<SUBMISSION>
<ACCESSION-NUMBER>0000882184-02-000006
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>4
<PERIOD>20020630
<FILING-DATE>20020813
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>HORTON D R INC /DE/
<CIK>0000882184
<ASSIGNED-SIC>1531
<IRS-NUMBER>752386963
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>0930
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>001-14122
<FILM-NUMBER>02730159
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>1901 ASCENSION BLVD
<STREET2>STE 100
<CITY>ARLINGTON
<STATE>TX
<ZIP>76006
<PHONE>8178568200
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>1901 ASCENSION BLVD
<STREET2>SUITE 100
<CITY>ARLINGTON
<STATE>TX
<ZIP>76006
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>drh10q3q2002.txt
<DESCRIPTION>D.R. HORTON, INC. 10Q 3RD QUARTER 2002
<TEXT>
                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


(Mark One)
  x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
 ---ACT OF 1934
For the Quarterly Period Ended    June 30, 2002
                               --------------------

                                       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   1-14122
                       -----------


                                D.R. Horton, Inc.
-------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            DELAWARE                                      75-2386963
--------------------------------           ------------------------------------
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation or organization)

  1901 Ascension Blvd., Suite 100, Arlington, Texas               76006
-------------------------------------------------------------------------------
      (Address of principal executive offices)                  (Zip Code)

                                 (817) 856-8200
-------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


-------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

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

                                  Yes X   No
                                    -----  -----


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

     Common stock, $.01 par value -- 146,490,625 shares as of August 8, 2002
                                    -------------

                         This report contains 30 pages.





<PAGE>




                                      INDEX

                                D.R. HORTON, INC.



<TABLE>
<CAPTION>
PART I.        FINANCIAL INFORMATION.                                                       Page
-------        ----------------------                                                       ----

<S>            <C>                                                                        <C>
ITEM 1.        Financial Statements.
               Consolidated Balance Sheets-- June 30, 2002 and September 30, 2001.             3
               Consolidated Statements of Income-- Three Months and Nine Months Ended
                   June 30, 2002 and 2001.                                                     4
               Consolidated Statements of Cash Flows-- Nine Months Ended June 30,
                   2002 and 2001.                                                              5
               Notes to Consolidated Financial Statements.                                  6-18
ITEM 2.        Management's Discussion and Analysis of Results of Operations and
                   Financial Condition.                                                    19-27
ITEM 3.        Quantitative and Qualitative Disclosures about Market Risk.                    28

PART II.       OTHER INFORMATION.
--------       -----------------
ITEM 6         Exhibits and Reports on Form 8-K.                                              29

SIGNATURES.                                                                                   30
----------
</TABLE>







<PAGE>



ITEM 1.  FINANCIAL STATEMENTS

                       D.R. HORTON, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                           June 30,     September 30,
                                                                            2002            2001
                                                                       --------------  --------------
                                                                              (In thousands)
                                                                         (Unaudited)
                                        ASSETS

<S>                                                                     <C>             <C>
Homebuilding:
Cash .................................................................   $   42,758      $  232,305
Inventories:
  Finished homes and construction in progress ........................    2,069,731       1,424,101
  Residential lots - developed and under development .................    2,301,671       1,377,452
  Land held for development ..........................................       10,251           2,824
                                                                         ----------      ----------
                                                                          4,381,653       2,804,377
Property and equipment (net) .........................................       73,338          53,096
Earnest money deposits and other assets ..............................      347,331         181,659
Excess of cost over net assets acquired ..............................      586,390         136,223
                                                                         ----------      ----------
                                                                          5,431,470       3,407,660
                                                                         ----------      ----------
Financial Services:
Cash .................................................................       13,169           6,975
Mortgage loans held for sale .........................................      288,478         222,818
Other assets .........................................................       17,611          14,737
                                                                         ----------      ----------
                                                                            319,258         244,530
                                                                         ----------      ----------
                                                                         $5,750,728      $3,652,190
                                                                         ==========      ==========

                                  LIABILITIES
Homebuilding:
Accounts payable and other liabilities ...............................   $  625,225      $  498,576
Notes payable ........................................................    2,750,333       1,701,689
                                                                         ----------      ----------
                                                                          3,375,558       2,200,265
                                                                         ----------      ----------

Financial Services:
Accounts payable and other liabilities ...............................       10,847          10,173
Notes payable to financial institutions ..............................      204,630         182,641
                                                                         ----------      ----------
                                                                            215,477         192,814
                                                                         ----------      ----------
                                                                          3,591,035       2,393,079
                                                                         ----------      ----------
Minority interests ...................................................       20,370           8,864
                                                                         ----------      ----------

                              STOCKHOLDERS' EQUITY

Preferred stock, $.10 par value, 30,000,000 shares authorized,
  no shares issued ...................................................         --              --
Common stock, $.01 par value, 200,000,000 shares authorized,
  146,445,994 shares at June 30, 2002 and 76,901,511 shares at
  September 30, 2001, issued and outstanding .........................        1,464             769
Additional capital ...................................................    1,349,142         704,842
Unearned compensation ................................................       (6,963)           --
Retained earnings ....................................................      795,680         544,636
                                                                         ----------      ----------
                                                                          2,139,323       1,250,247
                                                                         ----------      ----------
                                                                         $5,750,728      $3,652,190
                                                                         ==========      ==========
</TABLE>



          See accompanying notes to consolidated financial statements.

                                       -3-

<PAGE>



                       D.R. HORTON, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME


<TABLE>
<CAPTION>
                                                         Three Months             Nine Months
                                                        Ended June  30,          Ended June 30,
                                                   ------------------------ -----------------------
                                                       2002         2001        2002       2001
                                                   ------------ ----------- ----------- -----------

                                                          (In thousands, except per share data)
                                                           -----------------------------------
                                                                       (Unaudited)
                                                                       -----------
<S>                                                 <C>         <C>         <C>         <C>
Homebuilding:
Revenues
  Home sales .....................................   $1,750,189  $1,090,242  $4,410,284  $2,799,894
  Land/lot sales .................................       29,426      11,724      80,499      68,033
                                                     ----------  ----------  ----------  ----------
                                                      1,779,615   1,101,966   4,490,783   2,867,927
                                                     ----------  ----------  ----------  ----------
Cost of sales
  Home sales .....................................    1,416,050     872,095   3,573,790   2,244,754
  Land/lot sales .................................       25,938      10,712      70,048      54,791
                                                     ----------  ----------  ----------  ----------
                                                      1,441,988     882,807   3,643,838   2,299,545
                                                     ----------  ----------  ----------  ----------
Gross profit
  Home sales .....................................      334,139     218,147     836,494     555,140
  Land/lot sales .................................        3,488       1,012      10,451      13,242
                                                     ----------  ----------  ----------  ----------
                                                        337,627     219,159     846,945     568,382

Selling, general and administrative expense ......      177,020     109,085     444,931     295,084
Interest expense .................................        1,465       2,089       5,224       6,618
Other expense ....................................        3,842       5,040       3,988      14,038
                                                     ----------  ----------  ----------  ----------
                                                        155,300     102,945     392,802     252,642
                                                     ----------  ----------  ----------  ----------
Financial Services:
Revenues .........................................       28,864      19,015      77,651      47,553
Selling, general and administrative expense ......       18,220      12,540      48,261      32,507
Interest expense .................................        1,155       1,575       3,490       3,582
Other (income) ...................................       (4,714)     (2,240)    (10,576)     (4,869)
                                                     ----------  ----------  ----------  ----------
                                                         14,203       7,140      36,476      16,333
                                                     ----------  ----------  ----------  ----------
  INCOME BEFORE INCOME TAXES .....................      169,503     110,085     429,278     268,975
Provision for income taxes .......................       63,563      41,282     160,979     100,866
                                                     ----------  ----------  ----------  ----------
Income before cumulative effect of change in
  accounting principle ...........................      105,940      68,803     268,299     168,109
Cumulative effect of change in accounting
  principle, net of income taxes of $1,282 .......         --          --          --         2,136
                                                     ----------  ----------  ----------  ----------
  NET INCOME .....................................   $  105,940  $   68,803  $  268,299  $  170,245
                                                     ==========  ==========  ==========  ==========

Basic earnings per common share:
  Income before cumulative effect of change
    in accounting principle ......................   $     0.72  $     0.61  $     2.06  $     1.49
  Cumulative effect of change in accounting
    principle, net of income taxes ...............         --          --          --          0.02
                                                     ----------  ----------  ----------  ----------
  Net income .....................................   $     0.72  $     0.61  $     2.06  $     1.51
                                                     ==========  ==========  ==========  ==========

Diluted earnings per common share:
  Income before cumulative effect of change in
    in accounting principle ......................   $     0.67  $     0.60  $     1.94  $     1.46
  Cumulative effect of change in accounting
    principle, net of income taxes ...............         --          --          --          0.02
                                                     ----------  ----------  ----------  ----------
  Net income .....................................   $     0.67  $     0.60  $     1.94  $     1.48
                                                     ==========  ==========  ==========  ==========

Cash dividends per share .........................   $     0.06  $     0.05  $     0.17  $     0.14
                                                     ==========  ==========  ==========  ==========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       -4-

<PAGE>



                       D.R. HORTON, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS



<TABLE>
<CAPTION>
                                                                                     Nine Months
                                                                                    Ended June 30,
                                                                                 -------------------
                                                                                  2002         2001
                                                                                 ------       ------
                                                                                   (In thousands)
                                                                                     (Unaudited)
<S>                                                                          <C>          <C>
OPERATING ACTIVITIES
  Net income ..............................................................   $  268,299   $  170,245
  Adjustments to reconcile net income to net cash provided by (used in)
    operating activities:
  Depreciation and amortization ...........................................       18,621       18,463
  Amortization of debt premiums and fees ..................................        5,991        2,645
  Changes in operating assets and liabilities:
    Increase in inventories ...............................................     (311,773)    (416,639)
    Increase in earnest money deposits and other assets ...................      (38,274)     (33,649)
    Increase in mortgage loans held for sale ..............................      (65,660)     (50,616)
    (Decrease) increase in accounts payable and other liabilities .........     (110,590)      26,608
                                                                              ----------   ----------

NET CASH USED IN OPERATING ACTIVITIES .....................................     (233,386)    (282,943)
                                                                              ----------   ----------

INVESTING ACTIVITIES
  Net purchases of property and equipment .................................      (28,155)     (21,807)
  Distributions from (investments in) venture capital entities ............          250       (1,970)
  Net cash paid for acquisitions ..........................................     (152,662)     (49,009)
                                                                              ----------   ----------

NET CASH USED IN INVESTING ACTIVITIES .....................................     (180,567)     (72,786)
                                                                              ----------   ----------

FINANCING ACTIVITIES
  Proceeds from notes payable .............................................    2,439,106      891,420
  Repayment of notes payable ..............................................   (2,451,496)    (920,630)
  Issuance of senior and senior subordinated notes payable ................      247,928      393,904
  Proceeds from issuance of common stock associated with certain
    employee benefit plans ................................................       12,380        9,798
  Payment of cash dividends ...............................................      (17,318)      (9,885)
                                                                              ----------   ----------

NET CASH PROVIDED BY FINANCING ACTIVITIES .................................      230,600      364,607
                                                                              ----------   ----------

(DECREASE) INCREASE IN CASH ...............................................     (183,353)       8,878
  Cash at beginning of period .............................................      239,280       72,525
                                                                              ----------   ----------
  Cash at end of period ...................................................   $   55,927   $   81,403
                                                                              ==========   ==========
</TABLE>












          See accompanying notes to consolidated financial statements.

                                       -5-

<PAGE>


                       D.R. HORTON, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
                                  June 30, 2002


NOTE A - BASIS OF PRESENTATION

The  accompanying  unaudited,  consolidated  financial  statements  include  the
accounts of D.R. Horton, Inc. and its subsidiaries (the "Company"). Intercompany
accounts and transactions have been eliminated in consolidation.  The statements
have been prepared in accordance with generally accepted  accounting  principles
for  interim  financial  information  and  the  instructions  to Form  10-Q  and
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements.  In the opinion of management,  all adjustments considered
necessary for a fair presentation have been included.  Operating results for the
three-month  and  nine-month  periods  ended June 30,  2002 are not  necessarily
indicative of the results that may be expected for the year ending September 30,
2002.

Business - The Company is a national  builder  that is engaged  primarily in the
construction  and sale of single  housing  in the  United  States.  The  Company
designs,  builds and sells single-family houses on lots developed by the Company
and  on  finished  lots  which  it  purchases,   ready  for  home  construction.
Periodically,  the Company sells land or lots it has developed. The Company also
provides title agency and mortgage brokerage services to its home buyers.

NOTE B - CHANGES IN ACCOUNTING PRINCIPLES

Statement of Financial  Accounting  Standards  (SFAS) No. 133,  "Accounting  for
Derivative Instruments and Hedging Activities", was issued in June 1998, and was
later amended by SFAS 137 and 138, which were issued in June 1999 and June 2000,
respectively.  Pursuant to the implementation  requirements of SFAS No. 133, the
Company  adopted it on October 1, 2000,  the first day of the  Company's  fiscal
year ending September 30, 2001. The Company's  interest rate swaps, the terms of
which are more fully  described in Item 3, were not  designated  as hedges under
the provisions of SFAS No. 133. The Statement requires such swaps to be recorded
in the  consolidated  balance  sheet at fair value.  Changes in their fair value
must be recorded in the  consolidated  statements  of income.  Accordingly,  the
Company  recorded  a  cumulative  effect  of a change  in  accounting  principle
amounting to $2.1 million, net of income taxes of $1.3 million, as an adjustment
to net  income in the nine  months  ended June 30,  2001.  The fair value of the
Company's  interest  rate  swaps at June  30,  2002 and  September  30,  2001 is
recorded  in  homebuilding  other  assets,  and the  changes in their fair value
during  the  three  months  and nine  months  ended  June 30,  2002 and 2001 are
recorded in homebuilding other income.

SFAS No. 133 was also implemented on October 1, 2000 for the hedging  activities
of the Company's  financial  services segment.  The effects of doing so were not
significant.

In June 2001,  the  Financial  Accounting  Standards  Board issued SFAS No. 141,
"Business  Combinations",  and SFAS No.  142,  "Goodwill  and  Other  Intangible
Assets".  Under Statement No. 142, goodwill and intangible assets deemed to have
indefinite  lives  will no longer be  amortized  but will be  subject  to annual
impairment  tests.  Other  intangible  assets will continue to be amortized over
their useful lives.  The Company  early-adopted  the new rules on accounting for
goodwill and other  intangible  assets  beginning  October 1, 2001.  The Company
performed the required  impairment tests at October 31, 2001 and determined that
no  goodwill  or  other  intangible  asset  impairments   exist.  The  following
summarizes the pro forma impact of the  non-amortization  approach for the three
months and nine  months  ended  June 30,  2001 as if these  Statements  had been
adopted on October 1, 2000:

<TABLE>
<CAPTION>
                                                  Three Months Ended   Nine Months Ended
                                                     June 30, 2001       June 30, 2001
                                                   -----------------  ------------------
                                                   (In thousands, except per share data)
<S>                                                  <C>               <C>
Net income, as previously reported ...............   $        68,803   $       170,245
Amortization of goodwill, net of income taxes
  of $789 and $2,328, respectively ...............             1,316             3,880
                                                     ---------------   ---------------
Net income, as adjusted ..........................   $        70,119   $       174,125
                                                     ===============   ===============
Net income per share, as adjusted:
    Basic ........................................   $          0.62   $          1.54
                                                     ===============   ===============
    Diluted ......................................   $          0.61   $          1.52
                                                     ===============   ===============
</TABLE>
                                                        -6-
<PAGE>
                       D.R. HORTON, INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
                                  June 30, 2002



NOTE C - SEGMENT INFORMATION

The Company's financial reporting segments consist of homebuilding and financial
services.  The Company's  homebuilding  operations comprise the most substantial
part of its business,  with  approximately 98% of consolidated  revenues for the
three  months and nine  months  ended June 30, 2002 and 2001.  The  homebuilding
segment generates the majority of its revenues from the sale of completed homes,
with a lesser  amount  from the sale of land and lots.  The  financial  services
segment  generates  its revenues  from  originating  and selling  mortgages  and
collecting fees for title insurance agency and closing services.

NOTE D - EARNINGS PER SHARE

Basic  earnings  per share for the three  months and nine months  ended June 30,
2002 and 2001 is based on the weighted  average number of shares of common stock
outstanding.  Diluted earnings per share is based on the weighted average number
of shares of common stock and dilutive securities outstanding.

