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 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 February 6, 2004.




<PAGE>

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<CAPTION>

DELTA MILLS, INC.
                                      INDEX

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

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

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

Condensed consolidated statements of cash flows--
                  Six months ended December 27, 2003 and December 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           10-15

Item 3.    Quantitative and Qualitative Disclosures about Market Risk                                       16

Item 4.    Controls and Procedures                                                                          16

PART II. OTHER INFORMATION

Item 1.    Legal Proceedings                                                                                17

Item 2.     Changes in Securities and Use of Proceeds                                                       17

Item 3.     Defaults upon Senior Securities                                                                 17

Item 4.     Submission of Matters to a Vote of Security Holders                                             17

Item 5.     Other Information                                                                               17

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


SIGNATURES                                                                                                  18

CERTIFICATIONS                                                                                              27-34

</TABLE>



                                       2
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<TABLE>
<CAPTION>

ITEM 1. FINANCIAL STATEMENTS

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

ASSETS
CURRENT ASSETS
<S>                                                                        <C>                        <C>
  Cash and cash equivalents                                                $     594                  $     520
  Accounts receivable:
     Factor and other                                                         38,506                     44,628
     Less allowances for returns                                                  19                        180
                                                               ----------------------     ----------------------
                                                                              38,487                     44,448
  Inventories
     Finished goods                                                            8,538                      7,711
     Work in process                                                          22,812                     25,765
     Raw materials and supplies                                                8,864                     10,659
                                                               ----------------------     ----------------------
                                                                              40,214                     44,135

  Deferred income taxes                                                        1,433                      1,517
  Other assets                                                                   399                        520
                                                               ----------------------     ----------------------
                      TOTAL CURRENT ASSETS                                    81,127                     91,140

ASSETS HELD FOR SALE                                                           3,911                      3,948

PROPERTY, PLANT AND EQUIPMENT, at cost                                       160,089                    157,400
     Less accumulated depreciation                                            94,964                     90,619
                                                               ----------------------     ----------------------
                                                                              65,125                     66,781

DEFERRED LOAN COSTS AND OTHER ASSETS                                             404                        459

                                                               ----------------------     ----------------------
                                                                           $ 150,567                  $ 162,328
                                                               ======================     ======================

LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
  Trade accounts payable                                                    $ 10,222                   $ 14,217
  Revolving credit facility                                                   19,487                     24,856
  Payable to Affiliates                                                        3,686                      3,517
  Accrued employee compensation                                                4,738                      1,414
  Accrued and sundry liabilities                                              25,086                     20,479
                                                               ----------------------     ----------------------
                    TOTAL CURRENT LIABILITIES                                 63,219                     64,483
LONG-TERM DEBT                                                                31,941                     31,941
NON-CURRENT DEFERRED INCOME TAXES                                              2,849                      8,421
DEFERRED COMPENSATION                                                          4,338                      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                                                         (3,572)                    (1,882)
                                                               ----------------------     ----------------------
                                                                              48,220                     49,910
COMMITMENTS AND CONTINGENCIES
                                                               ----------------------     ----------------------
                                                                           $ 150,567                  $ 162,328
                                                               ======================     ======================

See notes to consolidated financial statements.
</TABLE>

                                       2
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<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Delta Mills Inc.
(In Thousands)


                                                   3 Mths Ended      3 Mths Ended     6 Mths Ended      6 Mths Ended
                                                   December 27,      December 28,     December 27,      December 28,
                                                       2003              2002             2003              2002
                                                 ----------------- ----------------- ---------------- -----------------

<S>                                                      <C>               <C>              <C>               <C>
Net sales                                                $ 48,500          $ 35,853         $ 91,081          $ 82,032

Cost of goods sold                                         44,087            32,158           86,049            72,792
                                                 ----------------- ----------------- ---------------- -----------------
Gross profit                                                4,413             3,695            5,032             9,240
Selling, general and administrative expenses                2,959             2,566            5,787             5,461
Other income                                                  411                23              701               488
                                                 ----------------- ----------------- ---------------- -----------------
  OPERATING PROFIT (LOSS)                                   1,865             1,152              (54)            4,267
Other (expense) income:
  Interest expense                                         (1,161)           (1,240)          (2,368)           (2,771)
  Gain on extinguishment of debt                                                565                              1,303
                                                 ----------------- ----------------- ---------------- -----------------
                                                           (1,161)             (675)          (2,368)           (1,468)
                                                 ----------------- ----------------- ---------------- -----------------

