SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q


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

                 FOR THE QUARTERLY PERIOD ENDED OCTOBER 11, 2004

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

      FOR THE TRANSITION PERIOD FROM ________________ TO _________________

                         COMMISSION FILE NUMBER 0-14837

                            ELMER'S RESTAURANTS, INC.
             (Exact name of registrant as specified in its charter)

            OREGON               ___________            93-0836824
(STATE OR OTHER JURISDICTION OF             (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)

        11802 S.E. Stark St.
          Portland, Oregon           97216               (503) 252-1485
(ADDRESS OF PRINCIPAL             (ZIP CODE)     (REGISTRANT'S TELEPHONE NUMBER,
 EXECUTIVE OFFICES)                                   INCLUDING AREA CODE)

           Securities registered pursuant to Section 12(b) of the Act:
                                      None

           Securities registered pursuant to Section 12(g) of the Act:
                           Common Stock, no par value

                                   ___________

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 Exchange Act Rule 12b-2). Yes [ ] No [X]

Number of shares of Common Stock outstanding at November 5, 2004: 1,840,900












<PAGE>
                            ELMER'S RESTAURANTS, INC.
                            -------------------------
                                      INDEX

                                                                           PAGE
                                                                          NUMBER
                                                                          ------
PART I:  FINANCIAL INFORMATION

     Item 1.  Financial Statements                                          3
              Condensed Consolidated Balance Sheets,
                  October 11, 2004 (Unaudited) and March 29, 2004

              Condensed Consolidated Statements of Income,                  4
                  12 and 28 weeks ended October 11, 2004 (Unaudited)
                  and October 13, 2003 (Unaudited)

              Condensed Statement of Changes in Shareholders' Equity,       5
                  Twenty eight weeks ended October 11, 2004 (Unaudited)

              Condensed Consolidated Statements of Cash Flows,              6
                  Twenty eight weeks ended October 11, 2004 (Unaudited)
                  and October 13, 2003 (Unaudited)

              Notes to Condensed Consolidated Financial Statements          7

     Item 2.  Management's Discussion and Analysis of Financial            10
                 Condition and Results of Operations

     Item 3.  Quantitative and Qualitative Disclosures about Market        16
                  Risk

     Item 4.  Controls and Procedures                                      16

PART II: OTHER INFORMATION AND SIGNATURES

     Item 5.  Other Information                                            17

     Item 6.  Exhibits and Reports on Form 8-K                             17

              Signatures                                                   17


















                                        2
<PAGE>
                         PART 1 - FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

                   ELMER'S RESTAURANTS, INC., AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                              October 11, 2004       March 29, 2004
                                                                                             ------------------     ----------------
                                                                                                 (Unaudited)
                                              ASSETS
<S>                                                                                        <C>                    <C>
Current assets:
Cash and cash equivalents                                                                  $         2,167,710    $       1,601,378
Marketable securities                                                                                  759,509              930,196
Accounts receivable                                                                                    296,465              261,669
Notes receivable - franchisees and related parties, current portion                                     47,293               41,036
Inventories                                                                                            345,485              372,707
Prepaid expenses and other                                                                             434,519              476,159
Income taxes receivable                                                                                 58,922              159,877
                                                                                             ------------------     ----------------

      Total current assets                                                                           4,109,903            3,843,022

Notes receivable - franchisees and related parties, net of current portion                             159,216              191,244
Property, buildings and equipment, net                                                               8,872,589            9,325,050
Goodwill                                                                                             4,897,743            4,897,743
Intangible assets                                                                                      602,709              602,709
Other assets                                                                                           292,658              185,561
                                                                                             ------------------     ----------------

      Total assets                                                                         $        18,916,818    $      19,045,329
                                                                                             ==================     ================

                               LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable, current portion                                                             $           429,889    $         416,278
Accounts payable                                                                                     1,193,610            1,496,905
Accrued expenses                                                                                       506,050              500,536
Accrued payroll and related taxes                                                                      402,364              662,253
                                                                                             ------------------     ----------------

      Total current liabilities                                                                      2,531,913            3,075,972

Notes payable, net of current portion                                                                4,761,694            4,916,157
Deferred income taxes                                                                                1,392,617            1,396,000
Obligation under interest rate swap                                                                      8,706               33,005
                                                                                             ------------------     ----------------

      Total liabilities                                                                              8,694,930            9,421,134
                                                                                             ------------------     ----------------

Commitments and contingencies

Shareholders' equity:
Common stock, no par value; 10,000,000 shares authorized, 1,816,335 shares and 1,833,083
shares issued and outstanding at March 29, 2004 and October 11, 2004 respectively.                   6,305,138            6,216,136
Retained earnings                                                                                    3,924,366            3,391,413
Accumulated other comprehensive gain (loss), net of taxes                                               10,384               16,646
                                                                                             ------------------     ----------------
      Total shareholders' equity                                                                    10,239,888            9,624,195
                                                                                             ------------------     ----------------

      Total liabilities and shareholders' equity                                           $        18,916,818    $      19,045,329
                                                                                             ==================     ================
</TABLE>
    The accompanying notes are an integral part of the condensed consolidated
                              financial statements.

                                        3
<PAGE>
                   ELMER'S RESTAURANTS, INC., AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME


<TABLE>
<CAPTION>
                                                   For the twenty-eight weeks ended               For the twelve weeks ended
                                                ----------------------------------------    ---------------------------------------
                                                   October 11,           October 13,           October 11,          October 13,
                                                      2004                  2003                  2004                 2003
                                                ------------------    ------------------    ------------------   ------------------
                                                   (Unaudited)           (Unaudited)           (Unaudited)          (Unaudited)

<S>                                                  <C>                   <C>                    <C>                  <C>
REVENUES                                             $ 17,637,774          $ 17,894,894           $ 7,833,090          $ 7,835,882
                                                ------------------    ------------------    ------------------   ------------------

COSTS AND EXPENSES:

  Cost of restaurant sales:
Food and beverage                                       5,154,207             5,440,866             2,311,157            2,340,907
Labor and related costs                                 6,002,505             5,912,821             2,585,414            2,514,260
Restaurant operating costs                              2,503,142             2,438,118             1,120,089            1,059,444
Occupancy costs                                         1,107,741             1,107,809               488,287              472,004
Depreciation and amortization                             467,494               441,257               200,354              189,110
  General and administrative expenses                   1,426,860             1,351,931               695,274              681,029
Net loss (gain) on disposition of property               (129,009)                4,071                16,294                    -
    Net loss on impairment of equipment                   140,000                     -                     -                    -
                                                ------------------    ------------------    ------------------   ------------------

