                        CAPITAL      DEFICIT)      TOTAL
                                                                       ---------   ------------   -------
<S>                                                                    <C>           <C>          <C>
Balance, December 31, 1995..........................................   $ 94,087      $ 16,725     $110,812
Capital Contributed by Trump Hotels & Casino Resorts Holdings, L.P..
                                                                        269,559            --      269,559
Net Loss............................................................         --       (48,513)     (48,513)
                                                                       --------      --------     --------
Balance, December 31, 1996..........................................    363,646       (31,788)     331,858
Capital Contributed by Trump Hotels & Casino Resorts Holdings, L.P..     10,144            --       10,144
Net Loss............................................................         --       (14,063)     (14,063)
                                                                       --------      --------     --------
Balance, December 31, 1997..........................................    373,790       (45,851)     327,939
Reversal of  Capital Contributed by Trump Hotels & Casino Resorts
   Holdings, L.P. (Note 7) .........................................    (44,099)           --      (44,099)
Net Loss............................................................         --       (11,081)     (11,081)
                                                                       --------      --------     --------
Balance, December 31, 1998..........................................   $329,691      $(56,932)    $272,759
                                                                       ========      ========     ========
</TABLE>

                 The accompanying notes are an integral part of
                    these consolidated financial statements.


                                      F-5
<PAGE>

<TABLE>
<CAPTION>
                                         TRUMP ATLANTIC CITY ASSOCIATES
                                                AND SUBSIDIARIES
                                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                              FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998
                                                 (IN THOUSANDS)

                                                                                 1996             1997           1998
                                                                              ----------        ---------     ---------
<S>                                                                           <C>               <C>           <C>  
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss............................................................      $  (48,513)      $ (14,063)     $ (11,081)
    Adjustments to reconcile net loss to net cash flows provided by
        operating activities:
       Noncash charges:
          Extraordinary loss............................................          59,132              --             --        
          Depreciation and amortization.................................          60,870          66,018         61,536
          Accretion of discount on indebtedness.........................             132              68            765
          Amortization of deferred loan offering costs..................           5,588           6,561          6,593
          Provision for losses on receivables...........................           8,599           7,399         14,349
          Valuation allowance of CRDA investments.......................           3,013           3,815          2,306
    Increase in receivables.............................................         (20,296)        (20,944)       (17,796)
    Decrease (increase) in inventories..................................              47            (486)           697
    Decrease (increase) in prepaid expenses and other current assets....           1,495            (408)           214
    (Increase) decrease in other assets.................................          (2,309)             97         (5,454)
    Increase in amounts due from affiliates.............................          (3,668)        (16,643)       (57,249)
    (Decrease) increase in accounts payable, accrued expenses and other
        current liabilities.............................................         (16,153)         (3,775)         9,930
    Decrease in other long-term liabilities.............................          (1,430)         (2,438)        (1,258)
                                                                              ----------       ---------      ---------
    Net cash provided by operating activities...........................          46,507          25,201          3,552
                                                                              ----------       ---------      ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of property and equipment.................................        (193,000)        (54,814)       (20,912)
    Purchases of CRDA investments.......................................          (6,725)         (8,723)        (7,604)
    Purchase of Taj Holding, net cash received..........................          46,714              --             --           
                                                                              ----------       ---------      ---------
    Net cash used in investing activities...............................        (153,011)        (63,537)       (28,516)
                                                                              ----------       ---------      ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Cost of issuing debt................................................         (41,042)         (4,254)          (395)
    Issuance of Trump AC Mortgage Notes.................................       1,200,000          95,605             --   
    Retirement of debt..................................................      (1,193,336)             --             --
    Additional Borrowings...............................................           6,170           1,886             --
    Payments and current maturities of long-term debt...................         (14,690)        (11,342)        (8,566)
    Contributed Capital by Trump Hotels & Casino Resorts Holdings, L.P..         204,785              --             --
                                                                              ----------       ---------      ---------
    Net cash provided by (used in) financing activities.................         161,887          81,895         (8,961)
                                                                              ----------       ---------      ---------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS....................          55,383          43,559        (33,925)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR..........................          15,937          71,320        114,879
                                                                              ----------       ---------      ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR................................      $   71,320       $ 114,879      $  80,954
                                                                              ===========      =========      =========
</TABLE>


                                      F-6
<PAGE>

<TABLE>
<CAPTION>                                       TRUMP ATLANTIC CITY ASSOCIATES
                                              AND SUBSIDIARIES
                                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                            FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998
                                         (IN THOUSANDS) (CONTINUED)
                                                                  1996             1997             1998
                                                               ----------       ----------       ----------
<S>                                                           <C>               <C>             <C>  
Supplemental Disclosures of Cash Flow Information:
o   Equipment purchased under capital leases.....             $        9,994    $    3,569      $      3,509
o   Cash paid during the year for interest.......             $      138,128    $  128,617      $    147,256
                                                              ==============    ==========      ============
</TABLE>

         Supplemental Disclosure of Noncash Activities:

o    During 1996 and 1997, Trump AC purchased certain parcels of land amounting
     to $14,455 and $10,144, respectively with capital contributed by THCR
     Holdings. This amount which was originally recorded as contributed capital
     was reclassified as "Due from affiliates, net" during the second quarter of
     1998.

o    During 1996, THCR purchased all of the capital stock of Taj Holding for
     $31,181 in cash and 323,423 shares of its common stock valued at $9,319. In
     addition, the contribution by Trump of his 50% interest in Taj Associates
     amounting to $40,500, net of the $10,000 payment to Bankers Trust, was
     recorded as minority interest. In conjunction with the acquisition, the
     accumulated deficit amounting to $108,574 was recorded as an increase to
     Property and Equipment.

