UNITED STATES 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 September 27, 2003
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  333-376-17

                                DELTA MILLS, INC.
                  ------------------------------------------
             (Exact name of registrant as specified in its charter)

          DELAWARE                                          13-2677657
   -------------------------                            --------------------
 (State or other jurisdiction of                           (I.R.S. Employer
  incorporation or organization)                          Identification No.)


  P.O. Box 6126 100 Augusta Street
  Greenville, South Carolina                                    29606
  ------------------------------------------------           -------------
 (Address of principal executive offices)                      (Zip Code)

                                  864 255-4122
                                ----------------
              (Registrant's telephone number, including area code)

                                (Not Applicable)
                            ----------------------
                    (Former name, former address and former
                   fiscal year, if changed since last report.)

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

Indicate by check mark if the registrant is an accelerated  filer (as defined in
Rule 12b-2 of the Exchange Act ). Yes [ ] No [ X ].

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest  practicable date. Common Stock, $.01 Par Value -
100 shares as of November 10, 2003.




<PAGE>
<TABLE>
<CAPTION>

DELTA MILLS, INC.
                                      INDEX

PART I. FINANCIAL INFORMATION
                                                                                                          Page
Item 1.  Financial Statements (Unaudited)

<S>                                                                                                      <C>
Condensed consolidated balance sheets--September 27, 2003 and June 28, 2003                                 3

Condensed consolidated statements of operations--
                  Three months ended September 27, 2003 and September 28, 2002                              4

Condensed consolidated statements of cash flows--
                  Three months ended September 27, 2003 and September 28, 2002                              5

Notes to condensed consolidated financial statements                                                        6-9


Item 2.    Management's Discussion and Analysis of  Financial Condition and Results of Operations           10-13

Item 3.    Quantitative and Qualitative Disclosures about Market Risk                                       14

Item 4.    Controls and Procedures                                                                          14

PART II. OTHER INFORMATION

Item 1.    Legal Proceedings                                                                                15

Item 2.     Changes in Securities and Use of Proceeds                                                       15

Item 3.     Defaults upon Senior Securities                                                                 15

Item 4.     Submission of Matters to a Vote of Security Holders                                             15

Item 5.     Other Information                                                                               15

Item 6.     Exhibits and Reports on Form 8-K                                                                15


SIGNATURES                                                                                                  16

CERTIFICATIONS                                                                                              17-24

</TABLE>



                                       2
<PAGE>
<TABLE>
<CAPTION>

ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
Delta Mills, Inc. (In Thousands, except share amounts)           September 27, 2003           June 28, 2003
                                                               -----------------------     ---------------------

ASSETS
CURRENT ASSETS
<S>                                                                         <C>                       <C>
  Cash and cash equivalents                                                 $     593                 $     520
  Accounts receivable:
     Factor and other                                                          37,736                    44,628
     Less allowances for returns                                                    3                       180
                                                               -----------------------     ---------------------
                                                                               37,733                    44,448
  Inventories
     Finished goods                                                             6,867                     7,711
     Work in process                                                           23,206                    25,765
     Raw materials and supplies                                                11,795                    10,659
                                                               -----------------------     ---------------------
                                                                               41,868                    44,135

  Deferred income taxes                                                         1,067                     1,517
  Other assets                                                                    267                       520
                                                               -----------------------     ---------------------
                                TOTAL CURRENT ASSETS                           81,528                    91,140

ASSETS HELD FOR SALE                                                            3,948                     3,948

PROPERTY, PLANT AND EQUIPMENT, at cost                                        158,651                   157,400
     Less accumulated depreciation                                             92,769                    90,619
                                                               -----------------------     ---------------------
                                                                               65,882                    66,781

DEFERRED LOAN COSTS AND OTHER ASSETS                                              432                       459

                                                               -----------------------     ---------------------
                                                                            $ 151,790                 $ 162,328
                                                               =======================     =====================

LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
  Trade accounts payable                                                    $   9,746                 $  14,217
  Revolver                                                                     23,023                    24,856
  Payable to Affiliates                                                         3,686                     3,517
  Accrued employee compensation                                                 1,242                     1,414
  Accrued and sundry liabilities                                               19,821                    20,479
                                                               -----------------------     ---------------------
                    TOTAL CURRENT LIABILITIES                                  57,518                    64,483
LONG-TERM DEBT                                                                 31,941                    31,941
NON-CURRENT DEFERRED INCOME TAXES                                               6,628                     8,421
DEFERRED COMPENSATION                                                           7,770                     7,573
SHAREHOLDER'S EQUITY
  Common Stock -- par value $.01 a share -- authorized
  3,000 shares, issued and outstanding 100 shares
  Additional paid-in capital                                                   51,792                    51,792
  Accumulated deficit                                                          (3,859)                   (1,882)
                                                               -----------------------     ---------------------
                                                                               47,933                    49,910
COMMITMENTS AND CONTINGENCIES
                                                               -----------------------     ---------------------
                                                                            $ 151,790                 $ 162,328
                                                               =======================     =====================

See notes to consolidated financial statements.
</TABLE>

                                       3
<PAGE>
<TABLE>
<CAPTION>

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Delta Mills Inc.
(In Thousands)


                                                   3 Mths Ended      3 Mths Ended
                                                  September 27,     September 28,
                                                       2003              2002
                                                 ----------------- -----------------