                                                       16,672,940            16,696,873             7,416,869            7,256,754
                                                ------------------    ------------------    ------------------   ------------------

INCOME FROM OPERATIONS                                    964,834             1,198,021               416,221              579,128

OTHER INCOME (EXPENSE):
Interest income                                            32,647                41,723                14,849               16,967
Interest expense                                         (224,337)             (208,530)             (114,791)             (92,537)
Gain (loss) on sale of marketable securities               10,809                14,419                 8,835               10,970
                                                ------------------    ------------------    ------------------   ------------------

  Income before provision for income taxes                783,953             1,045,633               325,114              514,528

  Income tax provision                                   (251,000)             (352,000)             (104,000)            (184,000)
                                                ------------------    ------------------    ------------------   ------------------

Net Income                                              $ 532,953             $ 693,633             $ 221,114            $ 330,528
                                                ==================    ==================    ==================   ==================


PER SHARE DATA:

  Net income per share - Basic                             $ 0.29                $ 0.34                $ 0.12               $ 0.16
                                                ==================    ==================    ==================   ==================

  Weighted average number of
  common shares outstanding - Basic                     1,820,460             2,041,709             1,825,960            2,041,709
                                                ==================    ==================    ==================   ==================


  Net income per share - Diluted                           $ 0.27                $ 0.32                $ 0.11               $ 0.15
                                                ==================    ==================    ==================   ==================

  Weighted average number of
  common shares outstanding - Diluted                   1,953,084             2,135,709             1,963,118            2,147,709
                                                ==================    ==================    ==================   ==================
</TABLE>

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

                                        4
<PAGE>

                   ELMER'S RESTAURANTS, INC., AND SUBSIDIARIES
             CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                        Common Stock                                  Accumulated other
                                ------------------------------                       comprehensive gain   Total shareholders'
                                    Shares          Amount       Retained earnings        (loss)                equity
                                ---------------  -------------   ------------------------------------------------------------
<S>                                  <C>          <C>                 <C>                     <C>                <C>
BALANCE, March 29, 2004              1,816,335    $ 6,216,136         $ 3,391,413             $ 16,646           $ 9,624,195
Stock option exercise                   16,748         89,002                                                         89,002
Comprehensive income:
  Net Income                                 -              -             532,953                    -               532,953
  Change in net unrealized gain
  (loss) on available for sale
  securities, net of taxes                                                                     (20,841)              (20,841)
  Change in fair market value of
  interest rate swap agreement,
  net of taxes                                                                                  14,579                14,579
                                ---------------  -------------   -----------------   ------------------   -------------------
Total comprehensive income                                                532,953               (6,262)              526,690

                                ---------------  -------------   -----------------   ------------------   -------------------
BALANCE, October 11, 2004            1,833,083    $ 6,305,138         $ 3,924,366             $ 10,384          $ 10,239,888
                                ===============  =============   =================   ==================   ===================
</TABLE>




























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

                                        5
<PAGE>
                   ELMER'S RESTAURANTS, INC., AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                             For the 28 weeks ended
                                                                                  --------------------------------------------
                                                                                    October 11, 2004         October 13, 2003
                                                                                  --------------------      ------------------
                                                                                      (Unaudited)              (Unaudited)

<S>                                                                                <C>                       <C>
Cash flows from operating activities:
Net income                                                                         $          532,953        $        693,933
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization                                                                 467,494                 441,257
Deferred income taxes                                                                               -                       -
(Gain) loss on disposition of equipment                                                      (129,009)                  4,071
Loss of impairment of equipment                                                               140,000                       -
Gain on sale of marketable securities                                                         (10,809)                (14,419)
Changes in assets and liabilities:
Current assets                                                                                 18,733                (172,728)
Other assets                                                                                 (107,097)                111,726
Accounts payable                                                                             (303,295)                101,184
Accrued expenses                                                                              (23,011)                120,883
Accrued payroll and related taxes                                                            (259,889)                (10,571)
Income taxes                                                                                  118,955                 286,472
                                                                                  --------------------      ------------------

Net cash provided by operating activities                                                     445,025               1,561,808
                                                                                  --------------------      ------------------

Cash flows from investing activities:
Additions to property, buildings and  equipment                                              (397,157)               (372,640)
Purchases of available-for-sale securities                                                   (262,221)               (874,928)
Proceeds from sale of available-for-sale securities                                           409,776                 590,207
Principal collected on note receivables                                                        25,771                  70,498
Proceeds from sale of assets                                                                  415,000                   4,900
Construction in progress                                                                            -              (1,207,457)
                                                                                  --------------------      ------------------

Net cash provided by (used in) investing activities                                           191,169              (1,789,420)
                                                                                  --------------------      ------------------

Cash flows from financing activities:
Issuance of notes payable                                                                      68,493                 592,400
Net change in principal debt service accounts                                                       -                 (54,166)
Payments on notes payable                                                                    (209,345)               (182,854)
Sale of common stock under stock option plan                                                   71,002                       -
                                                                                  --------------------      ------------------

Net cash provided by (used in) financing activities                                           (69,850)                355,380
                                                                                  --------------------      ------------------

Net change in cash and cash equivalents                                                       566,332                 127,768

Cash and cash equivalents, beginning of period                                              1,601,378               2,200,263
                                                                                  --------------------      ------------------

Cash and cash equivalents, end of period                                          $         2,167,710       $       2,328,031
                                                                                  ====================      ==================

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest                                                                          $           224,337       $         208,530
                                                                                  ====================      ==================

Income taxes                                                                      $           132,045       $          53,500
                                                                                  ====================      ==================

Supplemental disclosures of non-cash transactions:
Change in unrealized (gain) loss on available-for-sale securities, net of taxes   $           (20,841)      $          60,572
                                                                                  ====================      ==================
Change in fair market value of interest rate swap agreement, net of taxes         $            14,579       $          (4,633)
                                                                                  ====================      ==================
Tax benefit of stock option exercise                                              $            18,000       $               -
                                                                                  ====================      ==================
Note receivable issued for franchise fee receivable                               $                 -       $         123,000
                                                                                  ====================      ==================
</TABLE>

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

                                        6
<PAGE>
                            ELMER'S RESTAURANTS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.       BASIS OF PRESENTATION

The accompanying  unaudited condensed financial statements have been prepared in
accordance with the  instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
These  interim  financial  statements  do not  include all the  information  and
footnotes necessary for a fair presentation of financial position and results of
operations  and cash flows in  conformity  with  generally  accepted  accounting
principles in the United States of America. These condensed financial statements
should be read in  conjunction  with the financial  statements and related notes
contained in the  Company's  Annual Report on Form 10-K for the year ended March
29, 2004.  Operating  results  reflected in the interim  consolidated  financial
statements  are not  necessarily  indicative of the results that may be expected
for the year ending March 28, 2005.