         This transaction has been recorded by Trump AC.

<TABLE>
<CAPTION>
              <S>                                                                        <C>
                               
              Fair Value of net assets acquired......................................    $1,005,816
              Cash paid for the capital stock and payment to Bankers Trust...........       (41,181)
              Minority interest of Trump.............................................       (30,500)
                                                                                         ----------
                 Liabilities assumed.................................................    $  934,135
                                                                                         ==========
</TABLE>

o    In connection with the purchase of the Specified Parcels in 1996, THCR
     issued 500,000 shares of its common stock valued at $10,500, and
     contributed the Specified Parcels to Trump AC.

                 The accompanying notes are an integral part of
                    these consolidated financial statements.


                                      F-7
<PAGE>


                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) ORGANIZATION

         The accompanying consolidated financial statements include those of
Trump Atlantic City Associates ("Trump AC"), a New Jersey general partnership
and its subsidiaries, Trump Plaza Associates, a New Jersey general partnership
("Plaza Associates"), which owns and operates the Trump Plaza Hotel and Casino
located in Atlantic City, New Jersey ("Trump Plaza"), Trump Taj Mahal
Associates, a New Jersey general partnership ("Taj Associates"), which owns and
operates the Trump Taj Mahal Casino Resort located in Atlantic City, New Jersey
(the "Taj Mahal"), Trump Atlantic City Funding, Inc., a Delaware corporation
("Trump AC Funding"), Trump Atlantic City Funding II, Inc., a Delaware
corporation ("Trump AC Funding II"), Trump Atlantic City Funding III, Inc., a
Delaware corporation ("Trump AC Funding III)", Trump Atlantic City Corporation,
a Delaware Corporation ("TACC"), Trump Casino Services, L.L.C., a New Jersey
limited liability company ("Trump Services"), and Trump Communications, L.L.C.,
a New Jersey limited liability company. Trump AC's sole sources of liquidity are
distributions in respect of its interests in Plaza Associates and Taj
Associates. Trump AC is 100% beneficially owned by Trump Hotels & Casino Resorts
Holdings, L.P., a Delaware limited partnership ("THCR Holdings"). Trump AC,
Trump AC Funding, Trump AC Funding II and Trump AC Funding III have no
independent operations and, therefore, their ability to service debt is
dependent upon the successful operations of Plaza Associates and Taj Associates.
There are no restrictions on the ability of the guarantors (the "Subsidiary
Guarantors") of the Trump AC Mortgage Notes (as defined below) to distribute
funds to Trump AC.

         The separate financial statements of the Subsidiary Guarantors have not
been included because (i) the Subsidiary Guarantors constitute all of Trump AC's
direct and indirect subsidiaries; (ii) the Subsidiary Guarantors have fully and
unconditionally guaranteed the Trump AC Mortgage Notes on a joint and several
basis; (iii) the aggregate assets, liabilities, earnings and equity of the
Subsidiary Guarantors are substantially equivalent to the assets, liabilities,
earnings and equity of Trump AC on a consolidated basis; and (iv) the separate
financial and other disclosures concerning the Subsidiary Guarantors are not
deemed material to investors. The assets and operations of the nonguarantor
subsidiaries are not significant.

         All significant intercompany balances and transactions have been
eliminated in the accompanying consolidated financial statements.

         Trump AC was formed in February 1993. On June 12, 1995, Trump Hotels &
Casino Resorts, Inc., ("THCR"), completed a public offering of 10,000,000 shares
of common stock (the "Common Stock"), at $14.00 per share (the "Stock Offering")
for gross proceeds of $140,000,000. Concurrently with the Stock Offering, THCR
Holdings a then 60% subsidiary of THCR, issued 15 1/2% Senior Secured Notes (the
"Senior Secured Notes") for gross proceeds of $155,000,000 (the "Note Offering"
and, together with the Stock Offering, the "1995 Offerings"). From the proceeds
from the Stock Offering, THCR contributed $126,848,000 to THCR Holdings. THCR
Holdings subsequently contributed $172,859,000 to Trump AC.

         Prior to the 1995 Offerings, Donald J. Trump ("Trump") was the sole
stockholder of THCR and sole beneficial owner of THCR Holdings. Concurrent with
the 1995 Offerings, Trump contributed to THCR Holdings all of his beneficial
interest in Plaza Associates. Trump also contributed to THCR Holdings all of his
existing interest and rights to new gaming activities in both emerging and
established gaming jurisdictions, including Trump Indiana but excluding his
interests in the Taj Mahal and Trump's Castle Casino Resort.


                                      F-8
<PAGE>


                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

         On April 17, 1996, pursuant to the Agreement and Plan of Merger, as
amended (the "Taj Merger") each outstanding share of Class A Common Stock of Taj
Mahal Holding Corp., which in the aggregate represented 50% of the economic
interest in Taj Associates, was converted into the right to receive, at each
holder's election, either (a) $30 in cash or (b) that number of shares of THCR
Common Stock having a market value equal to $30. Trump held the remaining 50%
interest in Taj Associates and contributed such interest in Taj Associates to
Trump AC in exchange for limited partnership interests in THCR Holdings.