 INCOME (LOSS) BEFORE INCOME TAXES                            704               477           (2,422)            2,799
Income tax expense (benefit)                                  417               184             (732)            1,074
                                                 ----------------- ----------------- ---------------- -----------------

NET INCOME (LOSS)                                           $ 287             $ 293         $ (1,690)          $ 1,725
                                                 ================= ================= ================ =================







See notes to consolidated financial statements.
</TABLE>

                                       4
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<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Delta Mills Inc.
(In Thousands)
                                                                      6 Months Ended           6 Months Ended
                                                                       December 27,             December 28,
                                                                           2003                     2002
                                                                    --------------------     -------------------
OPERATING ACTIVITIES
<S>                                                                            <C>                      <C>
  Net income (loss)                                                            $ (1,690)                $ 1,725
  Adjustments to reconcile net income (loss) to net
     cash provided by operating activities:
     Depreciation                                                                 4,396                   4,578
     Amortization                                                                    55                      68
     Discount to face value on repurchase of bonds                                                       (1,303)
     Change in deferred income taxes                                             (5,488)                    (50)
     Gain on disposition of property and equipment                                 (253)                   (433)
     Deferred compensation                                                          418                     (86)
     Changes in operating assets and liabilities                                 10,376                   7,832
                                                                    --------------------     -------------------

NET CASH PROVIDED BY OPERATING ACTIVITIES                                         7,814                  12,331
                                                                    --------------------     -------------------

INVESTING ACTIVITIES
  Property, plant and equipment:
     Purchases                                                                   (2,795)                 (3,302)
     Proceeds of dispositions                                                       424                     775
                                                                    --------------------     -------------------

NET CASH USED IN INVESTING ACTIVITIES                                            (2,371)                 (2,527)
                                                                    --------------------     -------------------

FINANCING ACTIVITIES
  Proceeds from revolving lines of credit                                        91,571                  88,752
  Repayments on revolving lines of credit                                       (96,940)                (96,180)
  Repurchase and retirement of long term debt                                                            (1,778)
                                                                    --------------------     -------------------

NET CASH USED IN FINANCING ACTIVITIES                                            (5,369)                 (9,206)
                                                                    --------------------     -------------------

NET INCREASE IN CASH AND CASH EQUIVALENTS                                            74                     598

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

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                        $ 594                   $ 650
                                                                    ====================     ===================

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 six months ended December 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):


                                  December 27, 2003              June 28, 2003
                                  -----------------              -------------
Current assets                        $   216                      $    88
Non-current assets                         26                           38
Current liabilities                     2,149                        1,912
Non-current liabilities                   812                        1,047
Stockholders' deficit                  (2,719)                      (2,833)

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

                                                    Six Months Ended
                                           -------------------------------------
                                           December 27, 2003   December 28, 2002
                                           -----------------   -----------------

Net sales - Intercompany commissions            $2,044               $ 1,842
Cost and expenses                                1,930                 1,930
Net income (loss)                                  114                   (88)





                                       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  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 average interest
rate on the credit  facility  was 2.907% at December  27, 2003 and is based on a
spread over either LIBOR or a base rate.  Borrowings  under this  facility  were
$19.5  million  and $24.9  million as of December  27,  2003 and June 28,  2003,
respectively.   As  of  December  27,  2003,  the  revolver   availability   was
approximately $25 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.
At the end of the quarter ended  December 27, 2003,  the Company had returned to
compliance  with all  covenants  related  to its $50  million  revolving  credit
facility.  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.  The
indenture  pertaining  to  the  Company's  9.625%  Senior  Notes  also  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 charge coverage ratio test.
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 Delta Woodside subject to compliance with the same conditions.  At
December 27, 2003,  the Company was  prohibited by these  covenants  from paying
dividends  and making  loans to Delta  Woodside.  During  the six  months  ended
December 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  recorded 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  six  months  of  fiscal  2004  ended  December  27,  2003  and  the
corresponding  period of fiscal 2003 ended  December 28, 2002,  the Company paid
$236,000 and $30,000,  respectively,  in restructuring  costs. The Company had a
remaining  liability  of $106,000  and $342,000 as of December 27, 2003 and June
28, 2003, respectively.