In the opinion of management,  the accompanying  unaudited financial  statements
contain all  adjustments  (consisting  solely of normal  recurring  adjustments)
necessary  to present  fairly the  financial  position  of the  Company  and its
subsidiaries, and their results of operations and cash flows.

The Company had  comprehensive  income of $526,691  for the  twenty-eight  weeks
ended  October 11,  2004.  This was  composed  of net income of $532,953  and an
increase in the market value of an interest rate swap  agreement of $14,579 (net
of  taxes),  offset  by a  decline  in the  market  value of  available-for-sale
securities of $20,841 (net of taxes).

INTEREST  RATE  SWAP  AGREEMENT  - In June  2003,  and in  conjunction  with the
modification of the Wells Fargo Bank real estate debt agreement discussed below,
the Company  entered into an interest rate swap  agreement with Wells Fargo Bank
to reduce the impact of changes in interest rates on its floating rate mortgage.
The debt  modification  and  related  swap  agreement  effectively  changes  the
Company's  interest  rate exposure on the Wells Fargo Bank real estate debt to a
fixed  percentage rate of 6.17%. The notional amount of the swap agreement as of
October 11, 2004 was $1.0 million.  The interest rate swap agreement matures May
24, 2010.

Under the terms of the swap  agreement,  the Company has  committed to paying or
receiving interest on the spread between 30-day LIBOR and a fixed rate of 3.92%.
If 30-day LIBOR exceeds 3.92%,  the Company  receives  interest  income from the
bank equal to the spread.  If 30-day LIBOR is less than 3.92%, the Company makes
interest  payments  to the bank equal to the  spread.  The 30-day  LIBOR rate is
fixed on a monthly basis by the bank.

The swap is inversely  correlated to the related  hedged  long-term  debt and is
therefore  considered an effective cash flow hedge of the  underlying  long-term
debt. The level of effectiveness of the hedge is measured by changes in the fair
value of the hedged  long-term  debt  resulting  from  fluctuations  in interest
rates.  As a matter  of  policy,  the  Company  does not enter  into  derivative
transactions for trading or speculative purposes.

The interest rate swap agreement  qualifies as a cash flow hedge under Statement
of Financial  Accounting  Standards  (SFAS) No. 133,  Accounting  for Derivative
Instruments and Hedging Activities. SFAS No. 133 requires that the fair value of
derivative  instruments  be  recorded  and  changes  in the  fair  value  of the
derivative  instruments  be  recognized  in other  comprehensive  income.  As of
October 11, 2004 the obligation  under the swap agreement was $8,706 and results
in the  recognition of $14,579 (net of tax effect) in other  comprehensive  gain
during the quarter then ended.

STOCK OPTIONS - SFAS No. 123, Accounting for Stock-Based Compensation, defines a
fair  value-based  method of accounting  for employee  stock options and similar
equity  instruments,  and  encourages  all  companies  to adopt  that  method of
accounting for all of their employee stock  compensation  plans.  It encourages,
but does not require,  companies to record  compensation  costs for  stock-based
employee compensation plans at fair value. The Company has chosen to account for
stock-based   compensation  using  the  intrinsic  value  method  prescribed  in

                                        7
<PAGE>
Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to
Employees, and related interpretations.

Under SFAS No. 123 no  compensation  cost has been  recognized for the plan. Had
compensation cost for the stock-based  compensation plan been determined,  based
on the fair value of options at the date of grant consistent with the provisions
of SFAS No. 123, the Company's  pro forma net income and pro forma  earnings per
share would have been as follows:

<TABLE>
<CAPTION>
                                                     October 11, 2004                   October 13, 2003
                                                     ----------------                   ----------------
                                                  12 weeks         28 weeks          12 weeks         28 weeks
                                            ---------------     ------------      ------------    -------------
<S>                                               <C>              <C>               <C>              <C>
Net income - as reported                          $221,114         $532,953          $330,528         $693,633
Deduct: Total stock-based employee
compensation expense determined under
fair value based method for all awards,
net of related tax effects                         (7,242)         (16,897)          (18,327)         (42,762)
                                            ---------------     ------------      ------------    -------------
Net income - pro forma                            $213,872         $516,056          $312,201         $650,871
                                            ===============     ============      ============    =============

Basic earnings per share - as reported               $0.12            $0.26             $0.16            $0.34
Diluted earnings per share - as reported             $0.11            $0.25             $0.15            $0.32
Basic earnings per share - pro forma                 $0.12            $0.25             $0.16            $0.32
Diluted earnings per share - pro forma               $0.11            $0.24             $0.15            $0.30
</TABLE>

As of October 11, 2004 the Company  had  outstanding  option  grants for 430,656
shares,  of which  320,205 were  vested.  As of October 13, 2003 the Company had
outstanding  option  grants for  459,624  shares of which  295,330  shares  were
vested.

GUARANTEES - As a result of the sale of three  Elmer's  restaurants  to Southern
Oregon  Elmer's  LLC (the  "Buyer") in May 2002,  the Company is a guarantor  on
Grants Pass and Medford  real estate  leases  until April 2007 and on a Roseburg
real estate lease which could extend until 2018 if all options are  exercised by
the Buyer. The Company is also a guarantor on a franchisee lease in Nampa, Idaho
until 2007.  The Company is a guarantor of the lease on the  Company's  recently
refranchised   Palm  Springs   location  until  April  2007  and  on  a  rolling
twelve-month  basis  thereafter  until 2020. In all cases,  the franchisees have
indemnified the Company  against all losses incurred as guarantor.  In addition,
the  franchisees'  principals and their spouses have  personally  guaranteed the
franchisee's indemnification obligation.

In the event of default by the franchisee of the guaranteed  lease,  the Company
could be required to pay all rent and other  payments due under the terms of the
leases.  As of October 11, 2004,  the maximum  potential  liability  under these
guarantees is $1,097,146.  In the event of default, the Company expects it would
exercise its right to reoccupy and continue to operate the restaurants.