         In connection with the Taj Merger, THCR issued 13,250,000 shares of
Common Stock (the "1996 Stock Offering") for net proceeds of $386,062,000 and
(ii) Trump AC and Trump AC Funding, Trump AC's wholly owned finance subsidiary,
issued $1,200,000,000 aggregate principal amount of 11 1/4% First Mortgage Notes
due 2006 (the "Trump AC Mortgage Notes") (the "1996 Notes Offering" and together
with the 1996 Stock Offering, the "1996 Offerings"). In addition, THCR issued to
Trump warrants (the "Trump Warrants") to purchase an aggregate of 1.8 million
shares of Common Stock, (i) 600,000 shares of which may be purchased on or prior
to April 17, 1999, at $30 per share, (ii) 600,000 shares of which may be
purchased on or prior to April 17, 2000, at $35 per share, and (iii) 600,000
shares of which may be purchased on or prior to April 17, 2001, at $40 per
share.

         The Taj Merger has been accounted for as a "purchase" for accounting
and reporting purposes and the results of Taj Associates have been included in
the accompanying financial statements since the date of acquisition.
Accordingly, the excess of the purchase price over the fair value of the net
assets acquired ($200,782,000), which was allocated to land ($7,979,000) and
building ($192,803,000) based on an appraisal on a pro rata basis.

         In connection with the Taj Merger Transaction, THCR purchased the
Specified Parcels from Trump Taj Mahal Realty Corp., a corporation owned by
Trump, and Taj Associates was released from its guarantee to First Union
National Bank (the "Guarantee"). The aggregate cost of acquiring the Specified
Parcels was $50,600,000 in cash and 500,000 shares of THCR Common Stock valued
at $10,500,000. The obligation of Taj Associates which had been accrued with
respect to the Guarantee ($17,923,000) was eliminated. In addition, THCR
exercised the option to purchase a tower adjacent to Trump Plaza's main tower
("Trump Plaza East") for $28,084,000, which amount has been included in land and
building.

         Unaudited pro forma information, assuming that the Taj Merger had
occurred on January 1, 1996, is as follows:

                                                           YEAR ENDED
                                                        DECEMBER 31, 1996
                                                        -----------------
         Net revenues.............................        $984,789,000
                                                          ------------
         Income from operations...................        $115,504,000
                                                          ------------
         Loss before extraordinary loss...........        $(11,906,000)
                                                          ------------
         Extraordinary loss.......................        $(59,132,000)
                                                          ------------
         Net income (loss)........................        $(71,038,000)
                                                          ============

         The pro forma information is presented for informational purposes only
and does not purport to present what the results of operations would have been
had the Taj Merger Transaction, in fact, occurred on January 1, 1996 or to
project the results of operations for any future period.


                                      F-9
<PAGE>


                        TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Organization and Basis of Presentation

         Trump AC has no operations, except for its ownership of Plaza
Associates and Taj Associates. A substantial portion of Trump AC's revenues are
derived from its gaming operations. Competition in the Atlantic City casino
market is intense and management believes that this competition will continue as
more casinos are opened and new entrants into the gaming industry become
operational.

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

         Revenue Recognition

         Gaming revenues represent the net win from gaming activities which is
the difference between amounts wagered and amounts won by patrons. Revenue from
hotel and other services are recognized at the time the related service is
performed.

         Trump AC provides an allowance for doubtful accounts arising from
casino, hotel and other services, which is based upon a specific review of
certain outstanding receivables as well as historical collection information. In
determining the amount of the allowance, management is required to make certain
estimates and assumptions regarding the timing and amount of collection. Actual
results could differ from those estimates and assumptions.

         Promotional Allowances

         The retail value of accommodations, food, beverage and other services
provided to customers without charge is included in gross revenue and deducted
as promotional allowances. The estimated departmental costs of providing such
promotional allowances are included in gaming costs and expenses as follows:


                                      F-10
<PAGE>


                        TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

<TABLE>
<CAPTION>
                                                                          YEAR ENDED DECEMBER 31,
                                                           ------------------------------------------------------
                                                                1996                1997               1998
                                                           ----------------- ------------------- ----------------
<S>                                                           <C>                 <C>                <C>
Rooms..................................................       $14,906,000         $19,175,000        $19,530,000
Food and Beverage......................................        54,754,000          63,644,000         58,631,000
Other..................................................        10,240,000          15,783,000         13,519,000
                                                              -----------         -----------        -----------
                                                              $79,900,000         $98,602,000        $91,680,000
                                                              ===========         ===========        ===========

</TABLE>
         Inventories

         Inventories of provisions and supplies are carried at the lower of cost
(weighted average) or market.

         Property and Equipment

         Property and equipment is carried at cost and is depreciated on the
straight-line method using rates based on the following estimated useful lives:

Buildings and building improvements...........................   40 years
Furniture, fixtures and equipment.............................   3-10 years
Leasehold improvements........................................   10-40 years

         During the second quarter of 1997, Trump AC revised its estimates of
the useful lives of buildings, building improvements and furniture and fixtures
which were acquired in 1996. Buildings and building improvements were
reevaluated to have a forty year life and furniture and fixtures were determined
to have a seven year life. Trump AC believes these changes more appropriately
reflect the timing of the economic benefits to be received from these assets
during their estimated useful lives. For the year ended December 31, 1997 and
1998, the net effect of applying these new lives was to increase net income by
$5,995,000 and $7,701,000, respectively.