<S>                                                      <C>               <C>
Net sales                                                $ 42,581          $ 46,179

Cost of goods sold                                         41,962            40,634
                                                 ----------------- -----------------
Gross profit                                                  619             5,545
Selling, general and administrative expenses                2,828             2,895
Other income                                                  290               465
                                                 ----------------- -----------------
  OPERATING PROFIT (LOSS)                                  (1,919)            3,115
Other (expense) income:
  Interest expense                                         (1,207)           (1,531)
  Gain on extinguishment of debt                                                738
                                                 ----------------- -----------------
                                                           (1,207)             (793)
                                                 ----------------- -----------------

 INCOME (LOSS) BEFORE
                          INCOME TAXES                     (3,126)            2,322
Income tax expense (benefit)                               (1,149)              890
                                                 ----------------- -----------------

NET INCOME (LOSS)                                        $ (1,977)          $ 1,432
                                                 ================= =================

</TABLE>






See notes to consolidated financial statements.

                                       4
<PAGE>
<TABLE>
<CAPTION>

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Delta Mills Inc.
(In Thousands)
                                                                      3 Months Ended           3 Months Ended
                                                                       September 27,           September 28,
                                                                           2003                     2002
                                                                    --------------------     -------------------
OPERATING ACTIVITIES
<S>                                                                            <C>                      <C>
  Net income (loss)                                                            $ (1,977)                $ 1,432
  Adjustments to reconcile net income (loss) to net
     cash provided by operating activities:
     Depreciation                                                                 2,198                   2,289
     Amortization                                                                    28                      34
     Discount to face value on repurchase of bonds                                                         (738)
     Change in deferred income taxes                                             (1,342)                   (166)
     Gain on disposition of property and equipment                                 (253)                   (433)
     Deferred compensation                                                          197                    (272)
     Changes in operating assets and liabilities                                  4,102                   3,355
                                                                    --------------------     -------------------

NET CASH PROVIDED BY OPERATING ACTIVITIES                                         2,953                   5,501
                                                                    --------------------     -------------------

INVESTING ACTIVITIES
  Property, plant and equipment:
     Purchases                                                                   (1,355)                 (1,306)
     Proceeds of dispositions                                                       308                     743
                                                                    --------------------     -------------------

NET CASH USED IN INVESTING ACTIVITIES                                            (1,047)                   (563)
                                                                    --------------------     -------------------

FINANCING ACTIVITIES
  Proceeds from revolving lines of credit                                        47,435                  48,900
  Repayments on revolving lines of credit                                       (49,268)                (52,511)
  Repurchase and retirement of long term debt                                                              (815)
                                                                    --------------------     -------------------

NET CASH USED IN FINANCING ACTIVITIES                                            (1,833)                 (4,426)
                                                                    --------------------     -------------------

NET INCREASE IN CASH AND CASH EQUIVALENTS                                            73                     512

Cash and cash equivalents at beginning of period                                    520                      52
                                                                    --------------------     -------------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                     $    593                $    564
                                                                    ====================     ===================

See notes to consolidated financial statements.
</TABLE>


                                       5
<PAGE>

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (UNAUDITED)

NOTE A--BASIS OF PRESENTATION

The accompanying  unaudited condensed consolidated financial statements of Delta
Mills,  Inc. and  subsidiaries  ("the Company") have been prepared in accordance
with accounting  principles  generally  accepted in the United States of America
for interim  financial  information  and with the  instructions to Form 10-Q and
Article  10 of  Regulation  S-X.  Accordingly,  they do not  include  all of the
information and footnotes required by accounting  principles  generally accepted
in the United  States of  America  for  complete  financial  statements.  In the
opinion of management,  all  adjustments  (consisting  of only normal  recurring
accruals)  considered  necessary  for a fair  presentation  have been  included.
Operating  results  for the  three  months  ended  September  27,  2003  are not
necessarily  indicative  of the results that may be expected for the year ending
July 3, 2004.  For  further  information,  refer to the  consolidated  financial
statements and footnotes thereto included in the Company's annual report on Form
10-K for the year ended June 28, 2003.


NOTE B--SUMMARIZED FINANCIAL INFORMATION OF SUBSIDIARY

Delta Mills Marketing,  Inc. (the  "Guarantor") is a wholly-owned  subsidiary of
the Company and has fully and  unconditionally  guaranteed (the "Guarantee") the
Company's payment of principal, premium, if any, interest and certain liquidated
damages, if any, on the Company's Senior Notes. The Guarantor's  liability under
the  Guarantee  is limited to such  amount,  the payment of which would not have
left the Guarantor  insolvent or with unreasonably small capital at the time its
Guarantee  was entered into,  after giving effect to the  incurrence of existing
indebtedness immediately prior to such time.

The  Guarantor  is the sole  subsidiary  of the Company and does not  comprise a
material portion of the Company's assets or operations.  All future subsidiaries
of the Company will  provide  guarantees  identical to the one  described in the
preceding paragraph unless such future subsidiaries are Receivables Subsidiaries
(as defined in the indenture relating to the Notes). Such additional  guarantees
will be joint and several with the Guarantee of the Guarantor.

The Company has not presented separate financial statements or other disclosures
concerning the Guarantor  because  Company  management has determined  that such
information is not material to investors.

