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

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

          For the fiscal year ended December 31, 2000

                               OR

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

      For the transition period from ________ to ________

              Commission file number 333-17795-01

                 WATERFORD GAMING FINANCE CORP.
     (Exact name of registrant as specified in its charter)

             Delaware                      06-1485836
   (State or other jurisdiction of       (IRS Employer
    incorporation or organization)     Identification No.)

    914 Hartford Turnpike, P.O. Box 715
            Waterford, CT                      06385
  (Address of principal executive offices)   (Zip Code)

Registrant's telephone number, including area code (860) 442-4559

Securities registered pursuant to Section 12(b) of the Act:

Title of each class     Name of each exchange on which registered
     NONE


Securities registered pursuant to Section 12(g) of the Act:
                        NONE
                   (Title of Class)

The registrant  meets the conditions set forth in General  Instruction  J(1) (a)
and (b) of Form 10-K and is  therefore  filing  this Form 10-K with the  reduced
disclosure format.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days: Yes X No.

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

                 WATERFORD GAMING FINANCE CORP.
                       INDEX TO FORM 10-K

PART I.                                                      PAGE

Item 1.   Business                                              1
Item 2.   Properties                                            2
Item 3.   Legal Proceedings                                     2
Item 4.   Submission of Matters to a Vote of Security Holders   2

PART II.

Item 5.   Market for Registrant's Common Equity and
          Related Stockholder Matters                           2
Item 6.   Selected Financial Data                               2
Item 7.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations                   3
Item 8.   Financial Statements and Supplementary Data           3
Item 9.   Changes in and Disagreements with Accountants on
          Accounting and Financial Disclosure                   3

PART III.

Item 10.  Directors and Executive Officers of the Registrant    3
Item 11.  Executive Compensation                                3
Item 12.  Security Ownership of Certain Beneficial Owners and
          Management                                            3
Item 13.  Certain Relationships and Related Transactions        3

PART IV.

Item 14.  Exhibits, Financial Statement Schedules and
          Reports on Form 8-K                                   4

                                     Part I

ITEM 1.   BUSINESS

A.   General

Waterford Gaming Finance Corp.,  (the "Company"),  a Delaware  corporation,  was
formed on October 22, 1996 as a wholly owned  subsidiary  of  Waterford  Gaming,
L.L.C.  ("Gaming").  Effective as of May 15, 1997,  the Company  functioned as a
co-issuer  with its parent,  Gaming,  to issue $65 million  12-3/4% senior notes
payable  (the "$65 Million  Senior  Notes").  The $65 Million  Senior Notes were
redeemed as part of the Company's and Gaming's $125 million  9-1/2% senior notes
(the "$125  Million  Senior  Notes")  offering  which was completed on March 17,
1999.

B.   $125 Million 9-1/2% Senior Notes

On March 17, 1999,  the Company and Gaming,  issued $125 Million  Senior  Notes,
which mature March 15, 2010.  Payment of the  principal of, and interest on, the
$125  Million  Senior  Notes is  subordinate  in right of  payment  to all their
existing and future secured debts.

Interest is payable  semi-annually  in arrears on March 15 and September 15 at a
rate of 9-1/2% per annum which commenced on September 15, 1999.

The  principal  amount of the $125 Million  Senior Notes is payable on March 15,
2010.  The Company and Gaming may elect to redeem the $125 Million  Senior Notes
at any  time on or  after  March  15,  2004 at a  redemption  price  equal  to a
percentage (105.182% after March 14, 2004, and declining to 104.318% after March
14, 2005, 103.455% after March 14, 2006, 102.591% after March 14, 2007, 101.727%
after March 14, 2008, 100.864% after March 14, 2009, and to 100% after March 14,
2010) of the principal  amount thereof plus accrued  interest.  The $125 Million
Senior  Notes  provide  that  upon the  occurrence  of a Change of  Control  (as
defined),  the holders thereof will have the option to require the redemption of
the  $125  Million  Senior  Notes  at a  redemption  price  equal to 101% of the
principal amount thereof plus accrued interest.

