FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

(Mark One)

      X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

For the quarterly period ended October 25, 2003    Commission file number 1-4947

                                                                  OR

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

       For the transitional period from ______________ to ________________
                       Commission File No. ______________

                        J. C. PENNEY FUNDING CORPORATION
             (Exact name of registrant as specified in its charter)

           Delaware                                 51-0101524
(State or other jurisdiction of                    (I.R.S. Employer
incorporation or organization)                     Identification No.)

                  6501 Legacy Drive, Plano, Texas 75024 - 3698
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (972) 431-1000
              (Registrant's telephone number, including area code)
              (Former name, former address and former fiscal year,
                          if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

Yes       X       No

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).

Yes               No       X

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

500,000 shares of Common Stock of $100 par value, as of December 3, 2003.

THE REGISTRANT  MEETS THE CONDITIONS SET FORTH IN GENERAL  INSTRUCTION H (1) (a)
AND (b) OF FORM  10-Q  AND IS  THEREFORE  FILING  THIS  FORM  WITH  THE  REDUCED
DISCLOSURE FORMAT.
                                       1

<page>


PART I - FINANCIAL INFORMATION

Item 1 - Unaudited Financial Statements

The following interim financial  information of J. C. Penney Funding Corporation
("Funding"),  a  wholly  owned  subsidiary  of J. C.  Penney  Corporation,  Inc.
("JCPenney"),  is unaudited; however, in the opinion of Funding, it includes all
adjustments,  consisting only of normal recurring accruals, necessary for a fair
presentation.  The financial  information should be read in conjunction with the
audited  financial  statements  included in Funding's Annual Report on Form 10-K
for the 52 weeks ended January 25, 2003.


Statements of Income and Reinvested Earnings
(Dollars in millions) (Unaudited)
<table>

<c>                                                     <c>                <c>             <c>              <c>

                                                          13 weeks ended                     39 weeks ended
                                                   Oct. 25,          Oct. 26,          Oct. 25,        Oct. 26,
                                                      2003              2002              2003            2002
Interest earned from
        JCPenney and affiliates                     $    -            $    -            $    -          $    -

Interest expense                                         -                 -                 -               -
                                                       ___               ___               ___             ___
Income before income taxes                               -                 -                 -               -

Income taxes                                             -                 -                 -               -
                                                       ___               ___               ___             ___
Net income                                               -                 -                 -               -

Reinvested earnings at                               1,093             1,093             1,093           1,093
        beginning of period                          _____             _____             _____           _____
Reinvested earnings at
       end of period                                $1,093            $1,093            $1,093          $1,093
                                                    ======            ======            ======          ======

The accompanying notes are an integral part of these unaudited Interim Financial
Statements.
</table>
                                       2
<page>

Balance Sheets
(Dollars in millions) (Unaudited)
<table>

<c>                                                                     <c>             <c>                <c>
                                                                     Oct. 25,          Oct. 26,         Jan.25,
                                                                        2003              2002            2003
ASSETS

Loans to JCPenney and affiliates                                      $1,238            $1,238          $1,238

LIABILITIES AND EQUITY HELD BY JCPENNEY

Liabilities                                                                -                 -               -

Equity held by JCPenney:
        Common stock (including contributed
        capital), par value $100 per share:
        Authorized, 750,000 shares
        Issued and outstanding, 500,000 shares
                                                                         145               145             145

Reinvested earnings                                                    1,093             1,093           1,093
                                                                       _____             _____           _____
Total equity held by JCPenney                                          1,238             1,238           1,238
                                                                       _____             _____           _____
Total liabilities and equity held by JCPenney                         $1,238            $1,238          $1,238
                                                                      ======            ======          ======


The accompanying notes are an integral part of these unaudited Interim Financial
Statements.

</table>
                                       3
<page>

Consolidated Statements of Cash Flows
(Dollars in millions) (Unaudited)

<table>
<c>                                                   <c>                 <c>

                                                    39 weeks ended
                                                   Oct. 25,          Oct. 26,
                                                      2003              2002
Operating Activities                                 $   -             $   -

Financing Activities                                     -                 -
                                                       ___               ___

Increase in cash                                         -                 -

Cash at beginning of year                                -                 -
                                                       ___               ___
Cash at end of third quarter                         $   -             $   -
                                                     =====             =====

The accompanying notes are an integral part of these unaudited Interim Financial
Statements.
</table>
                                       4
<page>