Summarized financial information for the Guarantor is as follows (in thousands):


                              September 27, 2003             June 28, 2003
                              ------------------             -------------
Current assets                     $   135                     $     88
Non-current assets                      32                           38
Current liabilities                  1,845                        1,912
Non-current liabilities              1,169                        1,047
Stockholders' deficit              $(2,847)                    $ (2,833)

Summarized   results  of  operations  for  the  Guarantor  are  as  follows  (in
thousands):

<TABLE>
<CAPTION>
                                                         Three Months Ended
                                              ------------------------------------------
                                              September 27, 2003      September 28, 2002
                                              ------------------      ------------------

<S>                                                 <C>                      <C>
Net sales - Intercompany commissions                $  949                   $ 1,040
Cost and expenses                                      963                       895
Net income (loss)                                      (14)                      145
</TABLE>



                                       6
<PAGE>

NOTE C-LONG-TERM DEBT, CREDIT ARRANGEMENTS, AND NOTES PAYABLE

On August 25, 1997, the Company issued $150 million of unsecured ten-year Senior
Notes at an interest rate of 9.625%.  These notes will mature in August 2007. At
September  27,  2003,  the  outstanding  balance  of the notes was  $31,941,000,
unchanged from the balance at June 28, 2003.

On March 20, 2003,  the  Company's'  $50 million  credit  facility with GMAC was
amended.  The  facility  remained  a  $50  million  committed  revolving  credit
facility.  Among other things,  the amendment  removed the minimum  availability
requirement of $12.5 million,  added financial  covenants for a maximum leverage
ratio and a minimum  fixed  charge  coverage  ratio and extended the term of the
facility  until March 2007.  The amended  credit  facility also includes  GMAC's
consent to the sale of the Company's' Catawba Plant, the operational  closing of
which was announced on March 5, 2003, and allows the Company to exclude from the
calculation  of  EBITDA  (for  purposes  of  financial   covenant   ratios)  the
restructuring   charge  associated  with  the  closing  of  the  Catawba  Plant.
Borrowings under this credit facility are based on eligible accounts  receivable
and  inventories  of the  Company.  The  facility  is  secured  by the  accounts
receivable,  inventories and capital stock of the Company.  The interest rate on
the credit  facility was 2.870% at  September  27, 2003 and is based on a spread
over either  LIBOR or a base rate.  Borrowings  under this  facility  were $23.0
million  and  $24.9  million  as of  September  27,  2003  and  June  28,  2003,
respectively.   As  of  September  27,  2003,  the  revolver   availability  was
approximately $20 million. As a result of the operating loss in the current year
first quarter, the Company was not in compliance with the financial covenants in
the credit agreement at the end of the first quarter of fiscal 2004. As reported
on Form 8-K  furnished on September 26, 2003,  the Company  obtained a waiver of
compliance  with these covenants from GMAC for the first quarter of fiscal 2004.
Management is currently in discussions  with GMAC with respect to amending these
covenants or extending the waiver.  Management  believes the availability  under
the Company' credit facility is adequate for the foreseeable future.

The Company's  credit  facility  contains  restrictive  covenants  that restrict
additional  indebtedness,  dividends,  and capital expenditures.  The payment of
dividends with respect to the Company's  stock is permitted if there is no event
of  default  and there is at least $1 of  availability  under the  facility.  At
September 27, 2003,  the Company was  prohibited by these  covenants from paying
dividends to Delta Woodside.  The indenture  pertaining to the Company's  9.625%
Senior  Notes   contains   restrictive   covenants   that  restrict   additional
indebtedness,  dividends,  and investments by the Company and its  subsidiaries.
The payment of  dividends  with respect to the  Company's  stock is permitted if
there is no event of  default  under  the  indenture  and after  payment  of the
dividend, the Company could incur at least $1 of additional indebtedness under a
fixed coverage  ratio.  Dividends are also capped based on cumulative net income
and  proceeds  from the  issuance  of  securities  and  liquidation  of  certain
investments.  The  Company  may loan funds to the Delta  Woodside if there is no
event of  default  and a fixed  charge  coverage  ratio  test is  satisfied.  At
September 27, 2003,  the Company was  prohibited by these  covenants from paying
dividends  and making  loans to Delta  Woodside.  During the three  months ended
September 27, 2003 and the year ended June 28, 2003, the Company did not pay any
dividends to Delta Woodside Industries, Inc.

The Company  assigns a substantial  portion of its trade accounts  receivable to
GMAC  Commercial  Finance  LLC  (the  "Factor")  under a factor  agreement.  The
assignment of these  receivables is primarily  without  recourse,  provided that
customer  orders are approved by the Factor prior to shipment of goods,  up to a
maximum for each individual account.  The assigned trade accounts receivable are
recorded  on the  Company's  books at full value and  represent  amounts due the
Company  from the  Factor.  There are no  advances  from the Factor  against the
assigned receivables.  All factoring fees are recorded on the Company's books as
incurred as a part of selling, general and administrative expense.


NOTE D - RESTRUCTURING AND IMPAIRMENT CHARGES

During the year ended June 28, 2003, the Company recorded a restructuring charge
of $398,000 on a pre-tax basis  associated with the  operational  closing of its
Catawba  facility as announced on March 5, 2003. The charge  reflected  employee
termination costs of approximately $354,000.  Production at the Catawba facility
ceased in April 2003 and the Company is in the process of liquidating the assets
associated with this facility.


