<PAGE>
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C. 20549

                                  FORM 10-KSB

(Mark One)
       |X|    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                  For the fiscal year ended December 31, 2000

                                      OR

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

                For the Transition period from        to
                                               ------    -----

                        Commission File Number: 0-24554

                      CANTERBURY PARK HOLDING CORPORATION
--------------------------------------------------------------------------------
                (Name of small business issuer in its charter)

                 Minnesota                              41-1775532
     --------------------------------          ---------------------------
        (State or other jurisdiction                 (I.R.S. Employer
     of incorporation or organization)              Identification No.)

                             1100 Canterbury Road
                              Shakopee, MN 55379
                          ---------------------------
             (Address of principal executive offices and zip code)

      Registrant's telephone number, including area code: (612) 445-7223

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock,
                                                                $.01 par value

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

Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. |X|

The Company's operating revenues for its most recent fiscal year were
$32,463,416.

On March 20, 2001, the Company had 3,480,332 shares of common stock, $.01 par
value, outstanding.

The aggregate market value of the shares of voting stock held by
non-affiliates of the Company (persons other than directors and officers)
computed at the NASDAQ closing price of $6.625 per share on March 19, 2001 was
approximately $10,173,423.

                      DOCUMENTS INCORPORATED BY REFERENCE

The Company's Proxy Statement for its 2001 Annual Meeting of Shareholders, to
be held on June 7, 2001, is incorporated by reference into Part III of this
Form 10-KSB.


<PAGE>


                      CANTERBURY PARK HOLDING CORPORATION
                           FORM 10-KSB ANNUAL REPORT
                     FOR THE YEAR ENDED DECEMBER 31, 2000

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                              PAGE
                                    PART I

<S>            <C>                                                                             <C>
ITEM 1.        Description of Business.......................................................   3
ITEM 2.        Description of Property.......................................................  12
ITEM 3.        Legal Proceedings.............................................................  13
ITEM 4.        Submission of Matters to a Vote of Security Holders...........................  13

                                    PART II

ITEM 5.        Market for Common Equity and Related Stockholder Matters......................  14
ITEM 6.        Management's Discussion and Analysis of Financial Condition
                     and Results of Operations ..............................................  15
ITEM 7.        Financial Statements..........................................................  24
ITEM 8.        Changes In and Disagreements With Accountants on Accounting
                    and Financial Disclosure.................................................  39

                                   PART III

ITEM 9.        Directors, Executive Officers, Promoters and Control Persons; Compliance
                    With Section 16(a) of the Exchange Act...................................  39
ITEM 10.       Executive Compensation........................................................  39
ITEM 11.       Security Ownership of Certain Beneficial Owners and Management................  39
ITEM 12.       Certain Relationships and Related Transactions................................  39
ITEM 13.       Exhibits and Reports on Form 8-K..............................................  39

SIGNATURES ..................................................................................  40

EXHIBIT INDEX................................................................................  41
</TABLE>

                                      2

<PAGE>


Item 1  DESCRIPTION OF BUSINESS

(a)     BUSINESS DEVELOPMENT

     Canterbury Park Holding Corporation (the "Company") hosts pari-mutuel
wagering associated with live Thoroughbred and Quarter Horse racing at its
facilities in Shakopee, Minnesota (the "Racetrack") and pari-mutuel wagering
on races held at out-of-state racetracks that are televised simultaneously at
the Racetrack ("simulcasting"). Commencing on April 19, 2000, the Company
began operations of its Card Club as discussed below. The Company also derives
revenues from related services and activities, such as concessions, parking,
admissions and programs, and from other entertainment events held at the
Racetrack.

     The Company was incorporated under the laws of Minnesota on March 24,
1994 and acquired the Racetrack on March 29, 1994. On May 6, 1994 the Company
commenced simulcasting operations, which now are generally conducted seven
days per week. Beginning in May 1999, the Company began hosting annual live
horse racing ("live meets") and related pari-mutuel wagering on a seasonal
basis, generally from mid May to late August or early September.

     On April 19, 2000, the Company opened its Canterbury Card Club (the "Card
Club"). At the Card Club patrons compete against each other in various
unbanked card games. The Card Club operates under the authority of legislation
adopted in May 1999 by the Minnesota legislature (the "Card Club Legislation")
and is regulated by the Minnesota Racing Commission. Under the Card Club
Legislation, the Company is authorized to host up to 50 tables where card
games are played and receives a percentage of the wagers or a fee from the
players as its revenue for providing the facility and services. The Card Club
Legislation also specifies that the Racetrack's purse fund and the State of
Minnesota Breeders' Fund receive a total of 10% to 14% of the gross revenue
generated by the Card Club. The initial operations of the Card Club have been
favorable and enabled the Racetrack to increase purse amounts during the 2000
live race meet.

(b)     BUSINESS OF ISSUER

(i)     CARD CLUB AND RACING OPERATIONS

     The Company's racing operations consist of year-round pari-mutuel
wagering on simulcast horse races ("simulcasting") and live meets held on a
seasonal basis beginning in May and concluding in late August or early
September. Thoroughbred and Quarter Horse racing is conducted during the live
meet. The Company also conducted three-day live harness racing meets in 1997
and 1998, and plans to offer two days of live harness racing in September
2001.

       CARD CLUB.

     The Card Club commenced operations on April 19, 2000. It is open 24 hours
per day, seven days per week, offering two types of unbanked card games: poker
games and table games.

     Poker games, including Texas Hold `Em, 7-Card Stud and Omaha, with table
limits ranging between $2 and $30, are offered on a maximum of 33 tables
currently available in the poker room. These games are "unbanked", which
refers to a wagering system or game where the individual participants compete
against each other and not against the house. In an unbanked system or game,
the sponsor is allowed to deduct a percentage from the accumulated wagers and
impose other charges for hosting the activity, but does not have an interest
in the outcome of a game. The sponsor may add additional prizes, awards, or
money to any game for promotional purposes. In the Canterbury Card Club, a
dealer, employed by the Company, regulates the play of the game at each table
and deals the cards, but does not participate in play. The Company collects a
"rake" of 10% of each addition to the "pot", up to a maximum of $4.00 or $4.50
per hand, depending on the game, as its collection revenue. In addition, poker
games offer progressive jackpots for most games. In order to fund the jackpot
pool,

                                      3
<PAGE>

the dealer withholds $1.00 from each final pot which exceeds the minimum of
$15. In poker, the progressive jackpot is won if one player, holding a hand of
Aces over Tens or better, is beaten by a better poker hand. The player with
the Aces over Tens or better is referred to as having a "bad beat" hand and
receives 60% of the progressive jackpot amount. The player who won the poker
hand, receives 20% of the progressive jackpot amount, and the balance of the
jackpot amount is divided evenly among the remaining players at the table.

     Table games are offered currently at 10 tables. Table games include Pai
Gow Poker, Minnesota 21 (a version of blackjack), Super Pan Nine, Caribbean
Stud and Let-It-Ride. Table games are played using a "player pool" system.
"Player pool" means a wagering system or game where wagers lost in a number of
card games may be accumulated into a pool for purposes of enhancing the total
amount paid back to players in any other card game. In such instances, the
sponsor may only serve as custodian of the player pool and may not have an
active interest in any card game. In the table games area of the Card Club,
the amount that the dealer "wins" or "loses" during the course of play is
accumulated in a "Player Pool" to be used to repay players in the form of
promotions, giveaways, prizes or by other means. The Company takes a "rake" of
$.50 to $1.00 per wager, depending on the game, for the Company's collection
revenue. The only table game to offer a progressive jackpot is Caribbean Stud.
The player has the option of playing the jackpot, and has the opportunity to
win some, or all, of the jackpot amount depending upon his hand.

     SIMULCASTING.

     Simulcasting is the process by which live horse races held at one
facility (the "host track") are transmitted simultaneously to other locations
that allow patrons at each receiving location (the "guest track") to place
wagers on the race being broadcast. Monies are collected at the guest track
and the information with respect to the total amount wagered is electronically
transmitted to the host track. In effect, all of the amounts wagered at the
guest track are combined into the appropriate pools at the host track with the
final odds and payouts determined based upon all the monies in the pools.

     The Company offers "full card" simulcast racing (broadcasting of another
racetrack's entire daily live racing program) from up to 20 racetracks per
day, seven days a week, 364 days per year, including Churchill Downs,
Hollywood Park, Santa Anita, Gulfstream Park, Belmont Park and Saratoga
Racecourse. In addition, races of national interest, such as the Kentucky
Derby, Preakness Stakes and Breeders' Cup, supplement the regular simulcast
program. The Company regularly evaluates its agreements with other racetracks
in order to offer the most popular simulcast signals of live horse racing
which is feasible to offer at the Racetrack.

     Under applicable provisions of federal and state law, the Racetrack must
obtain the consent of the state's regulatory authority, and the organization
which represents the majority of the owners and trainers of the horses who
race at the Racetrack, with respect to simulcast operations both as a host and
guest track. In Minnesota such consent must be obtained from the Minnesota
Horsemen's Benevolent and Protective Association (the "MHBPA") and the
Minnesota Racing Commission.

     LIVE RACING.

     The Company conducts live horse racing at its facility generally from May
until late August or early September each year. The Company raced 60 days in
the year 2000, beginning May 20th and ending September 4th, consisting of 34
days of mixed Thoroughbred and Quarter Horse racing and 26 days of
Thoroughbred only racing. In 2001 the Racetrack will conduct 63 live race
days, beginning May 18th and concluding September 23rd. The race meet will
include 31 days of mixed Thoroughbred and Quarterhorse racing, 30 days of
Thoroughbred only racing, and 2 days of live harness racing.

     Currently, Minnesota law requires the Racetrack to schedule a minimum
of 125 days of live racing annually, unless the Minnesota Horsemen's
Benevolent and Protective Association (the "MHBPA") agrees to a lesser number
of live racing days. Since 1995, the MHBPA has agreed to waive the 125-day
requirement and allow the Company to run a minimum of 50 days of live racing
each year. After 2001, no assurance can be given that the MHBPA will agree to
a shorter live meet than the 125-day statutory minimum. If the MHBPA does not

                                      4
<PAGE>

agree to a live meet shorter than 125 days, the Company's operations could be
adversely impacted by a decrease in the daily purses and potential reduction
in quality of horses, attendance and overall handle, as well as increased
operating expenses.

(ii)    SPECIAL EVENTS

     While pari-mutuel horse racing is the Company's principal business, the
Company's facilities are capable of being used for multiple purposes. In an
effort to more fully utilize the property and to generate additional revenues,
the Company has, in each year of its operations, expanded the use of the
grandstand, grounds and parking lot for special events and rentals.

     From 1996 through 2000, a number of non-horseracing events were held,
including snowmobile races, major arts and crafts shows, trade shows,
concerts, motorcycle races, fund raisers, automobile shows and competitions
and private parties. Lilith Fair, an outdoor music event, came to Canterbury
Park in August for three consecutive years: 1997, 1998 and 1999, each year
drawing approximately 30,000 people to the Racetrack. The Company also
conducted two additional major concerts each September in 1998 through 2000.

     In 2000, the facility hosted a snowmobile race weekend and a number of
trade shows. Canterbury Park maintains a reputation as one of the premier
snowmobile racing venues in the world. However, due to the construction and
commencement of the Card Club operation in the year 2000, the available square
footage for special events occurring within the grandstand facility was
reduced. As a result, the Company experienced a reduction in the number and
size of these types of events and a corresponding reduction in special event
revenues in 2000. In October 2000, the Company invested in a semi-permanent
structure, which attaches to the main entrance of the grandstand, referred to
as the "Pavilion". The Pavilion has approximately 18,000 square feet and will
allow the Company to continue to market itself as a venue for large indoor
entertainment events.

(iii)   SOURCES OF REVENUE

        GENERAL.

     The Company's revenues in the year 2000 were principally derived from
pari-mutuel wagering and Card Club operations.

     In pari-mutuel wagering, bettors wager against each other in a pool,
rather than against the operator of the facility or with preset odds. From the
total amount wagered or "handle," the Minnesota Pari-Mutuel Horse Racing Act
(the "Racing Act") specifies the maximum percentage, referred to as the
"takeout," which may be withheld by the Racetrack, with the balance returned
to the winning bettors. The takeout constitutes the Racetrack's primary source
of operating revenue. From the takeout, funds are paid to the State of
Minnesota for pari-mutuel taxes, with additional amounts set aside for purses
and for the "Breeders' Fund," which is a fund apportioned by the Minnesota
Racing Commission ("Racing Commission") among various purposes related to
Minnesota's horse breeding and horse racing industries. The balance of the
takeout remaining after these deductions is commonly referred to as the
"retainage."

     The various forms of pari-mutuel wagering can be divided into two
categories: straight wagering pools and multiple wagering pools, which are
also referred to as "exotic" wagering pools. Examples of straight wagers
include: "win" (a wager on one specific horse to finish first); "place" (a
wager on one specific horse to finish first or second); and "show" (a wager on
one specific horse to finish first, second or third). Examples of exotic
wagers include: "daily double" (a wager in which the bettor selects the horses
that will win two consecutive races); "exacta" (a wager in which the bettor
selects the horses that will finish first and second, in order); "trifecta" (a
wager in which the bettor selects the horses that will finish first, second
and third, in order); and "pick six" (a wager in which the bettor selects the
horses that will finish first in six consecutive races).

     The amount of takeout earned by the Company depends on where the race is
run and the form of wager (straight or exotic). Net revenues from pari-mutuel
wagering on live races run at the Racetrack consist of the total

                                      5
<PAGE>

amount wagered, less the amounts paid (i) to winning patrons, (ii) for purses,
(iii) to the Breeders' Fund and (iv) for pari-mutuel taxes to the State of
Minnesota. Net revenues from pari-mutuel wagering on races being run at
out-of-state racetracks and simulcast to the Racetrack have similar expenses,
but also include a host fee payment to the host track. The host fee is
calculated as a percentage of monies wagered (generally 2.50% to 4.50%) and is
negotiated with the host track and must comply with state laws governing the
host track.

     WAGERING ON LIVE RACES.

     The Racing Act establishes the maximum takeout that may be deducted from
the handle. The takeout percentage on live races depends on the type of wager.
The total maximum takeouts are 17% from straight wagering pools and 23% from
exotic wagering pools. From this takeout, Minnesota law requires deductions
for purses, pari-mutuel taxes and the Breeders' Fund.