Notes to the Unaudited Interim Financial Statements

1) Background

Historically,   Funding  has  provided   short-term   financing   for  JCPenney.
Principally,  Funding  issued  commercial  paper to finance  JCPenney's  working
capital  needs.  In  2001,  JCPenney  sold the  assets  of J. C.  Penney  Direct
Marketing  Services,  Inc.  to an  unrelated  third  party.  The  result of this
transaction  coupled with JCPenney's  other sources of liquidity  eliminated the
need  for  Funding  to  issue   commercial   paper  for   short-term   borrowing
requirements.  Therefore,  Funding has not  produced  any revenue or income.  In
addition,  with  Funding's  current credit  ratings,  it is assumed that Funding
would have little or no current access to commercial paper borrowing.



                                       5
<page>

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

Funding  derives  earnings  on loans to  JCPenney  under  the  terms of the Loan
Agreement, which provides for unsecured loans to be made by Funding to JCPenney.
Additionally,  in order to maintain Funding's income at defined coverage ratios,
Funding's  income is supplemented by charges to JCPenney.  The income of Funding
is designed to cover  Funding's fixed charges  (interest  expense) at a coverage
ratio  mutually  agreed  upon by Funding  and  JCPenney.  The  earnings to fixed
charges coverage ratio has historically been at least one and one-half times.

When  applicable,  Funding  from time to time issues  commercial  paper  through
Credit Suisse First Boston  Corporation,  J.P. Morgan  Securities Inc.,  Merrill
Lynch Money  Markets  Inc.,  and Morgan  Stanley  Dean Witter to  corporate  and
institutional  investors  in  the  domestic  market.  The  commercial  paper  is
guaranteed by JCPenney on a  subordinated  basis.  No commercial  paper has been
issued or outstanding during 2003 or 2002. The commercial paper program is rated
"Not  Prime"  by  Moody's  Investors  Service,  Inc.  and "B" by Fitch  Ratings.
Standard & Poor's Rating Services does not rate the program.

Funding had no short-term  debt  outstanding  as of October 25, 2003,  nor as of
October 26, 2002.



ITEM 4.  Controls and Procedures

Based on their  evaluation of Funding's  disclosure  controls and procedures (as
defined in Rules  13a-14(c) and 15d-14(c)  under the Securities  Exchange Act of
1934) as of the end of the period covered by this Quarterly Report on Form 10-Q,
Funding's  principal  executive  officer and  principal  financial  officer have
concluded  that the design and  operation of Funding's  disclosure  controls and
procedures  are effective for the purpose of ensuring that material  information
required  to be in this  Quarterly  Report is made  known to them by others on a
timely basis. There have not been any changes in Funding's internal control over
financial reporting that occurred during Funding's last fiscal quarter that have
materially  affected,  or are reasonably likely to materially affect,  Funding's
internal control over financial reporting.



                                       6

<page>


PART II - OTHER INFORMATION


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

          (a)  Exhibits

               31.1 Certification  of Michael P. Dastugue  Pursuant to ss.302 of
                    the Sarbanes-Oxley Act of 2002

               31.2 Certification of William J. Alcorn Pursuant to ss.302 of the
                    Sarbanes-Oxley Act of 2002

               32.1 Certification  of Michael P. Dastugue  Pursuant to ss.906 of
                    the Sarbanes-Oxley Act of 2002

               32.2 Certification of William J. Alcorn Pursuant to ss.906 of the
                    Sarbanes-Oxley Act of 2002

          (b)  Reports on Form 8-K

               None.


                                       7

<page>


                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.





                                         J. C. PENNEY FUNDING CORPORATION


                                         By: /s/ W. J. Alcorn
                                            -------------------------------
                                             W. J. Alcorn
                                             Vice President and Controller
                                             (Principal Accounting Officer)



Date:  December 8, 2003



                                       8
<page>
                                                                    Exhibit 31.1

                                  CERTIFICATION
                                  -------------

I, Michael P. Dastugue, Chairman, certify that:

     1.   I have  reviewed  this  quarterly  report on Form 10-Q of J. C. Penney
          Funding Corporation;

     2.   Based on my  knowledge,  this  report  does  not  contain  any  untrue
          statement  of a  material  fact  or  omit to  state  a  material  fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this report,  fairly  present in all material
          respects the financial condition, results of operations and cash flows
          of the  registrant  as of,  and for,  the  periods  presented  in this
          report;

