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 March 29, 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 May 12, 2003.




<PAGE>

<TABLE>
<CAPTION>

DELTA MILLS, INC.
                                      INDEX

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

<S>                                                                                                        <C>
Condensed consolidated balance sheets--March 29, 2003 and June 29, 2002                                     3

Condensed consolidated statements of operations--
                  Three and nine months ended March 29, 2003 and March 30, 2002                             4

Condensed consolidated statements of cash flows--
                  Nine months ended March 29, 2003 and March 30, 2002                                       5

Notes to condensed consolidated financial statements                                                        6-8


Item 2.    Management's Discussion and Analysis of  Financial Condition and Results of Operations           9-13

Item 3.    Quantitative and Qualitative Disclosures about Market Risk                                       13

Item 4.    Controls and Procedures                                                                          14

PART II. OTHER INFORMATION

Item 1.    Legal Proceedings                                                                                14

Item 2.    Changes in Securities and use of Proceeds                                                        14

Item 3.    Defaults upon Senior Securities                                                                  14

Item 4.    Submission of Matters to a Vote of Security Holders                                              14

Item 5.    Other Information                                                                                14

Item 6.    Exhibits and Reports on Form 8-K                                                                 14


SIGNATURES                                                                                                  15

CERTIFICATIONS                                                                                              16-26

</TABLE>



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

CONDENSED CONSOLIDATED BALANCE SHEETS
DELTA MILLS, INC. (IN THOUSANDS, EXCEPT SHARE AMOUNTS)            MARCH 29, 2003              JUNE 29, 2002
                                                               ----------------------     ----------------------

ASSETS
CURRENT ASSETS
<S>                                                                        <C>                         <C>
  Cash and cash equivalents                                                $     642                  $      52
  Accounts receivable:
     Factor and other                                                         45,233                     49,887
     Less allowances for returns                                                  28                         32
                                                               ----------------------     ----------------------
                                                                              45,205                     49,855
  Inventories
     Finished goods                                                            5,597                      7,085
     Work in process                                                          24,355                     19,878
     Raw materials and supplies                                                8,228                      5,784
                                                               ----------------------     ----------------------
                                                                              38,180                     32,747

  Deferred income taxes                                                        1,346                      1,347
  Other assets                                                                   328                         25
                                                               ----------------------     ----------------------
                                TOTAL CURRENT ASSETS                          85,701                     84,026

Assets held for sale                                                           3,141                      3,141

PROPERTY, PLANT AND EQUIPMENT, at cost                                       149,768                    147,906
     Less accumulated depreciation                                            81,869                     77,405
                                                               ----------------------     ----------------------
                                                                              67,899                     70,501

DEFERRED LOAN COSTS AND OTHER ASSETS                                             668                        769

                                                               ----------------------     ----------------------
                                                                           $ 157,409                  $ 158,437
                                                               ======================     ======================

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
  Trade accounts payable                                                   $  11,970                  $  11,689
  Revolving credit facility                                                   13,403                     11,365
  Payable to Affiliates                                                        3,480                      3,321
  Accrued employee compensation                                                1,364                      1,696
  Accrued and sundry liabilities                                              17,845                     18,621
                                                               ----------------------     ----------------------
                    TOTAL CURRENT LIABILITIES                                 48,062                     46,692
LONG-TERM DEBT                                                                44,739                     47,819
DEFERRED INCOME TAXES                                                          9,283                      9,340
DEFERRED COMPENSATION                                                          7,381                      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)                                                  (3,848)                    (4,473)
                                                               ----------------------     ----------------------
                                                                              47,944                     47,319
COMMITMENTS AND CONTINGENCIES
                                                               ----------------------     ----------------------
                                                                           $ 157,409                  $ 158,437
                                                               ======================     ======================

See notes to consolidated financial statements.

