UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001
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 0-17955
SEARS DC CORP.
(Exact Name of Registrant as Specified in Its Charter)
Delaware (State of Incorporation)	36-3533346 ( I.R.S. Employer Identification No.)
3711 Kennett Pike, (Address of Principal Executive Offices) Greenville, Delaware	19807 (Zip Code)
Registrant's telephone number, including area code: 302/434-3100
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, and (2) has been subject to such filing requirements for the past 90 days.
Yes X . No .
As of March 31, 2001, the Registrant had 1,000 shares of common stock, par value $1.00 per share, outstanding, all of which were held by Sears, Roebuck and Co.
Registrant meets the conditions set forth in General Instruction H(1) (a) and (b) of Form 10-Q and is therefore filing this form with a reduced disclosure format.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

~~(PAGE)~~ Washington, D.C. 20549

~~SEARS DC CORP. INDEX TO QUARTERLY REPORT ON~~ FORM 10-Q ~~13 WEEKS ENDED MARCH 31, 2001~~

Part I -		Financial Information	Page
	X		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001
	Item 1.	Financial Statements
			OR
		Statements of Income (unaudited) -
			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
		13 Weeks Ended March 31, 2001 and April 1, 2000	1
			SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________ TO _________
		Statements of Financial Position -
		March 31, 2001 (unaudited), April 1, 2000 (unaudited),
		and December 30, 2000	2
		Statements of Cash Flows (unaudited) -
		13 Weeks Ended March 31, 2001 and April 1, 2000	3
		Notes to Financial Statements (unaudited)	4
	Item 2.	Management's Discussion and Analysis of
		Financial Condition and Results of Operations	5
Part II -		Other Information
	Item 6.	Exhibits and Reports on Form 8-K	6

Commission file number 0-1-17955

SEARS DC CORP.

(Exact Name of Registrant as Specified in Its Charter)

Delaware
(State of Incorporation)

36-3533346
( I.R.S. Employer Identification No.)

3711 Kennett Pike, Greenville, Delaware
(Address of Principal Executive Offices)

19807
(Zip Code)

Registrant's telephone number, including area code: 302/434-3100

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, and (2) has been subject to such filing requirements for the past 90 days.

YES

As of June 30, 2001, the Registrant had 1,000 shares of common stock, par value $1.00 per share, outstanding, all of which were held by Sears, Roebuck and Co.

Registrant meets the conditions set forth in General Instruction H(1) (a) and (b) of Form 10-Q and is therefore filing this form with a reduced disclosure format.

SEARS DC CORP.
INDEX TO QUARTERLY REPORT ON FORM 10-Q
13 AND 26 WEEKS ENDED JUNE 30, 2001

Part I - Financial Information			Page

	Item 1.	Financial Statements

		Statements of Income (unaudited) - 13 and 26 Weeks Ended June 30, 2001 and July 1, 2000	1

		Statements of Financial Position - June 30, 2001 (unaudited), July 1, 2000 (unaudited), and December 30, 2000	2

		Statements of Cash Flows (unaudited) - 26 Weeks Ended June 30, 2001 and July 1, 2000	3

		Notes to Financial Statements (unaudited)	4


	Item 2.	Management's Discussion and Analysis of

		Financial Condition and Results of Operations	5


Part II - Other Information

	Item 1.	Legal Proceedings

		None.

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

PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
SEARS DC CORP.
STATEMENTS OF INCOME
(Unaudited)

	13 Weeks Ended				26 Weeks Ended
	March 31,		April 1,
(thousands, except ratios)	June 30, 2001		July 1, 2000		June 30, 2001		July 1, 2000
(thousands, except ratios)	2001		2000
Revenues
Revenues
Earnings on notes of Sears	$	4,805	$	4,809	$	9,636	$	9,618
Earnings on notes of Sears	$ 4,831		$ 4,809
Expenses
Expenses
Interest and related expenses		4,776		4,774		9,577		9,547
Interest and related expenses	4,801		4,773
Operating expenses		5		11		11		23
Operating expenses	6		12
Total expenses		4,781		4,785		9,588		9,570
Total expenses	4,807		4,785
Income before income taxes		24		24		48		48
Income before income taxes	24		24
Income taxes		9		9		17		17
Income taxes	8		8
Net Income	$	15	$	15	$	31	$	31
Net income	$ 16		$ 16
Ratio of earnings to fixed charges		1.005		1.005		1.005		1.005
Ratio of earnings to fixed charges	1.005		1.005
See notes to financial statements.
See notes to financial statements.