As of December  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 quarter and six months ended December 27, 2003, the
Company did not recognize any gains from the  repurchase of debt.  For the three
months ended December 28, 2002,  Delta Mills,  Inc.  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 these  purchases.  For the six months ended December 28,
2002, Delta Mills,  Inc.  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.  These gains from the repurchase of debt are included in income
before income taxes in the accompanying statements of operations.

NOTE F - STOCK COMPENSATION

The Company participates in the Delta Woodside Industries Inc. Stock Option Plan
and the Delta Woodside Industries, Inc. 2004 Stock Plan.

The Delta  Woodside  Industries,  Inc. 2004 Stock Plan was approved by the Delta
Woodside's  shareholders  on November 6, 2003.  The Stock Plan permits the Delta
Woodside to grant  restricted stock awards and phantom stock awards for up to an
aggregate  maximum  of  240,000  shares  of its  common  stock.  Delta  Woodside
Industries,  Inc.  granted  awards for 132,000  shares of  restricted  stock and
phantom stock awards with the respect to 88,000 shares during December of 2003.

All awards granted are subject to vesting conditions, including conditions based
on continued  employment  with Delta Woodside  (fifty percent of the awards) and
performance-based  conditions  (fifty  percent of the awards).  One third of the
shares  subject to vesting based on continued  employment  will vest on the last
day of each of fiscal years 2004,  2005 and 2006.  The shares subject to vesting
based on  performance  will vest if certain  targets are attained for net income
and return assets in each of fiscal years 2004,  2005 and 2006. A participant in
the plan may not  transfer  shares  issued  under  the plan  prior to the  fifth
anniversary of the date the shares first vested.  To the extent that an award is
forfeited,  any shares subject to the forfeited  portion of the award will again
become  available for issuance  under the Stock Plan.  The issuance of shares is
subject to  registration  of such issuance  under the Securities Act of 1933, as
amended,  and  acceptance of the shares for  additional  listing by the New York
Stock Exchange.

                                       8
<PAGE>

NOTE F - STOCK OPTIONS - CONTINUED

The Company applies the intrinsic value-based method of accounting for its stock
compensation,  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. 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)                                             3 Months         3 Months          6 Months         6 Months
                                                           Ended            Ended             Ended            Ended
                                                           12/27/2003       12/28/2002        12/27/2003       12/28/2002
                                                           -------------    -------------     -------------    -------------

<S>                                                          <C>             <C>               <C>              <C>
Net income (loss), as reported                               $      287      $       293       $   (1,690)      $     1,725

Add stock based employee compensation expense
included in reported net income (loss), net of tax                    0               42                18               83

Less total stock based compensation expense
   determined under fair value based method, net
   of related tax effects                                             0            (121)              (18)            (242)
                                                           -------------    -------------     -------------    -------------

Pro forma net income (loss)                                 $       287      $       214       $   (1,690)      $     1,566
                                                           =============    =============     =============    =============

</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
amounted to $1.5 million, which included 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.


NOTE H - DEFERRED COMPENSATION

On  January  16,  2004,  based  on  the   recommendation   of  Delta  Woodside's
Compensation  Committee,  the Board (with Mr.  Garrett  abstaining)  approved an
amendment of the Company's  deferred  compensation  plan contingent on receiving
the requisite consent of the Company's  revolving credit agreement lender.  This
consent has subsequently been obtained. The deferred compensation plan amendment
provides that each participant's  deferred  compensation account will be paid to
the participant upon the earlier of the participant's  termination of employment
or in  accordance  with a schedule of payment that will pay  approximately  40%,
30%, 20% and 10% of the  participant's  current  account on February 15 of 2004,
2005,  2006  and  2007,  respectively.  Any such  February  15  payment  will be
conditioned  on there  being no  default  under  the  Delta  Mills  Senior  Note
Indenture or the Company's  revolving credit facility and on compliance with the
fixed  charge  coverage  ratio test in the Senior  Note  Indenture  for the most
recently ended four full fiscal quarters,  determined on a pro forma basis. As a
result of this amendment to the deferred  compensation plan,  approximately $3.7
million,  which  represents  the first February 15 payment,  plus  distributions
anticipated to occur in the next twelve months due to  participant  retirements,
has been  reclassified  on the balance  sheet at December 27, 2003 from deferred
compensation to accrued employee compensation in current liabilities.