</TABLE>


                                       3
<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Delta Mills Inc.
(In Thousands)


                                                  3 Mths Ended     3 Mths Ended      9 Mths Ended      9 Mths Ended
                                                   March 29,         March 30,         March 29,        March 30,
                                                      2003             2002              2003              2002
                                                ----------------- ----------------  ---------------- -----------------

<S>                                                     <C>              <C>              <C>               <C>
Net sales                                               $ 46,489         $ 41,190         $ 128,521         $ 122,307

Cost of goods sold                                        43,649           40,128           116,441           118,458
                                                ----------------- ----------------  ---------------- -----------------
Gross profit                                               2,840            1,062            12,080             3,849
Selling, general and administrative expenses               2,969            3,033             8,430             8,496
Impairment and restructuring expenses                        398                                398             8,683
Other income                                                  48               55               536                86
                                                ----------------- ----------------  ---------------- -----------------
  OPERATING PROFIT (LOSS)                                   (479)          (1,916)            3,788           (13,244)
Other (expense) income:
  Interest expense                                        (1,326)          (2,403)           (4,097)           (7,402)
  Interest income                                                              51                                 184
  Gain on extinguishment of debt                                              500             1,303               500
                                                ----------------- ----------------  ---------------- -----------------
                                                          (1,326)          (1,852)           (2,794)           (6,718)
                                                ----------------- ----------------  ---------------- -----------------

 INCOME(LOSS) BEFORE
            INCOME TAXES                                  (1,805)          (3,768)              994           (19,962)
Income tax expense (benefit)                                (705)          (1,321)              369            (6,960)
                                                ----------------- ----------------  ---------------- -----------------

NET INCOME (LOSS)                                       $ (1,100)        $ (2,447)         $    625         $ (13,002)
                                                ================= ================  ================ =================


</TABLE>





See notes to consolidated financial statements.

                                       4
<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
DELTA MILLS INC.
(IN THOUSANDS)
                                                                             9 MONTHS ENDED           9 MONTHS ENDED
                                                                                MARCH 29,                MARCH 30,
                                                                                  2003                     2002
                                                                           --------------------     --------------------
OPERATING ACTIVITIES
<S>                                                                                   <C>                     <C>
  Net income (loss)                                                                   $    625                $ (13,002)
  Adjustments to reconcile net income(loss) to net
     cash provided by operating activities:
     Depreciation                                                                        6,874                    6,836
     Amortization                                                                          101                      316
     Gain on extiguishment of debt                                                      (1,303)                    (500)
     Provision for impairment and restructuring                                            398                    8,683
     Change in deferred income taxes                                                       (56)                  (7,124)
     Gains on disposition of property
        and equipment                                                                     (433)
     Deferred compensation                                                                 113                      513
     Changes in operating assets and liabilities                                        (2,148)                   1,695
                                                                           --------------------     --------------------

           NET CASH PROVIDED (USED) BY
                          OPERATING ACTIVITIES                                           4,171                   (2,583)

INVESTING ACTIVITIES
  Property, plant and equipment:
     Purchases                                                                          (4,648)                  (5,786)
     Proceeds of dispositions                                                              807
                                                                           --------------------     --------------------
           NET CASH USED BY
                           INVESTING ACTIVITIES                                         (3,841)                  (5,786)


FINANCING ACTIVITIES
  Proceeds from revolving lines of credit                                              134,625
  Repayments on revolving lines of credit                                             (132,587)
  Repurchase and retirement of long term debt                                           (1,778)                    (500)
                                                                           --------------------     --------------------
           NET CASH PROVIDED (USED) BY
                          FINANCING ACTIVITIES                                             260                     (500)
                                                                           --------------------     --------------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                           590                   (8,869)

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

             CASH AND CASH EQUIVALENTS
                           AT END OF PERIOD                                           $    642                $   2,846
                                                                           ====================     ====================

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 nine months ended March 29, 2003 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):


                                 March 29, 2003               June 29, 2002
                                 --------------               -------------
Current assets                      $   42                       $   33
Noncurrent assets                       50                           61
Current Liabilities                  1,981                        1,902
Noncurrent liabilities                 991                          978
Stockholders' deficit              ($2,880)                     ($2,786)

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

<TABLE>
<CAPTION>
                                                             Nine Months Ended
                                                    --------------------------------------
                                                    March 29, 2003          March 30, 2002
                                                    --------------          --------------

<S>                                                    <C>                      <C>
Net sales -intercompany commissions                    $ 2,888                  $ 1,996
Cost and expenses                                        2,982                    3,063
Loss from continuing operations                            (94)                  (1,067)
Net loss                                                   (94)                  (1,067)

</TABLE>




                                       6
<PAGE>

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

On August 25, 1997 the Company issued $150 million of unsecured  ten-year Senior
Notes at an interest rate of 9.625%.  These notes will mature in August 2007. At
March 29, 2003, the outstanding balance of the notes was $44,739,000, a decrease
of $3,080,000 from the balance at June 29, 2002.