                                       7
<PAGE>

NOTE D - RESTRUCTURING AND IMPAIRMENT CHARGES - CONTINUED

During  the year  ended  June 29,  2002,  the  Company  took an  impairment  and
restructuring  charge of $8.7 million,  on a pretax basis,  associated  with the
closing  of the  Furman  Plant as  announced  on August 22,  2001.  The  Company
recorded an $8.2 million  non-cash asset  write-down to reflect the property and
equipment at the Furman Plant at its estimated  fair value,  less selling costs.
The carrying amount of these assets was reduced to approximately $3,923,000. The
balance of the charge was  approximately  $0.5  million of accrued  expenses for
involuntary  termination costs associated with the 122 employees terminated as a
result of the plant closing. Production at the Furman facility ceased in October
2001,  and the Company is in the process of  liquidating  the assets  associated
with this facility.

During the first quarter of fiscal 2004 ending  September 27, 2003 and the first
quarter of fiscal 2003 ending  September 28, 2002,  the Company paid $80,000 and
$17,000,  respectively,  in  restructuring  costs.  The  Company had a remaining
liability of $262,000  and $342,000 as of September  27, 2003 and June 28, 2003,
respectively.

As of  September  27, 2003 and June 28,  2003,  the Company had $3.9  million in
assets held for sale related to the closing of the Furman and Catawba plants.


NOTE E - GAIN ON EXTINGUISHMENT OF DEBT

In April 2002, the FASB issued Statement No. 145, "Rescission of FASB Statements
Nos. 4 and 64,  Amendment of FASB Statement No. 13, and Technical  Corrections".
Among other things,  Statement No. 145,  through the rescission of Statement No.
4, no longer requires extraordinary item treatment for gains and losses from the
extinguishment  of debt,  unless the debt  extinguishment  meets the  unusual in
nature  and  infrequency  of  occurrence  criteria  established  in APB 30.  The
Statement  was  effective  for fiscal  years  beginning  after May 15,  2002 and
requires  the  reclassification  of  prior  period  items  that do not  meet the
extraordinary item classification criteria in APB 30. Upon adoption, the Company
reclassified all extraordinary gains recognized for the early  extinguishment of
debt as a component of income before  income taxes for all  financial  statement
periods  presented.  For the three months ended  September 27, 2003, the Company
did not  recognize any gains from the  repurchase of debt.  For the three months
ended September 28, 2002, Delta Mills, Inc. purchased  $1,553,000 face amount of
its 9.625% Senior Notes for $815,000. The Company recognized a gain of $738,000,
net of the  write-off of deferred  loan costs,  as a result of these  purchases,
which is also  included  in  income  before  income  taxes  in the  accompanying
statement of operations.


NOTE F - STOCK OPTIONS

The Company  participates  in the Delta  Woodside  Industries  Inc. Stock Option
Plan. The Company applies the intrinsic value-based method of accounting for its
stock option plans, in accordance  with the provisions of Accounting  Principles
Board (APB)  Opinion No. 25,  "Accounting  for Stock Issued to  Employees",  and
related interpretations.  Under this method, compensation expense is recorded on
the date of the grant only if the current market price of the  underlying  stock
exceeded the exercise price.






                                       8
<PAGE>

NOTE F - STOCK OPTIONS - CONTINUED

If the Company had determined  compensation expense at fair value, as under SFAS
No. 123,  "Accounting  for Stock-Based  Compensation",  the Company's net income
(loss) would have been as follows:

<TABLE>
<CAPTION>

(In thousands)                                              Quarter Ended                   Quarter Ended
                                                            September 27, 2003              September 28, 2002
                                                            ------------------------        -----------------------

<S>                                                         <C>                             <C>
Net income (loss), as reported                              $               (1,977)         $               1,432

Add stock based employee compensation expense
included in reported net income (loss), net of tax                              16                             41

Less total stock based compensation expense
   determined under fair value based method, net
   of related tax effects                                                      (16)                          (121)
                                                            ------------------------        -----------------------

Pro forma net income (loss)                                 $               (1,977)         $               1,352
                                                            ========================        =======================

</TABLE>


NOTE G - COMMITMENTS AND CONTINGENCIES

During  1998,  the Company  received  notices  from the State of North  Carolina
asserting  deficiencies  in state  corporate  income and franchise taxes for the
Company's  1994 - 1997 tax years.  The total  assessment  proposed  by the State
amounts to $1.5 million,  which includes interest and penalties.  The assessment
was  delayed  pending  an  administrative  review of the case by the  State.  In
October  2002,  the State  proposed a settlement in which the Company would have
paid  approximately  90% of  the  assessed  amount  plus a  portion  of  certain
penalties  for the Company's  tax years 1994 - 2000.  The Company  rejected this
offer and continued with its appeal due to management's  belief that the State's
legal   position  is  in  conflict  with   established   principles  of  federal
constitutional  law. The Company  believes that its reserves for  settlement are
adequate  and any  payment in  settlement  of this  matter  will not result in a
material impact on the Company's results of operations.