                                       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

During  the  quarter  and six  months  ended  December  27,  2003,  the  Company
experienced  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.

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.


                                       10
<PAGE>

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

Net sales for the  quarter  ended  December  27,  2003 were  $48.5  million,  an
increase of 35.3% when  compared  to net sales of $35.9  million for the quarter
ended December 28, 2002. The increase over the prior year quarter was the result
of increased  unit sales  partially  offset by a 2.3%  decline in average  sales
price.  Net sales for the six months ended December 27, 2003 were $91.1 million,
an  increase of 11.0% when  compared  to net sales of $82.0  million for the six
months ended  December 28, 2002.  This increase was the result of an increase in
unit sales partially offset by a 1.0% decline in average sales price. Unit sales
increased  because customer demand  improved,  primarily as a result of stronger
retail sales  coupled with  improved  demand for military  fabrics.  Product mix
changes accounted for the decline in average sales price.

Gross  profit was $4.4  million and 9.1% of net sales for the second  quarter of
fiscal year 2004. This compares to gross profit of $3.7 million and 10.3% of net
sales in the prior year second  quarter.  Gross  profit for the six months ended
December  27,  2003 was $5.0  million and 5.5% of net sales as compared to gross
profit of $9.2 million and 11.3% of net sales for the six months ended  December
28,  2002.  The  improvement  in gross  profit in the current  year  quarter was
impacted by improved  manufacturing  costs  absorbed  due to  increased  running
schedules,  partially offset by deteriorating  margins on commodity products due
to  continued  pressure  from  imports  coupled  with over  capacity of domestic
textile  production.  The decline in gross profit for the current year six month
period resulted principally from unabsorbed  manufacturing costs associated with
reduced  running  schedules  during  the first  quarter  brought  on by  reduced
customer  demand in the first  quarter  coupled  with  deteriorating  margins as
mentioned  above.  Increased  employee  benefit  costs in the first quarter also
contributed to the decline in gross profit.

Selling,  general and administrative expense (SG&A) was $3.0 million and 6.1% of
net sales for the second  quarter of fiscal  year 2004  compared to SG&A of $2.6
million  and 7.2% of net sales  for the  prior  year  second  quarter.  Selling,
general and administrative expense (SG&A) was $5.8 million and 6.4% of net sales
for the six months ended  December 27, 2003 compared to SG&A of $5.5 million and
6.7% of net sales for the six months ended  December  28, 2002.  The increase in
SG&A in the quarter and the six month period is  attributable  to an increase in
distribution  costs  associated  with  increased  unit  volume,  an  increase in
factoring  costs  associated  with  increased  sales to  customers  based in the
Caribbean, and increased costs of audit and tax services.

The Company  reported an operating  profit of $1.9 million for the quarter ended
December 27, 2003  compared to an operating  profit of $1.2 million in the prior
year  quarter.  The Company  reported an  operating  loss of $54,000 for the six
months ended  December 27, 2003 compared to an operating  profit of $4.3 million
for the six months ended December 28, 2002. The improvement in operating  profit
for the current year quarter was attributable to the improvement in gross profit
discussed above and a gain on disposal of equipment reflected in other operating
income,  somewhat  offset  by the  increase  in SG&A  expense.  The  decline  in
operating  profit for the current year six month period was caused  primarily by
the decline in gross profit discussed above.

Interest  expense  was $1.2  million  and $2.4  million  for the quarter and six
months ended December 27, 2003, respectively,  compared to $1.2 million and $2.8
million for the  corresponding  prior year  periods.  The  reduction in interest
expense  for the six month  period was  primarily  due to the  reduction  in the
balance of Delta  Mills'  9.625%  Senior  Notes.  The prior year quarter and six
month  periods  are each net of $0.2  million  interest  capitalized  related to
capital  projects.  Capitalized  interest  in the current  year  periods was not
material. There was no interest income in either the current or prior year.