     4.   The registrant's other certifying officer(s) and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined  in  Exchange  Act  Rules  13a-15(e)  and  15d-15(e))  for the
          registrant and have:

          a)   Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  to ensure that material information relating to the
               registrant,  including  its  consolidated  subsidiaries,  is made
               known to us by others within those entities,  particularly during
               the period in which this report is being prepared;

          b)   [Intentionally omitted]

          c)   Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls  and   procedures  and  presented  in  this  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluation; and

          d)   Disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's most recent fiscal quarter (the registrant's  fourth
               fiscal  quarter  in  the  case  of an  annual  report)  that  has
               materially  affected,  or  is  reasonably  likely  to  materially
               affect,   the   registrant's   internal  control  over  financial
               reporting; and

     5.   The  registrant's  other  certifying  officer(s) and I have disclosed,
          based on our most recent evaluation of internal control over financial
          reporting, to the registrant's auditors and the audit committee of the
          registrant's  board of directors (or persons performing the equivalent
          functions):

          a)   All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and

          b)   Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.


Date:  December 8, 2003.                    /s/ Michael P. Dastugue
                                               ___________________________
                                               Michael P. Dastugue
                                               Chairman of the Board
                                               J. C. Penney Funding Corporation


                                       9



<page>
                                                                    Exhibit 31.2

                                  CERTIFICATION
                                  -------------

I, William J. Alcorn, Vice President and Controller, certify that:

     1.   I have  reviewed  this  quarterly  report on Form 10-Q of J. C. Penney
          Funding Corporation;

     2.   Based on my  knowledge,  this  report  does  not  contain  any  untrue
          statement  of a  material  fact  or  omit to  state  a  material  fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this report,  fairly  present in all material
          respects the financial condition, results of operations and cash flows
          of the  registrant  as of,  and for,  the  periods  presented  in this
          report;

     4.   The registrant's other certifying officer(s) and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined  in  Exchange  Act  Rules  13a-15(e)  and  15d-15(e))  for the
          registrant and have:

          a)   Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  to ensure that material information relating to the
               registrant,  including  its  consolidated  subsidiaries,  is made
               known to us by others within those entities,  particularly during
               the period in which this report is being prepared;

          b)   [Intentionally omitted]

          c)   Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls  and   procedures  and  presented  in  this  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluation; and

          d)   Disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's most recent fiscal quarter (the registrant's  fourth
               fiscal  quarter  in  the  case  of an  annual  report)  that  has
               materially  affected,  or  is  reasonably  likely  to  materially
               affect,   the   registrant's   internal  control  over  financial
               reporting; and

     5.   The  registrant's  other  certifying  officer(s) and I have disclosed,
          based on our most recent evaluation of internal control over financial
          reporting, to the registrant's auditors and the audit committee of the
          registrant's  board of directors (or persons performing the equivalent
          functions):

          a)   All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and

          b)   Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.


Date:  December 8, 2003.                    /s/ William J. Alcorn
                                               ___________________________
                                               William J. Alcorn
                                               Vice President and Controller
                                               J. C. Penney Funding Corporation


                                       10

<page>

                                                                    Exhibit 32.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of J. C. Penney Funding Corporation (the
"Company") on Form 10-Q for the period ending  October 25, 2003 (the  "Report"),
I, Michael P. Dastugue,  Chairman of the Board of the Company, certify, pursuant
to  18  U.S.C.  Section  1350,  as  adopted  pursuant  to  Section  906  of  the
Sarbanes-Oxley Act of 2002, that:

     (1)  the Report fully  complies with the  requirements  of section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (2)  the  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Company.

DATED this 8th day of December 2003.

                                                /s/ Michael P. Dastugue
                                                _________________________
                                                Michael P. Dastugue
                                                Chairman of the Board
                                                J. C. Penney Funding Corporation


                                       11
<page>

                                                                    Exhibit 32.2

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of J. C. Penney Funding Corporation (the
"Company") on Form 10-Q for the period ending  October 25, 2003 (the  "Report"),
I, William J. Alcorn,  Vice  President and  Controller of the Company,  certify,
pursuant to 18 U.S.C.  Section 1350,  as adopted  pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

     (1)  the Report fully  complies with the  requirements  of section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (2)  the  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Company.

DATED this 8th day of December 2003.

                                               /s/ William J. Alcorn
                                               _________________________
                                               William J. Alcorn
                                               Vice President and Controller
                                               J. C. Penney Funding Corporation



                                       12