RECENT TRANSACTIONS AND EVENTS

Receipt of Going Private Offer
------------------------------

August 6,  2004,  the  Company  announced  that it had  received  a  non-binding
proposal for a going private  transaction from a purchaser group led by Bruce N.
Davis,  the  Company's  Chairman  of the  Board,  Chief  Executive  Officer  and
President,  and consisting of the Company's Board of Directors and 12 additional
shareholders.  A copy of the proposal was  attached to the Press  Release  dated
August 6, 2004 and  available  in the 8-K filed  with the SEC on August 6, 2004.
The 8-K is also available on the Company's website www.elmers-restaurants.com.

                                        8
<PAGE>
Impairment Loss on Future Store Closing
---------------------------------------

The Company recognized a $140,000  impairment loss in the quarter ended July 14,
2004 on the write  down of  property  and  equipment  with a  carrying  value of
approximately  $155,000  to a fair value of  $15,000.  The loss  arises from the
anticipated closure of a restaurant when the lease will not be renewed.

Sale of Palm Springs Restaurant
-------------------------------

March 30, 2004, the Company  refranchised  the Company's  Elmer's  Restaurant in
Palm Springs,  California.  The buyer executed a 25-year franchise agreement and
assumed  the  Company's  operating  lease  obligations.  The  Company  remains a
guarantor  of the lease  until  April 2007 and on a rolling  twelve-month  basis
thereafter  until 2020.  The sales price of  $415,000  was  received in cash and
resulted  in a pretax  gain of  approximately  $129,000.  Assets  sold  included
prepaids and inventory of approximately $16,000, transaction expenses of $28,000
and equipment of approximately $242,000.

Franchise Opening
-----------------

Elmer's  newest  franchised  restaurant  opened on September 7, 2004.  The 6,000
square foot restaurant in Eugene,  Oregon occupies a converted Izzy's restaurant
site.

On June 28, 2004 the company signed a 25-year  franchise  agreement with the new
owner of the franchised Elmer's located in Pocatello, ID.

On March 15, 2004 a 4,500 square foot franchise restaurant in Corvallis,  Oregon
opened. It occupies a converted Lyons restaurant site.

On July 21, 2003 a 5,000  square foot  franchise  restaurant  in Coeur  d'Alene,
Idaho opened. It occupies a converted Village Inn site.

Lottery Commission
------------------

March 31, 2004, the Oregon Lottery  Commission  approved a new six-year retailer
contract  effective  June 27,  2004.  The impact of this  contract is  discussed
further under Revenues on page 13.

RECENTLY ISSUED ACCOUNTING STANDARDS

In May 2003,  the Financial  Accounting  Standards  Board (FASB) issued SFAS No.
150, Accounting for Certain Financial  Instruments with  Characteristics of both
Liabilities and Equity.  SFAS No. 150 establishes  standards for  classification
and measurement of certain financial  instruments with  characteristics  of both
liabilities  and equity.  This statement is effective for financial  instruments
entered into or modified  after May 31, 2003,  and otherwise is effective at the
beginning  of the first  interim  period  after  June 15,  2003.  The  Company's
adoption  of FASB  No.  150 did not  have a  material  effect  on the  Company's
consolidated financial statements.

In January 2003, FASB issued  Interpretation  No. 46 (FIN 46),  Consolidation of
Variable Interest  Entities.  This  interpretation  clarifies the application of
Accounting  Research Bulletin No. 51,  Consolidated  Financial  Statements,  and
requires existing  unconsolidated  variable interest entities to be consolidated
by their primary beneficiaries if the entities do not effectively disperse risks
among parties involved.  This  interpretation  explains how to identify variable
interest  entities and how an  enterprise  assesses its  interests in a variable
interest entity to decide whether to consolidate the entities. In December 2003,
FASB issued FIN 46R, which made revisions and delayed  implementation of certain
provisions of FIN 46. As a public entity that is not a "Small Business  Issuer,"
the  Company is now  required  to apply FIN 46R to all  unconsolidated  variable
interest  entities  no  later  than  March  29,  2004,  with  the  exception  of
unconsolidated special purpose entities, which had an implementation deadline of
December  31,  2003.   The  Company's   adoption  of  the   provisions  of  this
interpretation had no impact on the Company's consolidated financial statements.

                                        9
<PAGE>
ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

Elmer's Restaurants,  Inc. (the "Company" or "Elmer's") (NASDAQ Small Cap Market
symbol:  ELMS),  located in Portland,  Oregon,  is a franchisor  and operator of
full-service,  family oriented  restaurants under the names "Elmer's Breakfast o
Lunch o Dinner" and "Mitzel's  American Kitchen" and an operator of delicatessen
restaurants under the names "Ashley's", "Cooper's" and "Richard's Deli and Pub."
The Company is an Oregon  corporation and was incorporated in 1983. Walter Elmer
opened the first Elmer's  restaurant in Portland,  Oregon in 1960, and the first
franchised   restaurant  opened  in  1966.  The  Company  acquired  the  Elmer's
franchising operation in January 1984 from the Elmer family.

The Company  franchises or operates a total of 38 full-service,  family-oriented
restaurants,  with a warm, friendly atmosphere and comfortable furnishings. Most
of the restaurants are decorated in a home style,  with fireplaces in the dining
rooms.  The restaurants are primarily  freestanding  buildings,  ranging in size
from 4,600 to approximately  9,000 square feet with seating  capacities  ranging
from 120 to 220. A portion of the dining  room in most  restaurants  may also be
used for private group  meetings by closing it off from the public dining areas.
The menu offers an extensive selection of items for breakfast, lunch and dinner.

CRITICAL ACCOUNTING POLICIES

The  Company's  reported  results  are  affected by the  application  of certain
accounting  policies  that  require  subjective  or  complex  judgments.   These
judgments  involve  estimates  that  are  inherently  uncertain  and may  have a
significant  impact  on our  quarterly  or  annual  results  of  operations  and
financial  condition.  Changes  in these  estimates  and  judgments  could  have
significant  effects  on the  Company's  results  of  operations  and  financial
condition in future  years.  We believe the Company's  most critical  accounting
policies cover  accounting for long-lived  assets - specifically the acquisition
and  depreciation  of property,  buildings and  equipment,  and the valuation of
intangible  assets.  Additional  critical  accounting  policies  govern  revenue
recognition and accounting for stock options.