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 this  category  for the six months ended
December 28, 2002 was a $1.3 million gain also  resulting from the repurchase by
the  Company  of a portion of its 9.625%  Senior  Notes.  There was no income or
expense in this  category in the current  quarter and six months ended  December
27, 2003.

The income tax  benefit for the current  quarter  was $0.4  million  compared to
income tax expense of $0.2 million in the  previous  year  quarter.  For the six
months ended December 27, 2003,  the Company  recorded and income tax benefit of
$0.7  million  compared to income tax expense of $1.1 million for the prior year
six months ended December 28, 2002.

                                       11
<PAGE>

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

The Company  reported net income of $0.3 million for the quarter ended  December
27, 2003 compared to net income of $0.3 million for the quarter  ended  December
28,  2002.  Net income for the  previous  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. The Company reported a net loss of $1.7 million for the
six months ended  December  27, 2003  compared to net income of $1.7 million for
the six months ended  December 28,  2002.  Net income for the previous  year six
months 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.


LIQUIDITY AND CAPITAL RESOURCES

For the six months ended December 27, 2003,  the Company  generated $7.8 million
in cash from operations. The principal uses of cash were capital expenditures of
$2.4 million,  net of $0.4 million in proceeds from the disposal of assets.  The
outstanding  borrowings under the GMAC revolver  decreased $5.4 million from the
balance at June 28, 2003. The Company is currently in compliance with all of the
covenants related to its $50 million  revolving credit facility.  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,  Delta Mills  obtained a waiver of
compliance  with these covenants from GMAC for the first quarter of fiscal 2004.
At the end of the quarter ended  December 27, 2003,  Delta Mills had returned to
compliance  with all  covenants  related  to its $50  million  revolving  credit
facility.  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.

On  January  16,  2004,  based  on  the   recommendation   of  Delta  Woodside's
Compensation  Committee,  the Board (with Mr.  Garrett  abstaining)  approved an
amendment  of the  Company's  deferred  compensation  plan.  The  amendment  was
contingent on receiving the requisite consent of the Company's  revolving credit
agreement  lender.  This consent has  subsequently  been obtained.  The deferred
compensation   plan  amendment   provides  that  each   participant's   deferred
compensation  account  will be paid to the  participant  upon the earlier of the
participant's  termination  of employment  or in  accordance  with a schedule of
payment that will pay  approximately  40%, 30%, 20% and 10% of the participant's
current account on February 15 of 2004, 2005, 2006 and 2007,  respectively.  Any
such February 15 payment will be conditioned on there being no default under the
Delta Mills Senior Note Indenture or the Company's revolving credit facility and
on  compliance  with the fixed  charge  coverage  ratio test in the Senior  Note
Indenture for the most recently ended four full fiscal quarters, determined on a
pro forma basis. The Compensation Committee and the Board adopted this amendment
as a measure to retain key employees  who, in light of the general  difficulties
in the textile  industry,  have expressed a desire to diversify their retirement
assets. As of December 27, 2003, the Company's  aggregate deferred  compensation
liability  was   approximately  $8  million.   Of  this  amount,   approximately
$1,949,000,  $463,000 and $131,000  were for the accounts of William F. Garrett,
CEO,  William  H.  Hardman,   Jr.,  CFO,  and  Donald  C.  Walker,   Controller,
respectively.

As a result of this amendment to the deferred  compensation plan,  approximately
$3.7 million, which represents the first February 15 payment, plus distributions
anticipated to occur in the next twelve months due to  participant  retirements,
has been  reclassified on the condensed  consolidated  balance sheet at December
27, 2003 from deferred  compensation to accrued employee compensation in current
liabilities.  The Company  estimates that this amendment will result in interest
savings of $1.1 million over the next four years and approximately  $5.1 million
over the term of the original plan.

                                       12
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES - 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,  2005  and  2006,  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  $5.0 million and $5.0 million planned for capital
expenditures  in fiscal  years 2004 and 2005,  respectively.  During the quarter
ended December 27, 2003, the Company  revised its capital  expenditure  plans to
delay a portion of its spending into fiscal 2006.