The following table sets forth the computation of basic and diluted earnings per
share:



<TABLE>
<CAPTION>
                                                                     Three Months Ended          Nine Months Ended
                                                                           June 30,                    June 30,
                                                                    ----------------------     ---------------------
                                                                       2002          2001         2002          2001
                                                                    ---------     --------     ---------     -------

                                                                                   (In thousands)
<S>                                                                 <C>           <C>          <C>          <C>
Numerator:
     Net income...............................................       $105,940      $68,803      $268,299     $170,245
Effect of dilutive securities:
     Interest expense and amortization of issuance costs
        associated with zero coupon convertible senior
        notes, net of applicable income taxes.................          1,054          --          2,096          --
                                                                     --------      -------      --------     --------
     Numerator for diluted earnings per share after
        assumed conversions...................................       $106,994      $68,803      $270,395     $170,245
                                                                     ========      =======      ========     ========

Denominator:
     Denominator for basic earnings per share--
        weighted average shares...............................        146,331      113,390       130,174      112,994
Effect of dilutive securities:
     Zero coupon convertible senior notes.....................         10,000           --         6,667           --
     Employee stock options...................................          2,626        1,958         2,422        1,874
                                                                     --------      -------     ---------     --------
     Denominator for diluted earnings per share--
        adjusted weighted average shares and
        assumed conversions...................................        158,957      115,348       139,263      114,868
                                                                     ========      =======     =========     ========
</TABLE>

In March 2002, the Company's Board of Directors  declared a three-for-two  stock
split  (effected  as a 50% stock  dividend),  payable on April 9, 2002 to common
stockholders  of record on March 26, 2002.  All average share amounts  presented
above have been  restated  to reflect  the  effects of the  three-for-two  stock
split.

 On February 5, 2002,  each of the  Company's  381,113  zero coupon  convertible
 senior notes  outstanding  first became  eligible for  conversion  into 26.2391
 shares of the  Company's  common  stock.  These  convertible  senior  notes are
 convertible on any date as of which the average  closing price of the Company's
 common  stock for the twenty  preceding  trading  days  exceeds  the  specified
 threshold of 110% of the accreted value of each note, divided by the conversion
 rate.  The  twenty-day  average  closing  price of the  Company's  common stock
 exceeded the  specified  threshold  on June 30,  2002,  which had the effect of
 increasing the denominator for diluted  earnings per share by 10 million shares
 for the three months  ended June 30, 2002 and 6.67 million  shares for the nine

                                       -7-

<PAGE>


                       D.R. HORTON, INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
                                  June 30, 2002

 months ended June 30, 2002.  Also, the numerator for diluted earnings per share
 was increased by  tax-effected  interest  expense and  amortization of issuance
 costs  associated  with the  convertible  senior notes for the three months and
 nine months ended June 30, 2002.

NOTE E - DEBT

The Company's homebuilding notes payable consist of the following:


<TABLE>
<CAPTION>
                                                                                 June 30,        September 30,
                                                                                  2002               2001
                                                                               -----------        -----------
                                                                                       (In thousands)

<S>   <C>                                                                      <C>                <C>
Unsecured:
      Revolving credit facility due 2006...............................         $  255,000         $       --
      8.375% Senior notes due 2004, net................................            149,240            148,943
      10.5% Senior notes due 2005, net.................................            199,528            199,439
      10% Senior notes due 2006, net...................................            147,752            147,600
      9% Senior notes due 2008, net....................................            102,565                 --
      8% Senior notes due 2009, net....................................            383,392            383,257
      9.375% Senior notes due 2009, net................................            246,609                 --
      9.75% Senior subordinated notes due 2010, net....................            148,974            148,917
      9.375% Senior subordinated notes due 2011, net...................            199,704            199,688
      7.875% Senior notes due 2011, net................................            198,406            198,319
      10.5% Senior subordinated notes due 2011, net....................            153,672                 --
      8.5% Senior notes due 2012, net..................................            247,961                 --
      Zero coupon convertible senior notes due 2021, net...............            207,465            202,509
Other secured..........................................................            110,065             73,017
                                                                                ----------         ----------
                                                                                $2,750,333         $1,701,689
                                                                                ==========         ==========
</TABLE>

On January 31, 2002,  the Company  refinanced its existing  unsecured  revolving
credit facility with a new, replacement facility.  The new $805 million facility
includes $125 million which may be used for letters of credit.  The new facility
matures in January 2006, and is guaranteed by substantially all of the Company's
wholly-owned  subsidiaries  other  than  its  financial  services  subsidiaries.
Borrowings bear daily interest at rates based upon the London Interbank  Offered
Rate (LIBOR) plus a spread  based upon the  Company's  ratio of debt to tangible
net worth. In addition to stated interest rates,  the revolving  credit facility
requires  the  Company to pay certain  fees.  The new credit  facility  contains
covenants  which are  essentially  the same as those that existed  under the old
facility.

The revolving credit facility and the indentures related to the Company's Senior
and Senior  Subordinated  Notes contain covenants which,  taken together,  limit
amounts  of  debt  that  may  be  incurred,   investments  in  inventory,  stock
repurchases,  cash dividends and other restricted  payments,  asset dispositions
and creation of liens, and require certain levels of tangible net worth. At June
30, 2002,  these  covenants limit the additional  homebuilding  debt the Company
could incur to $1,251.3  million,  which included $464.9 million available under
the revolving credit facility.

On February  21,  2002,  the Company  assumed the  outstanding  debt of Schuler
Homes, Inc.  ("Schuler") as part of Schuler's merger into the Company. The debt
assumed included the 9% senior notes due 2008, the 9.375% senior notes due 2009
and the 10.5% senior subordinated notes due 2011, all of which were recorded by
the Company at their market values as of February 21, 2002.  The Company repaid
$20.2  million,   in  principal  amount,  of  the  Schuler  senior  and  senior
subordinated  notes  as  part of the  Company's  change  of  control  offer  in
connection with the merger.

On April 11,  2002,  the Company  issued $250  million of 8.5% Senior notes due
2012. The net proceeds from this offering were used to repay  borrowings  under
the  unsecured  revolving  credit  facility.  These  notes  are  guaranteed  by
substantially  all of the Company's  wholly-owned  subsidiaries  other than its
financial services subsidiaries.

                                       -8-

<PAGE>


                       D.R. HORTON, INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
                                  June 30, 2002


NOTE F - INTEREST

The  Company   capitalizes   interest  during   development  and  construction.
Capitalized  interest is charged to cost of sales as the related  inventory  is
delivered to the home buyer. Homebuilding interest costs are:

<TABLE>
<CAPTION>
                                                         Three Months Ended            Nine Months Ended
                                                               June 30,                     June 30,
                                                       -------------------------    -------------------------
                                                          2002          2001           2002           2001
                                                       ---------    ------------    ----------    -----------
                                                                         (In thousands)

<S>                                                    <C>           <C>            <C>           <C>
Capitalized interest, beginning of period........      $ 124,652     $    85,579    $   96,910    $    66,092
Interest incurred - homebuilding.................         58,349          34,133       141,596         94,861
Interest expensed:
      Directly - homebuilding....................        (1,465)         (2,089)       (5,224)        (6,618)
      Amortized to cost of sales.................       (37,811)        (24,012)      (89,557)       (60,724)
                                                       ---------     -----------     ---------    -----------
Capitalized interest, end of period..............      $ 143,725     $    93,611     $ 143,725    $    93,611
                                                       =========     ===========     =========    ===========
</TABLE>

NOTE G - ACQUISITIONS

On February 21, 2002,  Schuler  Homes,  Inc.  merged with and into D.R.  Horton,
Inc.,  with D.R.  Horton the surviving  corporation.  At the time of the merger,
Schuler's  assets  amounted to $1,364.4  million,  mostly  inventory.  The total
merger  consideration  consisted  of the issuance of  20,079,532  shares of D.R.
Horton, Inc. common stock, valued at $30.93 per share (the average closing price
of D.R.  Horton  common stock for a period of ten trading days from  December 4,
2001 to  December  17,  2001);  the  payment  of  $168.7  million  in cash;  the
assumption of $802.2 million of Schuler's debt, $238.2 million of which was paid
at closing; the assumption of trade payables and other liabilities  amounting to
$209.1  million;  and the  assumption  of $10.8  million of  obligations  to the
Schuler entities' minority interest holders. Also, D.R. Horton issued options to
purchase  approximately  527,000  shares of D.R.  Horton common stock to Schuler
employees to replace  outstanding  Schuler stock options.  The fair value of the
options  issued was $10.4  million and was recorded as additional  capital.  The
fair value of the unvested  options  issued was $7.8 million and was recorded as
unearned  compensation  The unearned  compensation  is being  amortized over the
remaining vesting period of the stock options.

The merger was  treated as a purchase of Schuler by D.R.  Horton for  accounting
purposes.  Under this method,  Schuler assets acquired and  liabilities  assumed
were recorded on the  Company's  balance sheet at their fair market values as of
February 21, 2002.

Schuler's  results of  operations  for the three months ended June 30, 2002 and
from February 22, 2002 to June 30, 2002, are included in the Company's  results
of  operations  for the three  months  and nine  months  ended  June 30,  2002,
respectively.

The following  unaudited pro forma  combined  condensed  financial data for the
nine-month  periods  ending  June  30,  2002  and  2001  are  derived  from the
historical financial statements of D.R. Horton, Inc., Schuler, Fortress-Florida
(acquired  in May 2001),  and Emerald  Builders  (acquired  in July 2001).  The
unaudited pro forma combined condensed financial data give effect to the merger
with Schuler and the  acquisitions of  Fortress-Florida  and Emerald as if they
had occurred at the beginning of each period  presented.  Pro forma adjustments
to the historical financial data reflect those that we deem appropriate and are
factually  supported based upon currently available  information.  The only pro
forma adjustment that significantly  affected the combined historical financial
data for the nine-month  periods ended June 30, 2001 and 2002 was the pro forma
effect of recording Schuler's inventories at fair value at the beginning of the
nine months ended June 30, 2001. Such pro forma  adjustment  would have reduced
net income for that period by $15.8 million.

                                       -9-

<PAGE>


                       D.R. HORTON, INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
                                  June 30, 2002


NOTE G - ACQUISITIONS - (Continued)

 The unaudited pro forma  combined  condensed  financial data have been included
 for  comparative  purposes  only and do not purport to show what the  operating
 results  would  have been if the merger  had been  consummated  as of the dates
 indicated  and should not be construed as  representative  of future  operating
 results.

<TABLE>
<CAPTION>
                                                                                Nine Months
                                                                               Ended June 30,
                                                                      --------------------------------
                                                                            2002            2001
                                                                      ---------------  ---------------





<S>                                                                    <C>              <C>
Revenues...........................................................    $    5,143,436   $    4,312,414
                                                                       --------------   --------------

Income before cumulative effect of change in accounting
     principle.....................................................           300,592          234,339
Cumulative effect of change in accounting principle,
     net of income taxes...........................................               --             2,136
                                                                       --------------   --------------
     Net income....................................................    $      300,592   $      236,475
                                                                       ==============   ==============

Basic earnings per common share:
     Income before cumulative effect of change in
          accounting principle.....................................    $         2.01   $         1.62
     Cumulative effect of change in accounting principle,
          net of income taxes......................................               --              0.02
                                                                       --------------   --------------
     Net income....................................................    $         2.01   $         1.64
                                                                       ==============   ==============

Diluted earnings per common share:
     Income before cumulative effect of change in
           accounting principle....................................    $         1.91   $         1.61
     Cumulative effect of change in accounting principle,
           net of income taxes.....................................               --              0.01
                                                                       --------------   --------------
     Net income....................................................    $         1.91   $         1.62
                                                                       ==============   ==============
</TABLE>

















                                      -10-

<PAGE>


                       D.R. HORTON, INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
                                  June 30, 2002

NOTE H - SUMMARIZED FINANCIAL INFORMATION

The 7.875%,  8%,  8.375%,  8.5%, 9%,  9.375%,  10% and 10.5% Senior Notes,  the
9.375%,  9.75%  and  10.5%  Senior  Subordinated  Notes,  and the  Zero  Coupon
Convertible Senior Notes are fully and unconditionally  guaranteed,  on a joint
and several  basis,  by all of the Company's  direct and indirect  subsidiaries
(Guarantor  Subsidiaries),  other  than  financial  services  subsidiaries  and
certain  other  inconsequential   subsidiaries   (collectively,   Non-Guarantor
Subsidiaries).  Each of the Guarantor Subsidiaries is wholly-owned.  In lieu of
providing  separate  financial  statements  for  the  Guarantor   Subsidiaries,
consolidated  condensed  financial  statements  are presented  below.  Separate
financial   statements   and  other   disclosures   concerning   the  Guarantor
Subsidiaries are not presented because  management has determined that they are
not material to investors.

<TABLE>
<CAPTION>
                                                     Consolidating Balance Sheet
                                                             June 30, 2002
                                                                                     Non-Guarantor
                                                                                     Subsidiaries
                                                                               -----------------------
                                                     D.R.        Guarantor     Financial                 Intercompany
                                                 Horton, Inc.   Subsidiaries    Services     Other       Eliminations     Total
                                               --------------- --------------  ---------- ------------  -------------- ------------
                                                                                      (In thousands)
                       ASSETS
<S>                                              <C>           <C>            <C>         <C>           <C>            <C>
Homebuilding:
Cash and cash equivalents.....................    $       --    $    32,208    $     --    $    10,550   $        --    $    42,758
Advances to/investments in affiliates.........      4,238,009       217,422          --            615     (4,456,046)          --
Inventories...................................        676,894     3,617,996          --         87,136           (373)    4,381,653
Property and equipment (net)..................          9,932        57,710          --          5,696            --         73,338
Earnest money deposits and other assets.......         88,113       250,352          --         12,824         (3,958)      347,331
Excess of cost over net assets acquired (net).            --        586,390          --            --             --        586,390
                                                  -----------   -----------    ---------   -----------   ------------   -----------
                                                    5,012,948     4,762,078          --        116,821     (4,460,377)    5,431,470
                                                  -----------   -----------    ---------   -----------   ------------   -----------
Financial services:
Cash and cash equivalents.....................            --            --        13,169           --             --         13,169
Mortgage loans held for sale..................            --            --       288,478           --             --        288,478
Other assets..................................            --            --        17,611           --             --         17,611
                                                  -----------   -----------    ---------   -----------   ------------   -----------
                                                          --            --       319,258           --             --        319,258
                                                  -----------   -----------    ---------   -----------   ------------   -----------
Total Assets                                      $ 5,012,948   $ 4,762,078    $ 319,258   $   116,821   $ (4,460,377)  $ 5,750,728
                                                  ===========   ===========    =========   ===========   ============   ===========


                LIABILITIES & EQUITY
Homebuilding:
Accounts payable and other liabilities........    $   190,379   $   427,614    $     --    $     7,252   $        (20)  $   625,225
Advances from parent/affiliates...............            --      3,103,400          --         50,424     (3,153,824)          --
Notes payable.................................      2,683,246        30,199          --         40,826         (3,938)    2,750,333
                                                  -----------   -----------    ---------   -----------   ------------   -----------
                                                    2,873,625     3,561,213          --         98,502     (3,157,782)    3,375,558
                                                  -----------   -----------    ---------   -----------   ------------   -----------
Financial services:
Accounts payable and other liabilities........            --            --        10,847           --             --         10,847
Advances from parent/affiliates...............            --            --        36,760           --         (36,760)          --
Notes payable.................................            --            --       204,630           --             --        204,630
                                                  -----------   -----------    ---------    ----------   ------------   -----------
                                                          --            --       252,237           --         (36,760)      215,477
                                                  -----------   -----------    ---------    ----------   ------------   -----------
Total Liabilities                                   2,873,625     3,561,213      252,237        98,502     (3,194,542)    3,591,035
                                                  -----------   -----------    ---------    ----------   ------------   -----------

Minority interests............................            --            --            18        20,352            --         20,370
                                                  -----------   -----------    ---------    ----------   ------------   -----------
Common stock..................................          1,464            45            6         6,155         (6,206)        1,464
Additional capital............................      1,349,142       352,295        2,885        28,434       (383,614)    1,349,142
Retained earnings.............................        795,680       848,525       64,112       (36,622)      (876,015)      795,680
Unearned compensation.........................         (6,963)          --           --            --             --         (6,963)
                                                  -----------   -----------    ---------    ----------   ------------   -----------
                                                    2,139,323     1,200,865       67,003        (2,033)    (1,265,835)    2,139,323
                                                  -----------   -----------    ---------    ----------   ------------   -----------
Total Liabilities & Equity                        $ 5,012,948   $ 4,762,078    $ 319,258    $  116,821   $ (4,460,377)  $ 5,750,728
                                                  ===========   ===========    =========    ==========   ============   ===========
</TABLE>
                                      -11-
<PAGE>

                       D.R. HORTON, INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)

NOTE H - SUMMARIZED FINANCIAL INFORMATION (Continued)