     While the Racing Act provides that a minimum of 8.4% of the live racing
handle is to be paid as purses to the owners of the horses, the size of the
purse is subject to further agreement with the horsepersons' associations. The
Breeders' Fund receives 1% of the handle. The pari-mutuel tax applicable to
wagering on all live races is 6% of takeout in excess of $12 million during
the twelve month period beginning July 1 and ending the following June 30.

     The following table sets forth the percentage distribution of each dollar
wagered on live races at the Racetrack, as established by the Racing Act, and
the Racetrack's retainage:

<TABLE>
<CAPTION>
                                                                              LIVE RACING
                                                                 STRAIGHT                     EXOTIC

<S>                                                    <C>           <C>          <C>          <C>
Returned to Winning Patrons                                          83.00%                     77.00%
     Purse (1)                                         8.40%                       8.40%
     Minnesota Breeders' Fund                          1.00                        1.00
     Minnesota Pari-Mutuel Taxes (2)                    .17                         .23
     Racetrack Retainage (1)                           7.43                       13.37
Total Takeout                                                        17.00                      23.00
                                                                ------------               -------------
Total Handle                                                        100.00%                    100.00%
                                                                ============               =============
</TABLE>

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

(1)  Minnesota law provides that the 8.40% purse payment is a minimum. The
     actual percentage, if any, above the minimum is determined between the
     Racetrack and the MHBPA. Any additional amounts paid for purses decrease
     the Racetrack's retainage.

(2)  The current pari-mutuel tax structure exempts the first $12 million of
     takeout during a statutorily mandated twelve-month period. The total
     pari-mutuel tax liability for a twelve-month period will depend upon the
     total takeout during that period.

                                      6
<PAGE>


     WAGERING ON SIMULCAST RACES.

     The amount of takeout from simulcast wagering is determined by the laws
of the state in which the host track is located. In addition, the Racing Act
established a minimum that must be set aside from simulcasting for purse
payments on racing within Minnesota. Different amounts are deducted for purses
from the takeout depending on whether simulcasting occurs during the "Racing
Season," a statutorily defined 25 week period beginning in early May each
year, or outside of the Racing Season. If simulcasting occurs during the
Racing Season, the amount set aside for purses further depends on whether the
simulcasting is part of a full racing card that occurs during the part of the
day that live races are conducted at the Racetrack. For races that are part of
a full simulcast racing card that takes place within the time of live races at
the Racetrack, the amount reserved for purse payout is 8.4%. For simulcasting
conducted during the Racing Season that does not occur within the time period
of live races, the purse is equal to 50% of the takeout remaining after
deductions for pari-mutuel taxes, payments to the Breeders' Fund and payments
to the host racetrack for host track fees. For simulcasting conducted outside
of the Racing Season, the amount that must be contributed to the purses is 25%
of the takeout after deducting an 8% expense factor, pari-mutuel taxes,
payments to the Breeders' Fund and host fee payments to the host racetrack.

     The following table sets forth the approximate percentage distribution of
each dollar wagered for races simulcast at the Racetrack and the Racetrack's
retainage:

<TABLE>
<CAPTION>
                                                              DURING RACING SEASON
                                                              --------------------

                                                                          Not Concurrent
                                                 Concurrent with               with                      Outside of
                                                  LIVE CARD                  LIVE CARD                  RACING SEASON
                                             ------------------         -----------------            ------------------
<S>                                           <C>                        <C>                          <C>
Returned to Winning Patrons (1)                     80.50%                     80.50%                      80.50%

     Minnesota Breeders' Fund                 1.00%                      1.10%                       1.10%
     Minnesota Pari-Mutuel Taxes (2)           .19                        .19                         .19
     Purse (3)                                8.40                       7.39                        1.70
     Host Track Fees (4)                      3.50                       3.50                        3.50
     Racetrack Retainage (3)                  6.41                       7.32                       13.01
Total Takeout                                       19.50                      19.50                       19.50
                                            ------------------          -----------------           ------------------
Total Handle                                       100.00%                    100.00%                     100.00%
                                            ==================          =================           ==================
</TABLE>


(1)  This amount will depend upon the takeout at the host racetrack. This
     percentage will be determined by local and state law applicable to the
     host track, and ranges from 75.0% to 85.0%.

(2)  The current pari-mutuel tax structure exempts the first $12 million of
     takeout during a statutorily mandated twelve-month period. The total
     pari-mutuel tax liability for a twelve month period will depend upon the
     total takeout during that period.

(3)  Although Minnesota law specifies a minimum, the actual percentage is
     determined by agreement between the Racetrack and the MHBPA. Any
     additional amounts paid for purses reduce the Racetrack's retainage.

(4)  Payments to the host track generally range from 2.5% to 4.5% of total
     handle, subject to negotiation with each host track. For purposes of this
     table, the host track fee is assumed to be 3.5%.

                                      7
<PAGE>

     CARD CLUB OPERATIONS

     As discussed above under "Business of Issuer", the Company began
receiving revenues from its Card Club operation on April 19, 2000. The Company
currently receives collection revenue from 33 poker tables and 10 tables
offering table games. Under Minnesota law, the Company is required to pay 10%
of the first $6 million of gross Card Club revenues as purse monies. After
meeting the $6,000,000 threshold, the Company must pay 14% of gross Card Club
revenues as purse monies. Of funds allocated for purses, the Company pays 10%
of the purse monies to the State of Minnesota Breeders' Fund. The remaining
90% of the purse monies is divided between thoroughbred (90%), quarter horse
(9%) and standard bred (1%) purse funds

     OTHER REVENUES

     The Company also derives revenue from other activities such as admissions
and parking fees, as well as from the sale of food and beverage, programs, and
other racing publications. The Company offers advertising signage space
similar to that appearing at many sports stadiums. Finally, additional
revenues are derived from use of the facilities for events such as concerts,
trade and craft shows, snowmobile racing, business meetings, private parties,
horse expositions and sales, boat and automobile storage, community events,
and rental of the parking lot for various automobile activities and vehicle
storage.

(iv)    COMPETITION

     The Company competes with other forms of gaming in the State of
Minnesota, particularly casino-style gambling located on Native American
reservations throughout the State of Minnesota, including a large casino
located approximately three miles from the Racetrack. In addition, the Company
competes against charitable gambling (bingo and pulltabs) and various state
lottery products. The Company also competes with a greyhound racetrack located
approximately 40 miles from the Racetrack at the eastern end of the
Minneapolis-Saint Paul metropolitan area. This greyhound track offers wagering
on live and simulcast dog racing, as well as wagering on simulcasting of
Thoroughbred horse racing. In addition, the Company faces increasing
competition from off-shore and out-of-state simulcast operations illegally
marketing internet and telephone account home wagering systems to Minnesota
residents.

     The Company also competes with other forms of entertainment in the
Minneapolis-Saint Paul metropolitan area, including a wide range of live and
televised professional and collegiate sporting events. Finally, live horse
racing competes with a wide variety of summer attractions, including
amusements parks, sporting events and other local activities.

     The Company also competes with racetracks located throughout the United
States in securing the better quality horses to run at the Racetrack.
Attracting the owners and trainers of better quality horses is largely
influenced by the ability to offer large purses. The Company experiences
significant competition for better quality horses from a racetrack located
near Des Moines, Iowa, as well as racetracks in Chicago, Illinois, which offer
substantially larger purses than the Company. This competition is expected to
continue for the foreseeable future.

(v)     MARKETING

     The Company's primary market is the seven-county Minneapolis-Saint Paul
metropolitan area. Current demographic information indicates that
approximately 2 million adults, age 21 and older, reside within a 50 mile
radius of Shakopee Minnesota. This information does not include adults, ages
18 to 20 years of age, which are also patrons of the Racetrack.

     To support its pari-mutuel horse racing and Card Club businesses, the
Company maintains year-round marketing efforts which are focused on
maintaining the loyalty of live and simulcast patrons and attracting new
racing and Card Club customers. The Company plans substantial marketing of the
Card Club using newspapers, television, the internet, other print media, radio
and direct mail once the remodeling is completed in early May

                                      8
<PAGE>

2001. The Company plans to combine its marketing efforts on communicating the
excitement of wagering on horse racing with card playing. In addition to its
regular advertising program, the Company conducts numerous special promotions
and handicapping contests to increase simulcast patronage, and is implementing
a player rewards program in March of 2001.

     The 2000, combined card club and live racing advertising campaigns
utilized print, radio and television advertising to highlight the attractive,
park-like atmosphere of Canterbury Park, promoting activities for the entire
family, as well as the fun and excitement of live horse racing and card
playing. In addition, the development of a customer database enabled the
Company to increasingly utilize direct mail advertising since 1997.

     Because wagering on horse racing and playing poker card games and table
card games are more complex than many other forms of gaming, such as slot
machines or the various lottery products, the Company continues to develop and
conduct various educational programs, such as complimentary poker and table
game lessons, tours of the Racetrack, wagering classes and contests that it
believes will make the sport of horse racing and pari-mutuel wagering and card
playing more understandable to the general public.

(vi)    REGULATION

     GENERAL.

     The ownership and operation of a horse racetrack in Minnesota is subject
to significant regulation by the Racing Commission under the Racing Act and
the rules adopted by the Racing Commission. The Racing Act provides for the
allocation of each wagering pool to winning bettors, the racetrack, purses,
the State of Minnesota and the Breeders' Fund and empowers the Racing
Commission to license and regulate substantially all aspects of horse racing
in the State. The Racing Commission, among other things, grants operating
licenses to racetracks after an application process and public hearings,
licenses all employees of a racetrack, jockeys, trainers, veterinarians and
other participants, regulates the transfer of ownership interests in licenses,
allocates live race days and simulcast-only race days, approves race programs,
regulates the conduct of races, sets specifications for the racing ovals,
animal facilities, employee quarters and public areas of racetracks, regulates
the types of wagers on horse races and approves significant contractual
arrangements with racetracks, including management agreements, simulcast
arrangements, totalizator contracts and concessionaire agreements. Decisions
by the Racing Commission in regard to any one or more of the foregoing matters
could adversely affect the Company's operations.

     A federal statute, the Interstate Horse Racing Act of 1978, also provides
that a racetrack must obtain the consent of the group representing the
majority of the horsepersons (owners and trainers) of the horses racing at the
racetrack, and the consent of the state agency regulating the racetrack, in
order to transmit simulcast signals of its live races or to receive and use
simulcast signals from other racetracks. The Company has obtained the consent
of the MHBPA and Minnesota Racing Commission for receiving and sending
simulcasting signals.

     ISSUANCE OF CLASS A AND CLASS B LICENSES TO THE COMPANY.

     The Racing Commission issued a Class A License to the Company on April
27, 1994. The Class A License allows the Company to own and operate the
Racetrack. The Class A License is effective until revoked or suspended by the
Racing Commission, or relinquished by the licensee. The fee for a Class A
License is $10,000 per calendar year.

     The Racing Commission issued a Class B License to the Company on April
27, 1994. The Class B License allows the Company to sponsor and manage horse
racing on which pari-mutuel wagering is conducted at its Class A licensed
racetrack and on other horse races run at out-of-state locations as authorized
by the Racing Commission. The Class B License is renewable each year by the
Racing Commission after a public hearing (if required by the Racing
Commission). The Company's Class B License was renewed for the 2001 season in
December 2000. The fee for a Class B License is $100 for each assigned race
day on which live racing is actually conducted and $50 for each day on which
simulcasting is authorized and actually takes place.

                                      9
<PAGE>

     The Racing Commission issued an additional Class B License to the Company
on January 19, 2000. This Class B License allows the Company to host unbanked
card games. The Class B License is renewable each year by the Racing
Commission after a public hearing (if required by the Racing Commission). The
fee for this Class B License is $10,000 per calendar year.

     LIMITATION ON THE NUMBER OF CLASS A AND CLASS B LICENSES.

     Pursuant to the Racing Act, so long as the Racetrack maintains its Class
A License, no other Class A License may be issued in the seven county
metropolitan area (the counties of Hennepin, Ramsey, Washington, Scott,
Dakota, Anoka and Carver), except the Racing Commission may issue an
additional Class A License within the seven county metropolitan area, provided
that the additional license may only be issued for a facility which, among
other conditions, is located more than 20 miles from the Racetrack, contains a
track no larger than five-eighths of a mile in circumference, and is used
exclusively for Standardbred (harness) racing. Therefore, as long as the
Company holds the Class A License, only the Company may own and operate a
racetrack in the seven county metropolitan area where Thoroughbred Horses and
Quarter Horses may be raced.

     LIMITATION ON OWNERSHIP AND MANAGEMENT OF AN ENTITY WHICH HOLDS A CLASS A
LICENSE AND/OR CLASS B LICENSE.

     The Racing Act requires prior Racing Commission approval of all officers,
directors, 5% shareholders, or other persons having a present or future direct
or indirect financial or management interest in any person applying for a
Class A and Class B license, and if a change of ownership of more than 5% of
the licensee's shares is made after an application is filed or the license
issued, the applicant or licensee must notify the Racing Commission of the
changes within five days of this occurrence and provide the information
required by the Racing Act.

     CARD CLUB REGULATION.

     The Racing Commission is authorized by law to regulate Card Club
operations. The law required that the Company submit a plan of operation for
card playing activities to the Racing Commission prior to receiving its Class
B license to operate the Card Club. The operating plan received final approval
and the Class B license was granted on January 19, 2000. The law required that
the Company reimburse the Minnesota Racing Commission for it's actual costs,
including personnel costs, of regulating the Card Club.

     LOCAL REGULATION.

     The Company's operations are subject to state and local laws,
regulations, ordinances and other provisions affecting zoning and other
matters which may have the effect of restricting the uses to which the
Company's land and other assets may be used. Also, any development of the
Racetrack site will, among other things, be subject to applicable zoning
ordinances and require approval by the City of Shakopee and other authorities
and there can be no assurance such approvals will be obtained.

(vii)   EMPLOYEES

     At March 20, 2000, the Company had approximately 340 full-time employees
and 470 part-time employees. On a seasonal basis the Company adds
approximately 120 full-time and 450 part-time employees for live racing
operations from early May until early September. The Company's management
believes its employee relations are good.