If the Company and Gaming have any Company  Excess Cash,  as defined,  they must
redeem the $125  Million  Senior Notes (on a  semi-annual  basis on March 15 and
September 15) equal to a percentage (109.500% after March 15, 1999 and declining
to 108.636% after March 14, 2000,  107.773% after March 14, 2001, 106.909% after
March 14, 2002,  106.045%  after March 14, 2003,  105.182% after March 14, 2004,
104.318%  after March 14, 2005,  103.455%  after March 14, 2006,  102.591% after
March 14, 2007,  101.727%  after March 14, 2008,  100.864% after March 14, 2009,
and to 100% after March 14, 2010).  On August 1, 1999 the Company and Gaming had
Company Excess Cash, as defined,  available for mandatory redemption of the $125
Million  Senior Notes  totaling  approximately  $8,983,000,  and  accordingly on
September  15, 1999 the Company and Gaming made a mandatory  redemption  of $125
Million  Senior Notes in the principal  amount of  $2,841,000 at the  redemption
price of 109.50%.  On February 1, 2000 the Company and Gaming had Company Excess
Cash, as defined,  available for mandatory redemption of the $125 Million Senior
Notes totaling approximately  $8,276,000,  and accordingly on March 15, 2000 the
Company and Gaming made a mandatory  redemption of $125 Million  Senior Notes in
the  principal  amount of  $2,277,000 at the  redemption  price of 108.636%.  On
February 1, 2001 the Company and Gaming had  Company  Excess  Cash,  as defined,
available  for  mandatory  redemption  of $125  Million  Senior  notes  totaling
approximately $6,173,000 and accordingly the Company and Gaming made a mandatory
redemption of $125 Million  Senior Notes in the principal  amount of $452,000 at
the redemption price of 107.773%. In some circumstances, if either Gaming or its
partner in Trading Cove Associates  ("TCA")  exercises the option to buy or sell
partnership  interests  in TCA,  the  Company  and Gaming  must  redeem the $125
Million Senior Notes.

The  indenture  relating  to the $125  Million  Senior  Notes (the  "Indenture")
contains certain  affirmative and negative  covenants  customarily  contained in
agreements of this type, including without limitation,  covenants that restrict,
subject to specified exceptions the Company's and Gaming's ability to (i) borrow
money,  (ii) pay dividends on stock or make certain other  restricted  payments,
(iii) use assets as security in other transactions,  (iv) make investments,  (v)
sell other assets or merge with other  companies and (vi) engage in any business
except as currently  conducted or contemplated or amend their  relationship with
TCA.  The  Indenture  also  provides  for  customary  events of default  and the
establishment  of a  restricted  investment  fund  with a trustee  for  interest
reserves.

                                1

ITEM 2.   PROPERTIES

The Company does not have an ownership interest in real property.

ITEM 3.   LEGAL PROCEEDINGS

On January 6, 1998, Leisure Resort Technology,  Inc.  ("Leisure") and defendants
Waterford Gaming,  L.L.C., Trading Cove Associates,  LMW Investments,  Inc., and
Slavik Suites,  Inc.  settled a prior lawsuit brought by Leisure.  In connection
with this  settlement,  Leisure and Trading Cove Associates,  Waterford  Gaming,
L.L.C., LMW Investments, Inc., and Slavik Suites, Inc. entered into a settlement
and release  agreement.  Pursuant  to this  settlement  and  release  agreement,
Waterford Gaming,  L.L.C.  bought out Leisure's  beneficial  interest in Trading
Cove Associates.

By complaint dated January 7, 2000, as amended February 4, 2000, Leisure filed a
four count complaint naming as defendants Waterford Gaming, L.L.C., Trading Cove
Associates, LMW Investments, Inc., Slavik Suites, Inc., Waterford Group, L.L.C.,
Len Wolman  and Mark  Wolman  (collectively,  the  "Defendants").  The matter is
pending in the Judicial  District of Middlesex at Middletown,  Connecticut.  The
complaint  alleged  breach  of  fiduciary  duties,  fraudulent   non-disclosure,
violation  of  Connecticut   Statutes  Section  42-110a,  et  seq.,  and  unjust
enrichment in connection  with the  negotiation  by certain of the Defendants of
the settlement and release agreement.  The complaint also brought a claim for an
accounting.  The complaint seeks  unspecified  legal and equitable  damages.  On
February 29 2000,  Defendants  filed a Motion to Strike and a Motion for Summary
Judgement, each with respect to all claims. The Court granted Defendants' Motion
to Strike in part and  denied  Defendants'  Motion  for  Summary  Judgement,  on
October 13, 2000. The Courts order dismissed the claim for an accounting and the
claim under Connecticut  Statues Section 42-110a,  et seq. The Court also struck
the alter ego allegations in the complaint against LMW Investments, Inc., Slavik
Suites, Inc., Len Wolman and Mark Wolman.