<TABLE>
<CAPTION>
                                                     Consolidating Balance Sheet
                                                          September 30, 2001
                                                                                    Non-Guarantor
                                                                                    Subsidiaries
                                                                                --------------------
                                                       D.R.         Guarantor   Financial              Intercompany
                                                   Horton, Inc.    Subsidiaries  Services    Other     Eliminations      Total
                                                  --------------  ------------- ----------- --------  --------------  ------------
                                                                                    (In thousands)
                       ASSETS
<S>                                               <C>            <C>           <C>         <C>        <C>            <C>
Homebuilding:
   Cash and cash equivalents...................... $        --    $   230,481   $     --    $  1,824   $        --    $   232,305
   Advances to/investments in affiliates..........    2,493,783        74,241         --         --      (2,568,024)          --
   Inventories....................................      564,593     2,212,933         --      27,230           (379)    2,804,377
   Property and equipment (net)...................        8,114        39,823         --       5,159            --         53,096
   Earnest money deposits and other assets........       39,978       140,436         --      10,793         (9,548)      181,659
   Excess of cost over net assets acquired (net)..          --        136,223         --         --             --        136,223
                                                   ------------   -----------   ---------   --------   ------------   -----------
                                                      3,106,468     2,834,137         --      45,006     (2,577,951)    3,407,660
                                                   ------------   -----------   ---------   --------   ------------   -----------

Financial services:
   Cash and cash equivalents......................          --            --        6,975        --             --          6,975
   Mortgage loans held for sale...................          --            --      222,818        --             --        222,818
   Other assets...................................          --            --       14,737        --             --         14,737
                                                   ------------   -----------   ---------   --------   ------------   -----------
                                                            --            --      244,530        --             --        244,530
                                                   ------------   -----------   ---------   --------   ------------   -----------
     Total Assets                                  $  3,106,468   $ 2,834,137   $ 244,530   $ 45,006   $ (2,577,951)  $ 3,652,190
                                                   ============   ===========   =========   ========   ============   ===========

                LIABILITIES & EQUITY
Homebuilding:
   Accounts payable and other liabilities......... $    191,596   $   304,486   $     --    $  2,552   $        (58)  $   498,576
   Advances from parent/affiliates................          --      1,944,796         --      28,367     (1,973,163)          --
   Notes payable..................................    1,664,625        37,064         --       9,489         (9,489)    1,701,689
                                                   ------------   -----------   ---------   --------   ------------   -----------
                                                      1,856,221     2,286,346         --      40,408     (1,982,710)    2,200,265
                                                   ------------   -----------   ---------   --------   ------------   -----------
Financial services:
   Accounts payable and other liabilities.........          --            --       10,173        --             --         10,173
   Advances from parent/affiliates................          --            --       13,748        --         (13,748)          --
   Notes payable..................................          --            --      182,641        --             --        182,641
                                                   ------------   -----------   ---------   --------   ------------   -----------
                                                            --            --      206,562        --         (13,748)      192,814
                                                   ------------   -----------   ---------   --------   ------------   -----------
   Total Liabilities                                  1,856,221     2,286,346     206,562     40,408     (1,996,458)    2,393,079
                                                   ------------   -----------   ---------   --------   ------------   -----------

   Minority interests.............................          --            --           10      8,854            --          8,864
                                                   ------------   -----------   ---------   --------   ------------   -----------

   Common stock...................................          769             1           6      6,155         (6,162)          769
   Additional capital.............................      704,842        84,612       2,299     10,129        (97,040)      704,842
   Retained earnings..............................      544,636       463,178      35,653    (20,540)      (478,291)      544,636
                                                   ------------   -----------   ---------   --------   ------------   -----------
                                                      1,250,247       547,791      37,958    ( 4,256)      (581,493)    1,250,247
                                                   ------------   -----------   ---------   --------   ------------   -----------
   Total Liabilities & Equity                      $  3,106,468   $ 2,834,137   $ 244,530   $ 45,006   $ (2,577,951)  $ 3,652,190
                                                   ============   ===========   =========   ========   ============   ===========
</TABLE>


                                      -12-

<PAGE>


                       D.R. HORTON, INC. AND SUBSIDIARIES
       NOTES TO CONSOLIDATED FINANCIAL STATEMENT (Unaudited) - (Continued)

NOTE H - SUMMARIZED FINANCIAL INFORMATION (Continued)



<TABLE>
<CAPTION>
                                               Consolidating Statement of Income
                                               Three Months Ended June 30, 2002
                                                                                  Non-Guarantor
                                                                                   Subsidiaries
                                                                               ----------------------
                                                    D.R.          Guarantor    Financial                Intercompany
                                                Horton, Inc.    Subsidiaries   Services      Other      Eliminations       Total
                                               -------------   --------------  ---------  -----------  --------------  ------------
                                                                                    (In thousands)
<S>                                             <C>            <C>             <C>        <C>          <C>            <C>
Homebuilding:
 Revenues:
      Home sales...............................  $ 239,827      $ 1,498,052     $    --    $  12,310    $       --     $ 1,750,189
      Land/lot sales...........................      2,106           27,320          --          --             --          29,426
                                                 ---------      -----------     --------   ---------    -----------    -----------
                                                   241,933        1,525,372          --       12,310            --       1,779,615
                                                 ---------      -----------     --------   ---------    -----------    -----------
 Cost of sales:
      Home sales...............................    184,347        1,221,525          --       10,237            (59)     1,416,050
      Land/lot sales...........................      2,129           23,809          --          --             --          25,938
                                                 ---------      -----------     --------   ---------    -----------    -----------
                                                   186,476        1,245,334          --       10,237            (59)     1,441,988
                                                 ---------      -----------     --------   ---------    -----------    -----------
 Gross profit:
      Home sales...............................     55,480          276,527          --        2,073             59        334,139
      Land/lot sales...........................        (23)           3,511          --          --             --           3,488
                                                 ---------      -----------     --------   ---------    -----------    -----------
                                                    55,457          280,038          --        2,073             59        337,627

 Selling, general and administrative expense...     43,885          129,788          --        1,465          1,882        177,020
 Interest expense..............................      1,018              446          --            1            --           1,465
 Other expense (income)........................   (158,949)          (2,035)         --         (132)       164,958          3,842
                                                 ---------      -----------     --------   ---------    -----------    -----------
                                                   169,503          151,839          --          739       (166,781)       155,300
                                                 ---------      -----------     --------   ---------    -----------    -----------
Financial services:
 Revenues......................................        --               --        28,864         --             --          28,864
 Selling, general and administrative expense...        --               --        20,102         --          (1,882)        18,220
 Interest expense..............................        --               --         1,155         --             --           1,155
 Other (income)................................        --               --        (4,714)        --             --          (4,714)
                                                 ---------      -----------     --------   ---------    -----------    -----------
                                                       --               --        12,321         --           1,882         14,203
                                                 ---------      -----------     --------   ---------    -----------    -----------
 Income before income taxes....................    169,503          151,839       12,321         739       (164,899)       169,503
 Provision for income taxes....................     63,563           56,939        4,621         276        (61,836)        63,563
                                                 ---------      -----------     --------   ---------    -----------    -----------
 Net income....................................  $ 105,940      $    94,900     $  7,700   $     463    $  (103,063)   $   105,940
                                                 =========      ===========     ========   =========    ===========    ===========
</TABLE>


                                      -13-

<PAGE>


                       D.R. HORTON, INC. AND SUBSIDIARIES
       NOTES TO CONSOLIDATED FINANCIAL STATEMENT (Unaudited) - (Continued)

NOTE H - SUMMARIZED FINANCIAL INFORMATION (Continued)



<TABLE>
<CAPTION>
                                               Consolidating Statement of Income
                                                Nine Months Ended June 30, 2002
                                                                                   Non-Guarantor
                                                                                   Subsidiaries
                                                                               --------------------
                                                         D.R.      Guarantor   Financial            Intercompany
                                                     Horton, Inc. Subsidiaries  Services    Other   Eliminations     Total
                                                     ------------ ------------ ---------  --------- ------------  -----------
                                                                                  (In thousands)
<S>                                                   <C>         <C>         <C>        <C>        <C>         <C>
Homebuilding:
Revenues:
  Home sales .......................................   $  641,378  $3,720,591  $     --   $  48,315  $      --    $ 4,410,284
  Land/lot sales ...................................        3,566      76,933        --         --          --         80,499
                                                       ----------  ----------  ---------  ---------  ----------   -----------
                                                          644,944   3,797,524        --      48,315         --      4,490,783
                                                       ----------  ----------  ---------  ---------  ----------   -----------
Cost of sales:
  Home sales .......................................      502,674   3,031,487        --      39,903        (274)    3,573,790
  Land/lot sales ...................................        2,634      67,414        --         --          --         70,048
                                                       ----------  ----------  ---------  ---------  ----------   -----------
                                                          505,308   3,098,901        --      39,903        (247)    3,643,838
                                                       ----------  ----------  ---------  ---------  ----------   -----------
Gross profit:
  Home sales .......................................      138,704     689,104        --       8,412         274       836,494
  Land/lot sales ...................................          932       9,519        --         --          --         10,451
                                                       ----------  ----------  ---------  ---------  ----------   -----------
                                                          139,636     698,623        --       8,412         274       846,945

Selling, general and administrative expense ........      116,930     318,241        --        4,772      4,988       444,931
Interest expense ...................................        3,929       1,292        --           13        (10)        5,224
Other expense (income) .............................     (410,501)     (3,909)       --        6,257    412,141         3,988
                                                       ----------  ----------  ---------  ----------  ---------   -----------
                                                          429,278     382,999        --       (2,630)  (416,845)      392,802
                                                       ----------  ----------  ---------  ----------  ---------   -----------

Financial services:
Revenues ...........................................          --          --      77,651         --          --        77,651
Selling, general and administrative expense ........          --          --      53,249         --       (4,988)      48,261
Interest expense ...................................          --          --       3,490         --          --         3,490
Other (income) .....................................          --          --     (10,576)        --          --       (10,576)
                                                       ----------  ----------  ---------  ----------  ----------  -----------
                                                              --          --      31,488         --        4,988       36,476
                                                       ----------  ----------  ---------  ----------  ----------  -----------
Income before income taxes .........................      429,278     382,999     31,488      (2,630)   (411,857)     429,278
Provision for income taxes .........................      160,979     143,624     11,809        (987)   (154,446)     160,979
                                                       ----------  ----------  ---------  ----------  ----------  -----------
Net income .........................................   $  268,299  $  239,375  $  19,679  $   (1,643) $ (257,411) $   268,299
                                                       ==========  ==========  =========  ==========  ==========  ===========
</TABLE>















                                      -14-

<PAGE>


                       D.R. HORTON, INC. AND SUBSIDIARIES
       NOTES TO CONSOLIDATED FINANCIAL STATEMENT (Unaudited) - (Continued)

NOTE H - SUMMARIZED FINANCIAL INFORMATION (Continued)



<TABLE>
<CAPTION>
                                               Consolidating Statement of Income
                                                Three Months Ended June 30, 2001
                                                                                  Non-Guarantor
                                                                                  Subsidiaries
                                                                             ---------------------
                                                       D.R.      Guarantor   Financial            Intercompany
                                                   Horton, Inc. Subsidiaries Services    Other    Eliminations    Total
                                                   ------------ ------------ --------- ---------- ------------ -----------
                                                                                (In thousands)
<S>                                                 <C>         <C>         <C>        <C>        <C>         <C>
Homebuilding:
Revenues:
  Home sales .....................................   $  199,313  $  887,058  $    --    $   3,871  $     --    $ 1,090,242
  Land/lot sales .................................        6,267       5,457       --         --          --         11,724
                                                     ----------  ----------  ---------  ---------  ----------  -----------
                                                        205,580     892,515       --        3,871        --      1,101,966
                                                     ----------  ----------  ---------  ---------  ----------  -----------
Cost of sales:
  Home sales .....................................      154,876     714,376       --        2,985        (142)     872,095
  Land/lot sales .................................        5,502       5,210       --         --          --         10,712
                                                     ----------  ----------  ---------  ---------  ----------  -----------
                                                        160,378     719,586       --        2,985        (142)     882,807
                                                     ----------  ----------  ---------  ---------  ----------  -----------
Gross profit:
  Home sales .....................................       44,437     172,682       --          886         142      218,147
  Land/lot sales .................................          765         247       --         --          --          1,012
                                                     ----------  ----------  ---------  ---------  ----------  -----------
                                                         45,202     172,929       --          886         142      219,159

Selling, general and administrative expense ......       28,294      77,838       --        1,779       1,174      109,085
Interest expense .................................        2,043          44       --           14         (12)       2,089
Other expense (income) ...........................      (95,220)       (305)      --        6,895      93,670        5,040
                                                     ----------  ----------  ---------  ---------  ----------  -----------
                                                        110,085      95,352       --       (7,802)    (94,690)     102,945
                                                     ----------  ----------  ---------  ---------  ----------  -----------

Financial services:
Revenues .........................................         --          --       19,015       --          --         19,015
Selling, general and administrative expense ......         --          --       13,714       --        (1,174)      12,540
Interest expense .................................         --          --        1,575       --          --          1,575
Other (income) ...................................         --          --       (2,240)      --          --         (2,240)
                                                     ----------  ----------  ---------  ---------  ----------  -----------
                                                           --          --        5,966       --         1,174        7,140
                                                     ----------  ----------  ---------  ---------  ----------  -----------
Income before income taxes .......................      110,085      95,352      5,966     (7,802)    (93,516)     110,085
Provision for income taxes .......................       41,282      35,757      2,237     (2,925)    (35,069)      41,282
                                                     ----------  ----------  ---------  ---------  ----------  -----------
Net income .......................................   $   68,803  $   59,595  $   3,729  $  (4,877) $  (58,447) $    68,803
                                                     ==========  ==========  =========  =========  ==========  ===========
</TABLE>



                                      -15-

<PAGE>


                       D.R. HORTON, INC. AND SUBSIDIARIES
       NOTES TO CONSOLIDATED FINANCIAL STATEMENT (Unaudited) - (Continued)

NOTE H - SUMMARIZED FINANCIAL INFORMATION (Continued)



<TABLE>
<CAPTION>
                                              Consolidating Statement of Income
                                               Nine Months Ended June 30, 2001
                                                                                 Non-Guarantor
                                                                                  Subsidiaries
                                                                             --------------------
                                                       D.R.      Guarantor    Financial           Intercompany
                                                   Horton, Inc. Subsidiaries  Services    Other   Eliminations    Total
                                                   ------------ ------------ ---------- --------- ------------ -----------
                                                                                 (In thousands)
<S>                                                 <C>         <C>         <C>        <C>        <C>         <C>
Homebuilding:
Revenues:
  Home sales .....................................   $  474,816  $2,309,055  $    --    $  16,023  $     --    $ 2,799,894
  Land/lot sales .................................       22,876      45,157       --         --          --         68,033
                                                     ----------  ----------  ---------  ---------  ----------  -----------
                                                        497,692   2,354,212       --       16,023        --      2,867,927
                                                     ----------  ----------  ---------  ---------  ----------  -----------
Cost of sales:
  Home sales .....................................      377,190   1,856,010       --       11,953        (399)   2,244,754
  Land/lot sales .................................       17,776      37,015       --         --          --         54,791
                                                     ----------  ----------  ---------  ---------  ----------  -----------
                                                        394,966   1,893,025       --       11,953        (399)   2,299,545
                                                     ----------  ----------  ---------  ---------  ----------  -----------
Gross profit:
  Home sales .....................................       97,626     453,045       --        4,070         399      555,140
  Land/lot sales .................................        5,100       8,142       --         --          --         13,242
                                                     ----------  ----------  ---------  ---------  ----------  -----------
                                                        102,726     461,187       --        4,070         399      568,382

Selling, general and administrative expense ......       70,449     215,610       --        6,100       2,925      295,084
Interest expense .................................        6,478         134       --          196        (190)       6,618
Other expense (income) ...........................     (243,176)     (1,517)      --       10,456     248,275       14,038
                                                     ----------  ----------  ---------  ---------  ----------  -----------
                                                        268,975     246,960       --      (12,682)   (250,611)     252,642
                                                     ----------  ----------  ---------  ---------  ----------  -----------

Financial services:
Revenues .........................................         --          --       47,553       --          --         47,553
Selling, general and administrative expense ......         --          --       35,432       --        (2,925)      32,507
Interest expense .................................         --          --        3,582       --          --          3,582
Other (income) ...................................         --          --       (4,869)      --          --         (4,869)
                                                     ----------  ----------  ---------  ---------  ----------  -----------
                                                           --          --       13,408       --         2,925       16,333
                                                     ----------  ----------  ---------  ---------  ----------  -----------
Income before income taxes .......................      268,975     246,960     13,408    (12,682)   (247,686)     268,975
Provision for income taxes .......................      100,866      92,610      5,028     (4,755)    (92,883)     100,866
                                                     ----------  ----------  ---------  ---------  ----------  -----------
Income before cumulative effect of change
 in accounting principle .........................      168,109     154,350      8,380     (7,927)   (154,803)     168,109
Cumulative effect of change in accounting
 principle, net of income taxes ..................        2,136        --         --         --          --          2,136
                                                     ----------  ----------  ---------  ---------  ----------  -----------
Net income .......................................   $  170,245  $  154,350  $   8,380  $  (7,927) $ (154,803) $   170,245
                                                     ==========  ==========  =========  =========  ==========  ===========
</TABLE>