                                      10
<PAGE>

(viii)  EXECUTIVE OFFICERS

     The executive officers of the Company, their ages and their positions
with the Company are as follows:

<TABLE>
<CAPTION>
NAME                                AGE              POSITION WITH COMPANY
----                                ---              ---------------------
<S>                                 <C>

Randall D. Sampson                  42               President, Chief Financial Officer, and
                                                     General Manager

Michael J. Garin                    45               Vice President of Hospitality

John R. Harty                       56               Vice President of Marketing

Mark A. Erickson                    44               Vice President of Facilities

Deborah D. Giardina                 48               Vice President of Card Club Operations
</TABLE>
-------------------

     Randall D. Sampson has been President and Chief Financial Officer since
the formation of the Company in March 1994 and General Manager since September
1995. He also serves as a director of the Thoroughbred Racing Association of
North America and Communications Systems, Inc. Mr. Sampson is the son of
Curtis A. Sampson, the Company's Chairman of the Board who is a holder of
approximately 31% of the Company's common stock.

     Michael J. Garin has been Vice President of Hospitality since May of
1997. He had served as President of Canterbury Park Concessions, Inc. since
April of 1994.

     John R. Harty was hired as Vice President of Marketing in February 2000.
John served as Vice President of Sales and Marketing for Kim and Sun Hosiery
in Philadelphia prior to joining Canterbury Park. He was employed by Sun
Hockey as its President from 1997 until 1998, and Vice President of Sales and
Marketing from 1992 through 1996.

     Mark A. Erickson has served as Vice President of Facilities since May
1997. He was the Director of Facilities from April 1994 until April 1997.

     Deborah D. Giardina joined the Company in November 1999 as Vice President
of Card Club Operations. From June 1995 until November 1999 Deborah was the
Poker Room Manager for Grand Casino Coushatta in Kinder, Louisiana.

                                      11
<PAGE>

ITEM 2.  DESCRIPTION OF PROPERTY

     GENERAL.

     The facility, which is operated under the name "Canterbury Park Racetrack
and Card Club," is a modern facility, generally comparable to other major
racetracks located throughout the country. The Racetrack has a patron capacity
of approximately 10,000 within an enclosed grandstand, and a maximum patron
capacity of over 30,000 including the outside areas around the grandstand. The
grandstand and most public outdoor areas contain numerous pari-mutuel windows,
odds information boards, video monitors, concessions stands and other
amenities. The audio/visual system includes over 600 television monitors with
most areas providing multi-screen viewing of the races.

     The facility is located approximately 25 miles southwest of downtown
Minneapolis. The area immediately surrounding the Racetrack consists primarily
of a partially developed industrial park and farm land. However, the Racetrack
is in reasonable proximity to a number of major entertainment destinations
including: Valleyfair, an amusement park about two miles from the Racetrack
which annually attracts approximately 1.3 million visitors during the spring
and summer; the Renaissance Festival, a seven-weekend late summer attraction
attracting approximately 340,000 visitors, located about five miles from the
Racetrack; and Mystic Lake Casino, located about three miles from the
Racetrack, which draws approximately 5.2 million patrons annually.
Approximately 20 miles from the Racetrack is the Mall of America, the largest
enclosed shopping mall in the United States, which attracts approximately 42.5
million visitors per year.

     RACING SURFACES.

     The racing surfaces consist of a one-mile oval dirt/limestone track and a
7/8 mile oval turf course. The dirt track includes a mile and one-quarter
front stretch chute, a 6-1/2 furlong backstretch chute and a quarter horse
chute, and is lighted for night racing.

     GRANDSTAND.

     The grandstand is a modern, air-conditioned, enclosed structure of
approximately 275,000 square feet with a variety of facilities on six levels.
The Lower Level contains space for support functions such as jockey quarters,
administrative offices, Racing Commission offices, the mutuels department,
concession and maintenance offices, first aid, mechanical and electrical
rooms. The Track Level includes mutuels windows, restrooms, a variety of
concession stands and other services. The Card Club currently occupies 15,828
square feet of track level. The Card Club will increase to 27,000 square feet
upon completion of the expansion currently underway. The Mezzanine Level
contains 1,320 fixed seats in a glass-enclosed, air-conditioned area and an
additional 3,000 seats located outside. In addition to the seats, the
Mezzanine Level contains mutuel windows, restrooms, concession stands and
other guest facilities. A portion of the mezzanine level is currently being
converted into a simulcast center to be used during live racing, and for
banquets and other events during the off-season. The Kitchen Level is an
intermediate level located between the Mezzanine and Clubhouse floors; it
contains a full-service kitchen which can support a full dining menu for the
track-side dining terraces on the Clubhouse Level and to prepare food for the
other concession areas. The Clubhouse Level is a multi-purpose area serving as
a simulcast center during wagering sessions on televised races, as well as a
full-service dining area during the live racing season. The Clubhouse Level
includes 325 trackside tables, each equipped with a television set, with a
total seating capacity of 1,200 patrons and an additional 1,000 seats are
located in lounges located throughout the area. An additional feature of the
Clubhouse Level is a special club area, which includes 225 dining seats, a
party room and a large bar and lounge. The Press Box/Officials' Level is
located in the roof trusses over the Clubhouse and contains work areas for the
press, racing officials, closed-circuit television, photo-finish and the track
announcer. In addition, the grandstand was structurally built to accommodate
skyboxes under the Press Box/Officials' Level, although none have yet been
constructed. Escalators and elevators are available to move patrons among the
various levels within the grandstand.

                                      12
<PAGE>

     OTHER VIEWING AREAS.

     In addition to the grandstand, patrons can watch races from the following
outdoor areas: the apron, or standee ramp, between the grandstand and the
racetrack and a large picnic area immediately north of the grandstand. These
areas have concession stands and mutuel windows nearby.

     GROUNDS; SADDLING PADDOCK AREA.

     The grounds surrounding the grandstand are extensively landscaped.
Located near the main entrance behind the grandstand is a European-style
paddock area where patrons can observe the jockey mounting and the post
parade.

     BARN AND BACKSIDE FACILITIES.

     The stable area consists of 33 barns with a total of approximately 1,650
stalls. In the stable area, there are 216 dormitory rooms for the grooms and
others working at the Racetrack. The stable area also contains a combination
racing office and cafeteria/recreation building for stable personnel, two
blacksmith buildings and a one half mile training track.

     PARKING.

     Approximately 7,500 paved parking spaces are available for patron and
employee automobiles at the Racetrack, including parking spaces that are
reserved for physically challenged patrons. The Racetrack also has unpaved
areas available for overflow parking for approximately 5,000 additional
automobiles. Areas are also reserved for bus parking.

     INSURANCE.

     The Company maintains insurance on its facilities in amounts it believes
are sufficient.

     OTHER PROPERTIES.

     Approximately 80 acres of the 355 acres owned by the Company are not
necessary for current operations. This property, adjacent to the Racetrack, is
undeveloped and could be sold in whole or in part, depending upon future
opportunities. The 355 acres includes 30 acres of undeveloped land adjacent to
Canterbury Park which was purchased on August 18, 1997 for investment or
future development. The Company regularly evaluates other business activities
and development opportunities that would maximize the use of the real estate
surrounding the Racetrack and which would complement the Company's primary
business of horse racing.

ITEM 3.  LEGAL PROCEEDINGS

     Not Applicable.

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

     Not Applicable.

                                      13
<PAGE>

                                    PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a)     MARKET INFORMATION

     The Company's Common Stock is traded on the NASDAQ Stock Market under the
symbol TRAK. The table set forth below indicates the high and low trade prices
for the Common Stock for the years ended December 31, 2000 and 1999. These
prices indicate interdealer prices without retail markup, markdowns or
commissions.

<TABLE>
<CAPTION>
                                              2000                                     1999
                                  ------------------------------          -------------------------------
                                     High                Low                High                 Low
                                  ------------         ---------          ----------          -----------

COMMON STOCK

<S>                               <C>                  <C>                <C>                 <C>
First Quarter                     $ 8 1/2              $ 5 1/16           $ 7 3/4             $ 4 1/8
Second Quarter                      11 15/16             6 9/16             6 1/4               3 1/2
Third Quarter                       9 3/8                7 1/2              5 1/2               4 11/16
Fourth Quarter                      8 3/8                7                  6 1/8               4 7/8
</TABLE>


(b)     HOLDERS

     At March 19, 2001, the Company had approximately 481 holders of record of
its common stock. In addition, on that date a depository company held
approximately 1,646,000 shares as nominees for an estimated 1,400 beneficial
holders.

(c)     DIVIDENDS

     The Company has not paid any dividends on its common stock and does not
anticipate paying any in the foreseeable future. The Company's current loan
arrangements with a commercial bank prohibit the payment of dividends without
the bank's consent.

                                      14
<PAGE>

ITEM 6   MANAGEMENT'S DISCUSSION AND ANALYSIS

GENERAL

     Canterbury Park Holding Corporation (the "Company") owns and operates
Canterbury Park Racetrack and Card Club in Shakopee, Minnesota. The business
of the Company includes pari-mutuel horse racing, unbanked card games,
facility rental for special events and vehicle storage, and food and beverage
operations. The company's revenues for the twelve months ended December 31,
2000 were derived primarily from Card Club revenues and pari-mutuel take-out
on live races and races simulcast year-round to Canterbury Park from
racetracks throughout the country. The Company's revenues for the twelve
months ended December 31, 1999 were derived primarily from pari-mutuel
activities.

     The Racetrack is the only pari-mutuel horse racing facility in the State
of Minnesota. The Racetrack earns revenues from pari-mutuel take-out on live
races and races simulcast year-round to Canterbury Park from racetracks
throughout the country. The Company earned pari-mutuel take-out during live
race meets featuring thoroughbred and quarter horse racing. In 2000 the
Company conducted 365 days of simulcast racing, including 60 days of live
racing. In 1999 the Company conducted 364 days of simulcast racing including
56 days of live racing. The live race meets in 2000 and 1999 commenced in the
month of May and concluded in September of 2000 and August of 1999,
respectively. During live race meets, the Company televises its races to
out-of-state racetracks around the country and the Company earns additional
pari-mutuel revenue on wagers placed at the out-of-state racetracks.

     The Canterbury Card Club (the "Card Club") is the only facility in the
State of Minnesota given the legislative authority to host unbanked card games
in which players compete against each other and not against the house. The
Company receives a percentage of the wagers or a fee from the players as
compensation for providing the Card Club facility and services. Card Club
operations commenced on April 19, 2000 and contributed significantly to
revenues in the second, third and fourth quarter of fiscal year 2000. The Card
Club is open twenty-four hours a day, seven days a week.

     In addition to pari-mutuel and card club revenues, the Company generates
revenues from concession sales, admissions, parking, publication sales,
special events, facility rental, advertising and other sources.

     The Minnesota Racing Commission is authorized by Minnesota law to
regulate Card Club and horse racing operations. The law requires that up to
14% of the gross revenue generated by the Card Club be paid to the Racetrack's
purse fund and the State of Minnesota Breeders' Fund. The Card Club's
operating plan was approved by the Minnesota Racing Commission on January 19,
2000. The Company hired a vice president of operations for the Card Club in
November 1999 and hired management and supervisory personnel for the Card Club
throughout 2000. The Company conducted an eight-week training school for card
dealers which commenced in late January 2000. The 15,828 square foot Card
Club, constructed within the Racetrack grandstand facility, was completed on
schedule in mid-April 2000. Expenditures related to the construction of the
Card Club and enhancements to the facility were approximately $2.3 million.
The Company entered into a lending agreement with Bremer Bank to provide term
financing for approximately 75% of the total estimated costs of construction.
The loan, with an initial principal balance of approximately $1,587,000, was
paid off in December 2000. Expenditures related to the acquisition of
furniture, fixtures, equipment and supplies were approximately $700,000 and
were funded with current cash flows. In March 2001, the Company began
construction of an expansion of the Card Club to allow for the maximum number
of 50 tables allowed by Minnesota law. The Company currently utilizes 41
tables. The expansion is expected to be completed on May 1, 2001. The
estimated total cost for construction and related furniture, fixtures and
equipment of $1,000,000 will be funded with current cash flows.

                                      15
<PAGE>

     In the twelve months ended December 31, 2000 the Card Club operation
generated net income of approximately $549,000 after incurring significant
non-recurring expenses related to the startup of the Card Club. These
non-recurring expenses included the development of the comprehensive operating
and marketing plans, recruiting and training of Card Club management, dealers
and other personnel, and development of security, surveillance and other
internal control systems required to safeguard the public and Card Club
assets.

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2000 AND
DECEMBER 31, 1999


     Total operating revenues for the year ended December 31, 2000 were $32.5
million, an increase of $12.2 million or 59.7% compared to total operating
revenues of $20.3 million for the year ended December 31, 1999. Pari-mutuel
revenues increased 1.1% in fiscal year 2000 compared to fiscal year 1999 and
concession revenues increased 24.1%. The increase in concession revenues is
due primarily to sales of food and beverage in the Card Club. Concession
revenues also increased due to four additional live racing days in 2000.
Discussions of the changes in card club and pari-mutuel revenues follow.

     Total Card Club revenues were approximately $11.3 million for the period
from April 19, 2000 to December 31, 2000. The Company receives a percentage of
the wagers or a fee from the players as compensation for providing the Card
Club facility and services, referred to as the "collection revenue", which
totaled $11.0 million in 2000. In addition, the Company is authorized by law
to retain a specified percentage of the jackpot fund collections as
reimbursement for administrative costs of maintaining the jackpot funds. The
card club also charges enrollment fees for dealer training school and collects
entry fees for card club tournaments.

     The Card Club is divided into two areas, the table games area (referred
to as the "California Room") and the poker game area. The average daily
collection amount per game is dependent upon the number of tables utilized to
offer the game. Patron demand determines the number of tables to be used for a
specific game. At December 31, 2000, there were a total of 10 tables in the
California room. One table is dedicated to Caribbean Stud and one table is
dedicated to Let It Ride. There were 33 poker tables at December 31, 2000. The
expansion of the Card Club to the maximum 50 tables allowed by law, will
increase the availability of tables used for California games to 17. The
remaining 33 tables will be dedicated to poker games.

     The following table summarizes Card Club collection revenue for the year
ended December 31, 2000.