On November 15, 2000,  Waterford Gaming,  L.L.C. and its co-defendants  answered
the complaint. In addition, Waterford Gaming, L.L.C. and Trading Cove Associates
asserted  counterclaims  for breach of the settlement and release  agreement and
breach of the implied  covenant of good faith against Leisure and its president,
Lee Tyrol.

Waterford Gaming,  L.L.C.  believes that it has meritorious defenses and intends
to  vigorously  contest  the claims in this  action and to assert all  available
defenses.  At the present time, Waterford Gaming, L.L.C. is unable to express an
opinion on the  likelihood of an  unfavorable  outcome or to give an estimate of
the amount or range of potential loss to Waterford Gaming, L.L.C. as a result of
this  litigation  due to the  disputed  issues of law and/or  facts on which the
outcome of this litigation depends and due to the infancy of both the action and
discovery in the action.

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

Omitted.

                                    Part II

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

Not Applicable.

ITEM 6.   SELECTED FINANCIAL DATA

Omitted.

                                       2

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

The following  discussions  should be read in conjunction with, and is qualified
in its entirety by, the  Company's  financial  statements  and the notes thereto
included elsewhere herein.

Certain Forward Looking Statements
----------------------------------

Certain  information  included in this Form 10-K and other materials filed or to
be filed by the Company with the Securities and Exchange  Commission (as well as
information  included in oral statements or other written  statements made or to
be made by the Company) contains forward-looking statements,  within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended.  Such  forward-looking  information
involves  important  risks and  uncertainties  that could  significantly  affect
anticipated results in the future, and accordingly, such results may differ from
those  expressed in any  forward-looking  statements made by or on behalf of the
Company.

Discussion of the years ended December 31, 2000, 1999 and 1998
--------------------------------------------------------------

For the years ended December 31, 2000,  1999 and 1998 the Company had no revenue
and expense.

The Company is a wholly-owned subsidiary of Waterford Gaming, L.L.C..

The Company is not expected to have significant operating activity.  Funding for
future operations will come from the financial support of its parent company.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Index to Financial Statements on Page 5.

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

None.

                             Part III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth certain  information  with respect to persons who
are  members  of the Board of  Directors  of the  Company  or who are  executive
officers of the Company.



Name                     Age            Position

Len Wolman               46             President, Chief
                                        Executive Officer, Member
                                        of the Board of Directors
Del J. Lauria            52             Secretary, Treasurer,
                                        Member of the Board of
                                        Directors

ITEM 11.  EXECUTIVE COMPENSATION

Omitted.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

The Company is a wholly owned subsidiary of Gaming.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Omitted.