                                      -16-

<PAGE>


                       D.R. HORTON, INC. AND SUBSIDIARIES
       NOTES TO CONSOLIDATED FINANCIAL STATEMENT (Unaudited) - (Continued)

NOTE H - SUMMARIZED FINANCIAL INFORMATION (Continued)



<TABLE>
<CAPTION>
                                          Consolidating Statement of Cash Flows
                                             Nine Months Ended June 30, 2002
                                                                                    Non-Guarantor
                                                                                     Subsidiaries
                                                                                 --------------------
                                                           D.R.      Guarantor   Financial            Intercompany
                                                       Horton, Inc. Subsidiaries  Services    Other   Eliminations   Total
                                                       ------------ ------------ ---------- --------- ------------ ---------
                                                                                   (In thousands)
<S>                                                     <C>         <C>         <C>        <C>       <C>         <C>
OPERATING ACTIVITIES
Net income ...........................................   $  268,299  $  239,375  $  19,679  $ (1,643) $(257,411)  $  268,299
Adjustments to reconcile net income to net cash
 provided by (used in) operating activities:
 Depreciation and amortization .......................        3,065      14,075      1,102       379       --         18,621
 Amortization of debt premiums and fees ..............        5,991        --         --        --         --          5,991
 Changes in operating assets and liabilities:
  Increase in inventories ............................     (115,340)   (150,207)      --     (46,220)        (6)    (311,773)
  Increase in earnest money
   deposits and other assets .........................      (19,419)     (8,916)    (2,068)   (2,281)    (5,590)     (38,274)
  Increase in mortgage loans held for sale ...........         --          --      (65,660)     --         --        (65,660)
  Increase (decrease) in accounts payable
   and other liabilities .............................      (30,740)    (96,768)       682    16,198         38     (110,590)
                                                         ----------  ----------  ---------  --------  ---------   ----------
Net cash provided by (used in) operating
 activities ..........................................      111,856      (2,441)   (46,265)  (33,567)  (262,969)    (233,386)
                                                         ----------  ----------  ---------  --------  ---------   ----------
INVESTING ACTIVITIES
Net (purchases) dispositions of property and
 equipment ...........................................       (4,014)    (21,317)    (1,908)     (916)      --        (28,155)
Distributions from venture capital entities ..........         --          --         --         250       --            250
Net cash paid for acquisitions .......................         --      (152,662)      --        --         --       (152,662)
                                                         ----------  ----------  ---------  --------  ---------   ----------
Net cash provided by (used in) investing
 activities ..........................................       (4,014)   (173,979)    (1,908)     (666)      --       (180,567)
                                                         ----------  ----------  ---------  --------  ---------   ----------
FINANCING ACTIVITIES
Net change in notes payable ..........................      478,331    (266,436)    21,989    (3,897)     5,551      235,538
Increase (decrease) in intercompany payables .........     (581,235)    469,448     32,378    46,856     32,553         --
Proceeds from issuance of common stock
 associated with certain employee benefit plans ......       12,380        --         --        --         --         12,380
Cash dividends/distributions paid ....................      (17,318)   (224,865)      --        --      224,865      (17,318)
                                                         ----------  ----------  ---------  --------  ---------   ----------
Net cash provided by (used in) financing
 activities ..........................................     (107,842)    (21,853)    54,367    42,959    262,969      230,600
                                                         ----------  ----------  ---------  --------  ---------   ----------
Increase (decrease) in cash ..........................         --      (198,273)     6,194     8,726       --       (183,353)
Cash at beginning of period ..........................         --       230,481      6,975     1,824       --        239,280
                                                         ----------  ----------  ---------  --------  ---------   ----------
Cash at end of period ................................   $     --    $   32,208  $  13,169  $ 10,550  $    --     $   55,927
                                                         ==========  ==========  =========  ========  =========   ==========
</TABLE>




                                      -17-

<PAGE>


                       D.R. HORTON, INC. AND SUBSIDIARIES
       NOTES TO CONSOLIDATED FINANCIAL STATEMENT (Unaudited) - (Continued)

NOTE H - SUMMARIZED FINANCIAL INFORMATION (Continued)





<TABLE>
<CAPTION>
                                          Consolidating Statement of Cash Flows
                                              Nine Months Ended June 30, 2001
                                                                                    Non-Guarantor
                                                                                    Subsidiaries
                                                                                 --------------------
                                                           D.R.       Guarantor  Financial            Intercompany
                                                       Horton, Inc. Subsidiaries Services     Other   Eliminations   Total
                                                       ------------ ------------ ---------  --------- ------------ ---------
                                                                                    (In thousands)
<S>                                                     <C>         <C>         <C>        <C>       <C>         <C>
OPERATING ACTIVITIES
Net income ...........................................   $  170,245  $  154,350  $   8,380  $ (7,927) $(154,803)  $  170,245
Adjustments to reconcile net income to net cash
 provided by (used in) operating activities:
 Depreciation and amortization .......................        1,418      15,711        955       379       --         18,463
 Amortization of debt premiums and fees ..............        2,645        --         --        --         --          2,645
 Changes in operating assets and liabilities:
  (Increase) decrease in inventories .................     (141,521)   (269,505)      --      (5,683)        70     (416,639)
  (Increase) decrease in earnest money
   deposits and other assets .........................       (5,522)    (48,394)    (5,555)    5,323     20,499      (33,649)
  Increase in mortgage loans held for sale ...........         --          --      (50,616)     --         --        (50,616)
  Increase (decrease) in accounts payable
   and other liabilities .............................       15,490     (11,378)       569      (369)    22,296       26,608
                                                         ----------  ----------  ---------  --------  ---------   ----------
Net cash provided by (used in) operating
  activities .........................................       42,755    (159,216)   (46,267)   (8,277)  (111,938)    (282,943)
                                                         ----------  ----------  ---------  --------  ---------   ----------
INVESTING ACTIVITIES
Net purchases of property and equipment ..............       (7,213)    (12,333)    (1,860)     (401)      --        (21,807)
Net investments in venture capital entities ..........         --          --         --      (1,970)      --         (1,970)
Net cash paid for acquisitions .......................         --       (49,009)      --        --         --        (49,009)
                                                         ----------  ----------  ---------  --------  ---------   ----------
Net cash used in investing activities ................       (7,213)    (61,342)    (1,860)   (2,371)      --        (72,786)
                                                         ----------  ----------  ---------  --------  ---------   ----------
FINANCING ACTIVITIES
Net change in notes payable ..........................      357,174     (48,899)    56,420       356       (357)     364,694
Increase (decrease) in intercompany payables .........     (413,026)    449,761      6,444    10,526    (53,705)        --
Proceeds from issuance of common stock
 associated with certain employee benefit plans ......        9,798        --         --        --         --          9,798
Cash dividends/distributions paid ....................       (9,885)   (161,500)    (4,500)     --      166,000       (9,885)
                                                         ----------  ----------  ---------  --------  ---------   ----------
Net cash provided by (used in) financing
 activities ..........................................      (55,939)    239,362     58,364    10,882    111,938      364,607
                                                         ----------  ----------  ---------  --------  ---------   ----------
Increase (decrease) in cash ..........................      (20,397)     18,804     10,237       234       --          8,878
Cash at beginning of period ..........................       20,397      40,349     10,727     1,052       --         72,525
                                                         ----------  ----------  ---------  --------  ---------   ----------
Cash at end of period ................................   $     --    $   59,153  $  20,964  $  1,286  $    --     $   81,403
                                                         ==========  ==========  =========  ========  =========   ==========
</TABLE>









                                      -18-

<PAGE>



ITEM 2.              MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS - CONSOLIDATED

D. R. Horton,  Inc.  and  subsidiaries  (the  "Company")  conduct  homebuilding
activities in 20 states and 44 markets through its 50  homebuilding  divisions.
Through its financial  services  segment,  the Company also  provides  mortgage
banking and title agency services in many of these same markets.

Three Months Ended June 30, 2002 Compared to Three Months Ended June 30, 2001

Consolidated  revenues  for the three  months  ended June 30,  2002,  increased
61.3%, to $1,808.5 million,  from $1,121.0 million for the comparable period of
2001, due to increases in both  homebuilding and financial  services  revenues.
Approximately  $447  million  of the  increase  in  homebuilding  revenues  was
attributable to revenues generated by Fortress- Florida,  acquired in May 2001,
Emerald  Builders,  acquired  in July 2001,  and  Schuler  Homes,  acquired  in
February 2002.

Income before income taxes for the three months ended June 30, 2002,  increased
54.0%,  to $169.5  million,  from $110.1 million for the  comparable  period of
2001.  As a percentage  of revenues,  income  before income taxes for the three
months ended June 30, 2002, decreased 0.4 percentage points, to 9.4%, from 9.8%
for the  comparable  period of 2001,  primarily  due to the effects of purchase
accounting adjustments related to the Schuler acquisition.

The  consolidated  provision for income taxes increased 54.0%, to $63.6 million
for the three  months  ended June 30,  2002,  from $41.3  million  for the same
period of 2001,  due to the  corresponding  increase  in income  before  income
taxes. The effective income tax rate was 37.5% for both periods.

Nine Months Ended June 30, 2002 Compared to Nine Months Ended June 30, 2001

Consolidated revenues for the nine months ended June 30, 2002, increased 56.7%,
to $4,568.4  million,  from $2,915.5 million for the comparable period of 2001,
primarily due to increases in home sales revenues. Approximately $1,069 million
of the increase in homebuilding revenues was attributable to revenues generated
by Fortress-Florida, Emerald Builders and Schuler.

Income before  income taxes for the nine months ended June 30, 2002,  increased
59.6%,  to $429.3  million,  from $269.0 million for the  comparable  period of
2001.  As a percentage  of revenues,  income  before  income taxes for the nine
months ended June 30, 2002, increased 0.2 percentage points, to 9.4%, from 9.2%
for the comparable  period of 2001,  primarily due to the increase in financial
services pre-tax income as a percentage of consolidated revenues.

The consolidated  provision for income taxes increased 59.6%, to $161.0 million
for the nine  months  ended June 30,  2002,  from  $100.9  million for the same
period of 2001,  due to the  corresponding  increase  in income  before  income
taxes. The effective income tax rate was 37.5% for both periods.

The  cumulative  effect of a change in  accounting  principle was an increase in
income of $2.1 million, net of income taxes of $1.3 million, for the nine months
ended June 30,  2001.  This  accounting  change is the  result of the  Company's
October 1, 2000 adoption of SFAS No. 133, "Accounting for Derivative Instruments
and Hedging  Activities,"  which  requires the Company to recognize its interest
rate swap agreements in the consolidated balance sheet at fair value.


                                      -19-

<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS - HOMEBUILDING

The  following  tables set forth certain  operating and financial  data for the
Company's homebuilding activities:


<TABLE>
<CAPTION>
                                                                        Percentages of Homebuilding Revenues
                                                             -----------------------------------------------------------
                                                                Three Months Ended                 Nine Months Ended
                                                                     June 30,                           June 30,
                                                             ------------------------           ------------------------
                                                              2002              2001             2002              2001
                                                             ------            ------           ------             -----
<S>                                                         <C>               <C>              <C>                <C>
Costs and expenses:
     Cost of sales.................................            81.0%             80.1%            81.2%             80.2%
     Selling, general and administrative expense...             9.9               9.9              9.9              10.3
     Interest expense..............................             0.1               0.2              0.1               0.2
                                                             ------            ------           ------             -----
Total costs and expenses...........................            91.0              90.2             91.2              90.7
Other (income) expense.............................             0.3               0.5              0.1               0.5
                                                             ------            ------           ------             -----
Income before income taxes.........................             8.7%              9.3%             8.7%              8.8%
                                                             ======            ======           ======             =====
</TABLE>


<TABLE>
<CAPTION>
Homes Closed                         Three Months Ended June 30,                Nine Months Ended June 30,
                               --------------------------------------  -------------------------------------------
                                      2002                2001               2002                     2001
                               ------------------  ------------------  -------------------   ---------------------
                                Homes               Homes               Homes                   Homes
                                Closed   Revenues   Closed   Revenues   Closed    Revenues      Closed    Revenues
                               -------   --------  -------   --------  -------   ---------   ---------   ---------
                                          ($'s in millions)                         ($'s in millions)
<S>                           <C>       <C>        <C>      <C>        <C>      <C>          <C>        <C>
Mid-Atlantic ...............       788   $  167.3      725   $  158.8    2,016   $   431.0       1,950   $   432.3
Midwest ....................       472      119.4      437      105.2    1,323       333.5       1,311       313.6
Southeast ..................       838      139.1      818      143.6    2,516       429.7       1,976       348.3
Southwest ..................     3,062      516.4    2,277      378.9    7,971     1,352.9       5,955       981.7
West .......................     2,717      808.0    1,210      303.7    6,381     1,863.2       2,895       724.0
                               -------   --------  -------   --------  -------   ---------   ---------   ---------
                                 7,877   $1,750.2    5,467   $1,090.2   20,207   $ 4,410.3      14,087   $ 2,799.9
                               =======   ========  =======   ========  =======   =========   =========   =========
</TABLE>


<TABLE>
<CAPTION>
Net New Sales Contracts              Three Months Ended June 30,                Nine Months Ended June 30,
                               --------------------------------------   -------------------------------------------
                                      2002                 2001                2002                    2001
                               ------------------   -----------------   -------------------   ---------------------
                                Homes                Homes               Homes                  Homes
                                Sold         $       Sold        $       Sold         $         Sold          $
                               -------   --------   -------  --------   -------   ---------   ---------   ---------
                                          ($'s in millions)                         ($'s in millions)
<S>                           <C>       <C>        <C>      <C>        <C>       <C>         <C>         <C>
Mid-Atlantic ...............       960   $  201.3      674   $  146.7     2,471   $   512.0       2,084   $   459.4
Midwest ....................       543      126.8      520      139.2     1,394       341.1       1,441       374.8
Southeast ..................       976      161.9      868      152.9     2,680       438.6       2,266       404.8
Southwest ..................     3,520      590.5    2,453      411.0     9,537     1,583.7       6,927     1,142.2
West .......................     3,066      954.1    1,499      364.7     6,744     2,014.1       4,237     1,089.4
                               -------   --------   -------  --------   -------   ---------   ---------   ---------
                                 9,065   $2,034.6    6,014   $1,214.5    22,826   $ 4,889.5      16,955   $ 3,470.6
                               =======   ========   =======  ========   =======   =========   =========   =========
</TABLE>


<TABLE>
<CAPTION>
Sales Contract Backlog                                        June 30, 2002             June 30, 2001
                                                         ----------------------      --------------------
                                                           Homes          $           Homes         $
                                                         --------     ---------      -------    ---------
                                                                      ($'s in millions)
<S>                                                     <C>          <C>            <C>        <C>
Mid-Atlantic.......................................         1,277     $   271.3          957    $   234.7
Midwest............................................           989         270.4        1,030        286.6
Southeast..........................................         1,628         262.4        1,629        288.2
Southwest..........................................         5,868         984.4        4,161        711.9
West...............................................         3,824       1,159.7        2,831        740.0
                                                         --------      --------      -------     --------
                                                           13,586      $2,948.2       10,608     $2,261.4
                                                         ========      ========      =======     ========
</TABLE>




                                      -20-

<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company's market regions consist of the following markets:
    Mid-Atlantic    Charleston, Charlotte, Columbia, Greensboro, Greenville,
                    Hilton Head, Maryland-D.C., Myrtle Beach, New Jersey,
                    Raleigh/Durham and Virginia-D.C.
    Midwest         Chicago and Minneapolis/St. Paul
    Southeast       Atlanta, Birmingham, Fort Myers/Naples, Jacksonville, Miami/
                    West Palm Beach and Orlando
    Southwest       Albuquerque, Austin, Dallas, Fort Worth, Houston, Killeen,
                    Phoenix, San Antonio and Tucson
    West            Colorado Springs, Denver, Fort Collins, Hawaii, Inland
                    Empire, Las Vegas, Los Angeles, Oakland, Orange County,
                    Portland, Sacramento, San Francisco, Salt Lake City, San
                    Diego, Seattle/Tacoma and Ventura County

Three Months Ended June 30, 2002 Compared to Three Months Ended June 30, 2001

Revenues from  homebuilding  activities  increased  61.5%, to $1,779.6  million
(7,877 homes  closed) for the three months ended June 30, 2002,  from  $1,102.0
million (5,467 homes closed) for the comparable  period of 2001.  Revenues from
home  sales  increased  in four of the  Company's  five  market  regions,  with
percentage  increases ranging from 5.4% in the Mid-Atlantic region to 166.1% in
the West.  Home sales  revenues  declined  3.1% in the  Southeast  region.  The
increases in total homebuilding  revenues and revenues from home sales were due
to strong housing demand throughout the majority of the Company's markets,  the
acquisitions of  Fortress-Florida  and Emerald Builders during fiscal 2001, and
the merger  with  Schuler in  February  2002.  In  divisions  where the Company
operated  throughout  both periods,  home sales revenues  increased  20.6%,  to
$1,310.2 million (6,295 homes closed) for the three months ended June 30, 2002,
from $1,086.1 million (5,452 homes closed) for the comparable period of 2001.