SUMMARY OF CARD CLUB COLLECTION REVENUE DATA:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
                                       Revenue Year       Number of          Average
                                          Ended           Days Game       Revenue Per
CARD CLUB GAME                          12/31/00           Offered             Day
------------------------------------ ----------------- ---------------- ---------------
<S>                                      <C>                    <C>          <C>

POKER GAMES

     Hold `Em                            $4,367,000             255          $17,100
     7 Card Stud                          2,680,000             255           10,500
     Omaha                                  482,000             255            1,900
                                     -----------------                  ---------------
               Total Poker Games          7,529,000                           29,500
                                     -----------------                  ---------------
TABLE GAMES

     Pai Gow Poker                        1,633,000             255              6,400
     MN 21 (blackjack)                      801,000             255              3,100
     Super Pan Nine                         680,000             255              2,700
     Let It Ride                            314,000             111              2,800
     Caribbean Stud                          76,000              43              1,800
                                     -----------------                  ---------------
               Total Table Games          3,504,000                             17,000
                                     -----------------                  ---------------
                         Total          $11,033,000             255            $43,000
                                     ================= ================ ===============
</TABLE>

                                      16
<PAGE>

     The average daily revenue figures in the table above reflect the fact
that upon the card club's opening, the club operated at or near capacity for
several months, referred to as its "honeymoon period". The honeymoon period
coincided with the Racetrack's live race meet, which ran from May until early
September in 2000. While the average daily revenue for the Card Club has
decreased to approximately $40,000 overall during the fourth quarter, the
Company anticipates that card club revenue will generally increase during the
Racetrack's live race meet.

     The following table summarizes pari-mutuel operating data for the years
ended December 31, 2000 and 1999:

SUMMARY OF PARI-MUTUEL OPERATING DATA:

<TABLE>
<CAPTION>
                                                                        2000                            1999
                                                                ----------------------         -----------------------
<S>                                                                         <C>                             <C>
       RACING DAYS
            Simulcast only days                                              305                            308
            Live and simulcast days                                           60                             56
                                                                ----------------------         -----------------------
                                      TOTAL RACING DAYS                      365                            364

       ATTENDANCE

            Simulcast only days                                          127,000                        133,000
            Live and simulcast days                                      233,000                        209,000
                                                                ----------------------         -----------------------
                                      TOTAL ATTENDANCE                   360,000                        342,000

       ON-TRACK HANDLE

            Simulcast only days                                 $     44,102,000               $     45,549,000
            Live and simulcast days
                Live racing                                           15,673,000                     13,898,000
                Simulcast racing                                      13,154,000                     12,779,000
       OUT-OF-STATE LIVE HANDLE                                        9,647,000                     10,427,000
                                                                ----------------------         -----------------------
                                      TOTAL HANDLE              $     82,576,000               $     82,653,000

       AVERAGE DAILY ATTENDANCE

            Simulcast only days                                              416                            432
            Live and simulcast days                                        3,883                          3,732

       ON-TRACK PER CAPITA WAGERING

            Simulcast only days                                 $            347               $            342
            Live and simulcast days                                          124                            128

       ON-TRACK AVERAGE DAILY HANDLE

            Simulcast only days                                 $        145,000               $        148,000
            Live and simulcast days                                      480,000                        476,000

</TABLE>

     Total pari-mutuel revenues increased 1.1% to approximately $15,609,000 in
2000 from $15,438,000 in 1999. Total attendance for live and simulcast racing
increased by 5.3% to 360,000 during the twelve months ended December 31, 2000,
from 342,000 during the twelve months ended December 31, 1999. Total on-track
handle increased approximately 1.0% to $72,929,000 in 2000 from $72,226,000 in
1999. However, the total on-track per capita wager for fiscal year 2000 was
down 3.8% to $203 from $211 for fiscal year 1999. Handle wagered at
out-of-state locations decreased 7.5% or $780,000 compared to 1999. Handle
wagered by out-of-state locations on the Claiming Crown races on August 6,
2000 was $1.4 million, unchanged from out-of-state wagering on the 1999
Claiming Crown races.

     Pari-mutuel revenues related to simulcast racing decreased 1.1% to
$11,722,000 in 2000 from $11,858,000 in 1999. This change was consistent with
the change in total simulcast handle, which decreased to $57,256,000 in 2000,
down from $58,328,000 in 1999.

                                      17
<PAGE>

     On-track wagering on live races at the Racetrack increased by $1,775,000,
or 12.8%, to $15,673,000 in 2000 from $13,898,000 in 1999, causing pari-mutuel
revenue related to live racing to increase by 13.4% to $3,304,000 in 2000 from
$2,913,000 in 1999. This increase is primarily due to an increase in the
number of live race days to 60 from 56 in 1999. An increase of 4.0% in average
daily attendance in 2000 compared to 1999 on days when both simulcast and live
racing were conducted resulted in an increase in average daily handle of
$4,075 or 0.9%.

     Pari-mutuel revenue from simulcasting the Racetrack's live races to
out-of-state locations totalled approximately $253,000 in 2000 compared to
$280,000 in 1999. The Racetrack receives amounts ranging from 2.50% to 3.00%
of amounts wagered at out-of-state racetracks as a "guest fee". The decrease
in revenues is attributable to the decrease in out-of-state handle as
discussed above.

     Revenues recognized on proceeds from winning pari-mutuel tickets which
were not presented for payment within one year of the end of the respective
race meets decreased to approximately $330,000 in 2000 compared to $387,000 in
1999.

     Other operating revenue decreased $38,000 or 5.0% to $734,000 in fiscal
year 2000. This decrease was primarily related to reduced revenues from space
rental for special events, which decreased from approximately $320,000 in 1999
to $166,000 in 2000. This decrease was due partly to the end of the Lilith
Fair Tour in 1999 and to a reduction of the number of events in 2000 due to
the construction of the Card Club during the first and second quarters of
2000. The construction of the Card Club on track level of the grandstand
reduced the available square footage for indoor events by approximately 16,000
square feet. The Company invested in a semi-permanent structure in October of
2000, which added 18,000 square feet to the facility to accommodate larger
indoor events. Increases in advertising revenues, check cashing and ATM fees,
and miscellaneous revenue from the Card Club partially offset the decrease in
space rental revenues from special events. Revenue from leasing unused areas
of the Racetrack for vehicle storage decreased slightly to approximately
$278,000 in 2000, compared to $296,000 in 1999.

     Total operating expenses increased approximately $11,203,000 or 56.7% to
$30,969,000 in 2000, from $19,766,000 in 1999. The increase in operating
expenses for the comparative twelve-month period is primarily due to the
non-recurring pre-opening costs of the Card club incurred in the first and
second quarters of 2000, and the ongoing costs of operating the Card Club
subsequent to the opening on April 19, 2000. Total operating expenses of the
Card Club, including allocations for shared personnel, and other services,
were approximately $10,277,000 for the twelve months ended December 31, 2000.

     Minnesota law requires the Company to allocate a portion of funds
received from betting in the Card Club and wagering on simulcast and live
horse races for future payment as purses for live horse races or other uses of
Minnesota's horsepersons' associations. This purse expense is one of the
Company's largest single expense items.

     Pari-mutuel expenses increased 16.26% or approximately $1,185,000 for the
year ended December 31, 2000 compared to the year ended December 31, 1999. The
increase was due primarily to the purse expense attributable to the Card Club
operation. Total purse expense for the Card Club for the period April 19, 2000
through December 31, 2000 was $1,305,000. Under Minnesota law, the Company is
required to pay 10% of the first $6 million of gross Card Club revenues as
purse monies. After meeting the $6,000,000 threshold, the Company must pay 14%
of gross Card Club revenues as purse monies. The Company estimates for each
year, an estimated annual effective rate for purse monies, which is applied to
gross Card Club revenue throughout the year. Of funds allocated for purses,
the Company pays 10% of the purse monies to the State of Minnesota Breeders'
Fund. The remaining 90% of the purse monies is divided between thoroughbred
(90%), quarter horse (9%) and standard bred (1%) purse funds

     The minimum percentage required by law to be set aside for purses from
simulcasting varies substantially depending on the time of year the
simulcasting is conducted. For the 25-week period beginning in

                                      18
<PAGE>

early May, which is the statutorily established "Racing Season," 50% of net
pari-mutuel revenue, before deducting for purses, is allocated to a fund for
the payment of purses during the live meet. For the remaining 27 weeks of the
racing year, November through April, funds accumulate at the rate of 25% of
net pari-mutuel revenue, before deducting for purses, but after deducting an
8% expense factor. Pari-mutuel purse expense as a percentage of the Company's
pari-mutuel commission and breakage revenues decreased to 28.4% in 2000,
compared to 29.6% in 1999 due to a reduction in the purse guarantee related to
the Claiming Crown races. The purse guarantee was $162,000 in 2000, compared
to $280,000 in 1999. Excluding the Claiming Crown purse guarantee, the 2000
purse expense percentage was 27.3%, compared to a purse expense percentage of
27.7% for 1999.

     As stated above, the Company incurred incremental pari-mutuel purse
expense due to Claiming Crown purse guarantees of $162,000 and $280,000 for
the years 2000 and 1999, respectively. These amounts are included in
pari-mutuel statutory purse expense in the statements of operations. While the
Company anticipated that the full amounts incurred for purses and other costs
to organize and promote this national event would not be recovered fully
through pari-mutuel and other revenues in its inaugural year, management had
hoped to profit from the event in subsequent years. The reduction in the purse
guarantee payment by the Company in 2000 is encouraging and management is
hopeful that a further reduction will be experienced in 2001. The Racetrack is
the scheduled site of the Claiming Crown this year and a total of four of the
next eight years the event is held.

     Amounts paid to the Minnesota Breeders' Fund for simulcast and live
horse-racing are a function of on-track handle and the increase to $783,000 in
2000 compared to $773,000 in 1999 is attributable to and consistent with the
increase in total on-track handle. The Company also paid $131,000 to the
Breeders Fund related to Card Club operations.

     Host track fees remained steady at 3.43% of simulcast handle in 2000
compared to 3.42% in 1999. The host fee is calculated as a percentage of
monies wagered on out-of-state racetracks (generally 2.50% to 4.50%) and is
negotiated with each host track. While the average fee rate remained steady,
the Company benefited by entering into a Hub Services Agreement with certain
racetracks in Chicago Illinois (the "Chicago Hub") in February 1999. This
agreement benefits the Racetrack by reducing simulcasting related expenses
such as data transmission costs and tote fees.

     Salary and benefit expenses increased by $7.1 million or 142.3% for the
twelve months ended December 31, 2000 compared to the twelve months ended
December 31, 1999. The commencement of Card club operations on April 19, 2000
was the primary reason for the significant increase in labor costs. The Card
Club salary and benefit expenses for the year 2000 were approximately $5.9
million. The Card Club operates seven days a week, 24 hours a day. The Company
also incurred labor costs preceding the opening of the Card Club in order to
establish and implement operating policies, procedures and internal controls
and to hire and train over 300 employees of the Card Club. Employees were
hired to fill positions for dealers, cage cashiers, security officers,
surveillance, chip count, administrative and floor managers and supervisors.
In addition, the Company added numerous personnel to financial,
administration, marketing, plant and other support areas to adequately handle
the increased volume of employees and revenue generating activities. In
addition, the Company experienced a significant increase in its health
insurance rates effective May 1, 2000. This rate increase, coupled with 300
additional employees, and partially offset by an increase in the employee
reimbursement rate, resulted in a net increase in costs for employee health
insurance in 2000 of $429,000 compared to 1999. Because numerous new employees
hired were not eligible for participation in health benefits until the third
quarter of 2000, an increase in these employee health benefits is expected to
continue into the year 2001. During 2000 the Company changed its vacation
policy to a Personal Time Off (PTO) program, which also contributed to the
increase in salaries and benefits expense in 2000. The Company extended the
length of its live race meet from 56 days in 1999 to 60 days in 2000,
increasing salaries related to the live racing operations in 2000 compared to
the same periods in 1999.

     Depreciation and amortization expense increased 17.1% in 2000 compared to
1999. The increase was primarily attributable to building improvements and
capital assets acquired for the Card Club during the year 2000.

     Repairs, maintenance and supply costs increased approximately $524,000 or
74.1% for the twelve month period ended December 31, 2000 compared to December
31, 1999 primarily due to commencement of the 24 / 7

                                      19
<PAGE>

operations of the Card Club. The Card Club repair, maintenance and supply
costs were $338,000 for the twelve months ended December 31, 2000. The Company
made significant repairs to the patron parking lots to accommodate the
incremental traffic for the Card Club and to other major building systems and
equipment, including elevators, electrical, heating and air flow systems.
Because the Card Club relies significantly upon these building systems due to
its 24 / 7 operations, it is allocated a pro-rata portion of these repair and
maintenance expenses. In addition, the Card Club makes significant purchases
for decks of cards, radios, uniforms, printed materials and other supplies.

     Real estate tax expense was approximately $261,000 in 2000 compared to
approximately $231,000 in 1999. The Company estimates and accrues property tax
expense each year for taxes due and payable the following year, based on
estimates received from the taxing authorities. Actual property tax payments
were approximately $261,000 in 2000 compared to approximately $293,000 in
1999.

     Advertising and marketing expenses increased in 2000 compared to 1999
primarily due to expenditures related to the opening of the Card Club. The
Company experienced increased costs for the production and broadcast of
television advertising to promote the Card Club and live racing. The Company
also hosted its Card Club Grand Opening in June of 2000. In addition, the
Company incurred expenses related to the design and production of a new
business logo. Advertising and marketing costs for the Card Club were
approximately $614,000 for the year ended December 31, 2000.

     Utility costs increased approximately $275,000 or 37.7% for the
twelve-month period ended December 31, 2000 compared to the twelve-month
period ended December 31, 1999. The Card Club is a continuous, 24-hour a day
operation. Beginning in April 2000, it became necessary to sustain lighting,
cooling and heating of the building, and to light and monitor parking lots, on
a 24-hour basis, which increased utility costs of all types.

     Other operating expenses include personnel costs, professional fees,
equipment rent, contracted services and other expenses. These expenses
increased approximately $816,000 or 35.5% in 2000, compared to 1999.
Approximately $609,000 of the increase was directly attributable to Card Club
operations. The remaining increase was primarily attributable to live racing
operations. The number of live race days increased to 60 days in 2000, from 56
days in 1999. This increase in number of days, along with an increase in rates
paid to the Minnesota Racing Commission for reimbursement for stewards,
veterinarians and drug testing costs, along with increased costs for ambulance
services and manure removal, resulted in an increase in contracted services
related to live racing of approximately $100,000 compared to 1999.