-21-

SEARS DC CORP.
STATEMENTS OF FINANCIAL POSITION

	(Unaudited)
	March 31,		April 1,				Dec. 30,
(thousands, except share data)	June 30, 2001		July 1, 2000		December 30, 2000
(thousands, except share data)	2001		2000				2000
Assets
Assets
Notes of Sears	$	224,263	$	224,071	$	224,166
Notes of Sears	$ 228,998			$ 228,802				$ 224,166
Interest receivable and other assets		235		361		299
Interest receivable and other assets	267			391				299
Total assets	$	224,498	$	224,432	$	224,465
Total assets	$ 229,265			$ 229,193				$ 224,465
Liabilities
Liabilities
Medium-term notes	$	213,025	$	213,025	$	213,025
Medium-term notes	$ 213,025			$213,025				$ 213,025
Interest payable and other liabilities		6,054		6,050		6,052
Interest payable and other liabilities	10,836			10,826				6,052
Total liabilities		219,079		219,075		219,077
Total liabilities	223,861			223,851				219,077
Stockholder's Equity
Stockholder's Equity
Common stock par value $1.00 per share, 1,000 shares authorized and outstanding		1		1		1
Common stock par value $1.00 per share,
Capital in excess of par value		7		7		7
1,000 shares authorized and outstanding	1			1				1
Retained income		5,411		5,349		5,380
Capital in excess of par value	7			7				7
Total stockholder's equity		5,419		5,357		5,388
Retained income	5,396			5,334				5,380
Total liabilities and stockholder's equity	$	224,498	$	224,432	$	224,465
Total stockholder's equity	5,404			5,342				5,388
See accompanying notes.
Total liabilities and stockholder's equity	$ 229,265			$ 229,193				$ 224,465
See notes to financial statements.

-32-

SEARS DC CORP.
STATEMENTS OF CASH FLOWS
(Unaudited)

	13 Weeks Ended
	26 Weeks Ended
	March 31,		April 1,
(thousands)	June 30, 2001			July 1, 2000
(thousands)	2001		2000
CASH FLOWS FROM OPERATING ACTIVITIES:
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	31		$	31
Net income	$ 16		$ 16
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Net change in interest receivable and other assets and interest payable and other liabilities		66			47
Net change in interest receivable and other assets
Net cash provided by operating activities		97			78
and interest payable and other liabilities	4,816		4,793
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash provided by operating activities	4,832		4,809
Increase in notes of Sears		(97)			(78)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash used in investing activities		(97)			(78)
Increase in notes of Sears	(4,832)		(4,809)
CASH FLOWS FROM FINANCING ACTIVITIES		--			--
Net cash used in investing activities	(4,832)		(4,809)
Net increase in cash and cash equivalents		--			--
CASH FLOWS FROM FINANCING ACTIVITIES	-		-
Cash and cash equivalents at beginning of period		--			--
Net increase in cash and cash equivalents	-		-
Cash and cash equivalents at end of period		--			--
Cash and cash equivalents at beginning of period	-		-
See accompanying notes.
Cash and cash equivalents at end of period	$ -		$ -
See notes to financial statements.

-43-

SEARS DC CORP.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

Notes to Financial Statements
(thousands)

Sears DC Corp. ("SDC"), a wholly-owned subsidiary of Sears, Roebuck and Co. ("Sears"), was formed to borrow in domestic and foreign debt markets and lend the proceeds of such borrowings to Sears and certain direct and indirect subsidiaries of Sears in exchange for their unsecured notes. The only current outstanding debts of SDC are two series of medium-term notes. SDC does not plan to issue additional debt.

Under an agreement between SDC and Sears, the interest rate paid by Sears on its unsecured notes is designed to produce earnings sufficient to cover SDC's fixed charges at least 1.005 times. Required payments of principal and interest to SDC under the Sears borrowing agreement are intended to be sufficient to allow SDC to make timely payments of principal and interest to the holders of its securities.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The significant accounting policies used in the presentation of these financial statements are consistent with the summary of significant accounting policies set forth in SDC's Annual Report on Form 10-K for the fiscal year ended December 30, 2000, and these financial statements should be read in conjunction with the financial statements and notes found therein. The interim financial statements reflect all adjustments (consisting only of normal recurring accruals) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The results of operations for the interim periods should not be considered indicative of the results to be expected for the full year.

The medium-term notes are generally not redeemable except under certain circumstances, primarily in the event of a significant decline in Discover Card receivables of Sears former subsidiary, Dean Witter, which is now a part of Morgan Stanley. Selected details of SDC's borrowings are shown below.

		Mar.31, 2001			April 1, 2000
	June 30, 2001		July 1, 2000
8.52% to 9.26% medium-term notes due through 2012	$ 213,025		$ 213,025	~~$ 213,025~~

At ~~March~~June 3130, 2001, medium-term ~~note~~ note maturities for the next five years, and thereafter are as follows:

2001	$	~~135,500~~$	135,500
2002		~~24,725~~	24,725
2003		~~9,000~~	9,000
2004		-	--
2005		-	--
Thereafter		~~43,800~~	43,800
	$	~~213,025~~$	213,025

-54-

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SEARS DC CORP. 13 AND 26 WEEKS ENDED ~~MARCH~~JUNE 3130, 2001 AND ~~APRIL~~JULY 1, 2000

(thousands)

Financial Condition:

SDC invests funds in promissory ~~notes~~ notes of Sears, which pay interest sufficient to cover SDC's fixed charges at at least 1.005 times, and in highly liquid short-term investments.