The average  selling  price of homes closed  during the three months ended June
30, 2002 was $222,200,  up 11.4% from $199,400 for the same period in 2001. The
increase in average selling price was due primarily to the Schuler acquisition.
Schuler's  operations are  concentrated on the West Coast and in Hawaii,  where
average home selling  prices are  significantly  higher than in the rest of the
United States.

The value of net new sales contracts  increased 67.5% to $2,034.6 million (9,065
homes) for the three months ended June 30, 2002,  from $1,214.5  million  (6,014
homes)  for the same  period of 2001.  The  number  of net new  sales  contracts
increased in all of the Company's five market regions, with percentage increases
ranging  from  4.4% in the  Midwest  region to  104.5%  in the West  region.  In
divisions where the Company operated  throughout both periods,  the value of net
new sales contracts  increased  22.2%, to $1,481.8 million (7,047 homes) for the
three months ended June 30, 2002,  from $1,213.0  million  (6,009 homes) for the
comparable  period of 2001. The average price of a net new sales contract in the
three  months  ended June 30,  2002 was  $224,500,  up 11.2%  from the  $201,900
average in the comparable  period of 2001. The increase in average selling price
was primarily due to the effect of the Schuler acquisition.

At June 30, 2002,  the value of the  Company's  backlog of sales  contracts was
$2,948.2 million (13,586 homes),  up 30.4% from $2,261.4 million (10,608 homes)
at June 30,  2001.  In divisions  where the Company  operated  throughout  both
periods,  the value of the Company's backlog of sales contracts increased 3.0%,
to $2,328.4  million  (11,171 homes),  from $2,261.1  million (10,606 homes) at
June 30, 2001.  The average  sales price of homes in sales backlog was $217,000
at June 30, 2002, up 1.8% from the average price of $213,200 at June 30, 2001.

Cost of sales increased by 63.3%, to $1,442.0 million for the three months ended
June 30,  2002,  from $882.8  million  for the  comparable  period of 2001.  The
increase  in cost  of  sales  was  primarily  attributable  to the  increase  in
revenues.  Cost of home sales as a percentage of home sales  revenues  increased
0.9 percentage  points,  to 80.9% for the three months ended June 30, 2002, from
80.0% for the  comparable  period of 2001,  due  primarily  to $14.0  million in
charges related to the Schuler  acquisition,  the majority of which was a result
of recording  Schuler's  inventory at fair value on the  acquisition  date.  The
increase in cost of home sales as a percentage of revenues was also the cause of
the 0.9  percentage  point  increase  in total  homebuilding  cost of sales as a
percentage of total  homebuilding  revenues,  to 81.0% in the three months ended
June 30, 2002, from 80.1% in the comparable period of 2001.

                                      -21-

<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Selling,   general  and   administrative   (SG&A)  expenses  from  homebuilding
activities increased by 62.3%, to $177.0 million in the three months ended June
30, 2002, from $109.1 million in the comparable period of 2001. As a percentage
of  homebuilding  revenues,  SG&A expenses  remained  unchanged at 9.9% for the
three months ended June 30, 2002 and 2001.

Interest  expense  associated  with  homebuilding  activities  decreased to $1.5
million  in the three  months  ended  June 30,  2002,  from $2.1  million in the
comparable   period  of  2001.  As  a  percentage  of   homebuilding   revenues,
homebuilding interest expense was 0.1% for the three months ended June 30, 2002,
a decline of 0.1 percentage  points from 0.2% in the comparable  period of 2001.
During both periods,  the Company expensed the portion of incurred  interest and
other  financing  costs  which  could not be charged to  inventory.  The Company
follows a policy of capitalizing  interest only on inventory under  construction
or development.  Capitalized  interest and other financing costs are included in
cost of sales at the time of home closings.

Other expense  associated with  homebuilding  activities was $3.8 million in the
three  months ended June 30,  2002,  compared to $5.0 million in the  comparable
period of 2001. The expense in the three months ended June 30, 2002 is primarily
due to a  decrease  in the  fair  value  of the  Company's  interest  rate  swap
agreements  during the  quarter.  During the year-ago  quarter,  the expense was
primarily due to write-downs to estimated fair value of the carrying  amounts of
the Company's  investments  in venture  capital  entities,  offset in part by an
increase in the fair value of the Company's interest rate swap agreements during
the quarter.

Nine Months Ended June 30, 2002 Compared to Nine Months Ended June 30, 2001

Revenues from  homebuilding  activities  increased  56.6%, to $4,490.8  million
(20,207  homes  closed) for the nine months ended June 30, 2002,  from $2,867.9
million (14,087 homes closed) for the comparable period of 2001.  Revenues from
home  sales  increased  in four of the  Company's  five  market  regions,  with
percentage  increases  ranging from 6.3% in the Midwest region to 157.3% in the
West  region.  Revenues  from  homebuilding  activities  declined  0.3%  in the
Mid-Atlantic region. The increases in total homebuilding  revenues and revenues
from home sales were due to strong  housing  demand  throughout the majority of
the  Company's  markets,  and the  acquisitions  of  Fortress-Florida,  Emerald
Builders and Schuler.  In divisions where the Company operated  throughout both
periods,  home sales revenues increased 21.1% to $3,378.5 million (16,368 homes
closed) for the nine months ended June 30, 2002, from $2,790.0  million (14,048
homes closed) for the comparable period of 2001.

The average selling price of homes closed during the nine months ended June 30,
2002 was  $218,300,  up 9.8% from  $198,800  for the same  period in 2001.  The
increase in average selling price was primarily due to the Schuler acquisition.
Schuler's  operations are  concentrated on the West Coast and in Hawaii,  where
average home selling  prices are  significantly  higher than in the rest of the
United States.

The value of net new sales  contracts  increased  40.9%,  to  $4,889.5  million
(22,826 homes) for the nine months ended June 30, 2002,  from $3,470.6  million
(16,955  homes)  for the same  period  of  2001.  The  value  of net new  sales
contracts  increased  in  four  of the  Company's  five  market  regions,  with
percentage  increases ranging from 8.3% in the Southeast region to 84.9% in the
West region.  The value of net new sales contracts declined 9.0% in the Midwest
region.  In divisions where the Company operated  throughout both periods,  the
value of net new sales contracts  increased  10.8%, to $3,838.0 million (18,585
homes) for the nine months ended June 30, 2002,  from $3,464.3  million (16,928
homes) for the comparable  period of 2001. The average price of a net new sales
contract in the nine months ended June 30, 2002 was $214,200,  up 4.6% over the
$204,700 average in the nine months ended June 30, 2001.

Cost of sales increased  58.5%,  to $3,643.8  million for the nine months ended
June 30, 2002,  from $2,299.5  million for the  comparable  period of 2001. The
increase  in cost of  sales  was  primarily  attributable  to the  increase  in
revenues.  Cost of home sales as a percentage of home sales revenues  increased
0.8 percentage  points,  to 81.0% for the nine months ended June 30, 2002, from
80.2% for the  comparable  period of 2001,  due  primarily to $47.6  million in
charges related to the Schuler acquisition,  the majority of which was a result
of recording  Schuler's  inventory at fair value on the  acquisition  date. The
increase in cost of home  sales as a  percentage  of  revenues  was the primary


                                      -22-

<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


cause of the 1.0 percentage point increase in total  homebuilding cost of sales
as a percentage  of total  homebuilding  revenues,  to 81.2% in the nine months
ended June 30, 2002, from 80.2% in the comparable period of 2001.

Selling,   general  and   administrative   (SG&A)  expenses  from  homebuilding
activities  increased by 50.8%, to $444.9 million in the nine months ended June
30, 2002, from $295.1 million in the comparable period of 2001. As a percentage
of homebuilding  revenues,  SG&A expenses decreased to 9.9% for the nine months
ended  June 30,  2002,  from  10.3%  for the  comparable  period  of 2001,  due
primarily  to the fixed costs  leverage  achieved  by the large  amount of home
closings  revenues  generated by the Schuler  operating  divisions  between the
Schuler  acquisition date,  February 21, 2002, and the end of the quarter ended
March 31, 2002.

Interest  expense  associated with  homebuilding  activities  decreased to $5.2
million  in the nine  months  ended  June 30,  2002,  from $6.6  million in the
comparable   period  of  2001.  As  a  percentage  of  homebuilding   revenues,
homebuilding  interest expense  decreased 0.1 percentage points to 0.1% for the
nine months ended June 30, 2002,  from 0.2% for the comparable  period of 2001.
During both periods,  the Company expensed the portion of incurred interest and
other  financing  costs  which could not be charged to  inventory.  The Company
follows a policy of capitalizing  interest only on inventory under construction
or development.  Capitalized interest and other financing costs are included in
cost of sales at the time of home closings.

Other expense  associated with  homebuilding  activities was $4.0 million in the
nine months ended June 30,  2002,  compared to $14.0  million in the  comparable
period of 2001. The expense in 2002 is primarily due to the change in fair value
of the Company's interest rate swap agreements during the period. The expense in
2001 is primarily  due to  write-downs  to estimated  fair value of the carrying
amounts of the Company's  investments in start-up and emerging growth  companies
and the decline in the fair value of the Company's interest rate swap agreements
during the period.

                                      -23-

<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS - FINANCIAL SERVICES

The  following  table  summarizes  financial  and  other  information  for  the
Company's financial services operations:

<TABLE>
<CAPTION>
                                                                      Three Months Ended            Nine Months Ended
                                                                           June 30,                      June 30,
                                                                   -----------------------        ---------------------
                                                                     2002           2001            2002         2001
                                                                   --------       --------        --------     --------
                                                                                       ($ in thousands)
<S>                                                               <C>            <C>            <C>           <C>
Number of loans originated....................................        5,134          3,658          13,581        8,733
                                                                   --------       --------        --------     --------
Loan origination fees.........................................     $  5,884       $  3,969        $ 14,702     $  9,695
Sale of servicing rights and gains from sale of mortgages.....       13,485          8,326          37,785       21,512
Other revenues................................................        2,144          2,130           6,777        4,952
                                                                   --------       --------        --------     --------
Total mortgage banking revenues...............................       21,513         14,425          59,264       36,159
Title policy premiums, net....................................        7,351          4,590          18,387       11,394
                                                                   --------       --------        --------     --------
Total revenues................................................       28,864         19,015          77,651       47,553
Selling, general and administrative expense...................       18,220         12,540          48,261       32,507
Interest expense..............................................        1,155          1,575           3,490        3,582
Interest/other (income).......................................       (4,714)        (2,240)        (10,576)      (4,869)
                                                                   --------       --------        --------     --------
Income before income taxes....................................     $ 14,203       $  7,140        $ 36,476     $ 16,333
                                                                   ========       ========        ========     ========
</TABLE>

Three Months Ended June 30, 2002 Compared to Three Months Ended June 30, 2001

Revenues from the financial  services segment  increased 51.8%, to $28.9 million
in the three months ended June 30, 2002,  from $19.0  million in the  comparable
period of 2001. The increase in financial services revenues was due to the rapid
expansion  of the  Company's  mortgage  loan  and  title  services  provided  to
customers of the Company's  homebuilding  segment and the effects of the Emerald
Builders acquisition.  Selling,  general and administrative  expenses associated
with financial  services  increased  45.3%, to $18.2 million in the three months
ended June 30, 2002,  from $12.5 million in the comparable  period of 2001. As a
percentage of financial services revenues,  selling,  general and administrative
expenses  decreased by 2.8 percentage points, to 63.1% in the three months ended
June 30, 2002, from 65.9% in the comparable period in 2001, due primarily to the
increase in revenues absorbing fixed costs.

Nine Months Ended June 30, 2002 Compared to Nine Months Ended June 30, 2001

Revenues from the financial  services segment  increased 63.3%, to $77.7 million
in the nine months ended June 30,  2002,  from $47.6  million in the  comparable
period of 2001. The increase in financial services revenues was due to the rapid
expansion  of the  Company's  mortgage  loan  and  title  services  provided  to
customers  of  the  Company's  homebuilding  segment  and  the  effects  of  the
Fortress-Florida  and  Emerald  Builders  acquisitions.   Selling,  general  and
administrative  expenses  associated with financial services increased 48.5%, to
$48.3 million in the nine months ended June 30, 2002,  from $32.5 million in the
comparable  period of 2001.  As a  percentage  of financial  services  revenues,
general and administrative expenses decreased by 6.2 percentage points, to 62.2%
in the nine months ended June 30, 2002,  from 68.4% in the comparable  period in
2001, due primarily to the increase in revenues absorbing fixed costs.


                                      -24-

<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2002, the Company had available  cash and cash  equivalents of $55.9
million.  Inventories  (including finished homes,  construction in progress, and
developed  residential  lots and other land) at June 30, 2002,  had increased by
$1,577.3 million since September 30, 2001, due to the acquisition of Schuler,  a
general  increase in business  activity and the  expansion of  operations in the
Company's  market  areas.  Net of  homebuilding  cash,  the  Company's  ratio of
homebuilding  notes  payable to total  capital at June 30, 2002,  increased  1.9
percentage  points, to 55.9% from 54.0% at September 30, 2001. The stockholders'
equity to total assets ratio increased 3.0 percentage  points,  to 37.2% at June
30, 2002, from 34.2% at September 30, 2001.

At June 30, 2002, the Company has an $805 million,  unsecured  revolving  credit
facility,  including  $125 million which may be used for letters of credit.  The
facility matures in January 2006, and is guaranteed by substantially  all of the
Company's   wholly-owned   subsidiaries   other  than  its  financial   services
subsidiaries.  The revolving  credit facility and the indentures  related to the
Company's Senior and Senior  Subordinated  Notes contain covenants which,  taken
together, limit amounts of debt that may be incurred,  investments in inventory,
stock  repurchases,   cash  dividends  and  other  restricted  payments,   asset
dispositions  and creation of liens,  and require certain levels of tangible net
worth. At June 30, 2002, these covenants limit the additional  homebuilding debt
the Company  could incur to $1,251.3  million,  which  included  $464.9  million
available  under the  revolving  credit  facility.  The Company has entered into
multi-year interest rate swap agreements,  aggregating a notional amount of $200
million,  that fix the interest rate on a portion of the variable rate revolving
credit facility.

In the normal course of business, the Company provides standby letters of credit
and performance  bonds,  issued by third parties,  to secure  performance  under
various contracts.  At June 30, 2002,  outstanding standby letters of credit and
performance  bonds,  the  majority of which  mature in less than one year,  were
$122.5 million and $632.1 million, respectively.

At June 30, 2002,  the financial  services  segment had mortgage  loans held for
sale of $288.5 million and loan  commitments  for $266.3 million at fixed rates.
The Company  hedges the interest rate market risk on these  mortgage  loans held
for  sale  and loan  commitments  through  the use of  best-efforts  whole  loan
delivery  commitments,  mandatory  forward  commitments to sell  mortgage-backed
securities and the purchase of options on financial instruments.

The  financial  services  segment has a $205 million,  one-year  bank  warehouse
facility that matures on August 13, 2002,  and is secured by mortgage loans held
for sale. The warehouse facility is not guaranteed by the parent company.  As of
June 30, 2002, $204.6 million had been drawn under this facility.  Substantially
all of the mortgage  company  activities  have been financed under the warehouse
facility.  To  supplement  the  warehouse  facility,  a new $100 million  credit
facility for  financial  services was  finalized in July 2002.  The new facility
will  mature on July 9, 2003,  and is also  secured by  mortgage  loans held for
sale.

On February 21, 2002,  Schuler  Homes,  Inc.  merged with and into D.R.  Horton,
Inc.,  with D.R.  Horton the surviving  corporation.  At the time of the merger,
Schuler's  assets  amounted to $1,364.4  million,  mostly  inventory.  The total
merger  consideration  consisted  of the issuance of  20,079,532  shares of D.R.
Horton, Inc. common stock, valued at $30.93 per share (the average closing price
of D.R.  Horton  common stock for a period of ten trading days from  December 4,
2001 to  December  17,  2001);  the  payment  of  $168.7  million  in cash;  the
assumption of $802.2 million of Schuler's debt, $238.2 million of which was paid
at closing; the assumption of trade payables and other liabilities  amounting to
$209.1  million;  and the  assumption  of $10.8  million of  obligations  to the
Schuler entities' minority interest holders. Also, D.R. Horton issued options to
purchase  approximately  527,000  shares of D.R.  Horton common stock to Schuler
employees to replace  outstanding  Schuler stock options.  The fair value of the
options  issued was $10.4  million and was recorded as additional  capital.  The
fair value of the unvested  options  issued was $7.8 million and was recorded as
unearned  compensation.  The unearned  compensation  is being amortized over the
remaining vesting period of the stock options. The fair value of the options was
estimated using the Black-Scholes option pricing model.