     Interest expense for the twelve months ended December 31, 2000 increased
to approximately $126,000 from approximately $34,000 for the twelve months
ended December 31, 1999. The Company incurred interest expense in 2000 on
amounts due on advances from the MHBPA and on a lending agreement with Bremer
Bank to fund the construction of the Card Club. The average daily balance of
amounts due under advances with the MHBPA was approximately $282,000 in 2000
compared to $383,000 in 1999. The weighted average rate of interest on the
amounts due to the MHBPA was 9.11% for fiscal year 2000, compared to 7.96% for
fiscal year 1999. The interest rate on the MHBPA advances was 9.50% at
December 31, 2000 compared to 8.50% at December 31, 1999. Interest charged to
operations on advances with the MHBPA was $25,680 in fiscal year 2000,
compared to $30,530 in fiscal year 1999.

                                      20
<PAGE>

     The Company entered into a borrowing agreement with Bremer Bank on April
20, 2000 to fund the construction of the Card Club. The agreement was
initially structured as a construction loan, which was converted to a
five-year installment loan on August 1, 2000. The loan had an initial
principal amount of $1,587,000, requiring monthly principal and interest
payments of approximately $33,600. The outstanding principal balance on the
loan was paid off on December 29, 2000 with current cash flow. The average
daily balance upon which interest was paid was $863,515. The interest rate on
the loan was prime rate plus 0.25%. The amount charged to operations for
interest expense in 2000 on this borrowing was approximately $100,300,
including a $15,000 financing fee paid to Bremer Bank. The weighted average
interest rate on the loan for the year ended December 31, 2000 was 11.62%.

     On June 11, 1998 the Company obtained a commercial revolving credit line
with Bremer Bank N.A. The line of credit was not utilized in the year 2000.
The average daily balance of borrowings under the line of credit was $47,000
in 1999. The weighted average rate of interest on the line of credit was 7.75%
and the amount charged to operations in 1999 for interest expense on the line
of credit with Bremer Bank was approximately $3,700.

     Interest income was approximately $114,000 in fiscal year 2000 compared
to approximately $28,000 in fiscal year 1999. The Company's cash balances have
exceeded its operating cash requirements since March of 1999 when the Company
was able to pay off an outstanding balance on its line of credit with Bremer
Bank. All cash balances of the Company are "swept" into a single account at
the close of every business day to maximize earnings and float. The cash
balances are invested in an overnight repurchase agreement on a daily basis,
collateralized by mortgage-backed securities. The increase in interest income
is due primarily to an increase in the average daily balance of these cash
balances. The average daily balance of amounts in the cash account was
approximately $1,713,000 in 2000, compared to $491,000 in 1999. The average
interest rate earned on the cash balances was 5.41% and 4.33%, for the years
ended December 31, 2000 and 1999, respectively.

     Pretax income for the Card Club operating segment for the twelve months
ended December 31, 2000 was approximately $970,000. After a pro-rata
allocation of income tax expense of $421,100, the Card Club segment earned net
income of $548,900. The horseracing segment of the Company earned pretax
income of $512,000 in fiscal year 2000 compared to $545,000 for fiscal year
1999. Pretax income for the concessions segment of the Company was $123,000 in
2000 compared to $191,000 in 1999.

     Income before income taxes increased to $1,482,209 in 2000 compared to
$558,461 in 1999. The Company incurred income tax expense of $643,300 in 2000
compared to income tax expense of $121,170 in 1999. Income tax expense in 1999
was lower than the statutory rate primarily due to the elimination of the
Company's valuation allowance, which reduced income tax expense by $130,000.
Net income for the year ended December 31, 2000 was $838,909, compared to net
income of $437,291 for the year ended December 31, 1999.

     On January 1, 2001, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING
ACTIVITIES, as amended by SFAS No. 138, ACCOUNTING FOR CERTAIN DERIVATIVE
INSTRUMENTS AND CERTAIN HEDGING ACTIVITIES. SFAS No. 133 establishes
accounting and reporting standards for derivative instruments and for hedging
activities. It requires that all derivatives, including those embedded in
other contracts, be recognized as either assets or liabilities and that those
financial instruments be measured at fair value. The accounting for changes in
the fair value of derivatives depends on their intended use and designation.
Management has reviewed the requirements of SFAS No. 133 and has determined
that they have no free-standing or embedded derivatives. All contracts that
contain provisions meeting the definition of a derivative also meet the
requirements of, and have been designated as, normal purchases or sales. The
Company's policy is to not use free-standing derivatives and to not enter into
contracts with terms that cannot be designated as normal purchases or sales.

                                      21
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES:

     During the year ended December 31, 2000, net cash provided by operations
was $3,561,337 which resulted primarily from net income of $838,909,
depreciation and amortization of $909,345, the addition of Card Club accruals
of $817,812, and an increase in accounts payable and accrued wages and payroll
taxes of $626,407. During the year ended December 31, 1999 cash provided by
operating activities was $1,018,339, which resulted principally from net
income of $437,291 and depreciation and amortization of $776,680, partially
offset by the increase in the deferred tax asset of $122,800 and a decrease in
accrued interest of $92,914.

     The Card Club operation requires the accrual of certain liabilities. The
Card Club offers progressive jackpots for poker games and certain table games.
Amounts collected for these jackpot funds are accrued as liabilities. At
December 31, 2000, accrued jackpot funds totaled approximately $297,000. Table
games are played using a "player pool". "Player pool" means a wagering system
or game where wagers lost in a number of card games may be accumulated into a
pool for purposes of enhancing the total amount paid back to players in any
other card game. In such games, the sponsor may only serve as custodian of the
player pool and may not have an active interest in any card game. In the table
games area of the Card Club, the net amount that the dealer "wins" or "loses"
during the course of play is accumulated as a "player pool" liability, and is
not recognized as revenue by the Company. The Company is required by law to
return accumulated player pool funds to the players in the forms of giveaways,
promotional items, prizes or by other means. The accumulated player pool
liability is approximately $305,000 at December 31, 2000. The Minnesota Racing
Commission regulates the operation of the jackpot and player pool funds. All
games in the Card Club are played using chips. The value of chips issued and
outstanding, referred to as the "outstanding chip liability", was
approximately $112,000 at December 31, 2000. These Card Club accruals have the
potential for significant fluctuation on a daily basis. The Company believes
it has adequate liquidity to meet the potential daily obligations of these
accrual items.

     Cash used in investing activities for the year ended December 31, 2000
was $4,159,318 for additions to property and equipment generally related to
the addition of the Card Club in April 2000. Building improvements totaled
$2.6 million in 2000. Additions to furniture, fixtures, machinery and
equipment were primarily to accommodate the Card Club operation. In addition,
the Company invested approximately $390,000 in a semi-permanent structure to
replace the square footage on track level for special events that was
dedicated to the Card Club. For fiscal 1999, net cash used in investing
activities was $470,416 for capital expenditures. In 1999 the Company invested
$100,000 in improvements to facilitate conducting large outdoor special
events.

     Cash provided by financing activities was $446,778 for the year ended
December 31, 2000 compared to $429,958 for the year ended December 31, 1999.
The net cash inflows resulted primarily from proceeds on the issuance of
common stock due to the exercise of stock options in 2000 of $390,734 and
proceeds in 1999 of $1,217,810. These common stock issuances also result from
the issuance of common stock pursuant to the Company's employee stock purchase
plan. In addition, the underwriters of the Company's initial stock offering
exercised warrants to acquire 120,000 shares at $4.80 prior to their
expiration in August 1999. During the year 2000, the Company entered into a
five-year installment loan to fund the construction of the Card Club. The
initial principal balance of the loan was $1,586,750. This loan was paid off
in December of 2000. In 1999, the cash inflows related to option exercises
were partly offset by net payments on the borrowings under the credit
agreement of $608,449 and $179,403 net payments on the advance with the MHBPA.

     Pursuant to an agreement with the Minnesota Horsemen's Benevolent and
Protective Association, (the "MHBPA"), the Company transferred into a trust
account or paid directly to the MHBPA, approximately $4,717,000 and $3,975,000
in purse funds for the years ended December 31, 2000 and 1999, respectively.
Minnesota Statutes specify that amounts transferred into trust are the
property of the trust and not of the Company. Unpaid purse fund obligations
due the MHBPA were $423,055 and $367,011 at December 31, 2000 and 1999,
respectively. The interest rates on any statutory purses accrued but not
transferred into the trust (which are guaranteed by the Company's Chairman of
the Board) were 9.50% and 8.50% at December 31, 2000 and 1999, respectively.

                                      22
<PAGE>

     The Company entered into a general credit and security agreement with
Bremer Bank, N.A., a financial institution located in South Saint Paul,
Minnesota, on June 3, 1998. Borrowings under the credit agreement include a
commercial revolving credit line, which provides for maximum advances of
$2,250,000 with interest at the prime rate (9.50% at December 31, 2000). No
borrowings under the credit line were outstanding during the year ended
December 31, 2000. The average daily balance on the line of credit was $47,000
in 1999, with a weighted average interest rate for the year of 7.75%.

     Cash balances at December 31, 2000 were $1,198,849 compared to $1,350,052
at December 31, 1999. Management believes that funds available in its cash
accounts, amounts available under the general credit and security agreement,
along with funds generated from operations, will be sufficient to satisfy its
liquidity and capital resource requirements during 2001. The Company
anticipates the Card Club expansion in the second quarter of 2001 to require
approximately $1 million of current cash flow.

     Cash inflows related to Card Club revenues are anticipated to increase in
2001, due to a full twelve months of operation, compared to approximately
eight and a half months of operation in the year ended December 31, 2000.
However, management anticipates that cash inflows due to the initial creation
of Card Club accruals in 2000, will not recur in the year 2001.

OPERATING PLAN:

     In 2000 the Company successfully conducted its sixth consecutive live
race meet. The Company plans a 63-day live race meet in 2001 consisting of 30
days of mixed Thoroughbred and Quarter Horse racing, 31 days of Thoroughbred
only racing and 2 days of harness racing. The Company competes with racetracks
located throughout the United States in securing the better quality horses to
run at the Racetrack. Attracting the owners and trainers of better quality
horses is largely influenced by the ability to offer large purses. Over the
past six years, the Company has offered consistent levels of purse monies from
year to year by limiting the number of live racing days and utilizing purse
monies from simulcasting and live race wagering. However, with the
commencement of Card Club operations in 2000, the Company was able to offer
two 10% purse increases during the 2000 live race meet. The Company continues
to experience stiff competition for better quality horses from a racetrack
located near Des Moines, Iowa, as well as racetracks in Chicago, Illinois,
which offer substantially larger purses. However, management anticipates that
the Company will be in the most competitive position in its history to attract
better quality horses beginning in the year 2001, because the Card Club is
expected to continue to significantly contribute to purse fund monies due to a
full twelve months of operation in 2001, compared to eight and a half months
of operation in 2000.

     The Company anticipates that it will improve its profitability in the
year 2001 due to a full year of operation of the Card Club. The expansion of
the Card Club is also expected to contribute positively to operating results
upon its completion in May 2001. Management anticipates it will be able to
maintain levels of attendance and handle for live and simulcast racing at or
near levels similar to previous years. The Company is hopeful that the higher
purse rates draw better quality horses and increase attendance compared to the
year 2000. The Company continues to pursue special events and to market its
facility as a venue for large outdoor and indoor events.

     Management intends to continue pursuing legislation for additional
potential sources of revenue. These efforts could result in increased
legislative related expenses in the future.

                                      23
<PAGE>

FACTORS AFFECTING FUTURE PERFORMANCE:

     From time to time, in reports filed with the Securities and Exchange
Commission, in press releases, and in other communications to shareholders or
the investing public, the Company may make forward-looking statements
concerning possible or anticipated future financial performance, business
activities or plans which are typically preceded by the words "believes,"
"expects," "anticipates," "intends" or similar expressions. For such
forward-looking statements, the Company claims the protection of the safe
harbor for forward-looking statements contained in federal securities laws.
Shareholders and the investing public should understand that such
forward-looking statements are subject to risks and uncertainties which could
cause actual performance, activities or plans to differ significantly from
those indicated in the forward-looking statements. Such risks and
uncertainties include, but are not limited to: fluctuations in attendance at
the Racetrack, changes in the level of wagering by patrons, continued interest
in the unbanked card games offered at the Card Club, legislative and
regulatory changes, the impact of wagering products and technologies
introduced by competitors; upward pressure on salary and benefit expense due
to the tight labor market; the general health of the gaming sector; higher
than expected expense related to new marketing initiatives; and other factors
discussed from time to time in the Company's filings with the Securities and
Exchange Commission.

ITEM 7.  FINANCIAL STATEMENTS

     The following financial statements of the Company are set forth on pages
25 through 38 of the Form 10-KSB:

<TABLE>
<CAPTION>
                                                                                                       Page
                                                                                                   -------------

<S>                                                                                                     <C>
Independent Auditors' Report.................................................................           25

Consolidated Balance Sheets as of December 31, 2000 and 1999.................................           26

Consolidated Statements of Operations for the years ended December 31, 2000 and 1999.........           27

Consolidated Statements of Changes in Stockholders' Equity for the years ended
December 31, 2000 and 1999 ..................................................................           28

Consolidated Statements of Cash Flows for the years ended December 31, 2000 and 1999.........           29

Notes to Consolidated Financial Statements for the years ended December 31, 2000 and 1999....           30
</TABLE>

                                      24
<PAGE>

INDEPENDENT AUDITORS' REPORT

Board of Directors
Canterbury Park Holding Corporation
Shakopee, Minnesota

We have audited the accompanying consolidated balance sheets of Canterbury
Park Holding Corporation and subsidiary (the Company) as of December 31, 2000
and 1999 and the related consolidated statements of operations, stockholders'
equity, and cash flows for the years then ended. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Canterbury
Park Holding Corporation and subsidiary as of December 31, 2000 and 1999 and
the results of their operations and their cash flows for the years then ended,
in conformity with accounting principles generally accepted in the United
States of America.