         Long-Lived Assets

         The provisions of Statement of Financial Accounting Standard No. 121
"Accounting for the Impairment of Long-Lived Assets" ("SFAS No. 121") requires,
among other things, that an entity review its long-lived assets and certain
related intangibles for impairment whenever changes in circumstances indicate
that the carrying amount of an asset may not be fully recoverable. Impairment of
long-lived assets exists if, at a minimum, the future expected cash flows
(undiscounted and without interest charges) from an entity's operations are less
than the carrying value of these assets. Trump AC does not believe that any such
changes have occurred.

         Income Taxes

         State income taxes are recorded in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS No.
109"). SFAS No. 109 requires recognition of deferred tax assets and liabilities
for the expected future tax consequences of events that have been included


                                      F-11
<PAGE>


                        TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

in the financial statements or tax returns. Under this method, deferred tax
assets and liabilities are determined based on the difference between the
financial statement and the tax basis of assets and liabilities using enacted
tax rates.

         The accompanying consolidated financial statements do not include a
provision for federal income taxes since any income or losses are allocated to
the partners and are reportable for federal income tax purposes by the partners.

         Under the New Jersey Casino Control Act (the "Casino Control Act"),
both Plaza Associates and Taj Associates are required to file a New Jersey
corporation business tax return. For New Jersey State Income Tax purposes, Plaza
Associates and Taj Associates have net operating loss carry-forwards of
approximately $115,000,000 and $204,000,000, respectively. A valuation allowance
has been provided for the deferred tax benefits of the operating loss carry
forwards.

         Statements of Cash Flows

         For purposes of the statements of cash flows, cash and cash equivalents
include hotel and casino funds, funds on deposit with banks and temporary
investments purchased with a maturity of three months or less.

         Reclassifications

         Certain reclassifications have been made to prior year financial
statements to conform to the current year presentation.

         Accounts Receivable

         Plaza Associates is appealing a real estate tax assessment by the City
of Atlantic City. Included in other accounts receivable as of December 31, 1997
is $3,696,000 which Plaza Associates believes will be recoverable on the
settlement of the appeal. During 1998, management determined that the amount
would not be settled within the year and reclassed the amount to other assets.
As of December 31, 1998, other assets includes $5,764,000 related to this
appeal.


                                      F-12
<PAGE>


                        TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


(3) LONG-TERM DEBT

         Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                                                  DECEMBER 31,      DECEMBER 31, 
                                                                                     1997              1998
                                                                                 --------------    --------------
<S>                                                                              <C>                <C>
Trump AC Mortgage Notes (11 1/4% First Mortgage Notes, due 2006) (a)......       $1,200,000,000    $1,200,000,000
Trump AC Mortgage Notes (11 1/4% First Mortgage Notes, due 2006), net of
   unamortized discount of $2,900,000 and $2,388,000, respectively (a) ...           72,100,000        72,612,000
Trump AC Mortgage Notes (11 1/4% First Mortgage Notes, due 2006), net of
   unamortized discount of $1,427,000 and $1,174,000, respectively (a) ...           23,573,000        23,826,000
Mortgage notes payable (b)................................................            3,229,000         1,348,000
Capitalized lease obligations (c).........................................            8,089,000         4,913,000
                                                                                 --------------    --------------
                                                                                  1,306,991,000     1,302,699,000
Less-Current maturities...................................................           (6,964,000)       (3,482,000)
                                                                                  -------------    --------------
                                                                                 $1,300,027,000    $1,299,217,000
                                                                                 ==============    ==============
</TABLE>

------------

(a)   On April 17, 1996, Trump AC together with Trump AC Funding, issued the
      Trump AC Mortgage Notes in an aggregate principal amount of $1,200,000,000
      which bear interest at 11.25% and are due May 1, 2006. Interest on the
      Trump AC Mortgage Notes is due semi-annually on each May 1 and November 1,
      commencing on November 1, 1996. The Trump AC Mortgage Notes are guaranteed
      as to payment of principal and interest jointly and severally by Taj
      Associates, Plaza Associates, Trump AC and all future subsidiaries of
      Trump AC (other than Trump AC Funding). The Trump AC Mortgage Notes are
      jointly and severally secured by mortgages representing a first lien and
      security interest on substantially all of the assets of Taj Associates and
      Plaza Associates.

      The indenture pursuant to which the Trump AC Mortgage Notes were issued
      restricts the ability of Trump AC and its subsidiaries to make
      distributions or to pay dividends, as the case may be, unless certain
      financial ratios are achieved. In addition, the ability of Plaza
      Associates and Taj Associates to make payments of dividends or
      distributions (except for payment of interest) through Trump AC to THCR
      Holdings may be restricted by the CCC.

      On December 10, 1997, Trump AC together with Trump AC Funding II, issued
      Trump AC Mortgage Notes in an aggregate principal amount of $75,000,000
      which bear interest at 11.25% and are due May 1, 2006. Interest on the
      Trump AC Mortgage Notes is due semi-annually on each May 1 and November 1.
      The Trump AC Mortgage Notes are guaranteed as to payment of principal and
      interest jointly and severally by Taj Associates, Plaza Associates, Trump
      AC and all future subsidiaries of Trump AC (other than Trump AC Funding).
      The Trump AC Mortgage Notes are jointly and severally secured by mortgages
      representing a first lien and security interest on substantially all of
      the assets of Taj Associates and Plaza Associates.