                                3

                                    Part IV

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

          (a)  Exhibits
               --------

               Exhibit No.    Description
                  3.1         Certificate of Incorporation of
                              Waterford Gaming Finance Corp. (i)
                  3.2         Bylaws of Waterford Gaming Finance Corp. (i)
                  4.1         Indenture, dated as of November 8, 1996, between
                              Waterford Gaming, L.L.C. and Waterford Gaming
                              Finance Corp., the issuers, and Fleet National
                              Bank, as trustee, relating to $65,000,000 12-3/4%
                              Senior Notes due 2003. (i)
                  4.1.1       First Supplemental Indenture, dated as of March 4,
                              1999, among Waterford Gaming, L.L.C. and Waterford
                              Gaming Finance Corp., as issuers, and State Street
                              Bank and Trust Company, as trustee, relating to
                              $65,000,000 12-3/4% Senior Notes due 2003. (iii)
                  4.2         Indenture, dated as of March 17, 1999, among
                              Waterford Gaming, L.L.C. and Waterford Gaming
                              Finance Corp., as issuers, and State Street Bank
                              and Trust Company, as trustee, relating to
                              $125,000,000 9-1/2% Senior Notes due 2010. (iii)
                  4.3         Security and Control Agreement, dated as of March
                              17, 1999, among Waterford Gaming, L.L.C. and
                              Waterford Gaming Finance Corp., as pledgors and
                              State Street Bank and Trust Company, as securities
                              intermediary.  (iii)
                  4.4         Specimen Form of 9-1/2% Senior Notes due 2010
                              (included in Exhibit 4.2). (iii)
                  10.1        Purchase Agreement, dated as of March 10, 1999,
                              among Waterford Gaming, L.L.C., Waterford Gaming
                              Finance Corp., Bear, Stearns & Co., Inc., Merrill
                              Lynch, Pierce, Fenner and Smith Inc. and Salomon
                              Smith Barney (iii)
                 10.2         Waiver and Acknowledgment of Noteholder. (ii)
                 21.1         Subsidiaries of Waterford Gaming
                              Finance Corp. (i)
                 99.1         Annual Report, for the year ended December 31,
                              2000 on Form 10-K of Waterford Gaming, L.L.C.,
                              dated March 30, 2001, incorporated by reference to
                              Waterford Gaming, L.L.C.'s electronic filing of
                              such report on Form 10-K  Securities  and Exchange
                              Commission  (the "Commission")file reference no.
                              333-17795.

 (i) Incorporated  by reference to the  Registrant's  Registration  Statement on
     Form S-4, Commission File No.  333-17795-01,  declared effective on May 15,
     1997.

(ii) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q
     for the period ended March 31, 1998,  Commission File No. 333-17795-01,  as
     accepted by the Commission on May 14, 1998.

(iii)Incorporated by reference to the  Registrant's  Quarterly  Report on
     Form  10-Q  for the  period  ended  March  31,  1999,  Commission  File No.
     333-17795-01, as accepted by the Commission on May 17, 1999.

                                4

(b)  Financial Statement Schedules

     INDEX TO FINANCIAL STATEMENTS

     Report of Independent Accountants                   F-1
     Financial Statements:
     Balance Sheets as of December 31, 2000 and 1999     F-2
     Statements of Operations and Retained
       Earnings (Deficit) for the years ended
         Decmeber 31, 2000, 1999, and 1998               F-3
     Statements of Cash Flows for the years ended
       December 31, 2000, 1999, and 1998                 F-4
     Notes to Financial Statements                       F-5

                                       5

                       REPORT OF INDEPENDENT ACCOUNTANTS




To the Stockholder of
Waterford Gaming Finance Corp.


In our opinion,  the accompanying  balance sheets and the related  statements of
operations, retained earnings (deficit) and of cash flows present fairly, in all
material respects, the financial position of Waterford Gaming Finance Corp. (the
"Company")  at December 31, 2000 and  December 31, 1999,  and the results of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 2000 in conformity with accounting principles generally accepted in
the United States of America.  These financial statements are the responsibility
of the  Company's  management;  our  responsibility  is to express an opinion on
these financial statements based on our audits. We conducted our audits of these
statements  in  accordance  with auditing  standards  generally  accepted in the
United  States of America  which  require  that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting the amounts and  disclosures in the financial  statements,  assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

March 15, 2001


                                      F-1


                          WATERFORD GAMING FINANCE CORP.

                                 BALANCE SHEETS

                           December 31, 2000 and 1999
                           --------------------------


                                          2000      1999
                                         ------    ------

           ASSETS

Cash                                     $  100    $  100
                                         ======    ======

           STOCKHOLDER'S EQUITY

Stockholder's equity:

     Common stock, $.01
       par value; 1,000 shares
        authorized, issued
         and outstanding                 $   10     $  10
     Additional paid-in
      capital                                90        90
     Retained earnings (deficit)             --        --
                                         ------    ------

       Total stockholder's equity        $  100    $  100
                                         ======    ======


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


                                       F-2


                         WATERFORD GAMING FINANCE CORP.