On March 20, 2003,  the  Company's  $50 million  credit  facility  with GMAC was
amended. The facility remains 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 of 2007. The amended credit  facility also includes  GMAC's consent to the
sale of the Company's Catawba Plant, the closing of which was announced 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 inventory of the Company. 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 $13.4 million
and $11.4  million as of March 29, 2003 and June 29, 2002,  respectively.  As of
March 29, 2003, the revolver  availability was approximately $34 million and the
Company  was  in  compliance  with  all  covenants.   Management   believes  the
availability under the Company's 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 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 nine months  ended  March 29, 2003 and the year ended June 29,  2002,
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 General and Administrative Expense.


NOTE D - RESTRUCTURING AND IMPAIRMENT CHARGES

During the quarter ended March 29, 2003,  the Company  recorded a  restructuring
charge of $0.4  million on a pre-tax  basis  associated  with the closing of its
Catawba facility as announced on March 5, 2003. The charge was recorded pursuant
to SFAS 146,  "Accounting for Obligations  Associated with Disposal  Activities"
and reflected employee termination costs of approximately $354,000.

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.  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 March 29, 2003 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, 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 nine  months  ended  March 29,  2003,  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.


NOTE F - STOCK OPTIONS

The Company  participates  in the Delta  Woodside  Industries  Inc. Stock Option
Plan.  The Company  applies the intrinsic  value-based  method of accounting for
these stock options, 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. No compensation  cost has been recognized for stock
based  compensation in consolidated net income (loss) for the periods presented,
as all options  granted under the Delta  Woodside  Industries  Inc. Stock Option
Plan had  exercise  prices  which were equal to the market price of the stock on
the date of the grant.  If the Company had  determined  compensation  expense at
fair value, as under SFAS No. 123,  "Accounting  for Stock-Based  Compensation",
the Company's net loss would have been as follows:

<TABLE>
<CAPTION>
                                                            Quarter Ended            Quarter Ended
                                                            March 29, 2003           March 30, 2002
                                                            -------------------      ------------------

<S>                                                         <C>                      <C>
Net loss, as reported                                       $          (1,100)       $         (2,453)

Less total stock based compensation expense
   determined under fair value based method, net
   of related tax effects                                                 (79)                    (84)
                                                            -------------------      ------------------

Pro forma net loss                                          $          (1,179)       $         (2,537)
                                                            -------------------      ------------------

</TABLE>

NOTE G - SUBSEQUENT EVENT

Following  the end of its fiscal 2003 third  quarter,  the  Company  completed a
"Modified  Dutch  Auction"  tender offer for a portion of its Senior Notes.  The
offer  commenced on March 5, 2003 and expired on April 2, 2003 as scheduled.  As
of the expiration, a total principal amount of $12,798,000 of notes was tendered
by holders of the notes and accepted for payment by the Company.  The  "Clearing
Price"  of $790 per  $1,000  principal  amount  was paid on April 7, 2003 to all
holders who tendered their notes. The Company paid a total of $10,110,420,  plus
accrued interest of $123,181, to repurchase notes. To fund this transaction, the
Company used funds borrowed  under its revolving  credit  facility.  The Company
expects to record a gain of $2.3 million in the fourth  quarter  related to this
transaction.



                                       8
<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 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  manufacturers  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  March 29,  2003 were  $46.5  million  as
compared  to $41.2  million in the same  quarter of the prior  fiscal  year,  an
increase  of 12.9%.  Net sales for the nine  months  ended  March 29,  2003 were
$128.5 million an increase of 5.1% over net sales of $122.3 million for the nine
months ended March 30, 2002. The sales  increases  were  primarily  increases in
units  along with a slight  increase  in average  sales  price due to changes in
product mix.

Gross profit was $2.8 million and 6.1% of sales for the third  quarter of fiscal
year 2003.  This  compares to gross  profit of $1.1 million and 2.6% of sales in
the prior year third  quarter.  Gross profit for the nine months ended March 29,
2003 was $12.1 million or 9.4% of sales compared to gross profit of $3.8 million
or 3.1% of sales for the nine months ended March 30,  2002.  In both the current
quarter  and the nine months  ended March 29,  2003,  the  improvement  in gross
profit was the  result of lower  product  costs  driven  primarily  by lower raw
material costs, improved operating schedules,  and a shift in product categories
to products that yield higher profit margins.  These improvements were partially
offset in the  current  quarter  by  dramatically  higher  energy  costs,  price
pressure on certain core products,  and poor  manufacturing  efficiencies in the
early part of the quarter associated with changes in product mix.

