UNITED STATES ~~SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549~~

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
	Act of 1934
	For the quarterly period ended April 30, 2001
	or
o	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
	Act of 1934

ý Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended October 31, 2001

o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File No. 33-99834

DAKOTA GROWERS PASTA COMPANY ~~(Exact name of registrant as specified in its charter)~~

(Exact name of registrant as specified in its charter)

North Dakota		45-0423511
(State of incorporation)		(IRS Employer Identification No.)

One Pasta Avenue, P.O. Box 21, Carrington, ND 58421-0021 ~~(Address of principal executive offices including zip code)~~

(~~701) 652-2855~~Address ~~(Registrant’s~~ ~~telephone~~of ~~number,~~principal executive offices including ~~area~~zip code)

~~NOT APPLICABLE~~ (~~Former name, former address and former fiscal year, if changed since last report~~701) 652-2855

~~Indicate by check mark whether the registrant~~ (~~1) has filed all reports required to be~~Registrant's ~~filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the~~ ~~preceding~~telephone ~~12 months (or for such shorter period that the registrant was required to file such reports)~~number, ~~and~~including ~~(2)~~area ~~has been subject to such filing requirements for the past 90 days.~~code)

~~Yes~~NOT ~~x No o~~APPLICABLE

~~The~~(Former ~~number of shares outstanding of the Registrant’s classes of common stock were~~ 1name,~~157~~ ~~shares~~former ofaddress ~~membership stock, par value $125.00,~~ and ~~11,253,121~~former offiscal ~~equity stock~~year, ~~par~~if ~~value~~changed ~~$2.50,~~since aslast ~~of June 14, 2001.~~report)

~~PART~~Indicate by Icheck -mark ~~FINANCIAL~~whether ~~INFORMATION~~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 ý No o

~~ITEM~~The number of shares outstanding of the Registrant's classes of common stock were 1,155 shares of membership stock, par value $125.00, ~~FINANCIAL~~and ~~STATEMENTS~~11,275,297 of equity stock, par value $2.50, as of December 13, 2001.

~~DAKOTA GROWERS~~PART ~~PASTA~~I ~~COMPANY~~— ~~CONSOLIDATED BALANCE SHEETS~~ ~~(In~~FINANCIAL ~~Thousands, Except Share Information)~~INFORMATION

	(Unaudited)April 30,2001	July 31,2000
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$ -	$1,725
Short-term investments (restricted)	1,974	1,974
Trade accounts receivable, less allowance for cash discounts and doubtful accounts of $548 and $348, respectively	12,600	12,890
Other receivables	626	593
Inventories	22,409	21,781
Prepaid expenses	1,328	1,603
Total current assets	38,937	40,566
PROPERTY AND EQUIPMENT
In service	115,933	110,021
Construction in process	531	2,560
	116,464	112,581
Less accumulated depreciation	(32,222)	(27,009)
Net property and equipment	84,242	85,572
INVESTMENT IN COOPERATIVE BANKS	2,211	2,037
OTHER ASSETS	7,816	3,682
	$133,206	$131,857

Item 1. Financial Statements

DAKOTA GROWERS PASTA COMPANY CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share Information)

	(Unaudited)April 30,2001	July 31,2000
LIABILITIES AND MEMBERS’ INVESTMENT
CURRENT LIABILITIES
Notes payable and current portion of long-term debt	$15,998	$4,979
Excess outstanding checks over cash on deposit	1,906	0
Accounts payable	5,516	4,104
Accrued grower payments	298	1,287
Accrued liabilities	4,999	5,107
Total current liabilities	28,717	15,477
COMMITMENTS AND CONTINGENCIES
LONG-TERM DEBT, net of current portion	48,360	51,626
DEFERRED INCOME TAXES	3,856	4,095
Total liabilities	80,933	71,198
REDEEMABLE PREFERRED STOCK
Series A, 6% non-cumulative, $100 par value, issued 633 and 733 shares, respectively	63	73
Series B, 2% non-cumulative, $100 par value, issued 525 shares	53	53
Total preferred stock	116	126
MEMBERS’ INVESTMENT
Convertible preferred stock Series C, 6% non-cumulative, $100 par value, issued 924 shares	92	92
Membership stock, $125 par value, issued 1,157 and 1,158 shares, respectively	145	145
Equity stock, $2.50 par value, issued 11,253,121 shares	28,133	28,133
Additional paid-in capital	22,876	22,876
Accumulated allocated earnings	4,596	1,931
Accumulated unallocated earnings (deficit)	(3,685)	7,356
Total members’ investment	52,157	60,533
Total liabilities and members’ investment	$133,206	$131,857
See Notes to Consolidated Financial Statements

CONSOLIDATED BALANCE SHEETS

~~DAKOTA GROWERS PASTA COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS~~ (In Thousands, Except ~~Per~~ Share ~~Amounts~~Information)~~(Unaudited)~~

	Three Months Ended April 30,
		(Unaudited)
	2001	2000
		October 31,			July 31,
Net revenues (net of discounts and allowances of $4,072 and $3,927, respectively)	$34,100	$35,209
		2001			2001
Cost of product sold	32,122	30,185
ASSETS
Gross proceeds	1,978	5,024
CURRENT ASSETS
Marketing, general and administrative expenses	2,258	2,827
Cash and cash equivalents		$	3		$	3
Operating proceeds (loss)	(280)	2,197
Short-term investments (restricted)		1,974			1,974
Other income (expense)
Trade accounts receivable, less allowance for cash discounts and doubtful accounts of $453 and $610, respectively		12,000			11,560
Interest and other income	89	109
Other receivables		965			1,138
Loss on sale of property and equipment	-	(45)
Inventories		20,000			21,050
Interest expense, net	(901)	(1,067)
Prepaid expenses		1,839			1,602
Income (loss) before income taxes	(1,092)	1,194
Total current assets		36,781			37,327
Income tax benefit	80	742
PROPERTY AND EQUIPMENT
Net income (loss) from patronage and non-patronage business	(1,012)	1,936
In service		115,005			114,984
Dividends on preferred stock	1	1
Construction in process		249			108
Net earnings (loss) from patronage and non-patronage business available for members	$(1,013)	$1,935
		115,254			115,092
Average equity shares outstanding	11,253	11,183
Less accumulated depreciation		(35,090		)	(33,367		)
Net earnings (loss) from patronage and non-patronagebusiness per average equity share outstanding
Net property and equipment		80,164			81,725
Basic	$(0.09)	$0.17
INVESTMENT IN COOPERATIVE BANKS		2,211			2,211
See Notes to Consolidated Financial Statements
OTHER ASSETS		6,916			7,395
		$	126,072		$	128,658

DAKOTA GROWERS PASTA COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, Except Per Share Amounts)(Unaudited)

LIABILITIES AND MEMBERS' INVESTMENT

CURRENT LIABILITIES
Notes payable	$	4,800	$	8,100
Current portion of long-term debt	6,801		2,657
Accounts payable	4,593		4,400
Excess outstanding checks over cash on deposit	377		1,072
Dividends payable	7		-
Accrued grower payments	1,345		969
Accrued liabilities	5,343		5,709

