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 December 28, 2002
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 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 February 11, 2003.

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



<PAGE>

DELTA MILLS, INC.
<TABLE>
<CAPTION>
                                      INDEX

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

<S>                                                                                                         <C>
Condensed consolidated balance sheets--December 28, 2002 and June 29, 2002                                  3

Condensed consolidated statements of operations--
                  Three and six months ended December 28, 2002 and December 29, 2001                        4

Condensed consolidated statements of cash flows--
                  Six months ended December 28, 2002 and December 29, 2001                                  5

Notes to condensed consolidated financial statements--December 28, 2002                                     6-8


Item 2.    Management's Discussion and Analysis of  Financial Condition and Results of Operations           8-11

Item 3.    Quantitative and Qualitative Disclosures about Market Risk                                       12

Item 4.    Controls and Procedures                                                                          12

PART II. OTHER INFORMATION

Item 1.    Legal Proceedings                                                                                13

Item 2.    Changes in Securities and use of Proceeds                                                        13

Item 3.    Defaults upon Senior Securities                                                                  13

Item 4.    Submission of Matters to a Vote of Security Holders                                              13

Item 5.    Other Information                                                                                13

Item 6.    Exhibits and Reports on Form 8-K                                                                 13


SIGNATURES                                                                                                  13

CERTIFICATIONS                                                                                              14-19

</TABLE>



                                       2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
Delta Mills, Inc. (In Thousands, except share amounts)         December 28, 2002      June 29, 2002
                                                             ---------------------   ---------------

<S>                                                            <C>                   <C>
ASSETS
CURRENT ASSETS
  Cash and cash equivalents                                    $           650      $            52
  Accounts receivable:
     Factor and other                                                   34,850               49,887
     Less allowances for returns                                            28                   32
                                                               ----------------     ----------------
                                                                        34,822               49,855
  Inventories
     Finished goods                                                      6,714                7,085
     Work in process                                                    20,725               19,878
     Raw materials and supplies                                          6,715                5,784
                                                               ----------------     ----------------
                                                                        34,154               32,747

  Deferred income taxes                                                  1,241                1,347
  Other assets                                                             469                   25
                                                               ----------------     ----------------
                                TOTAL CURRENT ASSETS                    71,336               84,026

Assets held for sale                                                     3,141                3,141

PROPERTY, PLANT AND EQUIPMENT, at cost                                 148,659              147,906
     Less accumulated depreciation                                      79,777               77,405
                                                               ----------------     ----------------
                                                                        68,882               70,501

DEFERRED LOAN COSTS AND OTHER ASSETS                                       702                  769

                                                               ----------------     ----------------
                                                               $       144,061      $       158,437
                                                               ================     ================

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
  Trade accounts payable                                       $         6,819      $        11,689
  Revolver                                                               3,938               11,365
  Payable to Affiliates                                                  3,480                3,321
  Accrued employee compensation                                            923                1,696
  Accrued and sundry liabilities                                        18,752               18,621
                                                               ----------------     ----------------
                    TOTAL CURRENT LIABILITIES                           33,912               46,692
LONG-TERM DEBT                                                          44,739               47,819
DEFERRED INCOME TAXES                                                    9,184                9,340
DEFERRED COMPENSATION                                                    7,182                7,267
SHAREHOLDERS' 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
  Retained earnings(deficit)                                            (2,748)              (4,473)
                                                               ----------------     ----------------
                                                                        49,044               47,319
COMMITMENTS AND CONTINGENCIES
                                                               ----------------     ----------------
                                                               $       144,061      $       158,437
                                                               ================     ================
</TABLE>

See notes to consolidated financial statements.


                                       3
<PAGE>

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

<TABLE>
<CAPTION>

                                                  3 Mths Ended     3 Mths Ended      6 Mths Ended      6 Mths Ended
                                                  December 28,     December 29,      December 28,      December 29,
                                                      2002             2001              2002              2001
                                                ----------------- ----------------  ---------------- -----------------

<S>                                             <C>               <C>               <C>              <C>
Net sales                                       $         35,853  $        44,140   $        82,032  $         81,117