Selling,  general and administrative expense (SG&A) was $3.0 million and 6.4% of
net sales for the third  quarter of fiscal  year 2003  compared  to SG&A of $3.0
million and 7.4% of net sales for the prior year third  quarter.  SG&A  expenses
for the nine months ended March 29, 2003 were $8.4 million and 6.6% of net sales
compared to $8.5  million or 6.9% of net sales for the nine  months  ended March
30,  2002.  The  improvement  in SG&A as a  percent  of sales is  attributed  to
increased sales volume.

The Company reported an operating loss of $0.5 million in the current year third
quarter  compared to an operating  loss of $2.0 million in the third  quarter of
fiscal  2002.  For the nine months ended March 29,  2003,  the Company  reported
operating  profit of $3.8 million  versus an operating loss of $13.2 million for
the nine months ended March 30, 2002.  The  operating  loss for the current year
quarter included restructuring charges of $0.4 million related to the closing of
the Company's  Catawba  facility.  The operating loss for the previous year nine
month period included asset impairment and restructuring charges of $8.7 million
related to the closing of the  Company's  Furman  facility.  Excluding the asset
impairment and restructuring  charge during the first nine months of fiscal year
2002, the  improvement in operating  profit was primarily due to the improvement
in gross profit as discussed above.

                                       9
<PAGE>

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

Interest expense was $1.3 million for the quarter ended March 29, 2003, compared
to $2.4 million for the prior year quarter. Interest expense for the nine months
ended March 29, 2003 was $4.1  million  versus $7.4  million for the nine months
ended March 30, 2002. 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 March 30, 2002 was a
$0.5 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 nine months
ended March 29, 2003 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 current year quarter ending March 29, 2003.

The income tax benefit for the quarter  was $0.7  million.  This  compares to an
income tax benefit of $1.3 million in the previous  year  quarter.  For the nine
months ended March 29, 2003 income tax expense was $369,000 versus a tax benefit
of $7.0 million for the nine months ended March 30, 2002. The effective tax rate
for the three  months and nine months  ended  March 29,  2003 was  approximately
38.5%.

The Company  reported a net loss of $1.1 million for the quarter ended March 29,
2003  compared to a net loss of $2.4  million  for the  quarter  ended March 30,
2002.  Net income for the nine  months  ended  March 29,  2003 was $0.6  million
compared  to a net loss of $13.0  million  for the  previous  year's nine months
ending March 30, 2002.  Net income for the current nine 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 nine months  ended
March 30, 2002 included asset impairment and restructuring costs associated with
closed  facilities  of $5.6  million  on an after  tax  basis and a gain of $0.3
million on an after tax basis from the Company's  repurchase of a portion of its
9.625% Senior Notes.

For the nine months ended March 29, 2003, the Company  generated $4.2 million in
cash from  operations.  The principal uses of cash were capital  expenditures of
$3.8 million,  net of $0.8 million in proceeds from the disposal of assets,  and
$1.8 million for the retirement of debt. The  outstanding  borrowings  under the
GMAC revolver  increased  $2.0 million and cash  increased  $0.6 million for the
nine  months  ended March 29,  2003.  The  Company  was in  compliance  with all
covenants at the end of the  quarter.  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.  The cost of this  project  makes up the
majority of the approximately $7.5 million in capital expenditures  expected for
fiscal year 2003 and the majority of the approximately  $8.0 million planned for
capital expenditures in each of fiscal years 2004 and 2005.

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
March 29, 2003, the outstanding balance of the notes was $44,739,000, a decrease
of $3,080,000 from the balance at June 29, 2002.

Following  the end of its fiscal 2003 third  quarter,  the  Company  completed a
"Modified  Dutch  Auction"  tender offer for a portion of its Senior Notes.  The
offer  commenced on March 5, 2003 and expired on April 2, 2003 as scheduled.  As
of the expiration, a total principal amount of $12,798,000 of notes was tendered
by holders of the notes and accepted for payment by the Company.  The  "Clearing
Price"  of $790 per  $1,000  principal  amount  was paid on April 7, 2003 to all
holders who tendered their notes. The Company paid a total of $10,110,420,  plus
accrued interest of $123,181, to repurchase notes. To fund this transaction, the
Company used funds borrowed  under its revolving  credit  facility.  The Company
expects to record a gain of $2.3 million in the fourth  quarter  related to this
transaction.