Deloitte & Touche LLP

March 9, 2001
Minneapolis, Minnesota

                                      25
<PAGE>

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARY

<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2000 AND 1999

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

                                                                                           2000                  1999
<S>                                                                                   <C>                   <C>

ASSETS

CURRENT ASSETS:
     Cash                                                                             $    1,198,849        $    1,350,052
     Accounts receivable                                                                     306,852               187,463
     Inventory                                                                               106,381                72,908
     Deposits                                                                                 24,500                20,000
     Prepaid expenses                                                                        267,425               136,686
     Income tax refund receivable                                                                                    6,693
                                                                                      ----------------    ----------------
         Total current assets                                                              1,904,007             1,773,802

PROPERTY AND EQUIPMENT, net  (Note 2)                                                     11,334,404             8,084,431

DEFERRED TAX ASSET  (Note 3)                                                                  79,100               330,800

                                                                                      ----------------    ----------------
                                                                                      $   13,317,511        $   10,189,033
                                                                                      ================    ================

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable                                                                 $      930,597        $      816,020
     Card club accruals                                                                      817,812
     Accrued wages and payroll taxes                                                         666,495               154,665
     Accrued interest                                                                         11,705                 7,453
     Advance from MHBPA (Note 1)                                                             423,055               367,011
     Accrued property taxes                                                                  292,546               292,546
     Income taxes payable                                                                    204,840
     Payable to horsepersons                                                                 207,818               100,538
                                                                                      ----------------    ----------------
         Total current liabilities                                                         3,554,868             1,738,233

COMMITMENTS AND CONTINGENCIES (Notes 7 and 8)

STOCKHOLDERS' EQUITY (Note 4):

     Common stock, $.01 par value, 10,000,000 shares authorized, 3,473,832 and
         3,371,999, respectively, shares issued and outstanding

                                                                                              34,738                33,720
     Additional paid-in capital                                                            9,965,017             9,493,101
     Accumulated deficit                                                                    (237,112)           (1,076,021)
                                                                                      ----------------    ----------------
         Total stockholders' equity                                                        9,762,643             8,450,800
                                                                                      ----------------    ----------------
                                                                                      $   13,317,511        $   10,189,033
                                                                                      ================    ================
</TABLE>

See notes to consolidated financial statements.

                                      26
<PAGE>

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARY

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2000 AND 1999

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

                                                                                            2000                    1999
<S>                                                                                   <C>                     <C>

OPERATING REVENUES:
     Pari-mutuel                                                                      $    15,608,800         $    15,438,261
     Card Club                                                                             11,277,153
     Concessions                                                                            3,689,715               2,971,195
     Admissions and parking                                                                   518,609                 469,821
     Publications                                                                             635,183                 679,036
     Other operating revenue                                                                  733,956                 772,195
                                                                                      ------------------    ------------------
                                                                                           32,463,416              20,330,508

OPERATING EXPENSES:
     Pari-mutuel expenses:
         Statutory purses                                                                   5,441,897               4,373,040
         Host track fees                                                                    1,961,447               1,992,624
         Pari-mutuel taxes                                                                    155,268                 148,706
         Minnesota Breeders' Fund                                                             913,868                 772,996
     Salaries and benefits                                                                 12,036,380               4,968,519
     Cost of sales related to concessions                                                   1,447,778                 824,225
     Cost of sales related to publications                                                    839,525                 803,193
     Depreciation and amortization                                                            909,345                 776,680
     Repairs, maintenance and supplies                                                      1,232,205                 707,734
     Property taxes                                                                           260,996                 231,070
     Advertising and marketing                                                              1,649,592               1,137,374
     Utilities                                                                              1,006,546                 731,116
     Other operating expenses                                                               3,114,132               2,298,513
                                                                                      ------------------    ------------------
                                                                                           30,968,979              19,765,790

NONOPERATING (EXPENSES) REVENUES:
     Interest expense (Note 6)                                                               (126,045)               (34,208)
     Other, net                                                                               113,817                  27,951
                                                                                      ------------------    ------------------
                                                                                              (12,228)                 (6,257)
                                                                                      ------------------    ------------------

INCOME BEFORE INCOME TAX EXPENSE                                                            1,482,209                 558,461

     Income tax expense  (Note 3)                                                            (643,300)               (121,170)

                                                                                      ------------------    ------------------
NET INCOME                                                                            $       838,909         $       437,291
                                                                                      ==================    ==================


WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING                                        3,449,666               3,178,426
                                                                                      ==================    ==================

BASIC NET INCOME PER COMMON SHARE (Note 5)                                            $            .24       $            .14
                                                                                      ==================    ==================

DILUTED NET INCOME PER COMMON SHARE (Note 5)                                          $            .23       $            .13
                                                                                      ==================    ==================
</TABLE>


See notes to consolidated financial statements.

                                      27
<PAGE>

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARY

<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 2000 AND 1999

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

                                                                          Additional
                                           Number          Common          Paid-in        Accumulated
                                         of Shares          Stock          Capital          Deficit             Total
                                        -------------    ------------    -------------   ---------------    --------------
<S>                                       <C>            <C>               <C>             <C>                <C>

  BALANCE,  DECEMBER 31, 1998             3,020,167      $ 30,202          $8,132,809      $(1,513,312)       $6,649,699

  Exercise of stock options                 213,050         2,130             591,786          593,916

  Tax benefit of stock option exercises                                                        146,000           146,000

  Exercise of underwriter warrants          120,000         1,200             574,800          576,000

  Shares issued under Employee Stock
       Purchase Plan                         18,782           188              47,706           47,894

  Net income                                                                                   437,291           437,291
                                          ---------      --------          ----------      -----------        ----------

  BALANCE,  DECEMBER 31, 1999             3,371,999      $ 33,720          $9,493,101      $(1,076,021)       $8,450,800

  Exercise of stock options                  84,200           842             314,952                            315,794

  Tax benefit of stock option exercises                                        82,200                             82,200

  Shares issued under Employee Stock
       Purchase Plan                         17,633           176              74,764                             74,940

  Net income                                                                                   838,909           838,909
                                          ---------      --------          ----------      -----------        ----------
  BALANCE,  DECEMBER 31, 2000             3,473,832      $ 34,738          $9,965,017      $  (237,112)       $9,762,643
                                          =========      ========          ==========      ===========        ==========
</TABLE>


See notes to consolidated financial statements.

                                      28
<PAGE>

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARY

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2000 AND 1999

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

                                                                                               2000
1999
<S>                                                                                      <C>                    <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                                                          $      838,909         $     437,291
     Adjustments to reconcile net income to net cash provided by operations:
         Depreciation and amortization                                                          909,345               776,680
         Deferred income taxes                                                                  251,700              (122,800)
         (Increase) decrease in accounts receivable                                            (119,389)               27,833
         Increase in other current assets                                                      (168,712)               (4,788)
         Increase (decrease) in income taxes payable                                            293,733               (14,875)
         Increase in accounts payable and accrued wages & payroll taxes                         626,407                43,655
         Increase in card club accruals                                                         817,812
         Increase (decrease) in accrued interest                                                  4,252               (92,914)
         Decrease in accrued property taxes                                                                           (61,476)
         Increase in payable to horsepersons                                                    107,280                29,733
                                                                                         ------------------   -------------------
              Net cash provided by operations                                                  3,561,337            1,018,339

CASH FLOWS FROM INVESTING ACTIVITIES:
     Additions to property and equipment and other assets                                     (4,159,318)            (470,416)
                                                                                         ------------------   -------------------
         Net cash used in investing activities                                                (4,159,318)            (470,416)

CASH FLOWS FROM FINANCING ACTIVITIES:
     Net payments on borrowings under credit agreement                                                               (608,449)
     Net proceeds / (payments) on advance from MHBPA                                              56,044             (179,403)
     Proceeds from issuance of common stock                                                      390,734            1,217,810
     Proceeds from long-term financing                                                         1,586,750
     Payments on long-term financing                                                          (1,586,750)
                                                                                         ------------------   -------------------
         Net cash provided by financing activities                                               446,778              429,958
                                                                                         ------------------   -------------------

NET (DECREASE) INCREASE IN CASH                                                                 (151,203)             977,881

CASH AT BEGINNING OF YEAR                                                                      1,350,052              372,171
                                                                                         ------------------   -------------------

CASH AT END OF YEAR                                                                      $     1,198,849        $   1,350,052
                                                                                         ==================   ===================

INTEREST PAID                                                                            $       121,793        $     127,101
                                                                                         ==================   ===================

INCOME TAXES PAID                                                                        $        99,476        $     213,748
                                                                                         ==================   ===================
</TABLE>


See notes to consolidated financial statements.

                                      29
<PAGE>



CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000 AND 1999

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

1.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          BUSINESS - Canterbury Park Holding Corporation (the Company) was
          incorporated on March 24, 1994. On March 29, 1994 the Company
          acquired all the outstanding securities of Jacobs Realty, Inc. (JRI)
          from Irwin Jacobs and IMR Fund, L.P. (an investment fund for various
          pension plans and trusts). JRI was merged into the Company and the
          acquisition was accounted for under the purchase method of
          accounting whereby the acquired assets and liabilities have been
          recorded at the Company's cost. The primary asset of JRI was
          Canterbury Downs Racetrack and the 325 acres of surrounding land.

          On May 20, 1994, the Company adopted a plan of Reorganization
          pursuant to which the sole shareholder of Canterbury Park
          Concessions, Inc. (CPC), and majority shareholder of the Company,
          agreed to exchange his shares of CPC stock for 198,888 shares of the
          Company's common stock concurrent with the closing of a public
          offering. Pursuant to the Plan of Reorganization, CPC became a
          wholly owned subsidiary of the Company in August 1994 when the
          Company completed the initial public offering of its common stock.
          This reorganization was treated in a manner similar to a pooling of
          interests. Net proceeds received by the Company from the public
          offering were approximately $4,847,000, which along with additional
          borrowings under the Company's line of credit with the majority
          shareholder, were used to pay off the remaining notes payable from
          the acquisition of JRI.

          The consolidated financial statements include the accounts of the
          Company and CPC after elimination of intercompany accounts and
          transactions.

          OPERATIONS - The Company's revenues are derived primarily from the
          operations of a Card Club and pari-mutuel wagering on simulcast and
          live horse races.

          ESTIMATES - The preparation of the consolidated financial statements
          in conformity with generally accepted accounting principles
          generally accepted in the United States of America requires
          management to make estimates and assumptions that affect the
          reported amounts of assets and liabilities and disclosure of
          contingent assets and liabilities at the date of the consolidated
          financial statements and the reported amounts of revenues and
          expenses during the reporting period. Actual results could differ
          from these estimates.

          DEPRECIATION - Property and equipment are depreciated on a
          straight-line basis over the estimated useful lives of the assets,
          generally 5 to 39 years.

          UNCASHED WINNING TICKETS - Pari-mutuel tickets which are not cashed
          within one year of the end of the respective race meet become the
          property of the Company. The Company records revenue associated with
          the uncashed winning tickets at the time that, based on historical
          experience, management can reasonably estimate the amount of
          additional winning tickets from a race meet that will be presented
          for payment.

          PARI-MUTUEL TAXES - The first $12 million of pari-mutuel revenue is
          exempt from the 6% pari-mutuel tax. Pari-mutuel taxes are estimated
          for each 12-month period from July 1 through June 30, and an
          estimated annual effective tax rate is applied to all pari-mutuel
          commission revenues.

                                      30
<PAGE>


          ADVANCE FROM THE MINNESOTA HORSEMEN'S BENEVOLENT AND PROTECTIVE
          ASSOCIATION, INC. (THE "MHBPA") - The Minnesota Pari-Mutuel Horse
          Racing Act specifies that the Company is required to segregate a
          portion of funds (recorded as statutory purses in the statements of
          operations), received from wagering on simulcast and live horse
          races, for future payment as purses for live horse races or other
          uses of the horsepersons' associations. Pursuant to an agreement
          with the MHBPA, the Company has transferred into a trust account or
          paid directly to the MHBPA, approximately $4,717,000 and $3,975,000
          for the years ended December 31, 2000 and 1999, respectively,
          related to thoroughbred races. Amounts due to the MHBPA are
          guaranteed by the Chairman of the Board. Minnesota Statutes specify
          that amounts transferred into the trust account are the property of
          the trust and not of the Company. The interest rates on any
          statutory purses accrued but not transferred into the trust were
          9.50% and 8.50% at December 31, 2000 and 1999, respectively.

          BORROWINGS - The weighted average interest rates on short-term
          borrowings at December 31, 2000 and 1999 were 9.50% and 8.50%,
          respectively. The weighted average rates for short-term borrowings
          for the years ended December 31, 2000 and 1999 were 9.11% and 7.93%,
          respectively. The Company incurred long-term debt in May 2000, which
          was paid in December 2000. The weighted average interest rate on
          this borrowing was 11.62%.

          INCOME TAXES - Prior to the completion of the Company's initial
          public offering of its common stock, the Company was taxed as a
          "small business corporation" under Subchapter S of the Internal
          Revenue Code. As a result, any income tax liability or benefit was
          being passed through to the individual shareholders and no income
          taxes payable or income tax expenses were recorded in the
          consolidated financial statements. Simultaneous with the Company's
          completion of the public offering of its common stock, the Company's
          Subchapter S election was terminated. A portion of the losses
          accumulated prior to the public offering is not available to offset
          future earnings. The Company currently accounts for income taxes in
          accordance with Statement of Financial Accounting Standards (SFAS)
          No. 109, ACCOUNTING FOR INCOME TAXES.

          NET INCOME PER SHARE - Basic net income per common share is based on
          the weighted average number of common shares outstanding during each
          year. Diluted net income per common share takes into effect the
          dilutive effect of potential common shares outstanding. The
          Company's only potential common shares outstanding are stock
          options.

          IMPAIRMENT OF LONG-LIVED ASSETS - Management of the Company
          periodically reviews the carrying value of property and equipment
          for potential impairment by comparing the carrying value of these
          assets with their related expected future net cash flows. Should the
          sum of the related expected future net cash flows be less than the
          carrying value, management will determine whether an impairment loss
          should be recognized. An impairment loss would be measured by the
          amount by which the carrying value of the asset exceeds the fair
          value of the asset. To date, management has determined that no
          impairment of these assets exists.

