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                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549


                                   FORM 8-K

                                CURRENT REPORT

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

               DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
                                March 31, 2001

                         PANCHO'S MEXICAN BUFFET, INC.
            (Exact name of registrant as specified in its charter)


<TABLE>
<S>                       <C>                     <C>
        Delaware                 0-04678                    75-1292166
(State of incorporation)  (Commission File No.)  (IRS Employer Identification No.)
</TABLE>


                              3500 Noble Avenue
                            Fort Worth, Texas 76111
              (Address of principal executive offices) (Zip Code)

      Registrant's telephone number, including area code:  (817) 831-0081




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Item 5.  Other Events

     On March 31, 2001, Pancho's Mexican Buffet, Inc., a Delaware corporation
(the "Company"), entered into an Agreement and Plan of Merger (the "Merger
Agreement"), pursuant to which the Company will be acquired in an all-cash
merger transaction for $4.60 per share (the "Merger") by a wholly-owned
subsidiary of Pancho's Foods, Inc., a Nevada corporation (the "Acquiror"). Under
the terms of the Merger Agreement, a wholly-owned subsidiary of Acquiror (the "
Merger Sub"), would be merged with and into the Company and each holder of
outstanding shares of the Company's common stock, par value $0.10 per share (the
"Shares"), would be entitled to receive $4.60 in cash per share ("Merger
Consideration").

     Consummation of the Merger is subject to certain closing conditions,
including the obtaining of a finance commitment letter by Acquiror, pursuant to
which the lender has committed, subject to the terms and conditions contained in
the commitment letter, to provide an aggregate of up to $ 6 million in cash as a
senior secured credit facility to Merger Sub. The commitment letter from the
lender is required to contain terms reasonably satisfactory to the Company. In
addition, Acquiror must have entered into a commitment letter with Mr. Stephen
Oyster, an affiliate of Acquiror, pursuant to which Mr. Oyster has committed to
provide an aggregate of an amount equal to the aggregate amount of the Merger
consideration and all other fees and expenses required to be paid by Acquiror
and Merger Sub in connection with the transactions contemplated by the Merger
Agreement, less the amount committed by the lender pursuant to its commitment.
The Company may terminate the Merger Agreement if such commitments have not been
obtained by May 18, 2001, or such other date as the parties may agree upon. The
aggregate cash amount to be provided under these commitment letters will be
required to be sufficient to pay the aggregate merger consideration and to make
all other necessary payments of fees and expenses required to be paid by
Acquiror and Merger Sub in connection with the transactions contemplated by the
Merger Agreement.

     In addition, the Company may terminate the Merger Agreement if the Company
has not received the written opinion of Wells Fargo Van Kasper on or before May
18, 2001, or such other date as the parties may agree upon, to the effect that
the Merger consideration is fair to the Company's stockholders from a financial
point of view. The Acquiror or Merger Sub may terminate the Merger Agreement, if
(i) the working capital of the Company as of the end of the calendar month
immediately prior to the Filing Date (as defined below), including all expenses
of the Company in connection with the transactions contemplated by this
Agreement, which shall include, but not limited to, legal and accounting fees,
the costs associated with the Stockholder Meeting and the Proxy Statement, and
the fees of Wells Fargo Van Kasper, is less than -(negative) $3,880,000 or (ii)
aggregate same store sales for the period from the beginning of the fiscal year
2001 of the Company through the end of the calendar month immediately prior to
Filing Date compared with the aggregate same store sales for the corresponding
period of the preceding fiscal year has decreased by more than 10%; or (iii)
prior to the Filing Date, the Acquiror and Merger Sub are not able to obtain and
deliver the lender commitment described in the preceding paragraph. "Filing
Date" means the date the definitive proxy statement to be delivered to the
Company's stockholders in connection with the special meeting of stockholders to
be held to permit the stockholders to consider approving the Merger Agreement is
filed with the Securities and Exchange Commission.

     Further, consummation of the Merger is subject to approval by the Company's
common stockholders, as well the fulfillment of other customary closing
conditions. The Merger Agreement and the

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transactions contemplated thereby will be submitted for approval at a special
meeting of the Company's stockholders. Prior to such meeting, the Company will
file a proxy statement with the Securities and Exchange Commission. The
acquisition is expected to close by the end of the second quarter of 2001.

     In connection with the Merger, the Company has amended its Stockholder
Rights Agreement, dated January 30, 1996 (the "Rights Agreement"), to provide
that the provisions of the Rights Agreement will not be applicable to the
transactions contemplated by the Merger.

     A copy of the press release of the Company announcing the Merger
transaction is filed as Exhibit 99.1 hereto and is incorporated herein by
reference. A copy of the Merger Agreement is filed as Exhibit 99.2 and is
incorporated herein by reference. A copy of the Amendment to the Rights
Agreement is filed as Exhibit 99.3 hereto and incorporated herein by reference.

     The foregoing description of and reference to all of the above-mentioned
agreements and documents are qualified in their entirety by reference to the
complete texts of the agreements and documents, filed as exhibits to this
Current Report on Form 8-K.

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Item 7.  Financial Statements and Exhibits

(c)   Exhibits


99.1  -   Press release dated April 2, 2001.
99.2  -   Agreement and Plan of Merger.
99.3  -   Form of Amendment to Rights Agreement.

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                                  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 hereunto duly authorized.

                                    PANCHO'S MEXICAN BUFFET, INC


Date:  April 3, 2001          By: /s/ Hollis Taylor
                                  ---------------------------
                                       Hollis Taylor
                                       President and Chief Executive Officer

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                                 EXHIBIT INDEX


Exhibit No.           Description
-----------           -----------

99.1  -  Press release dated April 2, 2001.
99.2  -  Agreement and Plan of Merger.
99.3  -  Form of Amendment to Rights Agreement.

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