            STATEMENT OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)

             For the Years Ended December 31, 2000, 1999, and 1998
                          --------------------------


                                       2000            1999            1998
                                  --------------  --------------  --------------

Revenue:                              $  --           $  --           $  --

Expenses:                                --              --              --
                                      -----           -----           -----
Net income                               --              --              --
Retained earnings (deficit),
  beginning of year                      --              --              --
                                      -----           -----           -----

Retained earnings (deficit),
  end of year                         $  --           $  --           $  --
                                      =====           =====           =====

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


                                      F-3


                         WATERFORD GAMING FINANCE CORP.

                            STATEMENT OF CASH FLOWS

              For the Years Ended December 31, 2000, 1999 and 1998

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



                                  2000           1999           1998
                              ------------   ------------   ------------

Cash flows from
 operating activities:
   Net income                    $  --          $  --          $  --
                                 -----          -----          -----
     Net cash prvided by
      operating
       activities                   --             --             --
                                 -----          -----          -----
     Net increase
      in cash                       --             --             --
     Cash at beginning
      of year                      100            100            100
                                 -----          -----          -----
     Cash at end of
      year                       $ 100          $ 100          $ 100
                                 =====          =====          =====

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

                                       F-4


                         WATERFORD GAMING FINANCE CORP.

                         NOTES TO FINANCIAL STATEMENTS
                           --------------------------

1.   ORGANIZATION:


     Waterford Gaming Finance Corp. (the "Company"), a Delaware corporation, was
formed on October 22, 1996 as a  wholly-owned  subsidiary  of Waterford  Gaming,
L.L.C.  ("Gaming").  Effective  as of May 15, 1997 the Company  functioned  as a
co-issuer  with its parent,  Gaming,  to issue $65 million  12-3/4% senior notes
payable  (the "$65 Million  Senior  Notes").  The $65 Million  Senior Notes were
redeemed as part of the Company's and Gaming's $125 million  9-1/2% senior notes
(the "$125  Million  Senior  Notes")  offering  which was completed on March 17,
1999.  The  Company is not  expected  to have  significant  operating  activity.
Funding  for  future  operations  will come from the  financial  support  of its
parent, Gaming.

2.   SUMMARY OF SINIFICANT ACCOUNTING POLICIES:

  Accounting Method
     The financial statements have been prepared utilizing the accrual method of
accounting.

  Use of Estimates

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


3.    $125 Million 9-1/2% Senior Notes:

On March 17, 1999,  the Company and Gaming,  issued $125 Million  Senior  Notes,
which mature March 15, 2010.  Payment of the  principal of, and interest on, the
$125  Million  Senior  Notes is  subordinate  in right of  payment  to all their
existing and future secured debts.

Interest is payable semi-annually in arrears on March 15 and September 15 at a
rate of 9-1/2% annum and commenced on September 15, 1999.

The  principal  amount of the $125 Million  Senior Notes is payable on March 15,
2010.  The Company and Gaming may elect to redeem the $125 Million  Senior Notes
at any  time on or  after  March  15,  2004 at a  redemption  price  equal  to a
percentage  (105.182% after March 14, 2004 and declining to 104.318% after March
14, 2005, 103.455% after March 14, 2006, 102.591% after March 14, 2007, 101.727%
after March 14, 2008,  100.864% after March 14, 2009 and to 100% after March 14,
2010) of the principal  amount thereof plus accrued  interest.  The $125 Million
Senior  Notes  provide  that  upon the  occurrence  of a Change of  Control  (as
defined),  the holders thereof will have the option to require the redemption of
the  $125  Million  Senior  Notes  at a  redemption  price  equal to 101% of the
principal amount threof plus accrued interest.