The  Schuler  merger was  accounted  for as a purchase.  Accordingly,  Schuler's
assets and  liabilities,  including  identifiable  intangibles,  were  initially
recorded at their fair  values as of the date of the  merger.  The excess of the
total consideration paid over the net assets' fair value  (approximately  $447.5
million) was recorded as an addition to goodwill.

                                      -25-

<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS




The Company's rapid growth and acquisition  strategy require significant amounts
of cash. It is anticipated that future home construction, lot and land purchases
and acquisitions will be funded through internally generated funds, existing and
future credit facilities and the issuance of new debt or equity  securities.  At
June 30, 2002,  under currently  effective shelf  registration  statements,  the
Company has  approximately 15 million shares issuable to effect,  in whole or in
part,  possible future acquisitions and the capacity to issue new debt or equity
securities  amounting to $1.0  billion.  In the future,  the Company  intends to
continue  to  maintain  effective  shelf   registration   statements  that  will
facilitate access to the capital markets.

During the three months ended June 30, 2002,  the  Company's  Board of Directors
declared a quarterly cash dividend of $0.06 per common share,  which was paid on
May 21, 2002 to  stockholders  of record on May 14, 2002. On March 4, 2002,  the
Company's Board of Directors declared a three-for-two stock split (effected as a
50% stock  dividend)  which was paid on April 9, 2002, to stockholders of record
on March 26, 2002. Cash was paid in lieu of fractional shares. On July 24, 2002,
the  Company's  Board of Directors  declared a cash dividend of $0.06 per common
share, payable on August 23, 2002 to stockholders of record on August 9, 2002.

On April 11,  2002,  the Company  issued $250  million of 8.5% Senior  notes due
2012.  The net proceeds from this offering were used to repay  borrowings  under
the  unsecured  revolving  credit  facility.   These  notes  are  guaranteed  by
substantially  all of the  Company's  wholly-owned  subsidiaries  other than its
financial services subsidiaries.

In 1999 and 2000, the Company  entered into three separate  limited  partnership
agreements  with the  purpose of  investing  in  start-up  and  emerging  growth
companies  whose  technology and business plans have the potential of permitting
the  Company  to  leverage  its  size,   expertise  and  customer  base  in  the
homebuilding  industry.  The Company originally  authorized  investment of up to
$125 million in such  companies  over a four-year  period.  In January 2001, the
original  $125 million  authorization  was reduced to the $31.3 million that had
been  invested  in  such  companies  as  of  that  date.  The   investments  are
concentrated in e-commerce  businesses that serve the homebuilding,  real estate
and financial service industries, as well as in businesses whose strategic focus
allows for the diversification of the Company's operations. As of June 30, 2002,
the carrying value of the Company's  investments in such companies,  reported in
homebuilding other assets, amounted to $5.0 million.

Except  for  ordinary  expenditures  for  the  construction  of  homes  and  the
acquisition  of land and lots for  development  and sale of  homes,  at June 30,
2002, the Company had no material commitments for capital expenditures.

                                      -26-

<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


SAFE HARBOR STATEMENT

Certain  statements  contained in this report,  as well as in other materials we
have filed or will file with the Securities and Exchange Commission,  statements
made by us in  periodic  press  releases  and oral  statements  made by  Company
officials to analysts, stockholders and the press in the course of presentations
about the Company,  may be construed as "forward-looking  statements" as defined
in the  Private  Securities  Litigation  Reform  Act of 1995.  Any or all of the
forward-looking  statements  included in this report and in any other reports or
public  statements of the Company are subject to risks,  uncertainties and other
factors,  many of which are outside of the Company's  control,  that could cause
actual  results  to  differ   materially  from  the  results  discussed  in  and
anticipated  by  the  forward-looking   statements.   The  following  risks  and
uncertainties  relevant  to  our  business  include  factors  we  believe  could
adversely  affect us. Other  factors  beyond  those listed could also  adversely
affect us.

      -  Changes in general economic, real estate and other business conditions
      -  Changes in interest rates and the availability of mortgage financing
      -  Governmental regulations and environmental matters
      -  The Company's substantial leverage
      -  Competitive conditions within the homebuilding industry
      -  The availability of capital
      -  The Company's ability to effect its growth strategies successfully

 We undertake no obligation to publicly update any  forward-looking  statements,
 whether as a result of new  information,  future events or otherwise.  However,
 any further disclosures made on related subjects in subsequent reports on Forms
 10-K, 1 and 8-K should be consulted.  Additional  information about issues that
 could lead to material  changes in  performance  is contained in the  Company's
 annual  report on Form 10-K,  which is filed with the  Securities  and Exchange
 Commission.


                                      -27-

<PAGE>



ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is subject to interest rate risk on its long term debt.  The Company
monitors its exposure to changes in interest  rates and utilizes  both fixed and
variable rate debt.  For fixed rate debt,  changes in interest  rates  generally
affect the value of the debt instrument,  but not the Company's earnings or cash
flows.  Conversely,  for variable rate debt, changes in interest rates generally
do not  impact  the fair  value  of the  debt  instrument,  but may  affect  the
Company's future earnings and cash flows. The Company has mitigated its exposure
to changes in interest  rates on its  variable  rate bank debt by entering  into
interest rate swap  agreements to obtain a fixed  interest rate for a portion of
the variable rate borrowings.  The Company generally does not have an obligation
to prepay fixed-rate debt prior to maturity and, as a result, interest rate risk
and changes in fair value would not have a  significant  impact on the Company's
fixed-rate  debt  until  such time as the  Company  is  required  to  refinance,
repurchase or repay such debt.

The Company's  interest rate swaps were not designated as hedges under Statement
of  Financial  Accounting  Standards  No. 133 when it was  adopted on October 1,
2000.  Since their  maturities  and other terms did not match the related  debt,
they were  determined to be  ineffective  hedges (as defined by the  Statement).
Therefore,  the Company is exposed to market risk associated with changes in the
fair  values of the  swaps,  since any such  changes  must be  reflected  in the
Company's income statements.

The  Company's  financial  services  segment is exposed  to  interest  rate risk
associated  with its mortgage loan  production  activities.  Mortgage  loans are
funded at fixed interest  rates before they are committed to specific  investors
and interest rate lock  commitments  (IRLC's) are extended to borrowers who have
applied for loan funding and who meet certain  defined  credit and  underwriting
criteria.  Forward commitments to sell mortgage-backed securities are designated
as fair value  hedges of the risk of changes in the overall fair value of funded
loans. The  effectiveness of the fair value hedge is continuously  monitored and
any  ineffectiveness,  which for the three and nine months  ended June 30, 2002,
was  not  significant,  is  recognized  in  current  earnings.  The  IRLC's  are
classified and accounted for as non-designated derivative instruments with gains
and losses  recorded in current  earnings.  Interest rate risk  associated  with
IRLCs  is  managed  through  the  use  of   best-efforts   whole  loan  delivery
commitments,  forward  commitments  to sell  mortgage-backed  securities and the
purchase of options on financial  instruments.  These instruments are considered
non-designated derivatives and are accounted for at fair market value with gains
and losses  recorded  in  current  earnings.  At June 30,  2002,  total  forward
commitments  to mitigate  interest  rate risk related to funded loans and IRLC's
were  approximately  $195.5  million,  the  duration of which was less than nine
months.

The following  table shows,  as of June 30, 2002,  the Company's  long term debt
obligations,  principal  cash  flows by  scheduled  maturity,  weighted  average
interest rates and estimated fair market value. In addition, the table shows the
notional  amounts,  weighted  average  interest  rates and estimated fair market
value of the Company's interest rate swaps.

<TABLE>
<CAPTION>
                            Three Months                                                                                    Fair
                              Ended                                                                                        market
                             Sep. 30,                        Year ended September 30,                                     value at
                            ---------      -------------------------------------------------------------

                              2002          2003          2004         2005         2006      Thereafter        Total     06/30/02
                             ------        ------        ------      -------      -------     ----------      --------    ---------
                                                                ($'s in millions)
<S>                         <C>           <C>           <C>          <C>          <C>          <C>           <C>          <C>
Debt:
  Fixed rate.............    $ 19.2        $ 20.0        $166.9       $210.7       $150.0       $2,047.1      $2,613.9     $2,543.9
  Average interest rate..     7.96%         6.62%         8.52%       10.69%       10.19%          8.15%         8.50%           --
  Variable rate..........    $210.8        $ 19.6        $  8.7           --       $261.1             --        $500.2       $500.2
  Average interest rate..     2.92%         5.75%         3.83%           --        3.73%             --         3.47%           --
Interest Rate Swaps:
  Variable to fixed......    $200.0        $200.0        $200.0       $200.0       $200.0         $200.0            --      ($11.2)
  Average pay rate.......     5.10%         5.10%         5.10%        5.10%        5.10%          5.07%            --           --
  Average receive rate...    90-day LIBOR
</TABLE>


                                      -28-

<PAGE>



PART II.    OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.


         (a)    Exhibits.
                3.1        Amended and Restated Certificate of Incorporation, as
                           amended, of the Company is incorporated herein by
                           reference from Exhibit 4.2 to the Company's
                           registration statement (No. 333-76175) on Form S-3,
                           filed April 13, 1999.

                3.2        Amended and Restated Bylaws of the Company are
                           incorporated herein by reference from Exhibit 3.1 to
                           the Company's Quarterly Report on Form 10-Q for the
                           quarter ended December 31, 1998.

               10.1*       D.R. Horton Deferred Compensation Plan, effective as
                           of June 15, 2002.

               10.2*       D.R. Horton, Inc. 1991 Stock Incentive Plan, as
                           amended and restated.

               10.3*       Amendment No. 1 to the D.R. Horton, Inc. 1991 Stock
                           Incentive Plan, as amended and restated.



------------
*Filed herewith.



         (b)      Reports on Form 8-K.
                  1.       On April 3, 2002, the Company filed a Current Report
                           on Form 8-K (Item 5), which included its press
                           release of that date announcing the Company planned
                           to sell approximately $250 million of senior notes to
                           qualified institutional buyers in reliance upon
                           Rule 144A.

                  2.       On May 30, 2002, the Company filed a Current Report
                           on Form 8-K (Item 5), which provided unaudited pro
                           forma combined condensed statements of income of D.R.
                           Horton, Inc. and Schuler Homes, Inc. for the six
                           months ended March 31, 2002 and the year ended
                           September 30, 2002.




                                      -29-

<PAGE>



                                   SIGNATURES


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

                                    D.R. HORTON, INC.



Date: August 13, 2002               By  /s/ Samuel R. Fuller
                                      ------------------------------------------

                                    Samuel R. Fuller, on behalf of D.R. Horton,
                                    Inc. and as Executive Vice President,
                                    Treasurer and Chief Financial Officer
                                    (Principal Financial and Accounting Officer)



                                      -30-

<PAGE>


                               INDEX TO EXHIBITS





               EXHIBIT
               NUMBER      DESCRIPTION
              --------     -----------

                3.1        Amended and Restated Certificate of Incorporation, as
                           amended, of the Company is incorporated herein by
                           reference from Exhibit 4.2 to the Company's
                           registration statement (No. 333-76175) on Form S-3,
                           filed April 13, 1999.

                3.2        Amended and Restated Bylaws of the Company are
                           incorporated herein by reference from Exhibit 3.1 to
                           the Company's Quarterly Report on Form 10-Q for the
                           quarter ended December 31, 1998.

               10.1*       D.R. Horton Deferred Compensation Plan, effective as
                           of June 15, 2002.

               10.2*       D.R. Horton, Inc. 1991 Stock Incentive Plan, as
                           amended and restated.

               10.3*       Amendment No. 1 to the D.R. Horton, Inc. 1991 Stock
                           Incentive Plan, as amended and restated.



------------
*Filed herewith.





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>exhibit101.txt
<DESCRIPTION>DEFERRED COMPENSATION PLAN AS OF JUNE 15, 2002
<TEXT>


















                              D.R. Horton

                      Deferred Compensation Plan







                    (Effective as of June 15, 2002)



<PAGE>


                                        i

                                TABLE OF CONTENTS

                                                                           Page

ARTICLE 1       ESTABLISHMENT AND PURPOSE.....................................1

ARTICLE 2       DEFINITIONS...................................................2

ARTICLE 3       ADMINISTRATION................................................5

ARTICLE 4       ELIGIBILITY AND PARTICIPATION.................................7

ARTICLE 5       CONTRIBUTIONS TO DEFERRAL ACCOUNTS............................7

ARTICLE 6       DISTRIBUTIONS.................................................8

ARTICLE 7       DEFERRED COMPENSATION ACCOUNTS...............................11

ARTICLE 8       TRUST........................................................13

ARTICLE 9       CHANGE IN CONTROL............................................13

ARTICLE 10      RIGHTS OF PARTICIPANTS.......................................13

ARTICLE 11      WITHHOLDING OF TAXES.........................................14

ARTICLE 12      AMENDMENT AND TERMINATION....................................14

ARTICLE 13      MISCELLANEOUS................................................14

ARTICLE 14      ADMINISTRATIVE INFORMATION...................................15

ARTICLE 15      ERISA RIGHTS.................................................16





<PAGE>


50153841_4.DOC
                          D.R. Horton

                  Deferred Compensation Plan


                          ARTICLE 1
                  ESTABLISHMENT AND PURPOSE

            1.1  Establishment.   D.R.  Horton,   Inc.,  a  Delaware
corporation  (the "Company"),   established  the  D.R.  Horton,  Inc.
Supplemental   Executive   Retirement  Plan  No.  1 (the  "Supplemental Plan"),
an  unfunded  deferred compensation  plan for a select  group of management  or
highly  compensated employees, effective as of November 15, 1993.  Effective as
of July 1, 2000, Schuler Homes, Inc. established the Schuler Homes, Inc.
Deferred Compensation Plan for Directors and Key Employees (the "Schuler Plan"),
which also is an unfunded deferred compensation plan maintained  primarily for
the purpose of providing deferred  compensation  to members of the board of
directors and a select group of management or highly compensated employees.

            Effective  February 21, 2002,  Schuler Homes,  Inc. merged with and
into the Company,  and the Company became the sponsor of the Schuler Plan. For
sake of efficiency,  the Company wishes to  consolidate  and restate the Schuler
Plan and  the  Supplemental  Plan  into  one  uniform  plan  of benefits for the
participants of such plans and to provide a select group of management or highly
compensated employees and nonemployee directors who are selected to participate
the opportunity to defer compensation on a pre-tax basis.

        Effective as of June 15, 2002,  the Company hereby  establishes  this
deferred compensation  plan for a select group of employees  and directors as
described herein,  which shall be known as the "D.R. Horton Deferred
Compensation Plan" (the "Plan"),  which shall be the successor to and supersede
the  Supplemental Plan and the Schuler Plan. In particular, the Schuler Plan
will be merged with and into the Supplemental Plan, with the Supplemental Plan
being the Surviving Plan,  which shall change its name to the Plan,  all
effective as of June 15, 2002.  Except as expressly  provided herein,  all
amounts  deferred under the Supplemental  Plan or the Schuler Plan shall be
payable under the terms of the Plan as of the effective date.

         The Plan is intended to be an unfunded plan maintained primarily to
provide deferred compensation benefits for a select group of "management or
highly compensated employees" within the meaning of sections 201, 301, and 401
of ERISA, and therefore exempt from the provisions of Parts 2, 3, and 4 of
Title I of ERISA.  The Plan is intended to constitute a "nonqualified deferred
compensation plan" for purposes of Code section 3121(v)(2) as well as 4 U.S.C.
section 114.

         1.2      Purpose.  The primary purpose of the Plan is to provide a
select group of management and members of the Board of Directors with a capital
accumulation opportunity by deferring compensation on a pre-tax basis. The Plan
also provides the Company with a method of rewarding and retaining its highly
compensated executives and directors.