                                       9
<PAGE>

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

The following  discussion  contains certain  "forward-looking  statements".  All
statements,  other than statements of historical fact, that address  activities,
events or developments that the Company expects or anticipates will or may occur
in the future,  including such matters as future revenues,  future cost savings,
future capital expenditures,  business strategy,  competitive strengths,  goals,
plans,   references   to  future   success  and  other  such   information   are
forward-looking  statements.  The  words  "estimate",  "project",  "anticipate",
"expect",  "intend",  "believe" and similar expressions are intended to identify
forward-looking statements.

The  forward-looking  statements  in this  Quarterly  Report  are  based  on the
Company's  expectations  and are  subject  to a number  of  business  risks  and
uncertainties, any of which could cause actual results to differ materially from
those set forth in or implied by the forward-looking statements. These risks and
uncertainties  include,  among others,  changes in the retail demand for apparel
products,  the cost of raw materials,  competitive conditions in the apparel and
textile industries, the relative strength of the United States dollar as against
other currencies,  changes in United States and international trade regulations,
including  without  limitation the expected end of quotas on textile and apparel
products among World Trade Organization member states in 2005, and the discovery
of unknown conditions (such as with respect to environmental matters and similar
items).  The  Company  does not  undertake  publicly  to update  or  revise  the
forward-looking  statements even if it becomes clear that any projected  results
will not be realized.

Delta Mills, Inc. ("the Company") sells a broad range of woven, finished apparel
fabric  primarily to branded apparel  manufacturers  and resellers.  The Company
also sells  camouflage  fabric  and other  fabrics  used in apparel  sold to the
United States Department of Defense.


RESULTS OF OPERATIONS

The Company expects to face significant  change in global competition in 2005 as
a result of the impact of multilateral  agreements intended to liberalize global
trade.  The World Trade  Organization  ("WTO") is  overseeing  the  phase-out of
textile and apparel quotas over a 10-year period ending 2004. Tariffs on textile
and  apparel  products  are being  reduced  (but not  eliminated)  over the same
10-year  period.  In  addition,  China's  admission  to  the  WTO  will  have  a
significant  impact on global textile and apparel trade. By gaining admission to
the WTO, China is able to take advantage of the elimination of quota limitations
on access to the U.S. market,  and there could be a significant  negative impact
on the  North  American  textile  industry.  With  the  arrival  of 2005 and the
elimination of quotas for WTO members, certain countries,  most particularly but
not  limited  to  China,  may have  cost  advantages  compared  to the  Company.
Accordingly,  the  Company  believes  it must fully  utilize  other  competitive
advantages  it  believes  it  has  compared  to  Asian  competitors.  Among  the
advantages  of the  Company  are its  well-established  relationships  with  its
customers, its ability to respond quickly to its customers' needs as well as the
logistic  advantages  associated with its  manufacturing  being located in North
America. However, there can be no assurance that these advantages will allow the
Company to successfully compete with foreign textile producers.

During the quarter ended  September 27, 2003, the Company  experienced a decline
in sales  primarily  due to a decline in customer  demand  attributable  to weak
retail sales,  continued  pressure  from imports and  oversupply in the domestic
textiles market. These factors also continue to cause negative price pressure on
the Company's  products.  As a result,  the Company does not expect  substantial
improvement  in pricing  until two  fundamental  factors  affecting the domestic
textile  market are  addressed -  competition  from imports and excess  domestic
capacity.  The Company  believes  that  consolidation  in the  domestic  textile
industry,  which is beyond the Company's control, is necessary to address excess
domestic capacity.  There can be no assurance that excess domestic capacity will
be addressed in a manner beneficial to the Company.


                                       10
<PAGE>

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS - CONTINUED

Net sales for the  quarter  ended  September  27,  2003 were  $42.6  million,  a
decrease  of 7.8% when  compared  to net sales of $46.2  million for the quarter
ended  September  28,  2002.  The  decrease was the result of a decrease in unit
sales  partially  offset by a 1.4% increase in average  sales price.  Unit sales
declined because customer demand declined,  primarily as a result of weak retail
sales.  Also  contributing  to the decline was  continued  pressure from imports
coupled with over capacity of domestic textile  production.  Product mix changes
accounted for the increase in average sales price.

Gross  profit was $0.6  million  and 1.5% of net sales for the first  quarter of
fiscal year 2004.  This  compares to gross  profit of $5.5  million and 12.0% of
sales in the prior  year  first  quarter.  In the  current  year  quarter  ended
September  27,  2003,  the  decline  in  gross  profit  was  principally  due to
unabsorbed manufacturing costs associated with reduced running schedules brought
on by reduced customer  demand.  The decline in unit sales,  increased  employee
benefit costs,  and price pressure on certain core products,  somewhat offset by
lower raw material prices, also contributed to the gross profit decline.

Selling,  general and administrative expense (SG&A) was $2.8 million and 6.6% of
net sales for the first  quarter of fiscal  year 2004  compared  to SG&A of $2.9
million and 6.3% of net sales for the prior year first quarter.  The increase in
SG&A as a percent of net sales is  attributable to the decreased sales volume in
the current year quarter.

The Company  reported an operating  loss of $1.9  million for the quarter  ended
September 27, 2003 compared to an operating  profit of $3.1 million in the prior
year quarter.  The operating  loss for the current year quarter was  principally
the result of the decline in gross profit discussed above.