The $213,025 in outstanding medium-term notes as of ~~March~~June 3130, 2001 are generally not redeemable prior to their stated maturity except under certain circumstances, primarily in the event of a significant decline in Discover Card receivables of Sears former subsidiary, Dean Witter, which is now a part of Morgan Stanley.

Results of Operations:

Revenues decreased 0.08% from $4,809 to $4,805 and increased 0.19% from $9,618 to $9,636 for the 13 and 26 weeks ended ~~April 1~~June 30, ~~2000~~2001 and ~~March~~July 311, ~~2001~~2000 respectively. Interest and related expenses were also relatively flat, increasing 0.504% from $4,~~809~~774 to $4,~~831,~~776 ~~respectively~~and increasing 0.31% ~~Interest~~from ~~and~~$9,547 ~~related~~to ~~expenses~~$9,577 for the 13 ~~weeks~~and 26 weeks ended ~~April~~June 130, ~~2000~~2001 and ~~March~~July 311, ~~2001~~2000 ~~were relatively flat, increasing 0.6% from $4,773 to $4,801,~~ respectively.

Earnings covered fixed charges 1.005 times for the 13 and 26 weeks ended ~~April~~June 130, ~~2000~~2001 and ~~March~~July 311, ~~2001~~2000.

Cautionary Statement Regarding Forward-Looking Information:

Certain statements made in this Report on Form 10-Q are forward-looking and are made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. As such they involve risks and uncertainties that could cause actual results to differ materially. These statements are based on a number of assumptions about a variety of factors, including the ability of Sears to perform under the agreements described herein and general economic conditions (such as interest rates). While SDC believes that these assumptions are reasonable, SDC cautions that it is impossible to predict the impact of certain facts that could cause actual results to differ from expected results.

-65-

PART II. OTHER INFORMATION

Item 6.	Exhibits and Reports on Form 8-K.
	(a)	~~(a)~~Exhibits.	~~Exhibits.~~
		An Exhibit Index has been filed as part of this Report on Page E-1.		~~An Exhibit Index has been filed as part of this Report on Page E-1.~~
	(b)	~~(b)~~Reports on Form 8-K.	~~Reports on Form 8-K.~~
		None			~~None~~

-76-

		Sears DC Corp. (Registrant)
May 11, 2000	By:	/s/MICHAEL J. CLEARY Michael J. Cleary Vice President and Controller
		(Authorized Officer and Principal Accounting Officer of Registrant)

SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

E-1

	Sears DC Corp. (Registrant)
	/s/ Michael J. Cleary
August 9, 2001	By: MICHAEL J. CLEARY Michael J. Cleary Vice President and Controller
	(Authorized Officer and Principal Accounting Officer of Registrant)

~~EXHIBIT INDEX~~-7- ~~SEARS DC CORP.~~ ~~13 WEEKS ENDED MARCH 31, 2001~~

Exhibit No.
3.1	Certificate of Incorporation of Discover Credit Corp. dated January 9, 1987 (Incorporated by reference to Exhibit 3(a) to Form 10 of the Registrant ("Form 10")*).
3.2	Amendment to Certificate of Incorporation of Discover Credit Corp. dated April 9, 1987 (Incorporated by reference to Exhibit 3(b) to Form 10*).
3.3	Certificate of Amendment of Certificate of Incorporation dated May 21, 1993 to change the name of Discover Credit Corp. to Sears DC Corp. (Incorporated by reference to Exhibit 3(c) to Form 10-K of the Registrant for the fiscal year ended December 28, 1996*).
3.4	By-laws of Sears DC Corp. as amended to February 6, 1996 (Incorporated by reference to Exhibit 3(c) to Form 10-K of the Registrant for the fiscal year ended December 30, 1995*).
4	Registrant hereby agrees to furnish the Securities and Exchange Commission, upon request, with the instruments defining the rights of holders of long-term debt of the Registrant with respect to which the total amount of securities authorized does not exceed 10% of the total assets of the Registrant.

E-1

EXHIBIT INDEX
SEARS DC CORP.
13 AND 26 WEEKS ENDED JUNE 30, 2001

Exhibit No.

3.1	Certificate of Incorporation of Discover Credit Corp. dated January 9, 1987 (Incorporated by reference to Exhibit 3(a) to Form 10 of the Registrant ("Form 10")*).

3.2	Amendment to Certificate of Incorporation of Discover Credit Corp. dated April 9, 1987 (Incorporated by reference to Exhibit 3(b) to Form 10*).

3.3	Certificate of Amendment of Certificate of Incorporation dated May 21, 1993 to change the name of Discover Credit Corp. to Sears DC Corp. (Incorporated by reference to Exhibit 3(c) to Form 10-K of the Registrant for the fiscal year ended December 28, 1996*).

3.4	By-laws of Sears DC Corp. as amended to February 6, 1996 (Incorporated by reference to Exhibit 3(c) to Form 10-K of the Registrant for the fiscal year ended December 30, 1995*).

4	Registrant hereby agrees to furnish the Securities and Exchange Commission, upon request, with the instruments defining the rights of holders of long-term debt of the Registrant with respect to which the total amount of securities authorized does not exceed 10% of the total assets of the Registrant.

_____________________
*Sec File No. 0-17955

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