          COMPREHENSIVE INCOME - Effective January 1,1998 the Company adopted
          Statement of Financial Accounting Standards (SFAS) No. 130,
          REPORTING COMPREHENSIVE INCOME, which establishes standards for
          reporting and display of comprehensive income and its components in
          a full set of financial statements. Comprehensive income includes
          all changes in stockholders' equity except those resulting from
          investments by and distributions to owners. SFAS No. 130 is not
          currently applicable for the Company because the Company did not
          have any items of other comprehensive income in any of the periods
          presented.

          CARD CLUB ACCRUALS - Minnesota law allows the Company to collect
          amounts from patrons to fund progressive jackpot pools in the Card
          Club. These amounts, along with amounts earned by the player pool,
          promotional pools and the outstanding chip liability, are accrued as
          short-term liabilities at each balance sheet date.

                                      31
<PAGE>



          DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - On January 1, 2001,
          the Company adopted Statement of Financial Accounting Standards
          (SFAS) No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING
          ACTIVITIES, as amended by SFAS No. 138, ACCOUNTING FOR CERTAIN
          DERIVATIVE INSTRUMENTS AND CERTAIN HEDGING ACTIVITIES. SFAS No. 133
          establishes accounting and reporting standards for derivative
          instruments and for hedging activities. It requires that all
          derivatives, including those embedded in other contracts, be
          recognized as either assets or liabilities and that those financial
          instruments be measured at fair value. The accounting for changes in
          the fair value of derivatives depends on their intended use and
          designation. Management has reviewed the requirements of SFAS No.
          133 and has determined that they have no free-standing or embedded
          derivatives. All contracts that contain provisions meeting the
          definition of a derivative also meet the requirements of, and have
          been designated as, normal purchases or sales. The Company's policy
          is to not use free-standing derivatives and to not enter into
          contracts with terms that cannot be designated as normal purchases
          or sales.

          LITIGATION - The Company is periodically involved in various legal
          actions arising in the normal course of business. At December 31,
          2000, management believes that the resolution of any legal actions
          outstanding will not have a material impact on the consolidated
          financial statements.

          RECLASSIFICATION - Certain reclassifications have been made to the
          1999 consolidated financial statements to conform to the
          presentation adopted in the 2000 consolidated financial statements.
          The reclassifications had no effect on stockholders' equity and net
          income as previously reported.

2.        PROPERTY AND EQUIPMENT

          Property and equipment consists of the following at December 31:

<TABLE>
<CAPTION>
                                                                  2000                     1999

<S>                                                       <C>                       <C>
           Land                                           $        3,617,865        $        3,617,865
           Buildings and building improvements                     5,653,251                 2,998,705
           Furniture and equipment                                 7,424,855                 5,920,083
                                                          ---------------------     --------------------
                                                                  16,695,971                12,536,653
           Accumulated depreciation                               (5,361,567)               (4,452,222)
                                                          ---------------------     --------------------
                                                          $       11,334,404        $        8,084,431
                                                          ---------------------     --------------------
                                                          ---------------------     --------------------
</TABLE>


3.        INCOME TAXES

          A reconciliation between income taxes computed at the statutory
          federal income tax rate and the effective tax rate is as follows:

<TABLE>
<CAPTION>
                                                                        2000                     1999

<S>                                                              <C>                      <C>
           Federal tax expense computed at statutory rate        $          519,000       $          195,000
           Decrease in valuation allowance                                                          (130,000)
           Nondeductible lobbying expense                                    22,000                   34,000
           State expense, net of federal impact                              99,000                   35,000
           Other                                                              3,300                  (13,000)
                                                                 --------------------     --------------------
                                                                 $          643,300       $          121,000
                                                                 --------------------     --------------------
                                                                 --------------------     --------------------
</TABLE>


                                      32
<PAGE>




          Income tax expense for the years ended December 31, 2000 and
          December 31, 1999 consists of the following:

<TABLE>
<CAPTION>
                                                                                         2000                     1999
           Current

<S>                                                                               <C>                      <C>
                Federal                                                           $          294,200       $       197,800
                State                                                                         97,400                46,000
                                                                                  --------------------    --------------------
                                                                                             391,600               243,800
           Deferred, primarily Federal                                                       251,700              (122,800)
                                                                                  --------------------    --------------------
                                                                                  $          643,300       $       121,000
                                                                                  --------------------    --------------------
                                                                                  --------------------    --------------------
</TABLE>

     Temporary differences and tax carryforwards at December 31 are as
follows:

<TABLE>
<CAPTION>
                                                                                         2000                     1999

<S>                                                                               <C>                      <C>
           Operating loss carryforward                                            $                0       $      127,000
           Federal / State AMT Benefit                                                       180,100              256,800
           Tax depreciation greater than book depreciation                                  (134,000)            (131,000)
           Repairs capitalized                                                                 5,000                8,000
           Other                                                                              28,000               70,000
                                                                                  --------------------    --------------------
                                                                                  $           79,100       $      330,800
                                                                                  --------------------    --------------------
                                                                                  --------------------    --------------------
--------------------
</TABLE>

          The Company had federal income tax net operating loss carryforwards
          of approximately $307,000 at December 31, 1999 which were fully
          utilized in 2000.

4.        STOCKHOLDERS' EQUITY

          EMPLOYEE STOCK PURCHASE PLAN:

          On April 3, 1995, the Board of Directors adopted the 1995 Employee
          Stock Purchase Plan. The plan, which is open to all employees of the
          Company working more than 15 hours per week, commenced on April 15,
          1995 and will continue for ten years. The plan consists of one-year
          phases. The phases commence on October 1 of each year. Under the
          terms of the plan, employees may set aside a portion of their
          payroll earnings to purchase shares of the Company's common stock at
          the lower of 85% of the fair market value of the shares on the
          commencement date of each phase or 85% of the fair market value on
          the termination date of each phase. The plan provides for the sale
          of up to 100,000 shares. The plan issued 17,633 and 18,782 shares in
          2000 and 1999, respectively.

          401(K) PLAN:

          On June 1, 1998 the Company established a defined contribution
          savings plan for employees who had completed one year of service, as
          defined in the Plan document. The defined contribution savings plan
          allows for employee compensation deferral contributions under
          Section 401(k) of the Internal Revenue Code and discretionary
          contributions by the Company. Employer contributions charged to
          operations in 2000 and 1999 were approximately $28,000 and $26,000,
          respectively.

                                      33
<PAGE>

          STOCK OPTIONS:

          The Company has a stock option plan (the Stock Option Plan) which
          provides for the granting of awards in the form of stock options,
          restricted stock, stock appreciation rights, and deferred stock to
          key employees and non-employees, including directors of and
          consultants to the Company and any subsidiary, to purchase up to a
          maximum of 850,000 shares of common stock. Options that are granted
          under the plan may be either options that qualify as "incentive
          stock options" within the meaning of Section 422 of the Internal
          Revenue Code of 1986, as amended (Incentive Stock Options), or those
          that do not qualify as Incentive Stock Options (Non-Qualified Stock
          Options). The plan is administered by the Board of Directors, or a
          committee designated by the Board, which determines the persons who
          are to receive awards under the plan, the type of award to be
          granted, the number of shares subject to each award and, if an
          option, the exercise price of each option. The plan also provides
          for formula grants of Non-Qualified Stock Options to non-employee
          directors of the Company.

          Stock option activity related to the Plan during the years ended
          December 31, 2000 and 1999 is summarized below:

<TABLE>
<CAPTION>
                                                          2000                                          1999
                                        ------------------------------------------      ------------------------------------------
                                                                   Weighted                                       Weighted
                                            Shares                 Average                 Shares                 Average
                                                                Exercise Price                                 Exercise Price
                                        ----------------     ---------------------    -----------------      ---------------------

<S>                                            <C>           <C>                             <C>           <C>
           Outstanding at
             beginning of year                 426,500       $            3.09               367,725       $       2.50
           Granted                             146,000                    6.23               147,000               4.35
           Exercised                           (34,200)                   3.75               (81,225)              2.63
           Canceled                             (2,000)                   5.63                (7,000)              4.13
                                        ----------------     ---------------------    -----------------      ---------------------
           Outstanding at end of
             year                              536,300       $            3.89               426,500       $       3.09
                                        ================     =====================    =================      =====================
           Options exercisable at
             end of year                       474,800       $            3.65               355,000       $       2.81
                                        ================     =====================    =================      =====================
</TABLE>

          In addition to options granted under the plan, in June 1994 the
          Company issued options to purchase 73,000 shares of common stock to
          certain individuals who were instrumental in assisting the Company
          commence operations. During 1999, 67,500 of the 69,500 options
          outstanding were exercised prior to their expiration in August 1999.

          In 1997, the Company issued an option to purchase 50,000 shares of
          common stock at an exercise price of $3.75 per share, for consulting
          services. The option was valued at $88,176, of which $22,044 was
          recognized in the 1998 statement of operations and $66,132 was
          recognized in 1997. The option was exercised prior to its expiration
          on March 31, 2000.

          The Company also issued options in 1998 and 1997 to purchase 15,000
          and 12,500 shares of common stock, respectively, to a Board member
          for consulting services. The exercise prices of the options are
          $2.625 and $3.25 per share, respectively. The options were valued at
          $18,796 and $19,926 and were recognized in the 1998 and 1997
          statements of operations, respectively. The option issued in 1997
          was exercised during 1999. The option issued in 1998 expires in
          September 2001.

                                      34
<PAGE>

          In 1994, the Chairman of the Board was granted an option to purchase
          51,825 shares at $2.64 per share. This option was exercised during
          1999.

          At December 31, 2000, the weighted average remaining contractual
          life of all options was 84 months, and the range of exercise prices
          was $1.75 to $9.94.

          The following table summarizes information concerning all options
          outstanding and exercisable options as of December 31, 2000:

<TABLE>
<CAPTION>

                                                     Weighted
                                                     Average         Weighted
                                                     Remaining       Average                          Weighted
                                        Options      Contractual     Exercise         Options         Average
          Range of Exercise Price     Outstanding    Life in Years   Price          Exercisable    Exercise Price
          -------------------------------------------------------------------------------------------------------
<S>                                     <C>              <C>          <C>             <C>             <C>
             $   1.75 - 2.50            214,800          5.92         $ 2.16          214,800         $ 2.16
          -------------------------------------------------------------------------------------------------------
                 2.50 - 5.00            174,500          6.57           3.78          174,500           3.78
          -------------------------------------------------------------------------------------------------------
                 5.00 - 9.94            162,000          9.07           6.18          100,500           6.47
          -------------------------------------------------------------------------------------------------------
</TABLE>


          In 1996, the Company adopted Statement of Financial Accounting
          Standards No. 123 (SFAS 123), "Accounting for Stock-Based
          Compensation." As permitted by SFAS 123, the Company has elected to
          continue following the guidance of APB 25 for measurement and
          recognition of stock-based transactions with employees. No
          compensation cost has been recognized for stock options issued under
          the Stock Option Plan because the exercise price of all options
          granted was at least equal to the fair value of the common stock at
          the date of grant. If compensation cost for the Company's stock
          option and employee stock purchase plans had been determined based
          on the fair value at the grant dates, consistent with the method
          provided in SFAS 123, the Company's net income and earnings per
          share would have been as follows:

<TABLE>
<CAPTION>
                                                          2000                      1999
                                                  ---------------------     ---------------------
<S>                                                   <C>                        <C>
           Net Income:
                As reported                           $    838,909               $   437,291
                Pro forma                                  374,355                   106,181

           Basic Earnings Per Share:
                As reported                           $        .24               $       .14
                Pro forma                                      .11                       .03

           Diluted Earnings Per Share:
                As reported                           $        .23               $       .13
                Pro forma                                      .10                       .03

</TABLE>

          The fair value of options granted under the Stock Option Plan during
          2000 and 1999 were estimated on the date of grant using the
          Black-Scholes option-pricing model with the following weighted
          average assumptions and results:

<TABLE>
<CAPTION>
                                                           2000                      1999
                                                   ---------------------     ---------------------
<S>                                                    <C>                       <C>
           Dividend yield                                     None                      None
           Expected volatility                                 47%                       41%
           Risk-free interest rate                           5.11%                     5.50%
           Expected life of option                         120 mo.                   120 mo.
           Fair value of options on grant date         $   666,200               $   442,098
</TABLE>


                                      35
<PAGE>

          WARRANTS:

          In 1999, the Company's selling agents exercised warrants to purchase
          120,000 shares of common stock at an exercise price of $4.80 per
          share in August 1999, and the remaining five thousand warrants
          expired unexercised.

          The Company's Articles of Incorporation provide that the Company may
          redeem, at fair market value, securities held by any person or
          entity whose status as a security holder, in the opinion of the
          Board of Directors of the Company, may result in the disapproval,
          modification, or nonrenewal of any contract or the loss or
          nonreinstatement from any governmental agency of any license or
          franchise held by the Company or any of its subsidiaries, which
          license or franchise is conditioned upon some or all of the holders
          of capital stock meeting certain criteria.

5.        EARNINGS PER SHARE

<TABLE>
<CAPTION>

                                             Year Ended December 31, 2000                     Year Ended December 31,1999
                                     ----------------------------------------------    --------------------------------------------
                                        Income           Shares         Per Share       Income           Shares          Per Share
                                     (Numerator)     (Denominator)       Amount       (Numerator)     (Denominator)       Amount
                                     -------------   ---------------   ------------  --------------  ----------------   -----------

<S>                                  <C>                 <C>           <C>           <C>                 <C>           <C>
          Net Income                 $   838,909                                     $   437,291
                                     =============                                   ==============
          BASIC EPS
          Income available
            to common
            stockholders                 838,909         3,449,666     $      .24        437,291         3,178,426       $      .14
                                     =============                     ============  ==============                     ===========
          EFFECT OF DILUTIVE
          SECURITIES

          Stock options                                    239,169                                         168,206
                                                     ---------------                                 ----------------
          DILUTED EPS

          Income available
            to common stock-
            holders                  $   838,909         3,688,836     $      .23    $   437,291         3,346,632       $      .13
                                     =============   ===============   ============  ==============  ================   ===========
</TABLE>


          Options to purchase 18,000 shares of common stock at a weighted
          average exercise price of $9.94 per share were outstanding during
          2000 but were not included in the computation of diluted EPS because
          the options' exercise prices were greater than the average market
          price of the common shares.