If the Company and Gaming have any Company  Excess Cash,  as defined,  they must
redeem the $125  Million  Senior Notes (on a  semi-annual  basis on March 15 and
September 15) equal to a percentage (109.500% after March 15, 1999 and declining
to 108.636% after March 14, 2000, 107.773% after March 14, 2001,, 106.909% after
March 14, 2002,  106.045%  after March 14, 2003,  105.182% after March 14, 2004,
104.318%  after March 14, 2005,  103.455%  after March 14, 2006,  102.591% after
March 14, 2007, 101.727% after March 14, 2008, 100.864% after March 14, 2009 and
to 100% after  March 14,  2010).  On August 1, 1999 the  Company  and Gaming had
Company Excess Cash, as defined,  available for mandatory redemption of the $125
Million  Senior Notes  totaling  approximately  $8,983,000,  and  accordingly on
September  15, 1999 the Company and Gaming made a mandatory  redemption  of $125
Million  Senior Notes in the principal  amount of  $2,841,000 at the  redemption
price of 109.50%.  On February 1, 2000 the Company and Gaming had Company Excess
Cash, as defined,  available for mandatory redemption of the $125 Million Senior
Notes totaling  approximately  $8,276,000 and accordingly the Company and Gaming
made a mandatory redemption of $125 Million Senior Notes in the principal amount
of $2,277,000 at the  redemption  price of 108.636% on March 15, 2000. On August
1, 2000 the Company and Gaming had Company  Excess Cash,  as defined,  available
for   mandatory   redemption  of  the  $125  Million   Senior  Notes,   totaling
approximately $5,902,000,  and accordingly on September 15, 2000 the Company and
Gaming made a mandatory redemption of $125 Million Senior Notes in the principal
amount of $191,000 at the redemption price of 108.636%.  On February 1, 2001 the
Company and Gaming had Company Excess Cash, as defined,  available for mandatory
redemption of the $125 Million  Senior Notes totaling  approximately  $6,173,000
and accordingly the Company and Gaming will make a mandatory  redemption of $125
Million Senior Notes in the principal amount of $452,000 at the redemption price
of 107.773% on March 15, 2001.  In some  circumstances,  if either Gaming or its
partner in Trading Cove Associates  ("TCA")  exercises the option to buy or sell
partnership  interests  in TCA,  the  Company  and Gaming  must  redeem the $125
Million Senior Notes.

                                      F-5

The  indenture  relating  to the $125  Million  Senior  Notes (the  "Indenture")
contains certain  affirmative and negative  covenants  customarily  contained in
agreements of this type, including without limitation,  covenants that restrict,
subject to specified exceptions the Company's and Gaming's ability to (i) borrow
money,  (ii) pay dividends on stock or make certain other  restricted  payments,
(iii) use assets as security in other transactions,  (iv) make investments,  (v)
sell other assets or merge with other  companies and (vi) engage in any business
except as currently  conducted or contemplated or amend their  relationship with
TCA.  The  Indenture  also  provides  for  customary  events of default  and the
establishment  of a  restricted  investment  fund  with a trustee  for  interest
reserves.


4.   CONTINGENCIES:

     LEGAL PROCEEDINGS

On January 6, 1998, Leisure Resort Technology,  Inc.  ("Leisure") and defendants
Waterford Gaming,  L.L.C., Trading Cove Associates,  LMW Investments,  Inc., and
Slavik Suites,  Inc.  settled a prior lawsuit brought by Leisure.  In connection
with this  settlement,  Leisure and Trading Cove Associates,  Waterford  Gaming,
L.L.C., LMW Investments, Inc., and Slavik Suites, Inc. entered into a settlement
and release  agreement.  Pursuant  to this  settlement  and  release  agreement,
Waterford Gaming,  L.L.C.  bought out Leisure's  beneficial  interest in Trading
Cove Associates.

By complaint dated January 7, 2000, as amended February 4, 2000, Leisure filed a
four count complaint naming as defendants Waterford Gaming, L.L.C., Trading Cove
Associates, LMW Investments, Inc., Slavik Suites, Inc., Waterford Group, L.L.C.,
Len Wolman  and Mark  Wolman  (collectively,  the  "Defendants").  The matter is
pending in the Judicial  District of Middlesex at Middletown,  Connecticut.  The
complaint  alleged  breach  of  fiduciary  duties,  fraudulent   non-disclosure,
violation  of  Connecticut   Statutes  Section  42-110a,  et  seq.,  and  unjust
enrichment in connection  with the  negotiation  by certain of the Defendants of
the settlement and release agreement.  The complaint also brought a claim for an
accounting.  The complaint seeks  unspecified  legal and equitable  damages.  On
February 29, 2000,  Defendants filed a Motion to Strike and a Motion for Summary
Judgement, each with respect to all claims. The Court granted Defendants' Motion
to Strike in part and  denied  Defendants'  Motion  for  Summary  Judgement,  on
October 13, 2000. The Courts order dismissed the claim for an accounting and the
claim under Connecticut  Statues Section 42-110a,  et seq. The Court also struck
the alter ego allegations in the complaint against LMW Investments, Inc., Slavik
Suites, Inc., Len Wolman and Mark Wolman.