Property, Buildings and Equipment
---------------------------------

When the Company  purchases  property,  buildings and equipment,  the assets are
recorded at cost. However,  when the Company acquires an operating restaurant or
business,  the Company must allocate the purchase  price between the fair market
value of the  tangible  assets  acquired  and any excess to  goodwill.  The fair
market value of restaurant  equipment  fixtures and  furnishings in an operating
restaurant  is  difficult  to  separate  from  the  going  concern  value of the
restaurant.  Most of the value of the equipment is due to the fact that it is in
the restaurant and working. The Company values in place equipment with reference
to replacement cost, age and condition, and utility in its intended use.

Intangible Assets
-----------------

The Company reviews the valuation of its goodwill and intangible assets annually
based  on its  third  quarter  financial  statements  and  assesses  for  events
occurring in the interim indicating possible  impairment.  If the fair values of
the intangibles were less than their recorded  values,  an impairment loss would
be  recognized.  The fair  values of the  reporting  units are  estimated  using
multiples of earnings before interest, taxes, depreciation and amortization. The
Company has 7 reporting  units. The reporting units are made up of the franchise
business,   operating  restaurants  or  groups  of  operating  restaurants.  The
determination of a reporting unit is made at the time of acquisition. The market
for these  intangibles is limited and the realizable  value will differ from the
fair values estimated by using a multiple of earnings.

                                       10
<PAGE>
Depreciation
------------

Property, buildings and equipment are depreciated using the straight-line method
over their estimated useful lives. The useful lives of the individual assets are
estimated  by the  Company's  management  based  upon  their  experience  in the
restaurant  industry.  Generally  buildings  are  depreciated  over 35 years and
equipment is depreciated over a range of 3 to 10 years.  Leasehold  improvements
are amortized on a straight-line method over their estimated useful lives or the
term of the  related  lease,  whichever  is  shorter.  Periodically  the Company
reviews the net book value of its  depreciable  assets to  determine if there is
any possible  impairment of value. The Company recognized a $140,000  impairment
loss on the write  down of  property  and  equipment  with a  carrying  value of
approximately  $155,000 to a fair value of $15,000 during the quarter ended July
19, 2004.  Differences  between the realized lives and the estimated lives could
result in changes to the  Company's  results from  operations in future years as
well as changes in the rate of recurring capital expenditures.

Revenue Recognition
-------------------

The Company's  revenue is primarily from cash and credit card  transactions.  As
such,  restaurant revenue is generally recognized upon receipt of cash or credit
cards  receipts.  Franchise fees based upon a percent of the  franchisees  gross
sales are recognized as the franchisees' sales occur.  Revenue from the lottery,
which includes traditional ticket based games and video poker games, is recorded
on a commission  basis,  net of state regulated  payouts.  Expenses are recorded
using accrual accounting based upon when goods and services are used.

Stock Options
-------------

The Company accounts for its stock-based  compensation using the intrinsic value
method prescribed in Accounting  Principles Board Opinion No. 25, Accounting for
Stock  Issued  to  Employees,  and  related   interpretations.   Based  on  this
methodology the Company has not recorded any  compensation  costs related to its
stock options  since all options have been issued at an exercise  price equal to
or greater than the market value of the Company's stock at the time of issuance.

In Section 1 Basis of  Presentation,  we provide  pro forma  disclosures  of net
income and  earnings  per share as if the  method  prescribed  by SFAS No.  123,
Accounting  for  Stock-Based   Compensation,   had  been  applied  in  measuring
compensation expense. A change to recognize compensation expense for all options
granted  using a fair value  approach in regularly  reported  financial  results
would have a significant impact on our results of operations.

HIGHLIGHTS OF HISTORICAL  RESULTS.  The Company  reported net income of $221,114
and $532,953 or $.12 and $.29 in basic earnings per share for the 12 and 28-week
periods  ended  October 11,  2004.  These  results are  compared to reported net
income  of  $330,528  and  $693,633,  or $.16 and $.34 per  share for the 12 and
28-week periods ended October 13, 2003. The Company's total assets as of October
11, 2004 were $18.9 million,  which is a decrease of  approximately  $.1 million
over total assets as of March 29, 2004.  In the 28 weeks ended October 11, 2004,
working  capital  increased  approximately  $811,000 while notes payable (net of
current  portion)  decreased  $154,000.  Cash  provided by operating  activities
totaled  $445,000 for the 28 weeks ended October 11, 2004 compared to $1,562,000
for the 28 weeks ended  October 13,  2003.  The decrease in cash  provided  from
operations is primarily  attributable  to the timing of payroll tax and worker's
compensation  insurance premiums as well as pay down of negative working capital
attributable to the sale of the Palm Springs restaurant.

COMPARISON  OF RESULTS OF  OPERATIONS.  The  following  discussion  and analysis
presents  the  Company's  results of  operations  for the 12 and 28 week periods
ended October 11, 2004 and October 13, 2003.

                                       11
<PAGE>
For the 12 and 28-week  periods ended October 11, 2004, the Company's net income
decreased  33.1% and 23.2% from the comparable  periods in 2003. Net income as a
percentage of total  revenue  decreased  from 3.9% for the 28-week  period ended
October 13, 2003, to 3.0% for the 28 weeks ended October 11, 2004  primarily due
to changes in the  lottery  contract  with the State of Oregon.  Net income as a
percentage of total  revenue  decreased  from 4.3% for the 12-week  period ended
October 13, 2003, to 2.8% for the 12 weeks ended October 11, 2004.