Cost of goods sold                                        32,158           42,432            72,792            78,330
                                                ----------------- ----------------  ---------------- -----------------
Gross profit                                               3,695            1,708             9,240             2,787
Selling, general and administrative expenses               2,566            2,871             5,461             5,463
Impairment and restructuring expenses                                                                           8,683
Other income                                                  23               18               488                31
                                                ----------------- ----------------  ---------------- -----------------
  OPERATING PROFIT (LOSS)                                  1,152           (1,145)            4,267           (11,328)
Other (expense) income:
  Interest expense                                        (1,240)          (2,544)           (2,771)           (4,999)
  Interest income                                                              36                                 133
  Gain on extinguishment of debt                             565                              1,303
                                                ----------------- ----------------  ---------------- -----------------
                                                            (675)          (2,508)           (1,468)           (4,866)
                                                ----------------- ----------------  ---------------- -----------------

 INCOME(LOSS) BEFORE INCOME TAXES                            477           (3,653)            2,799           (16,194)
Income tax expense (benefit)                                 184           (1,251)            1,074            (5,639)
                                                ----------------- ----------------  ---------------- -----------------

NET INCOME (LOSS)                               $            293  $        (2,402)  $         1,725  $        (10,555)
                                                ================= ================  ================ =================


</TABLE>





See notes to consolidated financial statements.




                                       4
<PAGE>

CONSOLIDATED STATEMENTS OF CASH FLOWS
Delta Mills Inc.
(In Thousands)
<TABLE>
<CAPTION>
                                                                             6 Months Ended           6 Months Ended
                                                                              December 28,             December 29,
                                                                                  2002                     2001
                                                                           --------------------     --------------------
OPERATING ACTIVITIES
<S>                                                                        <C>                      <C>
  Net income (loss)                                                        $             1,725      $           (10,555)
  Adjustments to reconcile net income(loss) to net
     cash provided by operating activities:
     Depreciation                                                                        4,578                    4,551
     Amortization                                                                           68                      211
     Gain on extiguishment of debt                                                      (1,303)
     Provision for impairment and restructuring                                                                   8,683
     Change in deferred income taxes                                                       (50)                  (5,811)
     Losses (gains) on disposition of property
        and equipment                                                                     (433)
     Deferred compensation                                                                 (86)                     367
     Changes in operating assets and liabilities                                         7,832                    3,726
                                                                           --------------------     --------------------

           NET CASH PROVIDED BY OPERATING ACTIVITIES                                    12,331                    1,172

INVESTING ACTIVITIES
  Property, plant and equipment:
     Purchases                                                                          (3,302)                  (2,674)
     Proceeds of dispositions                                                              775
                                                                           --------------------     --------------------
           NET CASH USED BY INVESTING ACTIVITIES                                        (2,527)                  (2,674)


FINANCING ACTIVITIES
  Proceeds from revolving lines of credit                                               88,752
  Repayments on revolving lines of credit                                              (96,180)
  Repurchase and retirement of long term debt                                           (1,778)
                                                                           --------------------     --------------------
           NET CASH USED BY FINANCING ACTIVITIES                                        (9,206)                       0
                                                                           --------------------     --------------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                           598                   (1,502)

Cash and cash equivalents at beginning of year                                              52                   11,715
                                                                           --------------------     --------------------

             CASH AND CASH EQUIVALENTS AT END OF PERIOD                    $               650      $            10,213
                                                                           ====================     ====================

See notes to consolidated financial statements.

</TABLE>




                                       5
<PAGE>

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (UNAUDITED)

NOTE A--BASIS OF PRESENTATION

The accompanying  unaudited consolidated condensed financial statements of Delta
Mills,  Inc. ("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  six  months  ended  December  28,  2002  are  not  necessarily
indicative  of the  results  that may be  expected  for the year ending June 28,
2003. 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 29, 2002.

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):


                                 December 28, 2002              June 29, 2002
                                 -----------------              -------------
Current assets                        $   61                       $   33
Noncurrent assets                         59                           61
Current Liabilities                    2,138                        1,902
Noncurrent liabilities                   856                          978
Stockholders' deficit                ($2,874)                     ($2,786)

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

                                                     Six Months Ended
                                          --------------------------------------
                                          December 28, 2002    December 29, 2001
                                          -----------------    -----------------

Net sales - intercompany commissions            $ 1,842             $ 1,306
Cost and expenses                                 1,930               1,962
Loss from continuing operations                     (88)               (656)
Net loss                                            (88)               (656)





                                       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
December 28,  2002,  the  outstanding  balance of the notes was  $44,739,000,  a
decrease of $3,080,000 from the balance at June 29, 2002.