Interest  expense was $1.2  million for the quarter  ended  September  27, 2003,
compared to $1.5 million for the prior year  quarter.  The reduction in interest
expense was  primarily  due to the  reduction  in the  balance of the  Company's
9.625% Senior Notes. There was no interest income in either the current or prior
year quarters.

Included in other (expense)  income for the quarter ended September 28, 2002 was
a $0.7 million gain resulting from the repurchase by the Company of a portion of
its 9.625% Senior Notes. There was no similar income or expense in this category
in the current year quarter ended September 27, 2003.

The income tax benefit for the current  quarter was $1.1 million.  This compares
to an income tax  expense of $0.9  million in the  previous  year  quarter.  The
effective  tax  rate  for  the  three  months  ended   September  27,  2003  was
approximately 36.8% compared to an effective tax rate of 38.3% in the prior year
quarter.

The Company  reported a net loss of $2.0 million for the quarter ended September
27, 2003 compared to net income of $1.4 million for the quarter ended  September
28,  2002.  Net income for the  previous  year  quarter  included a gain of $0.5
million on an after tax basis from the repurchase by the Company of a portion of
its 9.625% Senior Notes.


LIQUIDITY AND CAPITAL RESOURCES

For the three  months  ended  September  27, 2003,  the Company  generated  $3.0
million  in cash  from  operations.  The  principal  uses of cash  were  capital
expenditures of $1.0 million,  net of $0.3 million in proceeds from the disposal
of assets.  The outstanding  borrowings  under the GMAC revolver  decreased $1.8
million from the balance at June 28, 2003. As a result of the operating  loss in
the current  year first  quarter,  the Company  was not in  compliance  with the
financial  covenants of its $50 million  revolving credit agreement with GMAC at
the end of the first  quarter of fiscal 2004.  As reported on Form 8-K furnished
on September 26, 2003,  the Company  obtained a waiver of compliance  with these
covenants  from  GMAC for the  first  quarter  of  fiscal  2004.  Management  is
currently in discussions  with GMAC with respect to amending these  covenants or
extending the waiver.  The Company  believes that the cash flow generated by its
operations  combined with the availability on its revolving credit facility will
be  sufficient  to service its debt,  to satisfy its day to day working  capital
requirements  and to fund its planned capital  expenditures  for the foreseeable
future.


                                       11
<PAGE>

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS - CONTINUED


On November 6, 2002,  the Company  announced that it had started a major capital
project to  modernize  its Delta 3 cotton  finishing  plant in  Wallace  SC. The
Company completed the first phase of this project in June of 2003. During fiscal
years 2004 and 2005, the Company plans to make additional  capital  expenditures
for this  project to position  the  finishing  facility  for growth and improved
product  quality.  The  cost  of  this  project  makes  up the  majority  of the
approximately $6.4 million in capital  expenditures for fiscal year 2003 and the
majority of the approximately  $7.0 million and $8.0 million planned for capital
expenditures in fiscal years 2004 and 2005, respectively.

On August 25, 1997, the Company issued $150 million of unsecured ten-year Senior
Notes at an interest rate of 9.625%.  These notes will mature in August 2007. At
September  27,  2003,  the  outstanding  balance  of the notes was  $31,941,000,
unchanged from the balance at June 28, 2003.

On March 20, 2003,  the  Company's'  $50 million  credit  facility with GMAC was
amended.  The  facility  remained  a  $50  million  committed  revolving  credit
facility.  Among other things,  the amendment  removed the minimum  availability
requirement of $12.5 million,  added financial  covenants for a maximum leverage
ratio and a minimum  fixed  charge  coverage  ratio and extended the term of the
facility  until March 2007.  The amended  credit  facility also includes  GMAC's
consent to the sale of the Company's' Catawba Plant, the operational  closing of
which was announced on March 5, 2003, and allows the Company to exclude from the
calculation  of  EBITDA  (for  purposes  of  financial   covenant   ratios)  the
restructuring   charge  associated  with  the  closing  of  the  Catawba  Plant.
Borrowings under this credit facility are based on eligible accounts  receivable
and  inventories  of the  Company.  The  facility  is  secured  by the  accounts
receivable,  inventories and capital stock of the Company.  The interest rate on
the credit  facility was 2.870% at  September  27, 2003 and is based on a spread
over either  LIBOR or a base rate.  Borrowings  under this  facility  were $23.0
million  and  $24.9  million  as of  September  27,  2003  and  June  28,  2003,
respectively.   As  of  September  27,  2003,  the  revolver   availability  was
approximately $20 million. As a result of the operating loss in the current year
first quarter, the Company was not in compliance with the financial covenants in
the credit agreement at the end of the first quarter of fiscal 2004. As reported
on Form 8-K  furnished on September 26, 2003,  the Company  obtained a waiver of
compliance  with these covenants from GMAC for the first quarter of fiscal 2004.
Management is currently in discussions  with GMAC with respect to amending these
covenants or extending the waiver.  Management  believes the availability  under
the Company' credit facility is adequate for the foreseeable future.