                                       10
<PAGE>

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

On March 20, 2003,  the  Company's  $50 million  credit  facility  with GMAC was
amended. The facility remains 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 of 2007. The amended credit  facility also includes  GMAC's consent to the
sale of the Company's Catawba Plant, the closing of which was announced 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 inventory of the Company. 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 $13.4 million
and $11.4  million as of March 29, 2003 and June 29, 2002,  respectively.  As of
March 29, 2003, the revolver  availability was approximately $34 million and the
Company  was  in  compliance  with  all  covenants.   Management   believes  the
availability under the Company's 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 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 nine months  ended  March 29, 2003 and the year ended June 29,  2002,
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 General and Administrative Expense.

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.


RECENT ACCOUNTING PRONOUNCEMENTS

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.

                                       11
<PAGE>

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

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, 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.

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.

In December  2002,  the FASB issued  SFAS No. 148,  "Accounting  for Stock Based
Compensation  - Transition  and  Disclosure,  an amendment of FASB Statement No.
123".  This  Statement  amends  SFAS  No.  123,   "Accounting  for  Stock  Based
Compensation"  ("SFAS 123") to provide  alternative  methods of transition for a
voluntary change to the fair value method of accounting for stock based employee
compensation.  In addition,  this Statement amends the disclosure requirement of
SFAS 123 to require  prominent  disclosures in both annual and interim financial
statements.  Certain of the  disclosure  modifications  are required for interim
periods beginning after December 31, 2002 and are included in the notes to these
condensed consolidated financial statements.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure  Requirements for Guarantees,  Including  Indirect  Guarantees of
Indebtedness to Others,  an  interpretation of FASB Statements No. 5, 57 and 107
and a rescission of FASB  Interpretation No. 34" ("Fin 45"). This Interpretation
elaborates on the  disclosures to be made by a guarantor  about its  obligations
under guarantees  issued.  FIN 45 also clarifies that a guarantor is required to
recognize,  at inception of a guarantee,  a liability  for the fair value of the
obligation undertaken. The initial recognition and measurement provisions of FIN
45 are  applicable to guarantees  issued or modified after December 31, 2002 and
are  not  expected  to  have  a  material  effect  on  the  Company's  financial
statements.  The disclosure  requirements are effective for financial statements
of interim and annual reporting periods after December 31, 2002.

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

                                       12
<PAGE>

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:  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:  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
March 29, 2003 and June 29,2002,  the Company had approximately  $7.9 million in
net deferred tax liabilities.

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

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 March 29, 2003, a 10% decline in market price of the Company's fixed price
contracts would have had a negative impact of approximately  $1.1 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 March 29,  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 March 29, 2003, an
increase  in  the  interest  rate  of  1%  would  have  a  negative   impact  of
approximately  $134,000  annually.  As of June  29,  2002,  an  increase  in the
interest rate of 1% would have had a negative impact of  approximately  $114,000
annually.  The increase in the potential  negative  impact from June 29, 2002 to
March 29, 2003 is due to the increase 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.

                                       13
<PAGE>

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.


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

4.3.1.4  Consent and Amendment to Credit Agreement and Other Documents, dated as
         March 20, 2003.

99.1     Certificate Pursuant to Section 906 of the Sarbanes-Oxley  Act of 2002,
         signed by William F. Garrett, dated May 12, 2003.

99.2     Certificate  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
         signed by William H. Hardman, dated May 12, 2003.

b) Form 8-K dated  March 5, 2003  reporting  Other  Events was filed on March 6,
   2003.



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







                                       14
<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    May 12, 2003                           By:/s/ W.H. Hardman, Jr.
      ------------------------                 ---------------------------
                                               W.H. Hardman, Jr.
                                               Chief Financial Officer










                                       15
<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       May 12, 2003                      By: /s/ William F. Garrett
      -----------------------------          ------------------------------
                                             William F. Garrett
                                             President & Chief Executive Officer




                                       16
<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      May 12, 2003                       By: /s/ W. H. Hardman, Jr.
      -----------------------------          --------------------------------
                                             W.H. Hardman, Jr.
                                             Chief Financial Officer








                                       17