Total current liabilities	23,266		22,907

COMMITMENTS AND CONTINGENCIES	-		-
LONG-TERM DEBT, net of current portion	42,182		47,594
DEFERRED INCOME TAXES	3,697		3,777

Total liabilities	69,145		74,278


REDEEMABLE PREFERRED STOCK
Series A, 6% non-cumulative, $100 par value, issued 567 and 600 shares, respectively	57		60
Series B, 2% non-cumulative, $100 par value, issued 525 shares	53		53

Total preferred stock	110		113

MEMBERS' INVESTMENT
Convertible preferred stock Series C, 6% non-cumulative, $100 par value, issued 924 shares as of July 31, 2001	-		92
Membership stock, $125 par value, issued 1,155 and 1,156 shares, respectively	144		144
Equity stock, $2.50 par value, issued 11,275,297 and 11,253,121 shares, respectively	28,188		28,133
Additional paid-in capital	22,913		22,876
Accumulated allocated earnings	4,596		4,596
Accumulated unallocated earnings (deficit)	976		(1,574		)

Total members' investment	56,817		54,267

Total liabilities and members' investment	$	126,072	$	128,658

	Nine Months Ended April 30,
	2001	2000
Net revenues (net of discounts and allowances of $13,473 and $13,507, respectively)	$99,015	$104,873
Cost of product sold	93,079	88,416
Gross proceeds	5,936	16,457
Marketing, general and administrative expenses	7,329	7,781
Operating proceeds (loss)	(1,393)	8,676
Other income (expense)
Interest and other income	274	392
Loss on sale of property and equipment	-	(36)
Interest expense, net	(3,016)	(3,453)
Income (loss) before income taxes	(4,135)	5,579
Income tax benefit	239	1,242
Net income (loss) from patronage and non-patronage business	(3,896)	000
Dividends on preferred stock	14	2
Net earnings (loss) from patronage and non-patronage business available for members	$(3,910)	$6,819
Average equity shares outstanding	11,253	11,137
Net earnings (loss) from patronage and non-patronage business per average equity share outstanding
Basic	$(0.35)	$0.61
See Notes to Consolidated Financial Statements

See Notes to Consolidated Financial Statements

DAKOTA GROWERS PASTA COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands)(Unaudited)

	Nine Months Ended April 30,
	2001	2000
OPERATING ACTIVITIES
Net income (loss)	$(3,896)	$6,821
Add (deduct) non-cash items
Depreciation and amortization	6,625	6,891
Non-cash portion of patronage dividends	(204)	18
Cooperative bank stock valuation adjustment	-	36
Loss on sale of property and equipment	-	36
Deferred income taxes	(239)	(811)
Changes in assets and liabilities
Trade receivables	290	2,725
Other receivables	(33)	1,267
Inventories	(628)	(4,331)
Prepaid expenses	59	793
Other assets	-	(361)
Accounts payable	1,412	(1,205)
Excess outstanding checks over cash deposits	1,906	1,193
Growers payables	(989)	(819)
Other accrued liabilities	(108)	(904)
NET CASH FROM OPERATING ACTIVITIES	4,195	11,349
INVESTING ACTIVITIES
Purchases of property and equipment	(3,886)	(4,735)
Proceeds from sale of property and equipment	-	127
Receipts on note receivable	-	1,884
Net purchase of short-term investments	-	(1,461)
Payments for long-term prepaid marketing costs	(5,038)	(463)
Payments for package design costs	(259)	(427)
NET CASH USED IN INVESTING ACTIVITIES	(9,183)	(5,075)
FINANCING ACTIVITIES
Net change in short-term debt	12,165	3,875
Payments on long-term debt	(4,412)	(7,518)
Preferred stock issued	-	58
Preferred stock retirements	(10)	(3)
Dividends paid on preferred stock	(14)	(2)
Memberships issued, net	-	1
Options exercised	-	1,306
Patronage distributions	(4,466)	(7,358)
NET CASH FROM (USED IN) FINANCING ACTIVITIES	3,263	(9,641)

CONSOLIDATED STATEMENTS OF OPERATIONS

	Nine Months Ended April 30,
	2001	2000
NET CHANGE IN CASH AND CASH EQUIVALENTS	(1,725)	(3,367)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	1,725	3,425
CASH AND CASH EQUIVALENTS, END OF PERIOD	$ -	$58
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for
Interest	$3,816	$3,007
Income taxes	$9	$546
See Notes to Consolidated Financial Statements

(In Thousands, Except Per Share Amounts)(Unaudited)

DAKOTA GROWERS PASTA COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

	Three Months Ended
	October 31,
	2001			2000
Net revenues (net of discounts and allowances of $4,168 and $4,864, respectively)	$	37,546		$	33,283

Cost of product sold	31,642			30,947

Gross proceeds	5,904			2,336

Marketing, general and administrative expenses	2,429			2,603

Operating proceeds (loss)	3,475			(267		)

Other income (expense)
Interest and other income	112			139
Gain on sale of other assets	2			-
Interest expense, net	(1,111		)	(1,053		)

Income (loss) before income taxes	2,478			(1,181		)

Income tax benefit	80			79

Net income (loss) from patronage and non-patronage business	2,558			(1,102		)
Dividends on preferred stock	8			12

Net earnings (loss) from patronage and non-patronage business available for members	$	2,550		$	(1,114	)

Average equity shares outstanding	11,275			11,253

Net earnings (loss) from patronage and non-patronage business per average equity share outstanding

Basic	$	0.23		$	(0.10	)

~~The~~See ~~following~~Notes ~~notes should be read in conjunction with the notes~~ to ~~the~~Consolidated ~~financial~~Financial ~~statements for the year ended July 31, 2000 as filed in the Company’s Form 10-K.~~Statements

NOTEDAKOTA 1GROWERS -PASTA ORGANIZATIONCOMPANY

Dakota GrowersCONSOLIDATED PastaSTATEMENTS CompanyOF (“DakotaCASH Growers”, “the Company” or “the Cooperative”) is organized as a farmers’ cooperative for purposes of manufacturing food for human consumption from durum and other grain products. Net proceeds are allocated to patrons who are members on the basis of their participation in the Cooperative.FLOWS

~~The ownership~~(In of membership stock, which signifies membership in the Cooperative, is restricted to producers of agricultural products. The ownership of equity stock is restricted to members of the Cooperative. Preferred stock may be held by persons who are not members of the Cooperative.Thousands)(Unaudited)

NOTE 2 – FINANCIAL STATEMENT PRESENTATION

	Three Months Ended
	October 31,
	2001			2000
OPERATING ACTIVITIES
Net income (loss)	$	2,558		$	(1,102	)
Add (deduct) non-cash items
Depreciation and amortization	2,223			2,211
Gain on sale of other assets	(2		)	-
Deferred income taxes	(80		)	(79		)
Changes in assets and liabilities
Trade receivables	(440		)	1,055
Other receivables	173			(4		)
Inventories	1,050			1,045
Prepaid expenses	7			72
Other assets	-			1
Accounts payable	193			2,076
Excess outstanding checks over cash on deposit	(695		)	-
Grower payables	376			(109		)
Other accrued liabilities	(366		)	(42		)