6.        LINES OF CREDIT

          The Company entered into a general credit and security agreement
          with Bremer Bank, N.A., a financial institution located in South
          Saint Paul, Minnesota, on June 3, 1998. Borrowings under the credit
          agreement include a commercial revolving credit line, which provides
          for maximum advances of $2,250,000 with interest at the prime rate
          (9.50% at December 31, 2000). The Company had no borrowings under
          the credit line during the year 2000. Interest charged to operations
          under this line of credit was approximately $4,000 for the period
          ended December 31, 1999. The weighted average interest rate on the
          line of credit was 7.75% in 1999. The credit agreement contains
          covenants requiring the Company to maintain certain financial
          ratios. The Company was in compliance with these requirements as of
          December 31, 2000. The Company's current loan arrangements prohibit
          the payment of dividends without the bank's consent.


                                      36
<PAGE>

7.        OPERATING LEASES AND COMMITMENTS

          The Company leases certain copying equipment under an operating
          lease, which requires monthly payments of $5,560. Future payments of
          the lease, which expires in February 2001, are $5,560. Rental
          expenses charged to operations were approximately $66,720 for the
          period ended December 31, 2000.

          In addition, in January 1999 the Company entered into a five-year
          totalizator services agreement with Autotote Systems, Inc.
          (Autotote). Pursuant to the agreement, Autotote provides totalizator
          equipment and computer programs which record and process all wagers
          and calculate the odds and payoffs. For such services, Autotote
          receives a fee of approximately .45% of the gross monies wagered.
          Amounts charged to operations under this agreement for the years
          ended December 31, 2000 and 1999 were approximately $332,000 and
          $325,000, respectively. During the 2000 and 1999 live race meets,
          Autotote provided uplink services which enabled the Company to
          simulcast horse races held at Canterbury Park to out-of-state
          racetracks. These services resulted in an amount charged to
          operations in 2000 and 1999 of approximately $118,000 and $115,000,
          respectively. A director of the Company is the regional sales
          manager of Autotote.

8.        CONTINGENCIES

          In connection with the purchase of JRI (note 1), the company entered
          into an Earn Out Promissory Note dated March 29, 1994. In accordance
          with the Earn Out Note if (i) off-track betting becomes legally
          permissible in the State of Minnesota and (ii) the Company begins to
          conduct off-track betting with respect to or in connection with its
          operations, the Company will be required to pay to the IMR Fund,
          L.P. the greater of $700,000 per operating year, as defined, or 20%
          of the net pretax profit, as defined for each of five operating
          years. At the date (if any) that these two conditions are met, the
          five minimum payments will be discounted back to their present value
          and the sum of those discounted payments will be recorded as an
          increase to the purchase price. The purchase price will be further
          increased if payments become due under the "20% of Net Pretax
          Profit" calculation. The first payment is to be made 90 days after
          the end of the third operating year in which off-track betting is
          conducted by the Company. Remaining payments would be made within 90
          days of the end of each of the next four operating years.

9.        RELATED-PARTY TRANSACTIONS

          The president/director and two other directors have guaranteed
          performance by the Company under a $500,000 bond issued to the
          Minnesota Racing Commission.

          In 1999, the Company paid $40,000 to a Board member for advertising
          and marketing services provided to the Company. This Board member
          was also granted 15,000 stock options in 1998 and 12,500 stock
          options in 1997 (refer to Note 4).

10.       OPERATING SEGMENTS

          The Company has three reportable operating segments: card club,
          horse racing, and concessions. The card club segment includes
          operations of the Canterbury Card Club. The horse racing segment
          includes simulcast and live racing operations, and the concessions
          segment provides concessions during simulcast racing, live racing,
          in the card club and during special events. The Company's reportable
          operating segments are strategic business units that offer different
          products and services. They are managed separately because the
          segments differ in the nature of the products and services provided
          as well as processes to produce those products and services. The
          horse racing and card club segments are regulated by the State of
          Minnesota Racing Commission.

                                      37
<PAGE>

          The accounting policies of the operating segments are the same as
          those described in the summary of significant accounting policies.

          Depreciation, interest expense and income taxes are allocated to the
          segments but no allocation is made to concessions for shared
          facilities. However, the concessions segment pays approximately 25%
          of gross revenues to the horse racing segment for use of the
          facilities.

       The following table provides information about the Company's operating
segments (in 000's):

<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------------------
                                                Year Ended December 31, 2000               Year Ended December 31, 1999

-------------------------------------------------------------------------------------------------------------------------
                                                     Horse                                Horse
                                      Card Club     Racing     Concessions     Total      Racing   Concessions    Total

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

<S>                                    <C>          <C>          <C>          <C>        <C>          <C>        <C>
          Revenues from external
               customers               $ 11,347     $17,375      $3,741       $32,463    $17,255      $3,076     $20,331
          Intersegment revenues                         658         874         1,532        806                     806
          Net interest expense              100         (88)                       12         (6)                     (6)
          Depreciation and
               amortization                 324         585                       909        777                     777
          Segment income before
               income taxes                 970         512         123         1,605        545         191         736
          Segment Assets               $  3,318     $ 9,968      $  525       $13,811    $10,135      $  411     $10,546

=========================================================================================================================
</TABLE>

          Included in horse racing segment revenues for the years ended
          December 31, 2000 and 1999 is approximately $444,000 and $616,000,
          respectively, for rental of the racing facility for special events
          and storage.

          The following are reconciliations of reportable segment revenue,
          income before income taxes, and assets, to the Company's
          consolidated totals (in 000's):

<TABLE>
<CAPTION>
                                                                                    2000                    1999
                                                                             -------------------     -------------------

<S>                                                                           <C>                     <C>
         REVENUES
           Total revenue for reportable segments                                        $33,995                 $21,137
           Elimination of intersegment revenues                                          (1,532)                   (806)
                                                                             -------------------     -------------------
                    Total consolidated revenues                                          32,463                  20,331
                                                                             ===================     ===================
         INCOME BEFORE INCOME TAXES
           Total segment income before income taxes                                      $1,605                    $736
           Elimination of intersegment income before income taxes                          (123)                   (178)
                                                                             -------------------     -------------------
                    Total consolidated income before income taxes                         1,482                     558
                                                                             ===================     ===================


                                                                              December 31, 2000       December 31, 1999
                                                                             -------------------     -------------------
         ASSETS

           Total assets for reportable segments                                         $13,811                 $10,546
           Elimination of intercompany receivables                                         (493)                   (357)
                                                                             -------------------      ------------------
                    Total consolidated assets                                            13,318                  10,189
                                                                             ===================      ==================
</TABLE>


                                      38
<PAGE>

ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

          Not Applicable.



                                   PART III

ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

          Information required under this item with respect to the directors
          will be set forth in a section captioned "Election of Directors" in
          the Company's Proxy Statement for the Annual Meeting of Shareholders
          to be held on June 7, 2001 (the "2001 Proxy Statement"), a definitive
          copy of which will be filed with the Commission within 120 days of the
          close of the 2000 fiscal year, which information is incorporated
          herein by reference. Information regarding executive officers is
          presented under Item 1 herein.

ITEM 10.  EXECUTIVE COMPENSATION

          Information required under this item will be set forth in a section
          entitled "Executive Compensation and Other Information" in the
          Company's 2001 Proxy Statement which information is incorporated
          herein by reference.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

          Information required under this item will be set forth in a section
          entitled "Security Ownership of Certain Beneficial Owners" in the
          Company's 2001 Proxy Statement which information is incorporated
          herein by reference.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          Information required under this item will be set forth in a section
          entitled "Certain Transactions" in the Company's 2001 Proxy Statement
          which information is incorporated herein by reference.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

(a)       EXHIBITS. See Exhibit Index at page 38, which is incorporated
          herein by reference. Exhibits that cover management contracts or
          compensatory plans or arrangements are marked with an asterisk (*)
          on the Exhibit Index.

(b)       REPORTS ON FORM 8-K.  No reports on Form 8-K  were filed during the
          fourth quarter of 2000.

                                      39
<PAGE>



                                  SIGNATURES

       Pursuant to the requirements of Section 13 or 15(d) 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.

Dated:  March 30, 2001                  CANTERBURY PARK HOLDING CORPORATION


                                  By    /s/ Randall D. Sampson
                                        ----------------------------------------
                                        Randall D. Sampson
                                        President and Chief Executive Officer

       Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on the date set forth above.

                               POWER OF ATTORNEY

       Each person whose signature appears below constitutes and appoints
CURTIS A. SAMPSON, DALE H. SCHENIAN and RANDALL D. SAMPSON as his true and
lawful attorneys-in-fact and agents, each acting alone, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments to this Annual Report on
Form 10-KSB and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, each acting
alone, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all said attorneys-in-fact and agents, each acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by virtue
thereof.

<TABLE>
<CAPTION>
             SIGNATURE                                           TITLE                          DATE

<S>                                            <C>                                         <C>
/s/Curtis A. Sampson                           Chairman of the Board                       March 30, 2001
-------------------------------------
Curtis A. Sampson

/s/ Dale H. Schenian                           Director; Vice Chairman                     March 30, 2001
-------------------------------------
Dale H. Schenian

/s/ Randall D. Sampson                         Chief Executive Officer, President,         March 30, 2001
-------------------------------------          Chief Financial Officer, General
Randall D. Sampson                             Manager, Treasurer and Director


/s/ Brian C. Barenscheer                       Director                                    March 30, 2001
-------------------------------------
Brian C. Barenscheer

/s/ Gibson Carothers                           Director                                    March 30, 2001
-------------------------------------
Gibson Carothers

/s/ Terence McWilliams                         Director                                    March 30, 2001
-------------------------------------
Terence McWilliams

/s/ Carin Offerman                             Director                                    March 30, 2001
-------------------------------------
Carin Offerman

/s/ Judith M. Dahlke                           Chief Accounting Officer                    March 30, 2001
-------------------------------------
Judith M. Dahlke

</TABLE>

                                      40
<PAGE>



              CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARY
<TABLE>
<CAPTION>

                               Exhibit Index To
               Form 10-KSB for the Year Ended December 31, 2000

   Regulation S-B                                                                   Location in Consecutive Numbering
   Exhibit Table                                                                    System as Filed with the Securities and
     Reference             Title of Document                                        Exchange Commission
---------------------      ---------------------------------------------           ---------------------------------------
<S>                        <C>                                                      <C>

        3.1                Articles of Incorporation, as amended.                   Filed as Exhibit 3.1 to the Forms SB-2
                                                                                    Registration Statement of the Company,
                                                                                    File No. 33-81262C, (the "SB-2
                                                                                    Registration Statement") and
                                                                                    incorporated herein by reference.

        3.2                Bylaws, as amended                                       Filed as Exhibit 3.2 to the SB-2
                                                                                    Registration Statement and
                                                                                    incorporated herein by reference.

        4.1                Warrant Agreement between the Company and the            Filed as Exhibit 4.1 to the SB-2
                           Warrant                                                  Agent Registration Statement and
                                                                                    incorporated herein by reference.

        10.1               Plan of Reorganization dated as of May 20, 1994          Filed as Exhibit 10.1 to the SB-2
                           between Canterbury Park Holding Corporation and          Registration Statement and incorporated
                           Canterbury Park Concessions, Inc.                        herein by reference.

        10.2               Restated Stock Purchase Agreement                        Filed as Exhibit 10.2 to the SB-2
                                                                                    Registration Statement and incorporated
                                                                                    herein by reference.

        10.3               Letter dated April 4, 1994 from the Minnesota            Filed as Exhibit 10.3 to the SB-2
                           Horsemen's Benevolent and Protective Association,        Registration Statement and incorporated
                           Inc. to Minnesota Racing Commission waiving 125          herein by reference.
                           day racing minimum

        10.4               Totalizator Services Agreement dated May 2, 1994         Filed as Exhibit 10.4 to the SB-2
                           between Autotote Systems, Inc. and Canterbury            Registration Statement and incorporated
                           Park Holding Corporation.                                herein by reference.

        10.5               Stock Option Plan, as amended*                           Filed as Exhibit 4.1 to the
                                                                                    Registration Statement on Form S-8 of
                                                                                    the Company filed on August 28, 1997
                                                                                    (File No. 333-34509) and incorporated
                                                                                    herein by reference.

        10.6               Form of Non-qualified Stock Option Agreement             Filed as Exhibit 10.6 to the SB-2
                                                                                    Registration Statement and incorporated
                                                                                    herein by reference.

</TABLE>

* Denotes an exhibit that covers management contracts or compensatory plans or
arrangements.

                                      41
<PAGE>

<TABLE>
<CAPTION>

   Regulation S-B                                                                   Location in Consecutive Numbering
   Exhibit Table                                                                    System as Filed with the Securities and
     Reference             Title of Document                                        Exchange Commission
---------------------      ---------------------------------------------            ---------------------------------------
<S>                        <C>                                                      <C>

        10.7               Curtis A. Sampson Guaranty to HRA                        Filed as Exhibit 10.7 to the SB-2
                                                                                    Registration Statement and incorporated
                                                                                    herein by reference.

        10.10              General Credit and Security Agreement dated as of        Filed as Exhibit 10.10 to the Form
                           June 3, 1998 between Canterbury Park Holding             10-KSB for the fiscal year ended
                           Corporation and Bremer Bank N.A. (previously             December 31, 1998.
                           First American Bank, N.A.)  This exhibit 10.10
                           replaces exhibit 10.10 filed previously as an
                           exhibit to the SB-2 Registration Statement.

        10.11              Stock Purchase Savings Plan                              Filed as Exhibit 10.11 to Form
                                                                                    10-KSB for the fiscal year ended
                                                                                    December 31, 1997 and incorporated
                                                                                    herein by reference.

        10.13              Stock Option Plan for Non-Employee Consultants           Filed as Exhibit 4.3 to the
                           and Advisors                                             Registration Statement on Form S-8 of
                                                                                    the Company filed on August 28, 1997
                                                                                    (File No. 333-34509) and incorporated
                                                                                    herein by reference.

        21                 Subsidiary of the Registrant                             Filed herewith.

        23                 Independent Auditors' Consent                            Filed herewith.

        24                 Power of Attorney                                        Included in signature page at page 37.
</TABLE>

  The exhibits referred to in this Exhibit will be supplied to a shareholder
   at a charge of $.25 per page upon written request directed to Canterbury
       Park Holding Corporation at the executive offices of the Company.

                                      42