Delta Mills has a secured $50 million  revolving credit facility that expires on
March 31,  2004.  Borrowings  under this credit  facility  are based on eligible
accounts  receivable  and  inventory of the Company,  subject to a maximum $37.5
million  availability limit. The facility is secured by the accounts receivable,
inventory  and capital  stock of the Company.  The  interest  rate on the credit
facility is based on a spread over either LIBOR or a base rate. Borrowings under
this  facility  were $3.9 million and $11.4  million as of December 28, 2002 and
June 29, 2002, respectively.

The Delta Mills' credit facility  contains  restrictive  covenants that restrict
additional  indebtedness,  dividends,  and capital expenditures,  and includes a
minimum availability requirement. The payment of dividends with respect to Delta
Mills,  Inc.  stock is permitted if there is no event of default and there is at
least $1 of  availability  under  the  facility.  During  the six  months  ended
December 28, 2002 and the year ended June 29, 2002,  Delta Mills did not pay any
dividends to Delta  Woodside  Industries,  Inc.  Under the minimum  availability
requirement,  Delta  Mills'  availability  for  borrowings  cannot  exceed $37.5
million. The revolver availability was approximately $21 million at December 28,
2002. Management believes the availability under Delta Mills' credit facility is
adequate for the foreseeable future.

The Company  assigns a substantial  portion of its trade accounts  receivable to
GMAC Commercial Credit 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 General and Administrative Expense.


NOTE D - RESTRUCTURING AND IMPAIRMENT CHARGES

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.  Pursuant to SFAS
121, "Accounting for the Impairment of Long-Lived Assets to be Disposed Of", 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  on  October  21,  2001  and the  Company  is in the  process  of  either
liquidating or transferring the assets associated with this facility.

As of December 28, 2002 and June 29, 2002 the Company had $3.1 million in assets
held for sale related to the closing of the Furman plant.



                                       7
<PAGE>

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, will no longer require 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.  During the quarter  ended  December 28,  2002,  the Company
purchased  $1,527,000  face amount of its 9.625% Senior Notes for $962,000.  The
Company  recognized  a gain of $565,000 as a result of this  purchase,  which is
included  in  income  before  income  taxes  in the  accompanying  statement  of
operations.  For the six months ended December 28, 2002,  the Company  purchased
$3,080,000  face amount of its 9.625% Senior Notes for  $1,777,000.  The Company
recognized a gain of  $1,303,000 as a result of these  purchases,  which is also
included  in  income  before  income  taxes  in the  accompanying  statement  of
operations.



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 trade regulations 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 manufactures and resellers. The Company also
sells  camouflage  fabric and other  fabrics  used in apparel sold to the United
States Department of Defense.

Net sales for the three  months ended  December  28, 2002 were $35.9  million as
compared  to $44.1  million in the same  quarter  of the prior  fiscal  year,  a
decrease of 18.8%.  The sales  decrease was  primarily in units and was somewhat
offset by a slight  increase in average sales price.  The sales unit decline was
due to a decline in market  demand.  Net sales for the six months ended December
28, 2002 were $82.0 million  consistent  with net sales of $81.1 million for the
six months ended  December 29, 2001. The overall  average sales price  increased
approximately  2% in the current  quarter and the six months ended  December 28,
2002 as compared to the same periods in the prior year.  This  increase in sales
price was principally due to a shift in mix to higher price product categories.

Gross  profit  was $3.7  million  and 10.3% of sales for the  second  quarter of
fiscal  year 2003.  This  compares to gross  profit of $1.7  million and 3.9% of
sales in the prior year second  quarter.  Gross  profit for the six months ended
December 28, 2002 was $9.2 million or 11.3% of sales compared to gross profit of
$2.8  million or 3.4% of sales for the six months ended  December  29, 2001.  In
both the  current  quarter  and the six months  ended  December  28,  2002,  the
improvement in gross profit was the result of lower product costs and a shift in
product categories to products that yield higher profit margins.

                                       8
<PAGE>

Selling,  general and administrative expense (SG&A) was $2.6 million and 7.2% of
net sales for the second  quarter of fiscal  year 2003  compared to SG&A of $2.9
million and 6.5% of net sales for the prior year second quarter.  The decline in
SG&A dollars was primarily  due to a decline in  administrative  overhead  costs
during the current quarter.  SG&A expenses for the six months ended December 28,
2002 and December 29, 2001 were $5.5 million or 6.7% of net sales.