<TABLE>
<CAPTION>
                                                    RESULTS OF OPERATIONS         RESULTS OF OPERATIONS
Dollar amounts in thousands except per share       FOR THE 28 WEEKS ENDED         FOR THE 28 WEEKS ENDED
data                                                  OCTOBER 11, 2004               OCTOBER 13, 2003
                                                      ----------------               ----------------
                                                                Percent of                       Percent of
                                                 Amount          Revenues          Amount         Revenues
                                             -------------- ---------------    -------------- --------------
<S>                                                <C>              <C>              <C>            <C>
Revenues                                           $17,638          100.0%           $17,895        100.0%
Restaurant costs and expenses                       15,235           86.4%            15,341         85.7%
General and administrative expenses                  1,427            8.1%             1,352          7.6%
Loss (Gain) on sale of land, buildings and
equipment and loss on impairment                        11             .1%                 4          0.1%
 Income from operations                                965            5.5%             1,198          6.7%
Non operating income (expense)                       (181)          (1.0)%             (152)         (.9)%
Net income                                             533            3.0%               694          3.9%

Basic earnings per share                             $0.29                             $0.34

                                                    RESULTS OF OPERATIONS         RESULTS OF OPERATIONS
Dollar amounts in thousands except per share       FOR THE 12 WEEKS ENDED         FOR THE 12 WEEKS ENDED
data                                                  OCTOBER 11, 2004               OCTOBER 13, 2003
                                                      ----------------               ----------------
                                                                Percent of                       Percent of
                                                 Amount          Revenues          Amount         Revenues
                                             -------------- ---------------    -------------- --------------
Revenues                                            $7,833          100.0%            $7,836        100.0%
Restaurant costs and expenses                        6,706           85.6%             6,576         83.9%
General and administrative expenses                    695            8.9%               681          8.7%
Loss (Gain) on sale of land, buildings and
equipment and loss on impairment                        16             .2%                 0          0.0%
 Income from operations                                416            5.3%               579          7.4%
Non operating income (expense)                        (91)          (1.2)%              (65)         (.8)%
Net income                                             221            2.8%               331          4.3%

Basic earnings per share                             $0.12                             $0.16
</TABLE>















                                       12
<PAGE>
<TABLE>
<CAPTION>
                                          REVENUES                        REVENUES
Dollar amounts in thousands        FOR THE 28 WEEKS ENDED          FOR THE 28 WEEKS ENDED
                                      OCTOBER 11, 2004                OCTOBER 13, 2003
                                      ----------------                ----------------
                                                 Percent of                        Percent of
                                   Amount         Revenues           Amount         Revenues
                               -------------- ----------------   -------------- ----------------
<S>                                  <C>                <C>            <C>                <C>
Restaurant operations:
Restaurant sales                     $14,737            83.6%          $14,999            83.8%
Lottery                                2,153            12.2%            2,276            12.7%
                               -------------- ----------------   -------------- ----------------
                                      16,890            95.8%           17,275            96.5%

Franchise operations                     748             4.2%              620             3.5%
                               -------------- ----------------   -------------- ----------------

Total revenue                        $17,638           100.0%          $17,895           100.0%
                               ============== ================   ============== ================


                                          REVENUES                        REVENUES
Dollar amounts in thousands        FOR THE 12 WEEKS ENDED          FOR THE 12 WEEKS ENDED
                                      OCTOBER 11, 2004                OCTOBER 13, 2003
                                      ----------------                ----------------
                                                 Percent of                        Percent of
                                   Amount         Revenues           Amount         Revenues
                               -------------- ----------------   -------------- ----------------
Restaurant operations:
Restaurant sales                      $6,494            82.9%           $6,452            82.3%
Lottery                                1,013            12.9%            1,148            14.7%
                               -------------- ----------------   -------------- ----------------
                                       7,507            95.8%            7,600            97.0%

Franchise operations                     326             4.2%              236             3.0%
                               -------------- ----------------   -------------- ----------------

Total revenue                         $7,833           100.0%           $7,836           100.0%
                               ============== ================   ============== ================
</TABLE>

REVENUES.  Revenues for the 12 and 28 weeks ended October 11, 2004 were 0.0% and
1.4% less, respectively, than the comparable periods in 2003. Revenues from same
store restaurant operations showed a decrease of 1.7% and 2.2% for the 12 and 28
weeks ended October 11, 2004 respectively,  over the comparable periods in 2003.
Same store sales at the core Elmer's brand  increased 1.5% and decreased .4% for
the 12 and 28 weeks ended October 11, 2004. The Company defines same store sales
as restaurants that were Company owned and operating  continuously from April 1,
2003 through  October 11,  2004.  Revenue from  franchise  operations  increased
$128,000  due to  increases  in initial  franchise  fees as well as increases in
royalty income.

March 31, 2004, the Oregon Lottery  Commission  approved a new six-year retailer
contract  effective  June 27, 2004.  If the new  commission  structure  had been
applied  to sales for the year  ended  March 29,  2004,  it would  have  reduced
commissions by approximately $435,000, or 10%. The following table shows the pro
forma impact by quarter.

            Quarter ended:                                  Adverse impact
            ---------------                                 --------------
              July 19, 2004                                        $93,000
           October 11, 2004                                        250,000
            January 3, 2005                                         96,000
             March 28, 2005                                       (10,000)
              July 25, 2005                                          6,000

The Lottery has installed additional terminals in most Company locations and the
Company expects year over year sales increases to reduce, but not eliminate, the
impact of the new lower rates.  The $93,000 impact in the

                                       13
<PAGE>
quarter ended July 19, 2004 was more than offset by increased sales prior to the
contracts  effective  date of June 27, 2004.  For the quarter  ended October 11,
2004 lottery commissions declined by $135,000 from the prior year.

RESTAURANT COSTS AND EXPENSES.  A comparison of restaurant costs and expenses as
a percent of revenue for the 28 and 12 weeks ended  October 11, 2004 and October
13, 2003 are as follows:

<TABLE>
<CAPTION>
                                          RESTAURANT COSTS & EXPENSES        RESTAURANT COSTS & EXPENSES
Dollar amounts in thousands                 FOR THE 28 WEEKS ENDED             FOR THE 28 WEEKS ENDED
                                               OCTOBER 11, 2004                   OCTOBER 13, 2003
                                               ----------------                   ----------------
                                          Amount           Percent             Amount           Percent
                                       ------------   -----------------    --------------   ---------------
<S>                                         <C>                  <C>              <C>                <C>
Cost of restaurant sales:
Food and beverage                           $5,154               29.2%            $5,441             30.4%
Labor and related costs                      6,003               34.0%             5,913             33.0%
Restaurant operating costs                   2,503               14.2%             2,438             13.6%
Occupancy costs                              1,108                6.3%             1,108              6.2%
Depreciation and amortization                  467                2.7%               441              2.5%
Restaurant opening and closing
expenses                                        --                  --                --                --
                                       ------------   -----------------    --------------   ---------------
  Total Cost of Restaurant Sales           $15,235               86.4%           $15,341             85.7%
                                       ============   =================    ==============   ===============