On November 15, 2000,  Waterford Gaming,  L.L.C. and its co-defendants  answered
the complaint. In addition, Waterford Gaming, L.L.C. and Trading Cove Associates
asserted  counterclaims  for breach of the settlement and release  agreement and
breach of the implied  covenant of good faith against Leisure and its president,
Lee Tyrol.

Waterford Gaming,  L.L.C.  believes that it has meritorious defenses and intends
to  vigorously  contest  the claims in this  action and to assert all  available
defenses.  At the present time, Waterford Gaming, L.L.C. is unable to express an
opinion on the  likelihood of an  unfavorable  outcome or to give an estimate of
the amount or range of potential loss to Waterford Gaming, L.L.C. as a result of
this  litigation  due to the  disputed  issues of law and/or  facts on which the
outcome of this litigation depends and due to the infancy of both the action and
discovery in the action.

                                      F-6
(c)  Reports on Form 8-K

          (i) Form 8-K filed on December 28, 2000.

          Item 5.

          The Mohegan Tribal Gaming  Authority (the  "Authority")  has filed its
          annual  report on Form 10-K for the year ended  September  30, 2000, a
          copy of which  has been  filed as an  exhibit  to this  report  and is
          incorporated by reference to the Authority's electronic filing of such
          report on Form 10-K, Securities and Exchange Commission file reference
          no. 033-80655.

          Date of Report: December 14, 2000

          (ii) Form 8-K filed on February 14, 2001

          Item 5.

          The Mohegan Tribal Gaming  Authority (the  "Authority")  has filed its
          annual  report on Form 10-K for the year ended  December  31,  2000, a
          copy of which  has been  filed as an  exhibit  to this  report  and is
          incorporated by reference to the Authority's electronic filing of such
          report on Form 10-K, Securities and Exchange Commission file reference
          no. 033-80655.

          Date of Report: February 13, 2001

          (iii) Form 8-K/A filed on February 20, 2001

          Item 5.

          The Mohegan Tribal Gaming  Authority (the  "Authority")  has filed its
          quarterly report on Form 10-Q for the quarter ended December 31, 2000,
          a copy of which has been  filed as an  exhibit  to this  report and is
          incorporated by reference to the Authority's electronic filing of such
          report on Form 10-Q, Securities and Exchange Commission file reference
          no. 033-80655.

          Date of Report: February 13, 2001

          (iv) Form 8-K filed on February 20, 2001

          Item 5.

          The Mohegan  Tribal Gaming  Authority (the  "Authority")  has filed an
          amended quarterly report on Form 10-Q/A for the quarter ended December
          31,  2000, a copy of which has been filed as an exhibit to this report
          and is incorporated by reference to the Authority's  electronic filing
          of such report on Form 10-Q/A, Securities and Exchange Commission file
          reference no. 033-80655.

          Date of Report: February 14, 2001


                                       6


                                   SIGNATURES

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



                         Waterford Gaming Finance Corp.

Date: March 30, 2001     By: /s/Len Wolman
                         Len Wolman, Chief Executive Officer

Date: March 30, 2001     By: /s/Del Lauria
                         Del Lauria, Treasurer



Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this report has been signed by the following persons on behalf of the registrant
and in the capacities indicated on March 30, 2001.

Signature                      Title


 /s/ Len Wolman                President, Chief Executive Officer,
     Len Wolman                Member of the Board of Directors


 /s/ Del J. Lauria             Secretary, Treasurer,
     Del J. Lauria             Member of the Board of Directors

                                        7