                                       1
<PAGE>

                                    ARTICLE 2
                                   DEFINITIONS

         Whenever used herein, the following terms shall have the meanings set
forth below, and, when the defined meaning is intended, the term is capitalized:
(a)      "Affiliate" means any business entity 80% or more owned or controlled
         by the Company.
(b)      "Board" or "Board of Directors" means the Board of Directors of the
         Company.
(c)      "Change in Control" means the occurrence of any of the following
         events:

                  (i)      A merger, consolidation or reorganization of the
                           Company into or with another corporation or other
                           legal person if the stockholders of the Company,
                           immediately before such merger, consolidation or
                           reorganization, do not, immediately following such
                           merger, consolidation or reorganization, then own
                           directly or indirectly, more than 50% of the
                           combined voting power of the then-outstanding voting
                           securities of the corporation or other legal person
                           resulting from such merger, consolidation or
                           reorganization in substantially the same proportion
                           as their ownership of Voting Securities (as
                           hereinafter defined) immediately prior to such
                           merger, consolidation or reorganization;

                  (ii)     The Company sells all or substantially all of its
                           assets to another corporation or other legal person,
                           or there is a complete liquidation or dissolution of
                           the Company;

                  (iii)    There is a report filed on Schedule 13D or Schedule
                           14D-1 (or any successor schedule, form or report),
                           each as promulgated pursuant to the Securities
                           Exchange Act of 1934, as amended (the "Exchange
                           Act"), disclosing that any person (as the term
                           "person" is used in Section 13(d)(3) or Section
                           14(d)(2) of the Exchange Act) has become the
                           beneficial owner (as the term "beneficial owner" is
                           defined under Rule 13d-3 or any successor rule or
                           regulation promulgated under the Exchange Act) of
                           securities representing 20% or more of the combined
                           voting power of the then-outstanding voting
                           securities of the Company ("Voting Securities")
                           (computed in accordance with the standards for the
                           computation of total percentage ownership for the
                           purposes of Schedule 13D or Schedule 14D-1 (or any
                           successor schedule, form or report)); or

                  (iv)     The Company files a report or proxy statement with
                           the Securities and Exchange Commission pursuant to
                           the Exchange Act disclosing in response to Form 8-K
                           or Schedule 14A (or any successor schedule, form or
                           report or item therein) that a change in control of

                                       2
<PAGE>

                           the Company has occurred or will occur in the future
                           pursuant to any then-existing contract or
                           transaction.

                  Notwithstanding the provisions set forth in (iii) or (iv)
                  above, a "Change in Control" shall not be deemed to have
                  occurred for purposes of this Plan solely because (i) the
                  Company, (ii) any Affiliate, or (iii) any employee stock
                  ownership plan or any other employee benefit plan of the
                  Company or any Affiliate either files or becomes obligated to
                  file a report or a proxy statement under or in response to
                  Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any
                  successor schedule, form or report or item therein) under the
                  Exchange Act disclosing beneficial ownership by it of Voting
                  Securities, whether in excess of 20% or otherwise, or because
                  the Company reports that a change in control of the Company
                  has occurred or will occur in the future by reason of such
                  beneficial ownership.  For purposes of calculating beneficial
                  ownership pursuant to this subsection, any Voting Securities
                  held by Donald R. Horton as of the date hereof or received by
                  Donald R. Horton in connection with any merger involving the
                  Company and any affiliate of the Company shall not be included
                  in the calculation of beneficial ownership.

(d)      "Code" means the Internal Revenue Code of 1986, as amended from time
         to time.

(e)      "Committee" means a committee of three (3) or more persons appointed by
         the Board to administer the Plan pursuant to Article 3.

(f)      "Company" means D.R. Horton, Inc., a Delaware corporation.

(g)      "Compensation" means an Employee's Salary, Incentive Compensation,
         Director's Compensation, and other compensation paid by the Employer
         for the Plan Year.

(h)      "Deferral Account" means the accounting entry made with respect to each
         Participant for the purpose of maintaining a record of each
         Participant's benefit under the Plan.

(i)      "Director's Compensation" means such amounts payable to an Employee for
         the Plan Year for the Employee's service on the Board for the Plan Year
         including, with limitation, annual retainer and meeting fees.

(j)      "Disability" means a condition which meets the definition of a
         disability as contained in the Company's long-term disability plan
         (as determined by the Committee in its sole discretion).

(k)      "Eligible Employee" means an Employee who is eligible to participate in
         the Plan pursuant to Section 4.1.

(l)      "Employee" means any person either (i) employed by the Employer whose
         wages are subject to withholding for purposes of the Federal Insurance
         Contribution Act, or (ii) serving as a member of the Board of
         Directors.

                                       3
<PAGE>

(m)      "Employee Contributions" means those contributions credited to a
         Participant's Deferral Account in accordance with the Participant's
         deferral election pursuant to Section 5.1.

(n)      "Employer" means the Company and each Affiliate that adopts the Plan
         with the Company's permission.

(o)      "ERISA" means the Employee Retirement Income Security Act of 1974, as
         amended from time to time.

(p)      "Incentive Compensation" means such bonuses and other non periodic
         amounts (not including equity compensation) payable to an Employee in
         addition to his Salary and/or Director's Compensation for services
         rendered during the Plan Year, which may be paid to the Employee in the
         following Plan Year as determined by the Employer in accordance with
         its general policies and procedures and its sole discretion.  Whether a
         payment qualifies as "Incentive Compensation" shall be determined by
         the Company in its sole discretion.

(q)      "Installment Eligibility Age" means the attainment of age 50 and 10
         years of service with the Employer (including service with any
         predecessor employers designated by the Company as such).  This age and
         service requirement is applicable only to eligibility to receive
         installment payments hereunder and shall not apply to, or affect or be
         considered in interpreting, any other compensation, benefit, or plan of
         the Company.

(r)      "Participant" means an Eligible Employee who is participating in the
         Plan pursuant to Section 4.2 or an Employee who participated in the
         Supplemental Plan or the Schuler Plan whose compensation deferrals
         under those plans have been credited to a Deferral Account under the
         Plan.

(s)      "Plan" means the D.R. Horton Deferred Compensation Plan, as set forth
         herein, and as it may be amended from time to time.

(t)      "Plan Year" means January 1 to December 31 of each calendar year.  The
         first Plan Year shall be a short plan year that begins on June 15,
         2002, and ends on December 31, 2002.

(u)      "Salary" means the base annual compensation payable to an Employee by
         the Employer for services rendered during a Plan Year, before reduction
         for amounts deferred pursuant to the Plan or to the D.R. Horton, Inc.
         Profit Sharing Plus Plan, or any other deferred compensation, 401(k),
         or cafeteria plan, which is payable in cash to the Employee for
         services to be rendered during the Plan Year; provided that "Salary"
         shall exclude (i) Incentive Compensation, and (ii) Director's
         Compensation that may be paid by the Employer to an Employee with
         respect to the Plan Year.

(v)      "Schuler Plan" means the Schuler Homes, Inc. Deferred Compensation Plan
         for Directors and Key Employees.

                                       4
<PAGE>

(w)      "Supplemental Plan" means the D.R. Horton, Inc. Supplemental Executive
         Retirement Plan No. 1.

                                    ARTICLE 3
                                 ADMINISTRATION

         3.1      Authority of the Committee.  The Board shall appoint a
Committee of three (3) or more persons to administer the Plan.  The members of
the Committee shall be appointed by and shall serve at the discretion of the
Board.

         Subject to the provisions herein, the Committee shall have full power
and discretion to select Employees for participation in the Plan; to determine
the terms and conditions of each Employee's participation in the Plan; to
construe and interpret the Plan and any agreement or instrument entered into
under the Plan; to establish, amend, or waive rules and regulations for the
Plan's administration; to amend (subject to the provisions of Articles 9 and 12
herein) the terms and conditions of the Plan and any agreement entered into
under the Plan; and to make other determinations which may be necessary or
advisable for the administration of the Plan.

         3.2      Decisions Binding.  Subject to Section 3.4(b), all
determinations and decisions of the Committee as to any disputed question
arising under the Plan, including questions of construction and interpretation,
shall be final, conclusive, and binding on all parties and shall be given the
maximum possible deference allowed by law.

         3.3      Claim Procedures.  If a request for Plan benefits is denied in
whole or in part, the Participant or his beneficiary ("claimant") will be
notified in writing within 90 days after receipt of the claim.  In some
instances, the Committee may require an additional 90 days to consider the
claim.  When additional time is needed, the claimant will be notified of the
special circumstances requiring the extension.  The extension may not exceed a
total of 180 days from the date the claim was originally filed.

         If additional information is necessary to process the claim, the
claimant will be notified of the items needed in order to consider the claim.

         If a claimant's initial request for benefits is denied, the notice of
the denial will include the specific reasons for denial and references to the
relevant Plan provisions on which the denial was based, a description of any
additional material or information necessary to perfect the claim and an
explanation of why such information is necessary, if applicable, and a
description of the Plan's review procedures and the time limits applicable
thereto, including a statement of the claimant's rights under Section 502(a)
of ERISA.

         Within 60 days after receiving a denial, the claimant or his authorized
representative may appeal the decision by requesting a review by writing the
Committee.  On appeal, the claimant may submit in writing any comments or issues
with respect to the claim and/or any additional documents or information not
considered during the initial review and, upon request, the claimant may review
all documents pertinent to the claim.

         A decision on appeal will normally be given within 60 days of the
receipt of the appeals request.  If special circumstances warrant an extension,

                                       5
<PAGE>

then the decision will be made no later than 120 days after receipt of the
appeal.  Subject to Section 3.4, the Committee's decision on appeal shall be
final and binding on all parties.

         If a claimant's appeal is denied in whole or in part, the notice of the
decision on appeal shall include the specific reasons for the denial and
reference to the relevant Plan provisions on which the denial was based, a
statement that, upon request and free of charge, the claimant may review and
copy all documents relevant to the claim for benefits, a statement describing
the Plan's binding arbitration procedures (or, on or after a Change in Control,
other contest procedures) and the claimant's rights under Section 502(a) of
ERISA.

         3.4      Arbitration.  (a) Pre Change in Control.  The following
provisions shall apply before a Change in Control.  Any individual making a
claim for benefits under this Plan may contest the Committee's decision to deny
such claim or appeal therefrom only by submitting the matter to binding
arbitration before a single arbitrator.  Any arbitration shall be held in
Arlington, Texas, unless otherwise agreed to by the Committee.  The arbitration
shall be conducted pursuant to the Commercial Arbitration Rules of the
American Arbitration Association.

         The arbitrator's authority shall be limited to the affirmation or
reversal of the Committee's denial of the claim or appeal, based solely on
whether or not the Committee's decision was arbitrary or capricious, and the
arbitrator shall have no power to alter, add to, or subtract from any provision
of this Plan.  Except as otherwise required by ERISA, the arbitrator's decision
shall be final and binding on all parties, if warranted on the record and
reasonably based on applicable law and the provisions of this Plan. The
arbitrator shall have no power to award any punitive, exemplary, consequential
or special damages, and under no circumstances shall an award contain any amount
that in any way reflects any of such types of damages.  Each party shall bear
its own attorney's fees and costs of arbitration.  Judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof.

         (b)      Post Change in Control.  On and after a Change in Control, the
Committee's decisions shall be given no special deference, but rather shall be
reviewed de novo, and a claimant may contest any Committee decision through
arbitration or litigation, at the forum and the venue of his or her choice.
The Company shall be liable for all Court or arbitration costs and legal fees if
the claimant is the prevailing party.

         3.5      Indemnification.  Each person who is or shall have been a
member of the Committee, or of the Board, shall be indemnified and held harmless
by the Employer against and from any loss, cost, liability, or expense that may
be imposed upon or reasonably incurred by him in connection with or resulting
from any claim, action, suit, or proceeding to which he or she may be a party,
or in which he or she may be involved by reason of any action taken or failure
to act under the Plan, and against and from any and all amounts paid by him in
settlement thereof, with the Employer's approval, or paid by him in satisfaction
of any judgment in any such action, suit or proceeding against him, provided he
or she shall give the Employer an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his own
behalf.

                                       6
<PAGE>


         The foregoing right of indemnification shall not be exclusive of any
other rights of indemnification to which such persons may be entitled under the
Employer's Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Employer may have to indemnify them or hold
them harmless.

                                    ARTICLE 4
                          ELIGIBILITY AND PARTICIPATION

         4.1      Eligibility.  The Committee shall determine, in its sole and
absolute discretion, which such Employees shall be eligible to participate from
time to time, and may modify such determinations at any time, provided that at
all times the Plan shall continue to qualify as an unfunded plan maintained
primarily to provide deferred compensation benefits to a select group of
management or highly compensated employees, within the meaning of sections 201,
301, and 401 of ERISA.  To be eligible for selection by the Committee, an
Employee must either (i) be a Director serving on the Board, or (ii) have total
Compensation for the Plan Year scheduled to be at least $100,000 (or, if
greater, the highly compensated employee threshold under Code section 414(q)).
In addition, to be eligible to participate herein, a former Schuler Plan
participant must consent to the transfer of assets held in the Trust informally
funding the Schuler Plan (with First Hawaiian Bank as Trustee) being transferred
to the Grantor Trust informally funding this Plan, and must consent to the
distribution rules provided for herein with respect to amounts formerly credited
to the Schuler Plan.

         4.2      Participation.  Each Eligible Employee shall become a
Participant in the Plan upon his deferral of Compensation hereunder, pursuant to
Article 5.

         In the event a Participant ceases to be eligible to participate in the
Plan, such Participant shall become an inactive Participant, retaining all the
rights described under the Plan, except the right to make any further deferrals,
until such time that the Participant again becomes an active Participant.

         4.3      Partial Year Eligibility.  In the event that an Employee first
becomes eligible to participate in the Plan after the beginning of a Plan Year,
the Employer shall notify the Employee of his eligibility to participate, and
the Employer shall provide each such Participant with a "Deferral Election
Form," and any additional enrollment forms that must be completed by the
Participant as provided in Section 5.3 herein; provided, however, that such
Participant must make his election within 30 days thereof and may elect only to
defer that portion of his Compensation for such Plan Year which is to be earned
after the filing of the deferral election.

         4.4      Notice.  The Company shall notify an Employee within a
reasonable time of such Employee's gaining or losing eligibility for active
participation in the Plan.

                                    ARTICLE 5
                       CONTRIBUTIONS TO DEFERRAL ACCOUNTS

         5.1      Compensation Deferrals.  Subject to Sections 5.2 and 5.3, an
Eligible Employee may elect to defer and have credited to his Deferral Account
for any Plan Year (i) up to one hundred percent (100%) of his Incentive
Compensation and/or Director's Compensation, and (ii) up to ninety percent (90%)
of his Salary; provided, however, that the amount of deferrals selected by the

                                       7
<PAGE>

Participant shall not reduce his non-deferred Compensation below the amount that
is required to withhold for any state or federal payroll taxes (including
FICA/Medicare tax on deferred amounts), income tax, payments to be withheld
pursuant to the D.R. Horton Profit Sharing Plus Plan or any other benefit plan
of the Employer (other than this Plan), and any other required or elected
withholding.  The minimum amount of Compensation that may be deferred in any
Plan Year is five thousand dollars ($5,000) (or two thousand five hundred
dollars ($2,500) in the case of the first (short) Plan Year).

         5.2      Deferral Election.  Eligible Employees and Participants shall
make their elections to defer all or a portion of their Compensation for the
Plan Year no later than December 1 prior to the beginning of the Plan Year in
which the Salary, Incentive Compensation, and/or Director's Compensation is to
be earned, or not later than thirty (30) calendar days following notification of
eligibility to participate for a partial Plan Year (with respect to Compensation
not yet earned).  Notwithstanding the foregoing, any deferral election a
Participant made under the Supplemental Plan or the Schuler Plan shall be null
and void effective as of June 15, 2002.  If an Eligible Employee wishes to
participate in the Plan for the first (short) Plan Year, such Eligible Employee
must elect on or before June 14, 2002, to defer all or a portion of his
Compensation to be earned for the pay periods beginning on or after June 15,
2002; provided, however, that (i) Eligible Employees are not permitted to defer
any portion of their Incentive Compensation payable on June 15, 2002, and (ii)
Eligible Employees shall have a one-time irrevocable election until June 30,
2002, to revoke their prior deferral election, in which case they shall not be
eligible to participate herein until January 1, 2003.  Any Salary, Incentive
Compensation, and Director's Compensation deferral elections must be made before
the Compensation is earned and before the amount thereof is substantially
certain of payment.

         5.3      Length of Deferral and Modification of Elections. All deferral
elections shall be irrevocable for the Plan Year in which they are in effect,
and shall be made on a "Deferral Election Form," as described herein.  Once
made, a Participant's deferral election shall remain in effect for all
subsequent Plan Years for which the Participant is an Eligible Employee unless
and until the Participant increases, decreases, or terminates such election by
submitting a new Deferral Election Form to the Employer.  Deferral election
changes must be submitted to the Employer no later than December 1 prior to the
beginning of the Plan Year for which the change is to be effective.

         On the "Deferral Election Form" and related enrollment forms
Participants shall elect (i) the percentage or flat dollar amount of each
eligible component of Compensation to be deferred for the Plan Year; (ii) the
deemed investment elections of the amounts to be deferred, in accordance with
Section 7.2; (iii) any scheduled in-service withdrawal that may be desired
(which election must be made prior to the beginning of the deferral period for
the Plan Year deferral at issue, and can only be elected for one Plan Year's
deferral at a time); and (iv) a Beneficiary designation.