NET CASH FROM OPERATING ACTIVITIES	4,997			5,124

INVESTING ACTIVITIES
Purchases of property and equipment	(162		)	(685		)
Proceeds on sale of property, equipment, and other assets	53			-
Payment for long-term prepaid marketing costs	(250		)	-
Payments for package design costs	(66		)	(73		)

NET CASH USED IN INVESTING ACTIVITIES	(425		)	(758		)

FINANCING ACTIVITIES
Net change in short-term notes payable	(3,300		)	(1,875		)
Payments on long-term debt	(1,268		)	(1,263		)
Preferred stock retirements	(3		)	(3		)
Dividends paid on preferred stock	(1		)	(1		)

NET CASH USED IN FINANCING ACTIVITIES	(4,572		)	(3,142		)

NET CHANGE IN CASH AND CASH EQUIVALENTS	-			1,224

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	3			1,725

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	3		$	2,949

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for
Interest (net of amounts capitalized)	$	1,541		$	1,504

Income taxes	$	8		$	2

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES
Declaration of patronage distribution	$	-		$	4,466
Declaration of dividends on preferred stock	7			11

	$	7		$	4,477

~~The~~See ~~unaudited~~Notes ~~consolidated financial statements included herein as of April 30, 2001 and for the three and nine month periods ended April 30, 2001 and 2000, have been prepared pursuant~~ to ~~the~~ ~~rules and regulations of the Securities and Exchange Commission. Accordingly,~~ ~~they~~Consolidated doFinancial not include all the information and footnotes required by generally accepted accounting principles. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended April 30, 2001 are not necessarily indicative of the results that may be expected for the year ended July 31, 2001. The information included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis and the consolidated financial statements and footnotes included in the Company’s Form 10-K for the year ended July 31, 2000. The information contained in the balance sheet as of July 31, 2000 was derived from the Company’s audited annual report for fiscal 2000. Reclassifications have been made to facilitate comparability with current presentation. Such reclassifications have no effect on the net results of operations.Statements

TheDAKOTA financialGROWERS informationPASTA presented herein includes the consolidated balances and results of operations of Dakota Growers Pasta Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated.COMPANY

NOTENOTES 3TO –CONSOLIDATED INVENTORIESFINANCIAL STATEMENTS

Inventories are valued at lower of cost or market. Inventories as of April 30, 2001 include raw materials of $6,095,000 and finished goods of $16,314,000. Inventories at July 31, 2000 include raw materials of $5,329,000 and finished goods of $16,452,000.(Unaudited)

~~NOTE~~The 4following –notes ~~OTHER~~should ~~ASSETS~~be read in conjunction with the notes to the financial statements for the year ended July 31, 2001 as filed in the Company’s Form 10-K.

~~Other assets as of April 30, 2001 and~~NOTE ~~July~~ 1 ~~31,~~- ~~2000 consisted of the following:~~ORGANIZATION

	April 30, 2001	July 31, 2000
Package design costs - net	$1,256	$1,453
Prepaid marketing costs	6,302	1,979
Debt issuance costs	160	182
Other	98	68
	$7,816	$3,682

Dakota Growers Pasta Company (“Dakota Growers”, "the Company" or "the Cooperative") is organized as a farmers' cooperative for purposes of manufacturing food for human consumption from durum and other grain products. Net proceeds are allocated to patrons who are members on the basis of their participation in the Cooperative.

~~NOTE~~The 5ownership –of membership ~~LOAN~~stock, ~~AGREEMENTS~~which signifies membership in the Cooperative, is restricted to producers of agricultural products. The ownership of equity stock is restricted to members of the Cooperative. Preferred stock may be held by persons who are not members of the Cooperative.

InNOTE ~~December 2000, the Company renewed its $15 million seasonal line of credit with~~ ~~CoBank.~~2 ~~The~~– ~~available~~BASIS ~~credit~~OF on the seasonal line was increased to $19 million in January 2001. The seasonal loan has a variable interest rate and matures on December 31, 2001. It is secured by property, equipment, and current assets of the Company. The balance outstanding on the line of credit totaled $14,040,000 as of April 30, 2001.PRESENTATION

AsThe unaudited consolidated financial statements included herein have been prepared pursuant to the rules and regulations of ~~April~~the ~~30,~~Securities ~~2001~~and Exchange Commission. Accordingly, they do not include all the ~~Company~~information ~~was~~and ~~not~~footnotes required by accounting principles generally accepted in ~~compliance~~the ~~with~~United States of America for complete financial statements. In the ~~consolidated~~opinion ~~funded~~of ~~debt~~management, toall adjustments ~~consolidated~~(consisting ~~cash~~of ~~flow~~normal ~~ratio~~recurring accruals) considered necessary for ~~set~~ a ~~forth~~fair inpresentation ~~the~~have ~~first~~been ~~amendment~~included. toOperating ~~the~~results ~~note~~for ~~agreement~~the ~~with~~three ~~institutional~~months ~~investors.~~ ended ~~The~~October ~~first~~31, ~~amendment~~2001 toare ~~the~~not ~~note~~necessarily ~~agreement~~indicative ~~requires~~of the results that may be expected for the ~~ratio~~year ofended July 31, 2002. The information included in this ~~consolidated~~ Form ~~funded~~10-Q ~~debt~~should tobe read in conjunction with Management’s Discussion and Analysis and the consolidated ~~cash~~financial ~~flow~~statements ~~not~~and ~~exceed~~footnotes ~~3.00~~included toin the 1Company’s Form 10-K for ~~all periods~~the ~~after~~year ~~January~~ended July 31, 2001,. The information contained in ~~each~~the ~~case~~balance ~~determined~~sheet as of ~~the~~July ~~end~~31, of2001 ~~each fiscal~~was ~~quarter~~derived ~~for~~from the Company’s ~~immediately~~audited ~~preceding~~annual ~~four~~report for fiscal ~~quarters,~~2001. ~~treating~~Reclassifications have been ~~such~~ made ~~period~~to offacilitate ~~four~~comparability ~~fiscal~~with ~~quarters~~current aspresentation. aSuch reclassifications ~~single~~have ~~accounting~~no ~~period~~effect on the net results of operations.

The ~~Company~~financial isinformation ~~currently~~presented inherein ~~discussions~~includes the consolidated ~~with~~ balances ~~its~~and ~~lenders~~results ~~regarding~~of aoperations ~~waiver~~of Dakota Growers Pasta Company and ~~second~~its wholly ~~amendment~~owned tosubsidiary. ~~the~~All ~~note~~significant ~~agreement~~intercompany balances and transactions have been eliminated.