The Company reported operating profit of $1.2 million in the current year second
quarter  compared to an operating  loss of $1.1 million in the second quarter of
fiscal 2002. For the six months ended  December 28, 2002,  the company  reported
operating  profit of $4.3  million  versus a loss of $11.3  million  for the six
months ended  December  29,  2001.  The  operating  loss for the  previous  year
included  impairment and  restructuring  charges of $8.7 million  related to the
closing  of  the  Company's  Furman  facility.   Excluding  the  impairment  and
restructuring  charge  during  the first six  months of fiscal  year  2002,  the
improvement  in operating  profit was primarily due to the  improvement in gross
profit as discussed above.

Interest  expense was $1.2  million for the quarter  ended  December  28,  2002,
compared to $2.5 million for the prior year  quarter.  Interest  expense for the
six months ended  December 28, 2002 was $2.8 million versus $5.0 million for the
six months  ended  December  29, 2001.  The  reduction  in interest  expense was
primarily due to the reduction in the balance of the Senior Notes.  There was no
significant interest income in either the current or prior year quarters.

Included in other (expense) income for the quarter ended December 28, 2002 was a
$0.6 million gain  resulting  from the repurchase by the Company of a portion of
its 9.625% Senior Notes.  Included in other (expense)  income for the six months
ended December 28, 2002 was a $1.3 million gain also resulting from Senior Notes
repurchases. There was no similar income or expense reported in this category in
the previous year quarter or six months ending December 29, 2001.

The income tax expense for the quarter was $184,000.  This compares to an income
tax benefit of $1.3 million in the  previous  year  quarter.  For the six months
ended December 28, 2002 income tax expense was $1.1 million versus a tax benefit
of $5.6 million for the six months ended  December 29, 2001.  The  effective tax
rate for the three months and six months ended December 28, 2002 was 38.5%.

The Company  reported net income of $293,000 for the quarter ended  December 28,
2002 compared to a net loss of $2.4 million for the quarter  ended  December 29,
2001. Net income for the current year quarter included a gain of $0.3 million on
an after tax basis from the repurchase by the Company of a portion of its 9.625%
Senior  Notes.  Net income for the six months  ended  December 28, 2002 was $1.7
million  compared  to a net loss of $10.6  million for the  previous  year's six
months  ending  December 29,  2001.  Net income for the current six month period
included a gain of $0.8 million on an after tax basis from the repurchase by the
Company of a portion of its 9.625% Senior Notes. The net loss for the six months
ended  December 29, 2001  included  asset  impairment  and  restructuring  costs
associated with closed facilities of $5.6 million on an after tax basis.

For the current year to date, the Company generated $13.1 million and used $12.5
million in cash for a net increase in cash of $0.6 million.  Cash generated from
operations  was $12.3  million.  The Company also generated $0.8 million in cash
from various  machinery and equipment  sales.  Cash uses for the current year to
date were $3.3 million for capital expenditures, $1.8 million for the repurchase
of Senior  Notes,  and $7.4 million for  revolver  debt  reduction.  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.

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 expects that the first phase of this project will be complete by June of
2003.  During fiscal years 2004 and 2005, the Company plans  additional  capital
expenditures for this project to make the finishing facility better prepared for
growth and improved product quality.


                                       9
<PAGE>

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

On August 25, 1997 Delta Mills issued $150 million of unsecured  ten-year Senior
Notes at an interest rate of 9.625%.  These notes will mature in August 2007. At
December 28,  2002,  the  outstanding  balance of the notes was  $44,739,000,  a
decrease of $3,080,000 from the balance at June 29, 2002.

Delta Mills has a secured $50 million  revolving credit facility that expires on
March 31,  2004.  Borrowings  under this credit  facility  are based on eligible
accounts  receivable  and  inventory of Delta Mills,  subject to a maximum $37.5
million  availability limit. The facility is secured by the accounts receivable,
inventory  and capital  stock of Delta Mills.  The  interest  rate on the credit
facility is based on a spread over either LIBOR or a base rate. Borrowings under
this  facility  were $3.9 million and $11.4  million as of December 28, 2002 and
June 29, 2002, respectively.

The Delta Mills' credit facility  contains  restrictive  covenants that restrict
additional  indebtedness,  dividends,  and capital expenditures,  and includes a
minimum availability requirement. The payment of dividends with respect to Delta
Mills,  Inc.  stock is permitted if there is no event of default and there is at
least $1 of availability  under the facility.  During the quarter ended December
28, 2002 and the year ended June 29, 2002, Delta Mills did not pay any dividends
to Delta Woodside Industries,  Inc. Under the minimum availability  requirement,
Delta Mills'  availability  for  borrowings  cannot  exceed $37.5  million.  The
revolver  availability  was  approximately  $21  million at December  28,  2002.
Management  believes  the  availability  under Delta Mills'  credit  facility is
adequate for the foreseeable future.