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  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 average interest
rate on the credit  facility  was 2.907% at December  27, 2003 and is based on a
spread over either LIBOR or a base rate.  Borrowings  under this  facility  were
$19.5  million  and $24.9  million as of December  27,  2003 and June 28,  2003,
respectively.   As  of  December  27,  2003,  the  revolver   availability   was
approximately  $25 million.  At the end of the quarter ended  December 27, 2003,
the  Company was in  compliance  with all  covenants  related to its $50 million
revolving  credit  facility.  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.  The
indenture  pertaining  to  the  Company's  9.625%  Senior  Notes  also  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 charge coverage ratio test.
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 Delta Woodside subject to compliance with the same conditions.  At
December 27, 2003,  the Company was  prohibited by these  covenants  from paying
dividends  and making  loans to Delta  Woodside.  During  the six  months  ended
December 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.

                                       13
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES - 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
amounted to $1.5 million, which included 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   December   2003,   the   FASB   revised   Interpretation   No.   46   ("FIN
46"),"Consolidation  of Variable Interest Entities," which was originally issued
in  January  2003,  to  provide  guidance  regarding  issues  arising  from  the
implementation  of FIN 46. Many  variable  interest  entities have commonly been
referred to as  special-purpose  entities or off-balance  sheet  structures.  In
general, a variable interest entity is a corporation, partnership, trust, or any
other legal  structure used for business  purposes that either (a) does not have
equity  investors  with voting  rights or (b) has equity  investors  that do not
provide sufficient financial resources for the entity to support its activities.
Interpretation  46 requires a variable  interest  entity to be consolidated by a
company if that  company  is subject to a majority  of the risk of loss from the
variable interest  entity's  activities or entitled to receive a majority of the
entity's  residual  returns  or both.  A company  that  consolidates  a variable
interest  entity  is  called  the  primary   beneficiary  of  that  entity.  The
consolidation  requirements  of FIN 46 apply  immediately  to variable  interest
entities created after January 31, 2003. The consolidation requirements apply to
older  entities in the first fiscal year or interim period ending after December
15,  2003.  Certain  of the  disclosure  requirements  apply  in  all  financial
statements  issued  after  January 31,  2003,  regardless  of when the  variable
interest entity was  established.  The adoption of FIN 46 did not have an 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
December 27, 2003 and June 28, 2003, the Company had approximately  $1.4 million
and $6.9 million, respectively, in net deferred tax liabilities.

                                       14
<PAGE>

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.



























                                       15
<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 December 27, 2003, a 10% decline
in market price of the Company's fixed price contracts would have had a negative
impact of approximately  $0.4 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 December 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 December 27, 2003,
an  increase  in the  interest  rate  of 1%  would  have a  negative  impact  of
approximately  $195,000  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
December 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-15(e)  and  15d-15(e),  have
concluded that, as of December 27, 2003, the Company's  disclosure  controls and
procedures  were  adequate  and  effective to ensure that  material  information
required to be  disclosed by the Company in the reports that it files or submits
under the Exchange Act was recorded,  processed,  summarized and reported within
the time periods specified in the Securities and Exchange Commission's rules and
forms.

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.

                                       16
<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 (not applicable)

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     Consent Under Credit Agreement and Other Documents dated as of February 4, 2004 between Delta Woodside Industries,
            Inc. and GMAC Commercial Finance LLC.

10.1.1      First Amendment dated December 23, 2003 to Delta Woodside Deferred Compensation Plan for Key Managers, Amended and
            Restated Effective June 30, 2000.

10.1.2      Second Amendment dated January 16, 2004 to Delta Woodside Deferred Compensation Plan for Key Managers, Amended and
            Restated Effective June 30, 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

              There  were no  reports  filed  or  furnished  on Form 8-K for the
quarter ended December 27, 2003.









                                       17
<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    February 10, 2004                    By:/s/ W.H. Hardman, Jr.
      ---------------------------------      ---------------------------------
                                             W.H. Hardman, Jr.
                                             Chief Financial Officer











                                       18