NOTE 3 6 – ~~INCOME TAXES~~INVENTORIES

~~The Company~~Inventories isare avalued ~~non-exempt~~at ~~cooperative~~lower asof ~~defined~~cost byor market. ~~Section~~Inventories ~~1381(a)(2)~~as of ~~the Internal~~October ~~Revenue Code (“Code”). Accordingly~~31, ~~net~~2001 ~~margins~~include ~~from~~raw ~~business transacted~~materials ~~with~~of ~~its member patrons which are allocated~~$5, ~~qualified~~470, ~~and paid as~~000 ~~prescribed in Section 1382 of the Code will be taxable to the members and not~~ ~~to the Company. Net margins~~ and ~~member~~finished ~~allocations~~goods ~~are determined on the basis~~ of ~~accounting used for financial reporting purposes~~$14,530,000. ToInventories ~~the~~at ~~extent~~July ~~that net margins are not allocated and paid as stated above or arise from business done with non-members~~31, ~~the~~2001 ~~Company~~include ~~shall have taxable income subject to corporate~~raw ~~income tax rates. Cooperative organizations have 8 ½ months after their fiscal~~ ~~year~~materials ~~end~~of to$5,710,000 ~~make~~and ~~such~~finished ~~allocations~~goods ~~in the form~~ of ~~written notices of allocation or cash~~$15,340,000.

TheNOTE Company4 has– recordedINCOME an income tax benefit of $80,000 for the three months ending April 30, 2001 and $239,000 for the nine months ending April 30, 2001 resulting from reductions in deferred tax liabilities associated with differences between the book and tax basis of property and equipment.TAXES

AnThe ~~income~~Company ~~tax~~is ~~benefit~~a non-exempt ofcooperative ~~$742,000~~as ~~was recorded~~defined ~~for~~by ~~the~~Section ~~three~~1381(a)(2) ~~months~~of ~~ending~~the ~~April~~Internal 30Revenue Code (“Code”). Accordingly, ~~2000~~net ~~and~~margins ~~$1,242,000~~from ~~for~~business ~~the~~transacted ~~nine~~with its ~~months~~ member ~~ended~~patrons ~~April~~which 30are allocated, ~~2000. The $1~~qualified,~~242,000~~ ~~benefit~~and ~~for~~paid ~~the~~as ~~nine~~prescribed ~~months ended~~in ~~April~~ Section ~~30,~~1382 ~~2000~~of ~~consisted~~the ofCode awill ~~current~~be ~~benefit~~taxable ofto ~~$431,000~~the ~~related~~members and not to the Company. ~~reclassification~~ Net ofmargins ~~approximately~~and ~~$2,000,000~~member ofallocations ~~income~~are ~~from~~determined ~~nonpatronage~~on tothe basis of accounting ~~patronage~~ used for ~~the~~financial ~~year~~reporting ~~ended~~purposes. ~~July~~To ~~31,~~the ~~1999.~~extent ~~The~~that ~~reclassification~~net ~~was~~margins ~~based~~are onnot ~~cooperative~~ allocated ~~income~~and ~~tax~~paid ~~developments~~as ~~taking~~stated ~~place~~above inor ~~the~~arise ~~second~~from ~~quarter~~business ofdone with ~~fiscal~~ non-members, ~~year~~the ~~2000.~~Company ~~The~~shall ~~remaining~~have ~~$811,000~~taxable ~~of the~~ income ~~tax~~subject ~~benefit~~to ~~for~~corporate ~~the nine~~income ~~months~~ tax ~~ended~~rates. ~~April~~Cooperative ~~30,~~organizations ~~2000~~have ~~related~~8 to½ ~~reductions~~months inafter ~~deferred~~their ~~tax~~fiscal ~~liabilities~~year ~~associated~~ end ~~with~~to ~~differences~~make ~~between~~such allocations in the ~~book~~form ~~and~~of ~~tax~~written ~~basis~~notices of ~~property~~allocation ~~and~~or ~~equipment~~ cash.

~~NOTE~~The 7Company –has ~~PATRONAGE~~recorded ~~BUSINESS~~an income tax benefit of $80,000 and $79,000 for the three months ending October 31, 2001 and 2000, respectively, resulting from reductions in deferred tax liabilities associated with differences between the book and tax basis of property and equipment.

The Company’sNOTE business5 is– conductedPATRONAGE on a cooperative basis. The Company calculates income from patronage sources based on income derived from bushels of durum delivered by members. Non-patronage income is derived from the resale of pasta purchased from non-members, the resale of semolina purchased from non-members, certain amounts of interest income, rental income from Company assets and any income taxes assessed on non-member business. The net loss allocable to patronage business totaled $3,539,000 for the nine months ended April 30, 2001.This compares to $6,317,000of net earnings allocable to patronage business for the nine months ended April 30, 2000.BUSINESS

~~NOTE~~The 8Company’s business –is ~~EARNINGS~~conducted ~~(LOSS)~~on ~~PER~~a ~~SHARE~~cooperative basis. The Company calculates income from patronage sources based on income derived from bushels of durum delivered by members. Non-patronage income is derived from the resale of pasta purchased from non-members, the resale of semolina purchased from non-members, certain amounts of interest income and any income taxes assessed on non-member business. Net earnings allocable to patronage business totaled $2,580,000 for the three months ended October 31, 2001.This compares to a net loss allocable to patronage business of $913,000 for the three months ended October 31, 2000.

The ~~Company~~ ~~had convertible preferred stock and stock options for convertible~~Company ~~preferred~~ allocates ~~stock~~its ~~outstanding during the periods presented. Fully diluted~~ earnings (loss) ~~per~~and ~~share~~patronage ~~are~~distributions ~~calculated~~based ~~for~~on ~~the~~patronage business ~~assumed~~(bushels ~~conversion~~ of ~~these dilutive~~durum ~~securities.~~delivered, Aswhich ~~the~~approximates ~~Company’s~~one ~~stock~~bushel isof ~~only~~durum per ~~traded~~equity inshare). aFor ~~small~~presentation ~~secondary market through private transactions~~purposes, ~~the~~it ~~Company~~ has ~~assumed~~calculated ~~the~~basic ~~proceeds from~~net ~~the~~ earnings ~~exercise~~(loss) ofper ~~stock~~share ~~options~~by ~~would~~dividing ~~reduce~~earnings ~~debt~~(loss) from patronage and, non-patronage ~~thus,~~business ~~interest~~available ~~expense. Fully~~for ~~diluted~~members ~~earnings~~(net income (loss) ~~per~~less ~~share~~preferred dividends) ~~are~~by ~~not~~the ~~presented,~~weighted asaverage ~~the~~number ~~dilutive effect~~ of ~~outstanding~~equity ~~convertible~~shares ~~preferred~~effective ~~stock~~ and ~~stock options is not~~ ~~material~~ outstanding ~~for~~during the ~~periods presented~~period.

~~NOTE~~The 9Company –had convertible ~~DIVIDENDS~~preferred stock and stock options for convertible preferred stock outstanding during the periods presented. Fully diluted earnings (loss) per share are calculated for the assumed conversion of these dilutive securities. As the Company’s stock is only traded in a small secondary market through private transactions, the Company has assumed the proceeds from the exercise of stock options would reduce debt and, thus, interest expense. Fully diluted earnings (loss) per share are not presented, as the dilutive effect of outstanding convertible preferred stock and stock options is not material for the periods presented.