                                          RESTAURANT COSTS & EXPENSES        RESTAURANT COSTS & EXPENSES
Dollar amounts in thousands                 FOR THE 12 WEEKS ENDED             FOR THE 12 WEEKS ENDED
                                               OCTOBER 11, 2004                   OCTOBER 13, 2003
                                               ----------------                   ----------------
                                          Amount           Percent             Amount           Percent
                                       ------------   -----------------    --------------   ---------------
Cost of restaurant sales:
Food and beverage                           $2,311               29.5%            $2,341             29.9%
Labor and related costs                      2,586               33.0%             2,514             32.1%
Restaurant operating costs                   1,120               14.3%             1,060             13.5%
Occupancy costs                                488                6.2%               472              6.0%
Depreciation and amortization                  200                2.6%               189              2.4%
Restaurant opening and closing
expenses                                        --                  --                --                --
                                       ------------   -----------------    --------------   ---------------
  Total Cost of Restaurant Sales            $6,705               85.6%            $6,576             83.9%
                                       ============   =================    ==============   ===============
</TABLE>

The  Company  operated  15  restaurants  and 13  delis  during  2003  and  2004.
Restaurant  costs and expenses as a proportion of sales  increased  1.7% for the
12-week period ended October 11, 2004 over the comparable  period in 2003.  1.4%
of this increase is attributable  to the decrease in lottery  revenue  resulting
from the new contract.  For the 28 week period ended October 11, 2004,  food and
beverage  expenses  decreased by 1.2% of sales,  principally due to a decline in
sales of low margin  items at the  Company's  deli  operations  during the first
fiscal  quarter.  Food and beverage costs at the Company's  Elmer's  restaurants
increased .3% of sales while labor and related costs increased .6%.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative ("G&A") expenses
were 8.9% and 8.1% of total  revenue for the 12 and 28 weeks  ended  October 11,
2004,  compared  to 8.7% and 7.6% in the  comparable  period in 2003.  Corporate
wages  were  up  $30,000  due to  additional  marketing  and  franchise  support
expenses.

LOSS (GAIN) ON LAND,  BUILDINGS AND EQUIPMENT.  Loss on sale of land,  buildings
and equipment  increased  from 0.0% of sales for the 12 weeks ending October 13,
2003  to .2% for  the  current  quarter.  The  Company  sold  the  Palm  Springs
restaurant to a franchisee for a net gain of approximately $129,000. The Company
recognized  a  $140,000  impairment  loss  on the  write  down of  property  and
equipment  from a carrying  value of  approximately

                                       14
<PAGE>
$155,000  to a fair  value of  $15,000.  The loss  arises  from the  anticipated
closure of a restaurant when the lease will not be renewed.

INCOME FROM OPERATIONS.  Income from operations  decreased  $233,187 to $964,534
year to date.

NON-OPERATING  INCOME/(EXPENSE).  Non-operating expense was (1.2)% and (1.0)% of
total  revenues for the 12 and 28 weeks ended October 11, 2004 compared to (.8)%
and (.9)% of total revenues in the comparable  period in 2003. The Company had a
gain on marketable securities of $8,800 for the 12 weeks ending October 11, 2004
against a gain of $11,000 for the 12 weeks ending  October 13, 2003.  For the 28
weeks  ending  October  11, 2004 gains on  marketable  securities  were  $10,800
compared to a gain of $14,400 in marketable securities last year.

LIQUIDITY AND CAPITAL RESOURCES. As of October 11, 2004 the Company had cash and
cash  equivalents of  approximately  $2.2 million  representing an increase from
March 29,  2004 of  approximately  $566,000.  Cash  provided by  operations  was
$445,000.  Cash provided by investing activities was $191,000,  principally from
the sale of the Palm  Springs  restaurant,  offset by  capital  expenditures  of
$397,000.

The Company's  primary  liquidity needs arise from debt service on indebtedness,
operating  lease  requirements  and the  funding  of capital  expenditures.  The
Company's  primary  source of liquidity  during the year is the operation of its
restaurants,  franchise  fees earned  from its  franchisees,  cash on hand,  and
borrowings.  As of October 11, 2004, the Company had outstanding indebtedness of
$3.7  million  with GE Capital  and $1.5  million in real estate debt with Wells
Fargo Bank.

On January 14, 2004 the Company  purchased  204,255  shares of its Common Stock,
representing  approximately  10% of the then outstanding  shares,  at a purchase
price of $6.43 per share in  accordance  with the terms of a tender  offer.  The
aggregate price of the shares  purchased by the Company through the tender offer
was approximately $1,313,000. Fees and expenses associated with the tender offer
were  approximately  $17,000,  which was expensed in the  Company's  4th Quarter
ended March 29, 2004.

The Wells  Fargo Bank real  estate  debt  agreement  was amended in June 2003 to
change the fixed interest rate of 8% to a variable interest rate based on LIBOR.
In conjunction with this modification, the Company entered into an interest rate
swap  agreement,  which  effectively  fixed  the  interest  rate at  6.17%.  The
mortgages now have a weighted-average maturity of 7.5 years, bear interest at an
average of 6.0%,  require  monthly  payments of principal and interest,  and are
collateralized  by  three  real  estate  assets.  As of  October  11,  2004  the
obligation  under this  agreement was $8,706 and resulted in the  recognition of
$14,579 (net of tax effect) in other comprehensive gain.

Certain of the Company's debt agreements require compliance with debt covenants.
The most restrictive  covenants  require the Company to maintain a maximum ratio
of total  liabilities,  excluding  subordinated debt, to tangible net worth plus
subordinated debt of 3.5 to 1.0, and a ratio of cash generation  (defined as net
income before taxes,  interest expense,  depreciation and amortization) to total
interest  expense plus the prior period current  maturities of long-term debt of
at least 2.0 to 1.0.  Management believes that the Company is in compliance with
such requirements.

Elmer's Restaurants,  Inc., like most restaurant businesses,  is able to operate
with nominal or deficit working capital because sales are for cash and inventory
turnover is rapid.  Renovation  and/or  remodeling  of existing  restaurants  is
either funded  directly from available cash or, in some  instances,  is financed
through  outside  lenders.  Construction  or acquisition  of new  restaurants is
generally, although not always, financed by outside lenders.

The  Company  believes  that it will  continue  to be  able to  obtain  adequate
financing on acceptable terms for new restaurant construction,  acquisitions and
franchising and that cash generated from operations will be adequate to meet its
financial  needs  and to pay  operating  expenses  for the  foreseeable  future,
although no assurances can be given.