In August of 2001, the FASB issued SFAS 143,  "Accounting  for Asset  Retirement
Obligations".  SFAS 143  requires an  enterprise  to record the fair value of an
asset  retirement  obligation  as a liability in the period in which it incurs a
legal obligation  associated with the retirement of tangible  long-lived assets,
which  assets  result from the  acquisition,  construction,  development  and or
normal  use of the  assets.  The  enterprise  also is to record a  corresponding
increase to the  carrying  amount of the  related  long-lived  asset  (i.e.  the
associated asset retirement  costs) and to depreciate that cost over the life of
the asset.  The  liability  is changed at the end of each  period to reflect the
passage of time (i.e.  accretion  expense) and changes in the  estimated  future
cash flows  underlying  the initial fair value  measurement.  This  statement is
effective  for fiscal  years  beginning  after June 15,  2002.  The  Company has
adopted the Statement  effective for fiscal 2003.  The adoption of this standard
has not materially impacted the Company.

On  October 3, 2001 the FASB  issued  statement  No.  144,  "Accounting  for the
Impairment  or Disposal of  Long-Lived  Assets" that is  applicable to financial
statements issued for fiscal years beginning after December 15, 2001. The FASB's
new rules on asset impairment  supersede FASB statement No. 121, "Accounting for
the  Impairment of Long-Lived  Assets and for  Long-Lived  Assets to Be Disposed
Of", and provide a single  accounting model for long-lived assets to be disposed
of. The Company  has  adopted  the  Statement  effective  for fiscal  2003.  The
adoption of this standard has not materially impacted the Company.

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, will no longer require 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.



                                       10
<PAGE>

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

In July 2002, the FASB issued  Statement No. 146,  "Accounting  for  Obligations
Associated  with Disposal  Activities".  Statement  No. 146 addresses  financial
reporting and accounting for costs associated with exit or disposal  activities.
It nullifies EITF Issue No. 94-3,  "Liability  Recognition for Certain  Employee
Termination  Benefits  and Other  Costs to Exit an Activity  (including  Certain
Costs Incurred in a Restructuring)".  Statement 146 requires that a liability be
recognized  for such  costs only when the  liability  is  incurred,  which is in
contrast to EITF No. 94-3,  which  requires the  recognition of a liability upon
the  commitment to an exit plan. The Statement is effective for exit or disposal
activities that are initiated after December 31, 2002. The Company  believes the
adoption of Statement  No. 146 will not have a material  impact on its financial
statements.

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 any likely
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.


CRITICAL ACCOUNTING POLICIES

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

Impairment of Long - Lived Assets:  When required by circumstances,  the Company
evaluates the  recoverability of its long - lived assets by comparing  estimated
future  undiscounted cash flows with the asset's carrying amount to determine if
a write - down to fair value is required.

Income Taxes:  Deferred income taxes are recognized for the tax  consequences of
"temporary  differences" by applying  enacted  statutory tax rates applicable to
future years to differences between the financial statement carrying amounts and
the tax bases of existing assets and  liabilities.  The effect on deferred taxes
of a change in tax rates is recognized in income in the period that includes the
enactment  date.  At December 28,  2002,  the Company had regular tax loss carry
forwards of $35 million for federal purposes and $10 million for state purposes.
The Federal loss carry forwards  expire at various  intervals from 2013 to 2021,
while the state loss carry  forwards  expire at various  intervals  beginning in
2003. At December 28, 2002, the Company's  gross deferred tax assets are reduced
by a  valuation  allowance  of  $156,000  due to  expiring  tax  credits.  It is
management's  belief that it is more likely than not that the gross deferred tax
assets will be realized in the future. The ultimate  realization of deferred tax
assets is dependent  upon the  generation  of future  taxable  income during the
periods in which those temporary  differences become  deductible.  The potential
tax effect of  establishing  a full  valuation  allowance on gross  deferred tax
assets is approximately $13 million.