The BoardNOTE of7 Directors– authorized a qualified patronage allocation of $4,466,000 ($.4284 per bushel acquired or $.40 per average outstanding equity share) for fiscal year 2000 at its November 2000 meeting. The total qualified patronage allocation was paid in cash on November 30, 2000. The Board also voted to allocate, on a non-qualified basis, the remainder of the fiscal 2000 patronage earnings totaling $2,665,000. In taking these actions, the Board of Directors rescinded the patronage allocations authorized at the October 2000 meeting as reported in the Company’s Form 10-K for the year ended July 31, 2000.COMMITMENTS

~~NOTE~~The 10Company –forward ~~COMMITMENTS~~contracts for a certain portion of its future durum wheat requirements. The Company had outstanding commitments for grain purchases totaling $7,312,000 at October 31, 2001.

~~The~~ITEM ~~Company forward contracts for a certain portion of its future durum wheat requirements~~2. ~~The~~MANAGEMENT’S ~~Company~~DISCUSSION ~~had outstanding~~AND ~~commitments~~ANALYSIS ~~for~~OF ~~grain~~FINANCIAL ~~purchases~~CONDITION ~~totaling~~AND ~~$1,644,000~~RESULTS atOF ~~April 30, 2001.~~OPERATIONS

~~ITEM~~Forward-Looking ~~2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~Statements

~~Forward~~The following discussion contains forward-~~Looking~~looking ~~Statements~~statements. Such forward-looking statements include, among others, those statements including the words “expect”, “anticipate”, “believe”, “may” and similar expressions. Such statements are based on assumptions by the Company’s management, as of the date of this Quarterly Report, and are subject to risks and uncertainties, including those discussed in the Company’s 2001 Form 10-K under "Risk Factors", that could cause actual results to differ materially from those anticipated. The Company cautions readers not to place undue reliance on such forward-looking statements. The Company will not update any forward-looking statements in the Quarterly Report to reflect future events or developments.

The following discussion contains forward-looking statements. Such forward-looking statements include, among others, those statements including the words “expect”, “anticipate”, “believe”, “may” and similar expressions. Such statements are based on assumptions by the Company’s management, as of the date of this Quarterly Report, and are subject to risks and uncertainties, including those discussed in the Company’s 2000 Form 10-K under “Risk Factors”, that could cause actual results to differ materially from those anticipated. The Company cautions readers not to place undue reliance on such forward-looking statements. The Company will not update any forward-looking statements in the Quarterly Report to reflect future events or developments.Summary

~~Summary~~Dakota Growers generated net earnings of $2.6 million for the three months ended October 31, 2001, up considerably from the $1.1 million net loss incurred for the quarter ended October 31, 2000.

~~Dakota~~Various revenue ~~Growers~~enhancement ~~incurred~~and acost ~~net~~cutting ~~loss~~measures ofimplemented over the past year $3 contributed to the increase in profitability.9 ~~million~~The ~~for~~Company ~~the~~realized ~~nine~~volume ~~months~~and pricing ~~ended~~gains ~~April~~in ~~30,~~the ~~2001,~~foodservice ~~compared~~and toretail ~~net~~segments ~~earnings~~ in the first quarter of fiscal $62002.8 ~~million~~Cost ~~for~~efficiencies ~~the~~have ~~corresponding~~been ~~period~~realized from the closure of the Minneapolis ~~prior~~factory ~~year.~~in ~~The~~conjunction ~~net~~with ~~loss~~the completion of the lasagna line in ~~resulted~~ New ~~from~~Hope. ~~lower~~The ~~sales~~Company ~~volumes~~has ~~and~~reduced ~~competitive~~its ~~pricing~~labor ~~within~~force ~~the~~where ~~dry~~necessary ~~pasta~~to match ~~industry~~ product ~~combined~~demand ~~with~~levels ~~increased~~and ~~raw~~continues ~~material,~~to ~~packaging,~~explore ~~freight,~~opportunities ~~and~~to ~~utility~~reduce logistics costs.

~~The~~Results Company has increased prices, where possible, to cover higher input costs. With excess capacity available in the pasta industry, the Company was unable to implement price increases to fully cover the higher costs that have been incurred. There have also been instances whereby a major competitor has offered pricing below the Cooperative’s current cost of production, which has resulted in the loss of customers in certain instances. As a result of the loss of certain customers, the Company has reduced its labor force where necessary to match product demand levels. Although the Company has experienced adverse operating results due to industry overcapacity and competitive pricing, a favorable development occurred in late February 2001 when the Company began shipping to a significant new retail customer. Annualized volumes relating to this customer are expected to exceed 25 million pounds.Operations

~~The~~Comparison ~~Company~~of ~~continues to explore cost reduction opportunities as well. The lasagna line installed at~~ the ~~New~~Three ~~Hope,~~Months ~~Minnesota plant became operational in February 2001. This, combined with the~~ ~~closure~~Ended ofOctober ~~the Minneapolis~~31, ~~Minnesota production facility in February~~ 2001, ~~has reduced lasagna production costs. The Company is also implementing rail freight programs~~ and ~~consolidating product in certain forward warehouse locations to reduce logistics costs.~~2000

~~Results~~Net Revenues. Net revenues increased $4.3 million, or 12.8%, to $37.5 million for the quarter ended October 31, 2001, from $33.3 million for the quarter ended October 31, 2000. Higher per unit selling prices and higher sales volumes contributed to the increase over the corresponding period of ~~Operations~~the prior year as pasta per unit selling prices increased 6.2% while pasta sales volumes increased 4.7%.

~~Comparison~~Revenues from the retail segment increased $2.2 million, or 10.8%, as a result of a 6.2% increase in per unit selling prices combined with increased sales volumes. Retail growth was particularly strong in the ~~Three~~club ~~Months~~store ~~Ended~~market. ~~April~~Foodservice revenues 30increased $2.2 million, ~~2001~~or 33.6%, due to volume growth of 27.6% as well as slight increases in per unit selling prices. Volume growth in the foodservice segment continues to be driven primarily by expansions and ~~2000~~acquisitions by our customers. Revenues from the ingredient segment decreased $0.9 million, or 22.4%, mainly as a result of a 22.3% decrease in sales volumes.

~~Net~~The ~~Revenues.~~Company markets ~~Net~~ semolina ~~revenues~~production ~~totaled~~in ~~$34.1~~excess ~~million~~of ~~for~~its ~~the quarter~~own ~~ended~~requirements ~~April~~as ~~30,~~well ~~2001,~~as aby-products ~~decrease~~ of the ~~$1.1~~durum ~~million,~~milling ~~or 3~~process.~~1%,~~ Revenues from ~~the third~~semolina ~~quarter~~and ofby-product ~~fiscal~~sales ~~2000~~were up $0.8 ~~The~~million ~~decrease~~from ~~was~~the ~~primarily~~prior ~~due~~year toas ~~lower~~a ~~sales volumes,~~result ~~which~~of ~~were~~increases ~~down~~in ~~2.2%~~both ~~from~~sales ~~the~~volumes and ~~corresponding~~per ~~period~~unit ofselling ~~the prior year~~prices.