                                       15
<PAGE>
CONTRACTUAL OBLIGATIONS
The Company makes a range of contractual  commitments in the ordinary  course of
business and in conjunction  with the acquisition  and sale of restaurants.  The
following table shows the Company's contractual obligations:

<TABLE>
<CAPTION>
                          Commitment expiration period
                            Total amount committed       1 year or less        1-3 years      4-5 years  5 years or more
-------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>                    <C>            <C>            <C>              <C>
Term debt                               $5,191,583             $429,889       $1,133,789     $1,236,324       $2,391,581
Operating leases                         4,448,385            1,199,416        1,636,619        988,323          624,027
Guarantees                               1,097,146              389,481          660,196         47,469                -
-------------------------------------------------------------------------------------------------------------------------
Totals                                 $10,737,114           $2,018,786       $3,430,604     $2,272,116       $3,015,608
                                       ===========           ==========       ==========     ==========       ==========
</TABLE>


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS:

Certain  statements in this Form 10-Q  constitute  "forward-looking  statements"
which we believe are  reasonable and within the meaning of the Securities Act of
1933, as amended,  and the  Securities  Exchange Act of 1934,  as amended.  Such
forward-looking statements involve known and unknown risks,  uncertainties,  and
other  factors  relating to the Company's  business,  financial  condition,  and
operations which may cause the actual results,  performance,  or achievements of
Elmer's Restaurants,  Inc. (individually and collectively with its subsidiaries,
herein the  "Company")  to be  materially  different  from any  future  results,
performance,  or  achievements  expressed  or  implied  by such  forward-looking
statements. Such factors include, among others, the following:  general economic
and business conditions;  the ability to accomplish stated goals and objectives;
successful  integration of acquisitions;  the impact of competitive products and
pricing;  success of operating  initiatives;  development  and operating  costs;
advertising  and  promotional  efforts;  adverse  publicity;  acceptance  of new
product offerings;  consumer trial and frequency;  availability,  locations, and
terms of sites and contracts  for  restaurant  development;  changes in business
strategy  or  development  plans;  changes  in  regulations   affecting  lottery
commissions;  quality  of  management;  availability,  terms and  deployment  of
capital;  the results of financing  efforts;  business abilities and judgment of
personnel; availability of qualified personnel; food, labor and employee benefit
costs;  changes in costs  associated with  compliance,  or the failure to comply
with,  government  regulations;  continued NASDAQ listing;  weather  conditions;
construction and remodeling schedules; and other factors referenced in this Form
10-Q.

Market Risks
------------
The Company  invests  excess cash beyond its  working  capital  requirements  in
liquid marketable  securities.  These securities  consist primarily of corporate
and  government  bond mutual funds focusing on issues with medium and short term
maturities.  The Company  actively manages its portfolio to reduce interest rate
risk. However, an increase in interest rate levels will tend to reduce the value
of the portfolio.

Certain of the Company's outstanding financial instruments are subject to market
risks,  including  interest  rate  risk.  Such  financial  instruments  are  not
currently  subject to foreign  currency risk or commodity  price risk. A rise in
prevailing  interest rates could have adverse effects on the Company's financial
condition  and results of  operations.  The fair value of financial  instruments
approximated the book value at October 11, 2004.

ITEM 4.  CONTROLS AND PROCEDURES

The Company's  President  and its Corporate  Controller,  after  evaluating  the
effectiveness of the Company's disclosure controls and procedures (as defined in
the Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c)) as of October
11, 2004 on Form 10-Q (the  "Evaluation  Date"),  have  concluded that as of the
Evaluation Date, the Company's  disclosure controls and procedures were adequate
and  effective to ensure that material  information  relating to the Company and
its consolidated subsidiaries would be made known to them by others within those
entities,  particularly during the period in which this quarterly report on Form
10-Q was being prepared.

                                       16
<PAGE>
There were no significant changes in the Company's internal controls or in other
factors that could  significantly  affect the Company's  disclosure controls and
procedures  subsequent to the Evaluation Date, nor any significant  deficiencies
or material  weaknesses in such  disclosure  controls and  procedures  requiring
corrective actions. As a result, no corrective actions were taken.

                           PART II - OTHER INFORMATION


ITEM 5.  OTHER INFORMATION

In accordance  with  amendments  adopted on May 21, 1998 to Rule 14a-4 under the
Securities  and Exchange Act of 1934, if notice of a shareholder  proposal to be
raised at the annual  meeting  of  shareholders  is  received  at the  principal
executive  offices of the Company after May 15, 2005 (45 days prior to the month
and date in 2005 corresponding to the date on which the Company mailed its proxy
materials for the 2004 annual  meeting),  proxy voting on that proposal when and
if raised at the 2005 annual meeting will be subject to the discretionary voting
authority  of the  designated  proxy  holders.  Any  shareholder  proposal to be
considered  for  inclusion  in proxy  materials  for the  Company's  2005 annual
meeting  must be received at the  principal  executive  office of the Company no
later than January 21, 2005.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         a)       Exhibits:

                  Exhibits required to be attached by Item 601 of Regulation S-K
                  are  listed  in the  Exhibit  Index of this  Form 10-Q and are
                  incorporated herein by this reference.

         b)       Reports on Form 8-K:

                  June 23, 2004  reporting  fiscal year end  financial  results.
                  August 6, 2004 reporting going private proposal.
                  September 2, 2004 reporting first quarter financial results.

                                   SIGNATURES


Pursuant to the  requirements  of Section 13 of the  Securities  Exchange Act of
1934, Elmer's Restaurants,  Inc. has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                        Elmer's Restaurants, Inc.


                                        By: /s/ BRUCE N. DAVIS
                                        ---------------------------------------
                                        Bruce N. Davis
                                        Chief Executive Officer and President

Dated: November 18, 2004






<PAGE>
                                  EXHIBIT INDEX


Exhibit                                                               Sequential
  No.             Description                                          Page No.


3 (i) * Restated Articles of Incorporation of the Company  (Incorporated  herein
by reference  from Exhibit No. 3.1 to the  Company's  Annual Report on Form 10-K
for the year ended March 31, 1988.)

3 (ii) * By-Laws of the Company, as amended.  (Incorporated  herein by reference
from Exhibit 3.2 of the Company's  Annual Report on Form 10-K for the year ended
March 31, 1990.)

31.1     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
         pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,
         of Chief Executive Officer and President.                        19

31.2     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
         pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,
         of Secretary and Corporate Controller.                           20

32.1     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
         pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
         of Chief Executive Officer and President.                        21

32.2     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
         pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
         of Secretary and Corporate Controller.                           22