The Company's  credit  facility  contains  restrictive  covenants  that restrict
additional  indebtedness,  dividends,  and capital expenditures.  The payment of
dividends with respect to the Company's  stock is permitted if there is no event
of  default  and there is at least $1 of  availability  under the  facility.  At
September 27, 2003,  the Company was  prohibited by these  covenants from paying
dividends to Delta Woodside.  The indenture  pertaining to the Company's  9.625%
Senior  Notes   contains   restrictive   covenants   that  restrict   additional
indebtedness,  dividends,  and investments by the Company and its  subsidiaries.
The payment of  dividends  with respect to the  Company's  stock is permitted if
there is no event of  default  under  the  indenture  and after  payment  of the
dividend, the Company could incur at least $1 of additional indebtedness under a
fixed coverage  ratio.  Dividends are also capped based on cumulative net income
and  proceeds  from the  issuance  of  securities  and  liquidation  of  certain
investments.  The  Company  may loan funds to the Delta  Woodside if there is no
event of  default  and a fixed  charge  coverage  ratio  test is  satisfied.  At
September 27, 2003,  the Company was  prohibited by these  covenants from paying
dividends  and making  loans to Delta  Woodside.  During the three  months ended
September 27, 2003 and the year ended June 28, 2003, the Company did not pay any
dividends to Delta Woodside Industries, Inc.

The Company  assigns a substantial  portion of its trade accounts  receivable to
GMAC  Commercial  Finance  LLC  (the  "Factor")  under a factor  agreement.  The
assignment of these  receivables is primarily  without  recourse,  provided that
customer  orders are approved by the Factor prior to shipment of goods,  up to a
maximum for each individual account.  The assigned trade accounts receivable are
recorded  on the  Company's  books at full value and  represent  amounts due the
Company  from the  Factor.  There are no  advances  from the Factor  against the
assigned receivables.  All factoring fees are recorded on the Company's books as
incurred as a part of selling, general and administrative expense.

                                       12
<PAGE>

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS - CONTINUED

During  1998,  the Company  received  notices  from the State of North  Carolina
asserting  deficiencies  in state  corporate  income and franchise taxes for the
Company's  1994 - 1997 tax years.  The total  assessment  proposed  by the State
amounts to $1.5 million,  which includes interest and penalties.  The assessment
was  delayed  pending  an  administrative  review of the case by the  State.  In
October  2002,  the State  proposed a settlement in which the Company would have
paid  approximately  90% of  the  assessed  amount  plus a  portion  of  certain
penalties  for the Company's  tax years 1994 - 2000.  The Company  rejected this
offer and continued with its appeal due to management's  belief that the State's
legal   position  is  in  conflict  with   established   principles  of  federal
constitutional  law. The Company  believes that its reserves for  settlement are
adequate  and any  payment in  settlement  of this  matter  will not result in a
material impact on the Company's results of operations.


RECENT ACCOUNTING PRONOUNCEMENTS

In January  2003,  the FASB  issued  Interpretation  No. 46,  "Consolidation  of
Variable  Interest  Entities,  an interpretation of ARB No. 51" ("FIN 46"). This
interpretation  addresses the consolidation by business  enterprises of variable
interest  entities as defined in the  interpretation  and sets forth  additional
disclosures  about such  interests.  FIN 46 is effective for the Company's  2004
fiscal year. The adoption of FIN 46 is not expected to have a material effect on
the Company's consolidated financial statements.


CRITICAL ACCOUNTING POLICIES

Critical  accounting  policies  are  defined  as those  that are  reflective  of
significant  judgments and  uncertainties,  and potentially result in materially
different results under different assumptions and conditions.

Impairment of Long - Lived Assets:  In  accordance  with  Statement of Financial
Accounting  Standards (SFAS) No. 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets," long-lived assets, such as property, plant and equipment,
are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable.  Recoverability  of
assets to be held and used is measured by a comparison of the carrying amount of
an asset to estimated undiscounted future cash flows expected to be generated by
the asset. If the carrying amount of an asset exceeds its estimated  future cash
flows,  an  impairment  charge is recognized by the amount by which the carrying
amount of the asset  exceeds the fair value of the asset.  Assets to be disposed
of are  separately  presented in the balance  sheet and reported at the lower of
the  carrying  amount  or fair  value  less  costs  to sell,  and are no  longer
depreciated.

Income  Taxes:  The  Company  accounts  for  income  taxes  under  the asset and
liability  method  in  accordance  with  Financial   Accounting   Standard  109,
Accounting for Income Taxes ("SFAS 109"). The Company recognizes deferred income
taxes,  net of valuation  allowances,  for the  estimated  future tax effects of
temporary  differences  between  the  financial  statement  carrying  amounts of
existing  assets and  liabilities and their tax bases and net operating loss and
tax credit carryforwards. Deferred tax assets and liabilities are measured using
enacted  tax rates  expected  to apply to  taxable  income in the years in which
those temporary  differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment  date.  Changes in deferred tax
assets and  liabilities  are recorded in the provision  for income taxes.  As of
September 27, 2003 and June 28, 2003, the Company had approximately $5.6 million
and $6.9 million, respectively, in net deferred tax liabilities.

The Company  evaluates on a regular basis the  realizability of its deferred tax
assets for each  taxable  jurisdiction.  In making this  assessment,  management
considers  whether it is more  likely  than not that some  portion or all of its
deferred tax assets will be realized.  The ultimate  realization of deferred tax
assets is  dependent  on the  generation  of future  taxable  income  during the
periods in which  those  temporary  differences  become  deductible.  Management
considers all  available  evidence,  both positive and negative,  in making this
assessment.