~~Revenues~~Cost ~~from~~of ~~the~~Product ~~retail~~Sold. ~~segment,~~Cost of ~~including~~ product ~~co-pack~~sold ~~operations~~increased $0.7 million, ~~increased~~or 42.93%, onto ~~volume~~$31.6 ~~growth~~million offor ~~5.9%.~~the quarter ~~Foodservice~~ ended ~~revenues~~October ~~increased~~31, ~~by 7~~2001.~~0%,~~ ~~mainly~~The ~~due~~increase toresulted ~~volume~~mainly ~~growth~~from ofrevenue ~~5.1%~~growth offset ~~resulting~~ by ~~from~~lower ~~increased~~conversion ~~product~~costs ~~demand~~ due to ~~expansions~~labor reductions and ~~acquisitions~~other ~~made~~cost cutting by initiatives. ~~the~~Gross ~~Company’s~~margin ~~current~~as ~~customers.~~a ~~Ingredient~~percentage of net revenues ~~decreased~~increased 26from 7.50% ~~resulting~~ to ~~primarily~~15.7% ~~from~~as ~~volume~~a ~~declines~~result of these factors.

~~The~~Marketing, ~~Company~~General, ~~markets~~and ~~semolina~~Administrative (“MG&A”) ~~production~~Expenses. MG&A expenses totaled $2.4 million in for ~~excess~~the ofthree ~~its~~months ~~own~~ended ~~requirements~~October as31, ~~well~~2001, asdown ~~by-products~~6.7% from the corresponding period of ~~durum~~the ~~milling~~prior year. ~~Revenues~~ ~~from~~MG&A ~~semolina~~expenses ~~and~~as ~~by-product~~a ~~sales~~percentage ~~were~~of ~~relatively~~net ~~stable~~revenues decreased from 7.8% to 6.5%.

~~Cost~~Interest ~~of Product Sold~~Expense. ~~Cost~~Interest of expense ~~product sold~~ increased ~~6.4% to~~ $~~32.1 million. The $1.9 million increase resulted mainly from higher input costs including raw materials~~58,000 ~~packaging,~~primarily ~~and utilities. Gross margin~~ as a ~~percentage~~result of ~~net~~a ~~revenues~~one ~~decreased~~percent ~~from~~interest ~~14.3% to~~rate ~~5.8%~~ increase ason athe ~~result~~Senior ofSecured ~~increased~~Notes ~~input~~held ~~costs~~by ~~combined~~institutional ~~with~~investors ~~lower~~effective August ~~revenues~~1, 2001.

~~Marketing, General,~~Income ~~and~~Taxes. ~~Administrative~~The ~~(“MG&A”)~~Company ~~Expenses.~~has ~~MG&A~~recorded ~~expenses~~an income tax ~~decreased~~ benefit of $~~569~~80,000, orand ~~20.1%~~$79,000 ~~from~~for the ~~prior~~quarters ~~year~~ended ~~mainly~~October ~~due~~31, to2001 ~~decreases in~~and ~~internal marketing costs as well as consulting expenses. MG&A as a~~ ~~percentage~~2000, ofrespectively, ~~net~~relating ~~revenues~~to ~~decreased~~the ~~from~~reduction ~~8.0%~~in ~~for~~deferred ~~the~~tax ~~three~~liabilities ~~months~~associated ~~ended April~~with ~~30,~~ differences ~~2000~~between tothe ~~6.6%~~book ~~for~~and ~~the~~tax ~~three~~basis ~~months~~of ~~ended~~property ~~April~~and ~~30, 2001~~equipment.

~~Interest Expense~~Net Income. ~~Interest~~Net ~~expense~~income ~~decreased~~for bythe ~~$166,000 primarily~~three ~~due~~months toending ~~patronage~~October 31, ~~refunds~~2001 ~~received~~totaled ~~from CoBank totaling~~ $~~248,000~~2.6 ~~in cash~~million ~~and~~compared ~~patronage~~to ~~equity~~the ~~credited~~$1.1 ~~against~~million ~~interest~~net ~~expense~~loss incurred for the three months ending ~~April~~October 3031, ~~2001~~2000. The ~~patronage~~$3.7 ~~refunds~~million ~~were~~increase ~~partially~~in ~~offset by higher~~net ~~interest~~ earnings ~~costs~~resulted ~~resulting~~ from increases in ~~average~~per ~~outstanding~~unit ~~debt~~selling ~~levels~~prices and sales volumes combined with cost reductions as noted above.

~~Income~~Liquidity ~~Taxes. The Company has recorded an income tax benefit of $80,000~~ and ~~$742,000~~Capital for the quarters ended April 30, 2001 and 2000, respectively, relating to the reduction in deferred tax liabilities associated with differences between the book and tax basis of property and equipment.Resources

~~Net~~The Company's ~~Income~~liquidity requirements include the operation of manufacturing ~~(Loss).~~ facilities, ~~The~~investments ~~net~~in ~~loss~~equipment ~~for~~and the ~~three~~expansion ~~months~~of ~~ended~~working ~~April~~capital to 30 meet its growth requirements, ~~2001~~as ~~totaled~~well ~~$1.0~~as ~~million,~~providing a ~~decrease~~fair ofreturn $2to its members.9 ~~million~~The Company meets these liquidity requirements from ~~the~~cash ~~$1.9~~provided ~~million~~by ~~net~~ operations, ~~income~~short-term ~~reported~~borrowings ~~for~~under ~~the~~its ~~three~~line ~~months~~of ~~ended~~credit, ~~April~~sales ~~30,~~of ~~2000~~equities and outside debt financing. ~~The~~Working ~~drop~~capital ~~in earnings~~as ~~was~~of ~~due~~October to31, ~~the~~2001 ~~decreases~~was in$13.5 million ~~sales~~compared ~~volumes~~to ~~combined~~$14.4 ~~with~~million ~~increases~~as ~~in input~~of ~~costs~~July ~~noted~~31, ~~above~~2001.

~~Comparison~~The Company utilizes financing on a short-term basis to fund operations and capital projects until permanent financing is issued. The Company has a seasonal line of credit for $19.0 million with CoBank, ACB (“the ~~Nine~~Bank”). ~~Months~~The ~~Ended~~balance outstanding ~~April~~on 30the line of credit was $4.8 million as of October 31, 2001. Cash, receivables and ~~2000~~inventories secure borrowings against the line of credit.

~~Net Revenues. Net revenues totaled~~The ~~$99.0~~ Company’s ~~million~~long-term ~~for~~financing ~~the~~is ~~nine~~provided ~~months~~through ~~ended~~various ~~April~~secured ~~30,~~term ~~2001. The decrease of $5.9~~loans ~~million,~~ and orsecured ~~5.6%,~~notes ~~from~~with the ~~nine~~Bank ~~months~~and ~~ended~~institutional ~~April~~investors. ~~30,~~Variable ~~2000~~interest rates ~~resulted~~on ~~from~~term ~~a decline~~and inseasonal ~~pasta~~loans ~~sales~~are ~~volumes~~based ~~combined~~on ~~with~~the ~~lower~~Bank’s ~~average~~cost ~~selling~~of ~~prices~~funds.