      On December 10, 1997, Trump AC together with Trump AC Funding III, issued
      Trump AC


                                      F-13
<PAGE>


                        TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


      Mortgage Notes in an aggregate principal amount of $25,000,000
      which bear interest at 11.25% and are due May 1, 2006. Interest on the
      Trump AC Mortgage Notes is due semi-annually on each May 1 and November 1.
      The Trump AC Mortgage Notes are guaranteed as to payment of principal and
      interest jointly and severally by Taj Associates, Plaza Associates, Trump
      AC and all future subsidiaries of Trump AC (other than Trump AC Funding).
      The Trump AC Mortgage Notes are jointly and severally secured by mortgages
      representing a first lien and security interest on substantially all of
      the assets of Taj Associates and Plaza Associates.

      Underwriting costs, legal and accounting fees, printing costs and other
      expenses of $48,850,000 associated with the issuance of the Trump AC
      Mortgage Notes are being amortized over the term of the Trump AC
      Mortgage Notes. Amortization is included in interest expense in the
      accompanying statements of operations and totaled $6,561,000 and
      $6,593,000 from the date of issuance through December 31, 1997 and for
      the year ended December 31, 1998, respectively.

(b)   Interest on these notes is payable with an interest rate of 8.5%. The
      notes are due in 2012 and are secured by certain real property.

(c)   Interest on these leases are payable with interest rates ranging from 6.5%
      to 12.5%. The leases are due at various dates between 1999 and 2001 and
      are secured by equipment.

      Future minimum payments under capital leases (principal portion
      included in the table of debt maturities below) are as follows:

      1999..............................................      $3,751,000
      2000..............................................       1,119,000
      2001..............................................         481,000
                                                              ----------
      Total Minimum Payments............................       5,351,000
      Less--Amount representing interest................        (438,000)
                                                              ----------
      Present Value of minimum lease payments...........      $4,913,000
                                                              ==========
    

                                      F-14
<PAGE>


                        TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


         The aggregate maturities of long-term debt as of December 31, 1998 are
as follows:

     1999..............................................   $    3,482,000
     2000..............................................        1,081,000
     2001..............................................          523,000
     2002..............................................           68,000
     2003..............................................           74,000
     Thereafter........................................    1,297,471,000
                                                          --------------
                                                          $1,302,699,000
                                                          ==============

         The ability of Trump AC to repay its long-term debt when due will
         depend on the ability of Plaza Associates and Taj Associates to
         generate cash from operations sufficient for such purposes or on the
         ability of Trump AC to refinance such indebtedness. Cash Flow from
         operations may not be sufficient to repay a substantial portion of the
         principal amount of the Trump AC Mortgage Notes upon maturity in 2006.
         The future operating performance and the ability to refinance such
         indebtedness will be subject to the then prevailing economic
         conditions, industry conditions and numerous other financial, business
         and other factors, many of which are beyond the control of Trump AC.
         There can be no assurance that the future operating performance of
         Plaza Associates and Taj Associates will be sufficient to meet these
         repayment obligations or that the general state of the economy, the
         status of the capital markets generally or the receptiveness of the
         capital markets to the gaming industry will be conducive to refinancing
         or other attempts to raise capital.

(4) NON-OPERATING INCOME

         Non-operating income in 1996 includes $806,000 of costs associated with
Trump Plaza East and Trump World's Fair net of miscellaneous non-operating
credits.

         During 1996, Plaza Associates and Taj Associates each entered into an
agreement with Atlantic Thermal Systems, Inc. ("Atlantic Thermal") pursuant to
which Atlantic Thermal was granted an exclusive license to use, operate and
maintain certain steam and chilled water production facilities located at Plaza
Associates and Taj Associates. In consideration for the license, Atlantic
Thermal paid Plaza Associates and Taj Associates a $10,000,000 and $5,000,000
non-refundable license fee, respectively. This amount has been included in other
non-operating income in the accompanying financial statements.

(5) COMMITMENTS AND CONTINGENCIES

         Leases and Employment Agreements

         Plaza Associates entered into an easement agreement with the NJSEA.
Under the terms of the agreement, Plaza Associates has an exclusive easement
over, in and through portions of the old Atlantic City Convention Center. The
easement is for a 25-year term with annual payments of $2,000,000, adjusted
every 5 years for changes in the Consumer Price Index.

         Trump AC leases certain property (primarily land), office, warehouse
space, certain parking space, and various equipment under operating leases. Rent
expense for the years ended December 31, 1996, 1997 and 1998 was $7,200,000,
$9,269,000 and $8,470,000, respectively, of which $1,981,000 in 1996 relates to
affiliates.


                                      F-15
<PAGE>


                        TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


         Future minimum lease payments under the noncancelable operating leases
are as follows:

                                                                    TOTAL
                                                                ------------

         1999...............................................    $  4,702,000
         2000...............................................       3,164,000
         2001...............................................       3,000,000
         2002...............................................       3,000,000
         2003...............................................       3,000,000
         Thereafter.........................................     107,000,000
                                                                ------------
                                                                $123,866,000
                                                                ============

         Certain of these leases contain options to purchase the leased
properties at various prices throughout the leased terms.

         As of December 31, 1998, Trump AC has entered into employment
agreements with certain key employees and had approximately $9,382,000 of
commitments under employee agreements. These commitments mature at various dates
through 2001.

         Taj Associates received a permit under the Coastal Area Facilities
Review Act ("CAFRA") (which included a condition of Taj Associates' casino
license) that initially required Taj Associates begin construction of certain
improvements on the Steel Pier by October 1992, which improvements were to be
completed within 18 months of commencement. Taj Associates initially proposed a
concept to improve the Steel Pier, the estimated cost of which was $30,000,000.
Such concept was approved by the New Jersey Department of Environmental
Protection, the agency which administers CAFRA. In March 1993, Taj Associates
obtained a modification of its CAFRA permit providing for the extension of the
required commencement and completion dates of the improvements to the Steel Pier
for one year, which has been renewed annually based upon an interim use of the
Steel Pier as an amusement park. The pier sublease terminates on December 31,
1999 unless extended.