                                       11
<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. 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 December 28, 2002,  a 10% decline in market price of the  Company's  fixed
price contracts would have had a negative impact of  approximately  $0.7 million
on the value of the  contracts.  As of June 29, 2002,  such a 10% decline  would
have had a  negative  impact  of $1.5  million.  The  decline  in the  potential
negative  impact from June 29, 2002 to December 28, 2002 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 2004 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 December 28, 2002,
an  increase  in the  interest  rate  of 1%  would  have a  negative  impact  of
approximately  $39,400. As of June 29, 2002, an increase in the interest rate of
1% would have had a negative impact of  approximately  $114,000.  The decline in
the potential  negative impact from June 29, 2002 to December 28, 2002 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

Under the supervision and with the  participation  of our management,  including
the Chief Executive Officer and Chief Financial  Officer,  we have evaluated the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures  within 90 days of the filing  date of this  quarterly  report,  and,
based on their  evaluation,  our Chief  Executive  Officer  and Chief  Financial
Officer have concluded  that these controls and procedures are effective.  There
were no  significant  changes in our internal  controls or in other factors that
could  significantly  affect  these  controls  subsequent  to the  date of their
evaluation.

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.




                                       12
<PAGE>

PART II.  OTHER INFORMATION

Item 1.     Legal Proceedings *

Item 2.     Changes in Securities and Use of Proceeds*

Item 3.     Defaults upon Senior Securities*

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

Item 5.     Other Information*

Item 6.     Exhibits and Reports on Form 8-K

         a) Listing of Exhibits

99.1     Certificate Pursuant to Section 906 of the Sarbanes-Oxley  Act of 2002,
         signed by William F. Garrett, dated February 11, 2003.

99.2     Certificate Pursuant to  Section 906 of the Sarbanes-Oxley Act of 2002,
         signed by William H. Hardman, dated February 11, 2003.

         b) No report on Form  8-K  was  filed  during the fiscal  quarter ended
            December 28, 2002.


* Items 1,2,3,4 and 5 are not applicable.





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




                                       13
<PAGE>


                                 CERTIFICATIONS



I, William F. Garrett, certify that:

1.        I have reviewed this quarterly report on Form  10-Q  of  Delta  Mills,
          Inc;

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

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

4.        The registrant's  other certifying  officers and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange  Act Rules  13a-14 and 15d-14) for the  registrant
          and we have:

a)        designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;
b)        evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report ("the Evaluation Date"); and
c)        presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.        The registrant's other certifying officers and I have disclosed, based
          on our most recent  evaluation,  to the registrant's  auditors and the
          audit  committee of the  registrant's  board of directors  (or persons
          fulfilling the equivalent functions):

a)        all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and
b)        any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.        The  registrant's  other  certifying  officers and I have indicated in
          this quarterly report whether or not there were significant changes in
          internal controls or in other factors that could significantly  affect
          internal   controls   subsequent  to  the  date  of  our  most  recent
          evaluation,   including   any   corrective   actions  with  regard  to
          significant deficiencies and material weaknesses.




Date      February 11, 2003                  By: /s/ William F. Garrett
      ----------------------------           --------------------------------
                                             William F. Garrett
                                             President & Chief Executive Officer





<PAGE>


I, William H. Hardman, certify that:

1.       I have reviewed this quarterly report on Form 10-Q of Delta Mills, Inc;

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

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

4.       The registrant's  other  certifying  officers and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         we have:

a)       designed  such  disclosure  controls  and  procedures  to  ensure  that
         material  information   relating  to  the  registrant,   including  its
         consolidated  subsidiaries,  is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;
b)       evaluated the  effectiveness of the registrant's  disclosure   controls
         and procedures as of a date within 90 days prior to the filing date  of
         this quarterly report ("the Evaluation Date"); and
c)       presented  in  this  quarterly   report  our   conclusions   about  the
         effectiveness  of the disclosure  controls and procedures  based on our
         evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed,  based
         on our most recent  evaluation,  to the  registrant's  auditors and the
         audit  committee of the  registrant's  board of  directors  (or persons
         fulfilling the equivalent functions):

a)       all  significant  deficiencies  in the design or  operation of internal
         controls  which  could  adversely  affect the  registrant's  ability to
         record,   process,   summarize  and  report  financial  data  and  have
         identified  for the  registrant's  auditors any material  weaknesses in
         internal controls; and
b)       any fraud,  whether or not material,  that involves management or other
         employees  who have a  significant  role in the  registrant's  internal
         controls; and

6.       The registrant's other certifying officers and I have indicated in this
         quarterly  report  whether  or not there  were  significant  changes in
         internal controls or in other factors that could  significantly  affect
         internal controls subsequent to the date of our most recent evaluation,
         including   any   corrective   actions   with  regard  to   significant
         deficiencies and material weaknesses.




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