~~Revenues from the retail segment,~~The ~~including co-pack operations, decreased by 2.8%, primarily due to lower per~~ ~~unit~~various ~~selling~~debt ~~prices,~~agreements ~~which~~with ~~were~~the ~~down~~Bank ~~3.5%.~~and ~~Foodservice~~institutional ~~revenues~~investors ~~increased~~obligate bythe ~~12.7%~~ Company ~~due~~ to amaintain ~~volume~~or ~~increase~~achieve ofcertain ~~5.5%~~amounts ~~resulting~~of ~~from~~equity ~~expansions~~and bycertain ~~the Company’s~~financial ~~current~~ ratios ~~customer~~and ~~base~~impose ~~combined~~certain ~~with~~restrictions ~~increases~~on inthe ~~per unit selling prices~~Company. ~~Ingredient~~ ~~revenues~~The ~~decreased~~Company ~~significantly,~~was ~~down 20.7% from the corresponding~~in ~~period~~ compliance ofwith ~~the~~these ~~prior~~financial ~~year,~~covenants as ~~a result~~ of ~~lower~~October ~~sales~~31, ~~volumes~~2001.

~~Revenues~~Operations generated ~~from~~$5.0 ~~semolina~~million ~~sales~~of ~~were~~net ~~down~~cash flow for the three months ended October 31, 2001 compared to $15.01 million ~~from~~for the ~~same~~three ~~period~~months ofended ~~the~~October ~~prior~~31, ~~year~~2000. The decrease in net cash provided by operations was primarily due to ~~a significant~~an ~~decline~~increase in receivables ~~sales~~and ~~volume.~~a ~~By-product~~decrease ~~sales~~in ~~were~~accounts ~~comparable~~payable tofor the ~~prior~~ ~~year~~corresponding onperiods offset ~~relatively~~by ~~steady~~the ~~volumes~~increase ~~and~~in ~~per~~net ~~unit prices~~income.

~~Cost of~~Net ~~Product~~ cash ~~Sold.~~used ~~Cost~~in ofinvesting ~~product~~activities ~~sold~~relates ~~for~~primarily to the ~~nine~~purchase ~~months~~and ~~ended~~ installation ~~April~~of ~~30,~~milling ~~2001~~and ~~totaled~~pasta ~~$93.1~~equipment ~~million,~~and anpayments ~~increase~~made ofunder 5long-term marketing agreements.3% ~~from~~Net ~~the corresponding~~cash ~~period~~used ofin ~~the~~financing ~~prior~~activities ~~year~~totaled $0.4 million ~~The~~and $40.78 million ~~increase~~for ~~resulted mainly~~the ~~from~~three ~~higher~~months ~~input~~ended ~~costs~~October ~~including raw materials~~31, ~~packaging,~~2001 ~~freight~~ and 2000, ~~utilities~~ respectively. A ~~Gross~~majority ~~margin~~of asthe Company’s atechnology ~~percentage~~assets ofare ~~net~~placed ~~revenues~~under ~~decreased~~lease ~~from~~agreements, ~~15.7%~~which toallows the ~~6.0%~~ Company ~~resulting~~to ~~from~~stay ~~increased~~relatively ~~input~~current ~~costs combined~~ with ~~lower~~changing ~~revenues~~technologies.

~~Marketing,~~Net ~~General,~~ cash ~~and~~used ~~Administrative~~in ~~(“MG&A”)~~financing ~~Expenses. MG&A~~activities ~~expenses~~totaled ~~decreased~~ $~~452,000, or 5~~4.~~8%,~~6 ~~from~~million ~~the~~and ~~corresponding~~$3.1 ~~period~~million offor the ~~prior year mainly due to decreases~~ in three ~~internal~~months ~~marketing~~ended ~~costs~~October as31, ~~well~~2001 asand ~~consulting~~2000, ~~expenses~~respectively. ~~MG&A~~Substantially ~~as a~~all ~~percentage~~ of ~~net~~these ~~revenues~~amounts ~~remained~~related ~~steady~~to atdebt 7payments.~~4%.~~

~~Interest~~The ~~Expense.~~ Company ~~Interest~~has ~~expense~~current ~~decreased~~commitments byfor $~~437~~7.3 million in raw material purchases,~~000,~~ primarily ~~due~~durum topurchase ~~patronage~~commitments ~~refunds~~from ~~received~~its ~~from~~members. ~~CoBank~~The ~~totaling~~Company anticipates capital expenditures to total approximately $~~248,000~~2.0 million in fiscal year 2002. ~~cash~~ These expenditures are primarily for pasta line upgrades and ~~patronage~~cost ~~equity~~reduction projects. ~~credited~~Commitments ~~against~~for ~~interest~~monthly ~~expense~~operating ~~during~~lease ~~the~~payments ~~third~~for technology and ~~quarter~~ other assets total $0.8million, of ~~fiscal~~which ~~2001~~$0.6 ~~The~~million ~~remainder~~is ofdue within ~~the~~one ~~decrease~~year. ~~resulted~~We ~~from~~expect ~~lower~~to fund these commitments through cash from ~~average~~ operations ~~outstanding~~and ~~debt~~borrowings ~~levels~~under our line of credit.

~~Income~~Management believes ~~Taxes.~~that ~~The~~net ~~Company~~cash ~~has~~currently ~~recorded an~~available ~~income~~and ~~tax~~to ~~benefit~~be ofprovided ~~$239~~by operating activities,~~000~~ ~~for~~along ~~the~~with ~~nine~~its ~~months~~available ~~ending~~line ~~April~~of 30credit, ~~2001 resulting~~will ~~from~~be ~~reductions~~sufficient into ~~deferred tax liabilities associated with~~meet ~~differences~~ the ~~between~~Company’s ~~the~~expected ~~book~~capital and ~~tax~~liquidity ~~basis~~requirements offor ~~property~~the ~~and equipment~~foreseeable future.

AnITEM income tax benefit of $1,242,000 for the nine months ended April 30, 2000 consisted of a current benefit of $431,000 related to a reclassification of approximately $2,000,000 of income from nonpatronage to patronage for the year ended July 31, 19993. ~~The~~QUANTITATIVE ~~reclassification~~AND ~~was~~QUALITATIVE ~~based~~DISCLOSURES onABOUT ~~cooperative~~MARKET income tax developments taking place in the second quarter of fiscal year 2000. The remaining $811,000 of the income tax benefit for the nine months ended April 30, 2000 related to reductions in deferred tax liabilities associated with differences between the book and tax basis of property and equipment.RISK

~~Net Income~~Market ~~(Loss). The~~ ~~net~~risk ~~loss~~is ~~for~~ the ~~nine~~risk ~~months~~of ~~ended~~loss ~~April~~to 30future earnings, ~~2001~~to ~~totaled~~fair ~~$3.9~~values ~~million~~or ~~compared~~ to ~~net~~future ~~income~~cash flows ofthat ~~$6.8~~may ~~million~~result ~~reported~~from ~~for~~changes in the ~~nine~~price ~~months~~of ~~ended~~a ~~April~~financial ~~30, 2000~~instrument. The value ~~$10.7~~of ~~million~~a ~~decrease~~financial ininstrument ~~earnings~~may ~~was~~change ~~mainly~~as ~~due~~a toresult ~~the~~of ~~decreases~~changes in interest ~~sales~~ rates, ~~volumes~~commodity ~~and~~prices, exchange rates, equity prices, ~~combined~~and ~~with~~other ~~increases~~market changes. inMarket ~~input~~risk ~~costs~~is ~~noted~~attributed ~~above~~to all market-risk sensitive financial instruments, including long-term debt.