         Casino License Renewal

         The operation of an Atlantic City hotel and casino is subject to
significant regulatory controls which affect virtually all of its operations.
Under the Casino Control Act, Plaza Associates and Taj Associates are required
to maintain certain licenses. Casino licenses must be renewed periodically, are
not transferable, are dependent on the financial stability of the licensee and
can be revoked at any time.

         In June 1995, the CCC renewed Plaza Associates' and Taj Associates'
casino licenses to operate Trump Plaza and the Taj Mahal for a period of four
years through 1999. In June 1996, the CCC granted TCS, an initial casino license
which, in July 1997, was renewed through July 1998, and in July 1998 the license
was renewed through July 1999. Upon revocation, suspension for more than 120
days, or failure to renew the casino license, the Casino Control Act provides
for the mandatory appointment of a conservator to take possession of the hotel
and casino's business and property, subject to all valid liens, claims and
encumbrances.

         Legal Proceedings

         Plaza Associates, Taj Associates, its Partners, certain members of its
former Executive Committee, and certain of its employees, have been involved in
various legal proceedings. In general, Plaza Associates


                                      F-16
<PAGE>


                        TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

and Taj Associates have agreed to indemnify such persons against any and all
losses, claims, damages, expenses (including reasonable costs, disbursements and
counsel fees) and liabilities (including amounts paid or incurred in
satisfaction of settlements, judgments, fines and penalties) incurred by them in
said legal proceedings.

         Various legal proceedings are now pending against Plaza Associates and
Taj Associates. Plaza Associates and Taj Associates consider all such
proceedings to be ordinary litigation incident to the character of their
business. Plaza Associates and Taj Associates believe that the resolution of
these claims will not, individually or in the aggregate, have a material adverse
effect on their financial condition or results of operations.

         Plaza Associates and Taj Associates are also a party to various
administrative proceedings involving allegations that they have violated certain
provisions of the Casino Control Act. Plaza Associates and Taj Associates
believe that the final outcome of these proceedings will not, either
individually or in the aggregate, have a material adverse effect on their
financial condition, results of operations or on the ability of Plaza Associates
or Taj Associates to otherwise retain or renew any casino or other licenses
required under the Casino Control Act for the operation of the respective
properties.

         Self-Insurance Reserves

         Self-insurance reserves represent the estimated amounts of uninsured
claims related to employee health medical costs, workmen's compensation and
personal injury claims that have occurred in the normal course of business.
These reserves are established by management based upon specific review of open
claims, with consideration of incurred but not reported claims as of the balance
sheet date. During 1998 self insurance reserves decreased due to an internally
focused aggressive policy where potential lawsuits are challenged immediately.
Additionally, a more aggressive litigation policy was pursued to deter present
and future frivolous lawsuits. Trump AC also retained an outside consultant to
comprehensively review certain claims and to assist Trump AC in establishing the
estimated reserves at December 31, 1998. The costs of the ultimate disposition
of these claims may differ from these reserve amounts.

         Federal Income Tax Examination

         Plaza Associates and Taj Associates are currently involved in
examinations with the Internal Revenue Service ("IRS") concerning Plaza
Associates' federal partnership income tax returns for the years 1993 through
1996 and Taj Associates' federal partnership income tax returns for the tax
years 1994 through 1996. While any adjustment which results from this
examination could affect Plaza Associates' and Taj Associates' state income tax
returns, Plaza Associates and Taj Associates do not believe that adjustments, if
any, will have a material adverse effect on its financial condition or results
of operations.

         Casino Reinvestment Development Authority Obligations

         Pursuant to the provisions of the Casino Control Act, Plaza Associates
and Taj Associates, must either obtain investment tax credits (as defined in the
Casino Control Act), in an amount equivalent to 1.25% of its gross casino
revenues, or pay an alternative tax of 2.5% of its gross casino revenues (as
defined in the Casino Control Act). Investment tax credits may be obtained by
making qualified investments or by the purchase of bonds at below market
interest rates from the Casino Reinvestment Development Authority ("CRDA").
Plaza Associates and Taj Associates intend on satisfying their obligations
primarily by depositing funds to be used for the purchase of bonds or by making
qualified investments. Plaza Associates and Taj Associates are required to make
quarterly deposits with the CRDA based on 1.25% of


                                      F-17
<PAGE>


                        TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

its gross revenue. For the years ended December 31, 1996, 1997 and 1998, Trump
AC charged to operations $3,477,000, $3,736,000 and $3,758,000 respectively, to
give effect to the below market interest rates associated with CRDA bonds that
have either been issued or are expected to be issued from funds deposited.
Additionally, for the years ended December 31, 1996, 1997 and 1998, Plaza
Associates credited operations for $464,000, $27,000 and $1,505,000,
respectively, resulting from the recapture of the valuation allowance on the
CRDA receivable.

         In connection with Trump Plaza East, the CRDA has approved the refund
of up to $14,135,000 of qualifying deposits made by Plaza Associates. Included
in current receivables at December 31, 1998, is a receivable from the CRDA of
$5,976,000. While the receivable is fully realizable by Plaza Associates, the
amount of actual reimbursements Plaza Associates will receive in any one year is
limited to 75% and 50%, respectively, of the amount of funds Plaza Associates
deposits with the CRDA to cover its Atlantic City non-housing and South Jersey
obligations.