                                       13
<PAGE>

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Commodity Risk Sensitivity

As a part of the Company's  business of converting fiber to finished fabric, the
Company makes raw cotton purchase  commitments and then fixes prices with cotton
merchants who buy from producers and sell to textile manufacturers.  Daily price
fluctuations  are minimal,  yet long-term trends in price movement can result in
unfavorable pricing of cotton. In recent months, the price of cotton has trended
upward, and the Company increased its cotton inventory during the fourth quarter
of fiscal  2003 in order to obtain its cotton at a lower  price.  Before  fixing
prices, the Company looks at supply and demand fundamentals, recent price trends
and other  factors  that affect  cotton  prices.  The Company  also  reviews the
backlog of orders  from  customers  as well as the level of fixed  price  cotton
commitments in the industry in general.  As of September 27, 2003, a 10% decline
in market price of the Company's fixed price contracts would have had a negative
impact of approximately  $0.6 million on the value of the contracts.  As of June
28, 2003,  such a 10% decline would have had a negative  impact of $0.8 million.
The decline in the potential negative impact from June 28, 2003 to September 27,
2003 is due principally to a decline in the quantity of cotton with fixed prices
as compared to the previous period.


Interest Rate Sensitivity

The $50 million secured four-year  revolving credit facility expiring in 2007 is
sensitive to changes in interest rates. Interest is based on a spread over LIBOR
or a base rate. An interest rate  increase  would have a negative  impact to the
extent the Company borrows  against the revolving  credit  facility.  The impact
would be  dependent on the level of  borrowings  incurred.  As of September  27,
2003,  an increase in the  interest  rate of 1% would have a negative  impact of
approximately  $230,000  annually.  As of June  28,  2003,  an  increase  in the
interest rate of 1% would have had a negative impact of  approximately  $249,000
annually.  The decrease in the potential  negative  impact from June 28, 2003 to
September 27, 2003 is due to the decrease in borrowings from the facility.

An interest  rate change  would not have an impact on the payments due under the
fixed rate ten year Senior Notes.


Item 4.  CONTROLS AND PROCEDURES

Disclosure  controls and procedures are our controls and other  procedures  that
are  designed to ensure that  information  required to be disclosed by us in the
reports that we file or submit  under the  Exchange Act is recorded,  processed,
summarized and reported within the time periods  specified in the Securities and
Exchange  Commission's  rules and  forms.  Disclosure  controls  and  procedures
include,  without  limitation,  controls and procedures  designed to ensure that
information required to be disclosed by us in the reports that we file or submit
under the  Exchange  Act is  accumulated  and  communicated  to our  management,
including  our  Chief  Executive  Officer  and  Chief  Financial   Officer,   as
appropriate to allow timely decisions regarding required disclosure.


Evaluation of Disclosure Controls and Procedures

The Company's  principal  executive officer and its principal financial officer,
after  evaluating the  effectiveness  of the Company's  disclosure  controls and
procedures  (as defined in Exchange Act Rules  13a-14(c)  and  15d-14(c)),  have
concluded that, as of September 27, 2003, 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.


Changes in Internal Controls

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 during the most recent fiscal quarter, nor were there any significant
deficiencies or material  weaknesses in the Company's  internal  controls.  As a
result, no corrective actions were required or undertaken.

                                       14
<PAGE>

PART II.  OTHER INFORMATION

Item 1.     Legal Proceedings (not applicable)

Item 2.     Changes in Securities and Use of Proceeds (not applicable)

Item 3.     Defaults upon Senior Securities

At the  end of the  first  quarter  of  fiscal  2004,  the  Company  was  not in
compliance  with  financial  covenants  in  its  $50  million  revolving  credit
agreement with GMAC imposing a maximum leverage ratio and a minimum fixed charge
coverage ratio. As reported on September 26, 2003, the Company obtained a waiver
of  compliance  with these  covenants  from GMAC for the first quarter of fiscal
2004.  Management is currently in discussions with GMAC with respect to amending
these covenants or extending the waiver.

Item 4.     Submission of Matters to a Vote of Security Holders (not applicable)

Item 5.     Other Information (not applicable)

Item 6.     Exhibits and Reports on Form 8-K

a) Listing of Exhibits
<TABLE>

<S>      <C>
4.3.1.5  Letter from GMAC dated September 27, 2003 agreeing to waive the existing  defaults of the Revolving Credit
         and Security Agreement dated as of March 31, 2000.

31.1     Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2     Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1     Certification of CEO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2     Certification of CFO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

</TABLE>


b) Reports on Form 8-K

              Form 8-K dated August 19, 2003 reporting  Regulation FD Disclosure
              and Results of Operations  and Financial  Condition for the fiscal
              quarter  and year  ended  June 28,  2003  under  Items 7, 9 and 12
              furnished on August 20, 2003.










                                       15
<PAGE>


                                   SIGNATURES



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



                                  Delta Mills, Inc.
                                  -----------------------------------
                                  (Registrant)




Date     November 11, 2003         By:/s/ W.H. Hardman, Jr.
      -----------------------      --------------------------------------------
                                   W.H. Hardman, Jr.
                                   Chief Financial Officer


















                                       16