~~Liquidity~~The Company ~~and~~does ~~Capital~~not ~~Resources~~believe it is subject to any material market risk exposure with respect to interest rates, commodity prices, exchange rates, equity prices, or other market changes that would require disclosure under this item.

~~The~~PART ~~Company’s primary sources of~~II ~~liquidity are cash provided by operations and short-term borrowings under its~~ ~~line~~– ofOTHER ~~credit.~~INFORMATION

~~The~~ITEM ~~Company renewed its seasonal line of credit for $15 million with CoBank (“the Bank”) in December 2000~~6. ~~The~~EXHIBITS ~~available credit~~AND onREPORTS ~~the~~ON ~~seasonal~~FORM line was increased to $19 million in January 2001. The balance outstanding on the line of credit totaled $14,040,000 as of April 30, 2001. Property, equipment, and current assets of the Company secure borrowings against the line of credit.8-K

The Company’s long-term financing is provided through various secured term loans and secured notes from both the Bank and certain institutional investors. Variable interest rates on term and seasonal loans are based on the lender’s cost of funds, and are subject to an adjustment (increase or decrease) depending on the Company’s financial condition. The CoBank loan agreement, which covers the seasonal line of credit and various term loans, was renewed in December 2000.Exhibits

The various debt agreements with the Bank and institutional investors obligate the Company to maintain or achieve certain amounts of equity and certain financial ratios and impose certain restrictions on the CompanyNone. As of April 30, 2001, the Company was not in compliance with the consolidated funded debt to consolidated cash flow ratio set forth in the first amendment to the note agreement with institutional investors. The first amendment to the note agreement requires that the ratio of consolidated funded debt to consolidated cash flow not exceed 3.00 to 1 for all periods after January 31, 2001, in each case determined as of the end of each fiscal quarter for the immediately preceding four fiscal quarters, treating such period of four fiscal quarters as a single accounting period. The Company is currently in discussions with its lenders regarding a waiver and second amendment to the note agreement.

~~Operations~~Reports ~~generated~~on ~~$4.2~~Form million of net cash flow for the nine months ended April 30, 2001, compared to $11.3 million generated for the corresponding period of the prior year. The decrease in net cash provided by operations is primarily due to a decrease in net income offset by lower working capital requirements for the corresponding periods.8-K

~~Net cash used in investing activities relates primarily to the construction and installation of milling and pasta equipment and payments made under long-term marketing agreements~~None. Net cash used in financing activities totaled $9.2 million and $5.1 million for the nine months ended April 30, 2001 and 2000, respectively. A majority of the pasta equipment expenditures for the nine months ended April 30, 2001 related to the installation of a lasagna line at the New Hope, Minnesota plant. The lasagna line was completed and became operational in February 2001.

Net cash from financing activities totaled $3.3 million for the nine months ended April 30, 2001, mainly from borrowings on the seasonal line of credit offset by payments on long-term debt and patronage distributions. The Board of Directors authorized a qualified patronage allocation of $4,466,000 ($.4284 per bushel acquired or $.40 per average outstanding equity share) for fiscal year 2000 at its November 2000 meeting. The total qualified patronage allocation was paid in cash on November 30, 2000. The Board also voted to allocate, on a non-qualified basis, the remainder of the fiscal 2000 patronage earnings totaling $2,665,000. In taking these actions, the Board of Directors rescinded the patronage allocations authorized at the October 2000 meeting as reported in the Company’s Form 10-K for the year ended July 31, 2000. Net cash used in financing activities of $9.6 million for the nine months ended April 30, 2000 resulted mainly from patronage distributions and long-term debt payments offset by amounts received upon the exercise of stock options and borrowings on the seasonal line of credit.SIGNATURES

~~The~~ Pursuant ~~Company~~to ~~has~~the ~~current~~requirements ~~commitments~~of ~~for~~Section ~~$1.6 million in raw material purchases, primarily durum purchase commitments~~ ~~from~~13 ~~its~~or ~~members.~~15(d) ~~The~~of ~~Company~~the ~~anticipates~~Securities ~~capital~~Exchange ~~expenditures~~Act toof ~~total~~1934, ~~$4.0 million~~the inregistrant ~~fiscal~~has ~~year 2001. These expenditures are primarily for pasta line~~duly ~~upgrades~~ caused ~~and~~this ~~cost~~report ~~reduction~~to ~~projects.~~be ~~Commitments~~signed ~~for~~on ~~monthly~~its ~~operating~~behalf ~~lease payments~~by ~~for~~the ~~technology and other assets total $0.9 million~~undersigned, ~~of which $0.5~~thereunto ~~million~~ duly ~~is due within one year~~authorized.

Since April 30, 2001 net cash provided by operating activities and the Company’s available line of credit have been sufficient to meet its capital and liquidity requirements. Management believes those resources will be sufficient to meet capital and liquidity requirements for the foreseeable future.

	DAKOTA GROWERS PASTA COMPANY



	By:	/s/ Timothy J. Dodd
		Timothy J. Dodd,
		PRESIDENT AND GENERAL MANAGER,
		AND PRINCIPAL EXECUTIVE OFFICER

	Dated: December 13, 2001

~~ITEM~~ Pursuant 3.to ~~QUANTITATIVE~~the ~~AND~~requirements ~~QUALITATIVE~~of ~~DISCLOSURES~~the Securities ~~ABOUT~~Exchange ~~MARKET~~Act ~~RISK~~of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Market risk is the risk of loss to future earnings, to fair values or to future cash flows that may result from changes in the price of a financial instrument. The value of a financial instrument may change as a result of changes in interest rates, commodity prices, exchange rates, equity prices, and other market changes. Market risk is attributed to all market-risk sensitive financial instruments, including long-term debt.

Signature	Title	Date


/s/ Timothy J. Dodd	President and General Manager
Timothy J. Dodd	(Principal Executive	December 13, 2001
	Officer)


/s/ Thomas P. Friezen	Chief Financial Officer
Thomas P. Friezen	(Principal Financial	December 13, 2001
	Officer)


/s/ Edward O. Irion	Vice President - Finance
Edward O. Irion	(Principal Accounting	December 13, 2001
	Officer)

The Company does not believe it is subject to any material market risk exposure with respect to interest rates, commodity prices, exchange rates, equity prices, or other market changes that would require disclosure under this item.

PART II – OTHER INFORMATION

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

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

Exhibits

None.

Reports on Form 8-K

None.

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.

DAKOTA GROWERS PASTA COMPANY By: /s/ Timothy J. Dodd Timothy J. Dodd, PRESIDENT AND GENERAL MANAGER, AND PRINCIPAL EXECUTIVE OFFICER Dated: June14, 2001

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 and on the dates indicated.

Signature	Title	Date
/s/ Timothy J. Dodd	General Manager (Principal Executive Officer)
		June14, 2001
Timothy J. Dodd
/s/ Thomas P. Friezen	Chief Financial Officer (Principal Financial Officer)
		June 14, 2001
Thomas P. Friezen
/s/ Edward O. Irion	Vice President - Finance (Principal Accounting Officer)
		June 14, 2001
Edward O. Irion

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