         Concentrations of Credit Risks

         In accordance with casino industry practice, Plaza Associates and Taj
Associates extend credit to a limited number of casino patrons, after extensive
background checks and investigations of credit worthiness. For the years ended
December 31, 1997 and 1998, approximately 49% and 52%, respectively, of casino
receivables (before allowances) were from customers whose primary residence is
outside the United States, and approximately 32% and 26%, respectively,
represents credit extended to patrons from the Far East.

(6) EMPLOYEE BENEFIT PLANS

         Plaza Associates and Taj Associates have a retirement savings plan (the
"Plan") for its nonunion employees under Section 401(k) of the Internal Revenue
Code. Employees are eligible to contribute up to 15% of their earnings to the
Plan. Plaza Associates and Taj Associates will match 50% of the first 5% of an
eligible employee's contributions in 1996 and 1997, and 50% of the first 6% in
1998. Trump AC recorded charges of $1,882,000, $2,680,000 and $3,483,000 for
matching contributions for the years ended December 31, 1996, 1997 and 1998,
respectively.

         Plaza Associates and Taj Associates make payments to various trusteed
multi-employer pension plans under industry-wide union agreements. The payments
are based on the hours worked by or gross wages paid to covered employees. Under
the Employee Retirement Income Security Act, Plaza Associates and Taj Associates
may be liable for their share of the plan's unfunded liabilities, if any, if the
plans are terminated. Pension expense charged to operations for the years ended
December 31, 1996, 1997 and 1998 was $1,285,000, $1,595,000 and $1,682,000
respectively.

(7) TRANSACTIONS WITH AFFILIATES

         In 1996 and 1997, Plaza Associates purchased certain property for
$24,599,000 with capital contributed by THCR Holdings. In addition, THCR
Holdings contributed in 1996 $19,500,000 in capital to Plaza Associates for
improvements related to Trump World's Fair. In 1998, these amounts, which were
originally recorded as capital, were reversed and reclassified as amounts due to
affiliates. Trump AC subsequently repaid $33,074,000 to THCR Holdings.

         Trump AC has engaged in certain transactions with Trump and entities
that are wholly or partially owned by Trump. Amounts receivable at December 31
are as follows:


                                      F-18
<PAGE>


                        TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                                                YEAR ENDED DECEMBER 31,
                                         ------------------------------------
                                             1997                    1998
                                         -----------              -----------
Castle Associates (a)..................  $20,964,000              $20,679,000
Trump Organization (a).................      670,000                  483,000
THCR Holdings (a)......................      246,000               13,869,000
                                         -----------              -----------
                                         $21,880,000              $35,031,000
                                         ===========              ===========


(a)   Trump Atlantic City Associates engages in various transactions with the
      other Atlantic City hotel/casinos and related casino entities owned by
      Trump. These transactions are charged at cost or normal selling price
      in the case of retail items and include certain shared professional
      fees, insurance, and payroll costs as well as complimentary services
      offered to customers.

         TCS was formed on June 27, 1996 for the purpose of realizing cost
savings and operational synergies by consolidating certain administrative
functions of, and providing certain services to, Plaza Associates, Taj
Associates and Castle Associates.

         Services Agreement

         Pursuant to the terms of a Services Agreement with Trump Plaza
Management Corp. ("TPM"), a corporation beneficially owned by Trump, in
consideration for services provided, Plaza Associates paid TPM an annual fee of
$1,000,000, and reimbursed TPM for all reasonable out-of-pocket expenses
incurred by TPM in performing its obligations under such services agreement, up
to certain amounts. Under such services agreement, approximately $1,000,000 was
charged to expense for the year ended December 31, 1996. The service agreement
was terminated in August 1996.

         Taj Associates had entered into a Services Agreement which provided
that Trump render to Taj Associates marketing, advertising, promotional and
related services with respect to the business operations of Taj Associates. In
consideration for the services to be rendered, Taj Associates was to pay an
annual fee equal to 1.5% of Taj Associates earnings before interest, taxes and
depreciation, as defined, less capital expenditures and partnership
distributions for such year, with a minimum base fee of $500,000 plus expenses.
For the period from January 1, 1996 through April 17, 1996, Taj Associates
incurred $512,000 under the Services Agreement. The services agreement was
terminated in April 1996.

         Trump Plaza East

         Under an agreement with Midlantic National Bank, Trump had (i) an
option to acquire Trump Plaza East (Trump Plaza East Purchase Option) and (ii)
had a lease agreement for Trump Plaza East which would expire on June 30, 1998
requiring $260,000 per month in lease payments. In October 1993, Plaza
Associates assumed the option and the lease agreement from Trump.

         Until such time as the Trump Plaza East Purchase Option was exercised
or expired, Plaza Associates was obligated to pay the net expenses associated
with Trump Plaza East. During 1996, Plaza Associates incurred approximately
$1,100,000 of such expenses of which $348,000 are included in non-operating
expenses in the accompanying consolidated financial statements.

         In connection with the Taj Merger Transaction described in Note 1,
Plaza Associates exercised its option to acquire Trump Plaza East. The purchase
price of $28,084,000 has been included in land and


                                      F-19
<PAGE>


building in the accompanying financial statements.

(8) FAIR VALUE OF FINANCIAL INSTRUMENTS

         The carrying amount of the following financial instruments approximates
fair value, as follows: (a) cash and cash equivalents, receivables and payables
are based on the short term nature of these financial instruments and (b) CRDA
bonds and deposits are based on the allowances to give effect to the below
market interest rates.

         The estimated fair values of other financial instruments are as
follows:

<TABLE>
<CAPTION>
                                                                                    DECEMBER 31, 1998
                                                                  -------------------------------------------------------
                                                                      CARRYING AMOUNT                 FAIR VALUE
                                                                  --------------------------   --------------------------
<S>                                                                   <C>                           <C>
Trump AC Mortgage Notes.......................................        $1,200,000,000                $1,044,000,000
Trump AC Funding II Mortgage Notes............................        $   72,612,000                $   65,250,000
Trump AC Funding III Mortgage Notes...........................        $   23,826,000                $   21,750,000

</TABLE>

         The fair values of the Trump AC Mortgage Notes, Trump AC Funding II
Mortgage Notes and Trump AC Funding III Mortgages Notes are based on quoted
market prices as of December 31, 1998.

         There are no quoted market prices for other notes payable and a
reasonable estimate could not be made without incurring excessive costs.

(9) COMBINED FINANCIAL INFORMATION - TRUMP AC FUNDING, TRUMP AC FUNDING II
    AND TRUMP AC FUNDING III

         Combined financial information relating to Trump AC Funding, Trump AC
Funding II and Trump AC Funding III as of December 31, 1998 is as follows:

<TABLE>
<CAPTION>
<S>                                                                                  <C>
Total Assets (including First Mortgage Notes receivable of $1,296,438,000 and
  related interest receivable).................................................      $1,320,813,000
                                                                                     ==============
Total Liabilities and Capital (including First Mortgage Notes payable of
  $1,296,438,000 and related interest payable).................................      $1,320,813,000
                                                                                     ==============
Interest Income................................................................      $  146,219,000
                                                                                     ==============
Interest Expense...............................................................      $  146,219,000
                                                                                     ==============
Net Income.....................................................................                  --
                                                                                     ==============
</TABLE>

                                      F-20
<PAGE>


To Trump Atlantic City Associates and
   Subsidiaries:

         We have audited in accordance with generally accepted auditing
standards, the consolidated financial statements of Trump Atlantic City
Associates and Subsidiaries included in this Form 10-K and have issued our
report thereon dated February 2, 1999. Our audit was made for the purpose of
forming an opinion on the basic consolidated financial statements taken as a
whole. The accompanying schedule is the responsibility of Trump Atlantic City
Associates and Subsidiaries management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic consolidated financial statements. This schedule has been subjected to
the auditing procedures applied in the audit of the basic consolidated financial
statements and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.

                                                          ARTHUR ANDERSEN LLP

Roseland, New Jersey
February 2, 1999


                                      S-1
<PAGE>

<TABLE>
<CAPTION>
                                                                                                            SCHEDULE II
                              TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES
                                     VALUATION AND QUALIFYING ACCOUNTS
                           FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
            
                                                       BALANCE AT    CHARGED TO         OTHER               BALANCE AT
                                                        BEGINNING     COSTS AND        CHANGES                END OF
                                                        OF PERIOD     EXPENSES       (DEDUCTIONS)             PERIOD
                                                       -----------   -----------     ------------           ----------
<S>                                                    <C>           <C>             <C>             <C>    <C>
YEAR ENDED DECEMBER 31, 1998:
Allowance for doubtful accounts...................     $17,095,000   $14,349,000     $(5,743,000)    (A)     $25,701,000
Valuation allowance for interest differential on
  CRDA bonds......................................     $15,707,000   $ 3,758,000     $(8,667,000)    (B)     $10,798,000
YEAR ENDED DECEMBER 31, 1997:
Allowance for doubtful accounts...................     $17,355,000   $ 7,399,000     $(7,659,000)    (A)     $17,095,000
Valuation allowance for interest differential on
  CRDA bonds......................................     $12,461,000   $ 3,736,000     $  (490,000)    (B)     $15,707,000
YEAR ENDED DECEMBER 31, 1996:
Allowance for doubtful accounts...................     $ 8,077,000   $ 8,599,000     $   679,000     (C)     $17,355,000
Valuation allowance for interest differential on
  CRDA bonds......................................     $ 1,077,000   $ 3,477,000     $ 7,907,000     (D)     $12,461,000
</TABLE>

---------------

(A)   Write-off of uncollectible accounts.

(B)   Includes the reclassification of approximately $14,330,000 of previous
      CRDA deposits, the carrying value of which was $7,165,000 to property
      and equipment and $1,505,000 representing the adjustment to the
      allowance to give effect to the CRDA deposits to be refunded.

(C)   Includes $(6,916,000) representing the write-off of uncollectible
      amounts and $7,596,000 which represents Taj Associates' beginning
      balance as of April 17, 1996.

(D)   Includes $(464,000) representing the recapture of allowance applicable
      to CRDA contributions and $8,371,000 which represents Taj Associates'
      beginning balance as of April 17, 1996.


                                       S-2
<PAGE>


                                  EXHIBIT INDEX

 EXHIBIT                      
   NO.                       DESCRIPTION OF EXHIBIT
---------                    ----------------------
                  
  21          List of Subsidiaries of Trump Atlantic City Associates.
  27.1        Financial Data Schedule of Trump Atlantic City Associates.
  27.2        Financial Data Schedule of Trump Atlantic City Funding, Inc.
  27.3        Financial Data Schedule of Trump Atlantic City Funding II, Inc.
  27.4        Financial Data Schedule of Trump Atlantic City Funding III, Inc.