                                    ARTICLE 6
                                  DISTRIBUTIONS

         6.1      Scheduled In-Service Distributions.  A Participant may elect
in the manner prescribed by the Committee to receive all or a portion of the

                                       8

<PAGE>

vested portion of his Deferral Account while he is still employed by the
Employer in (i) a single lump sum payment, or (ii) annual installment payments
over a period of two (2) to five (5) years; provided, however, that a
Participant may not elect to receive an in-service distribution under this
Section 6.1 of the portion of his Deferral Account attributable to amounts
deferred under the Supplemental Plan, if any.  If the amount the Participant
elects to receive is less than $25,000 (for all years combined), payment shall
be made in a single lump sum.  If a Participant elects to receive installment
payments under (ii) above, the amount of each installment payment shall be equal
to the balance remaining in the portion of the Participant's Deferral Account
that is subject to such installment election (as determined immediately prior to
each such payment), multiplied by a fraction, the numerator of which is one (1),
and the denominator of which is the total number of remaining installment
payments.  The installment amount shall be adjusted annually to reflect gains
and losses, if any, allocated to such Participant's Deferral Account pursuant to
Article 7.

         A Participant's election under this Section 6.1 must specify the future
year in which the payment of the deferred amounts shall commence, provided that
the year in which distributions are to commence must be at least two (2) years
beyond the end of the Plan Year in which the compensation is deferred.  Any
desired in-service distribution must be separately elected for each year
compensation is deferred.  Thus, to elect a scheduled in-service withdrawal for
future plan years' deferrals, a new distribution election form must be submitted
during the applicable enrollment period. Once the applicable enrollment period
has passed, a scheduled in-service distribution cannot be elected for that plan
year's deferrals. Distributions under this Section 6.1 shall commence in January
of the year specified in the Participant's election.  A Participant may delay
the commencement of in-service payments or amend his election as to the form of
the distribution at any time provided that such amendment must be made in the
manner specified by the Committee at least one (1) calendar year prior to the
date the distribution is to commence, and any change in the form of payment
(such as from lump sum to installment) or the timing of the payment must delay
or extend the length of the payments and may not accelerate them.  If a
Participant's employment or Board service with the Employer terminates for any
reason prior to receiving full payment of an in-service distribution or while he
is receiving scheduled installment payments pursuant to this Section 6.1, the
unpaid portion of the Participant's elected distribution shall be paid in
accordance with Section 6.3 below.

         Notwithstanding anything in this Section 6.1 to the contrary, if a
Participant has elected or is receiving an Interim Distribution (as such term is
defined in the Schuler Plan) under the Schuler Plan as of the effective date of
this Plan, the Participant shall receive or shall continue receiving such
distribution in accordance with his election under the Schuler Plan; provided,
however, installment payments shall not be made for a period longer than five
(5) years from the first January 1 following the effective date of this Plan.

         6.2      Distributions upon Installment Eligibility Age, Death, or
Disability.  Within ninety (90) days of a Participant's termination of
employment with the Employer after attaining Installment Eligibility Age,
separation from Board service, or incurring a Disability, the Participant may
elect to receive the vested balance credited to his Deferral Account in (i) a
single lump sum payment or, (ii) annual installment payments over a period of
two (2) to ten (10) years.  If a Participant fails to make a distribution
election within ninety (90) days following his termination of employment or if
the vested balance credited to his Deferral Account is less than $50,000,

                                       9
<PAGE>

payment shall be made in a single lump sum.  The amount of each installment
payment under (ii) above shall be equal to the balance remaining in the portion
of the Participant's Deferral Account that is subject to such installment
election (as determined immediately prior to each such payment), multiplied by a
fraction, the numerator of which is one (1), and the denominator of which is the
total number of remaining installment payments.  The installment amount shall be
adjusted annually to reflect gains and losses, if any, allocated to such
Participant's Deferral Account pursuant to Article 7.

         Distributions under this Section 6.2 shall begin as of the first day of
the thirteenth (13th) month after the Participant submits his distribution
election; provided, however, that a Participant can delay the commencement of
distributions to a date no later than the January of the year immediately
following his attainment of age 62.  In the event a participant dies while
receiving installment payments or before distributions have commenced in
accordance with this Section 6.2, the unpaid portion of the Participant's
Deferral Account shall be paid in accordance with Section 6.3 below.

         Any prior retirement or termination of employment elections under the
Supplemental Plan or Schuler Plan shall be null and void.

         6.3      Termination of Employment.  If a Participant's employment with
the Employer terminates for any reason (including the Participant's death) prior
to the date the Participant attains Installment Eligibility Age or incurs a
Disability, the unpaid vested portion of such Participant's Deferral Account
shall be paid to the Participant or (in the event of his death) the
Participant's designated beneficiary in a single lump sum payment as soon as
administratively feasible following the Participant's termination of employment
or death.

         6.4      Nonscheduled In-Service Withdrawals.  Notwithstanding any
provision of this Plan to the contrary, a Participant may at any time request a
lump sum distribution of all or a portion of his vested Deferral Account.  In
the event a Participant requests a distribution under this Section 6.4, (i) such
Participant will receive a portion of his Deferral Account equal to 90% of the
requested distribution, and the remaining 10% of the requested distribution will
be forfeited, and (ii) such Participant will be ineligible to participate in the
Plan for the remainder of the Plan Year in which the distribution is received
and for the immediately following Plan Year.

         6.5      Financial Hardship.  The Committee shall have the authority to
alter the timing or manner of payment of deferred amounts in the event that the
Participant establishes, to the satisfaction of the Committee, severe financial
hardship.  In such event, the Committee may, in its sole discretion, distribute
all or a portion of such Participant's Deferral Account to the Participant
without penalty.

         For purposes of this Section 6.5, "severe financial hardship" shall
mean any financial hardship resulting from extraordinary and unforeseeable
circumstances arising as a result of one or more recent events beyond the
control of the Participant, including, but not limited to, the illness or injury
of a Participant or dependent (as determined by the Committee), or the casualty
loss of a Participant's real or personal property.  In any event, payment under
this Section 6.5 may not be made to the extent such emergency is or may be
relieved: (i) through reimbursement or compensation by insurance or otherwise;
(ii) by liquidation of the Participant's assets, to the extent the liquidation
of such assets would not itself cause severe financial hardship; and (iii) by

                                       10
<PAGE>

cessation of deferrals under the Plan.  Withdrawals of amounts because of a
severe financial hardship may only be permitted to the extent reasonably
necessary to satisfy the hardship, plus to pay taxes on the withdrawal.
Examples of what are not considered to be severe financial hardships include
the need to send a Participant's child to college or the desire to purchase a
home.  The Participant's Deferral Account will be credited with earnings in
accordance with the Plan up to the date of distribution.

         The Committee shall judge the severity of the financial hardship.
The Committee's decision with respect to the severity of financial hardship and
the manner in which, if at all, the Participant's future deferral opportunities
shall be ceased, and/or the manner in which, if at all, the payment of deferred
amounts to the Participant shall be altered or modified, shall be final,
conclusive, and not subject to appeal.

         In the event a Participant receives a distribution under this Section
6.5, then such Participant will be ineligible to participate in the Plan for the
remainder of the Plan Year in which the distribution was received.

         6.6      Incompetence of Distributee.  In the event that it shall be
found that a person entitled to receive payment under the Plan (including a
designated beneficiary) is a minor or is physically or mentally incapable of
personally receiving and giving a valid receipt for any payment due (unless
prior claim therefor shall have been made by a duly qualified committee or other
legal representative), such payment may be made to any person whom the Committee
in its sole discretion determines is entitled to receive it, and any such
payment shall fully discharge the Employer, the Company, the Committee and the
Plan from any further liability to the person otherwise entitled to payment
hereunder, to the extent of such payment.

                                    ARTICLE 7
                         DEFERRED COMPENSATION ACCOUNTS

         7.1      Participants' Accounts.  The Company shall establish and
maintain an individual bookkeeping Deferral Account for Employee Contributions.
Each Deferral Account shall be credited with Employee Contributions generally
within five (5) business days of the applicable payroll deduction, and as
provided in Section 7.2.  The Employee Contributions held in each Participant's
Deferral Account shall be one hundred percent (100%) vested at all times.

         A Participant's Deferral Account shall also be credited with
(i) compensation deferrals, if any, made under the Supplemental Plan or the
Schuler Plan, (ii) Matching Contributions and Discretionary Contributions
(as those terms are defined in the Schuler Plan) made on the Participant's
behalf under the Schuler Plan, if any, and (iii) any deemed earnings credit to
such amounts prior to the effective date of this Plan.  (These credits are in
lieu of the amounts formerly credited under the Supplemental Plan and Schuler
Plan, which are being merged into this Plan.)  Participants shall be one hundred
percent (100%) vested at all times in the compensation deferrals made under the
Supplemental Plan or the Schuler Plan credited to their Deferral Accounts.  If a
Participant's Deferral Account is credited with Matching Contributions and/or
Discretionary Contributions made under the Schuler Plan, the Participant's
vested interest in such contributions shall be determined in accordance with the
terms of the Schuler Plan.

                                       11
<PAGE>

         7.2      Earnings on Deferred Amounts.  A Participant's Deferral
Account shall be credited with earnings (or losses) based on a deemed investment
of the Participant's Deferral Account, as directed by each Participant, which
deemed investment shall be in one or more funds among the investment options
selected by the Committee from time to time.  Deemed earnings (and losses) on a
Participant's Deferral Account shall be based upon the daily unit valuation of
the funds selected by such Participant, and shall be credited to a Participant's
Deferral Account on a monthly basis.  Deemed earnings (or losses) shall be paid
out to a Participant in accordance with the applicable Deferral Election Form.
Any portion of a Participant's Deferral Account which is subject to distribution
in installments shall continue to be credited with deemed earnings (or losses)
until fully paid out to the Participant.

         The Committee reserves the right to change the options available for
deemed investments under the Plan from time to time, or to eliminate any such
option at any time.  A Participant may specify a separate investment allocation
with respect to each Deferral Election Form or amended Deferral Election Form.
Participants may modify their deemed investment instructions each business day
with respect to any portion (whole percentages only) of their Deferral Account;
provided they notify the Committee or its designee within the time and in the
manner specified by the Committee.  Elections and amendments thereto pursuant
to this Section 7.2 shall be made in the manner prescribed by the Committee.
The Committee reserve the right to credit earnings (or losses) on a basis
different from that elected by the Participants.

         7.3      Designation of Beneficiary.  Each Participant may designate a
beneficiary or beneficiaries who, upon the Participant's death, or physical or
mental incapacity will receive the amounts that otherwise would have been paid
to the Participant under the Plan. All designations shall be signed by the
Participant, and shall be in such form as prescribed by the Committee.
Each designation shall be effective as of the date delivered to the Committee or
its designee by the Participant.

         Participants may change their beneficiary designations on such form as
prescribed by the Committee.  The payment of amounts deferred under the Plan
shall be in accordance with the last unrevoked written beneficiary designation
that has been signed by the Participant and delivered to the Committee or its
designee prior to the Participant's death.  Notwithstanding the foregoing, a
Participant who is married may not designate a beneficiary other than the
Participant's spouse, unless the spouse consents in writing to such alternate
beneficiary designation.

         In the event that all the beneficiaries named by a Participant pursuant
to this Section 7.3 predecease the Participant, the deferred amounts that would
have been paid to the Participant or the Participant's beneficiaries shall be
paid to the Participant's estate.

         In the event a Participant does not designate a beneficiary, or for any
reason such designation is ineffective, in whole or in part, the amounts that
otherwise would have been paid to the Participant or the Participant's
beneficiaries under the Plan shall be paid to the Participant's estate.

                                       12
<PAGE>

                                    ARTICLE 8
                                      TRUST

         Nothing contained in this Plan shall create a trust of any kind or a
fiduciary relationship between the Employer and any Participant.  Nevertheless,
the Employer may establish one or more trusts, with such trustee(s) as the
Committee may approve, for the purpose of providing for the payment of deferred
amounts and earnings thereon.  Such trust or trusts may be irrevocable, but the
assets thereof shall be subject to the claims of the Employer's general
creditors upon the bankruptcy or insolvency of the Employer.

                                    ARTICLE 9
                                CHANGE IN CONTROL

         9.1      Trust and Trustees.  Upon the occurrence of a Change in
Control, the trust or trusts that may be established by the Employer pursuant to
Article 8 shall become irrevocable and the Employer shall not thereafter be
permitted to remove, terminate, or change the trustee(s) without the prior
written consent of the majority of the Participants, with weighted voting as
measured by their account balances.

         9.2      Advanced Funding.  No later than 30 days after a Change in
Control occurs, the Employer shall make a contribution to the trust or trust(s)
established pursuant to Article 8 to the extent required to fully fund all
benefits that are or may become payable under the Plan, assuming for purposes of
this calculation that all Participants retire with 100% vesting, and to fund in
advance all administrative, legal, and other costs of maintaining the Plan, in
an amount no less than $125,000.  No later than December 31 of each Plan Year
thereafter, the Employer shall make such additional contributions to the trust
or trusts to fully fund the additional benefits that may become payable to
Participants or beneficiaries under the Plan and the additional administrative,
legal, and other Plan expenses.

         9.3      Amendment and Termination.  After the occurrence of a Change
in Control, the Employer may not amend the Plan without the prior approval of a
majority of the Participants.  After a Change in Control, the Employer may not
terminate the Plan until either (i) all benefits have been paid in full, or (ii)
the majority of the Participants approve the same.  For purposes hereof,
Participants' votes shall be weighted based on their relative Plan account
balances.

                                   ARTICLE 10
                             RIGHTS OF PARTICIPANTS

         10.1     Contractual Obligation.  The Plan shall create an unfunded,
unsecured contractual obligation on the part of the Employer to make payments
from the Participants' Deferral Accounts when due.  Payment of Deferral Account
balances shall be made out of the general assets of the Employer or from the
trust or trusts referred to in Article 8 above.

         10.2     Unsecured Interest.  No Participant or party claiming an
interest in deferred amounts of a Participant shall have any interest whatsoever
in any specific asset of the Employer. To the extent that any party acquires a
right to receive payments under the Plan, such right shall be equivalent to that
of an unsecured general creditor of the Employer.  Each Participant, by
participating hereunder, agrees to waive any priority creditor status for wage

                                       13
<PAGE>

payments with respect to any amounts due hereunder.  The Employer shall have no
duty to set aside or invest any amounts credited to Participants' Deferral
Accounts under this Plan.  Accounts established hereunder are solely for
bookkeeping purposes and the Employer shall not be required to segregate any
funds based on such Accounts.

         10.3     Employment.  Nothing in the Plan shall interfere with or limit
in any way the right of the Employer to terminate a Participant's employment at
any time, or confer upon any Participant any right to continue in the employ of
the Employer.

                                   ARTICLE 11
                              WITHHOLDING OF TAXES

         The Employer shall have the right to require Participants to remit to
the Employer an amount sufficient to satisfy federal, state, and local
withholding tax requirements, or to deduct from all payments made pursuant to
the Plan (or from a Participant's other Compensation) amounts sufficient to
satisfy withholding tax requirements.  Employment taxes with respect to amounts
deferred hereunder shall be payable in accordance with Code section 3121(v)(2)
and may be withheld from a Participant's Compensation even if due prior to the
time of a distribution hereunder.  The Employer makes no representations,
warranties, or assurances and assumes no responsibility as to the tax
consequences of this Plan or participation herein.


                                   ARTICLE 12
                            AMENDMENT AND TERMINATION

         Subject to Article 9, the Employer reserves the right to amend, modify,
or terminate the Plan (in whole or in part) at any time by action of the Board
or the Committee, with or without prior notice.  Except as described below in
this Article 12, no such amendment or termination shall in any material manner
adversely affect any Participant's rights to any amounts already deferred or
credited hereunder or deemed earnings thereon, up to the point of amendment or
termination, without the consent of the Participant.

         The Board may terminate the Plan and commence termination payout for
all or certain Participants, or remove certain Employees as Participants, if it
is determined by the United States Department of Labor or a court of competent
jurisdiction that the Plan constitutes an employee pension benefit plan within
the meaning of section 3(2) of ERISA that is not exempt from the provisions of
Parts 2, 3, and 4 of Title I of ERISA, or if the IRS otherwise taxes amounts
deferred prior to their scheduled payment date.  If payout is commenced pursuant
to the operation of this Article 12, the payment of deferred amounts and
earnings thereon shall be made in the manner selected by each Participant under
Section 6.2 herein (other than the commencement date), as if the Participant had
attained Installment Eligibility Age.

                                   ARTICLE 13
                                  MISCELLANEOUS

         13.1     Notice.  Any notice or filing required or permitted to be
given to the Employer under the Plan shall be sufficient if in writing and hand
delivered, or sent by registered or certified mail to the D.R. Horton Deferred

                                       14
<PAGE>

Compensation Plan Committee, and if mailed, shall be addressed to the principal
executive offices of the Employer.  Notice mailed to a Participant shall be at
such address as is given in the records of the Employer.  Notices to the
Employer shall be deemed given as of the date of delivery.  Notice to a
Participant or beneficiary shall be deemed given as of the date of hand
delivery, or if delivery is made by mail, three (3) days following the postmark
date.

         13.2     Nontransferability.  Except as provided in Section 7.3 and
this Section 13.2, Participants' rights to deferred amounts and earnings
credited thereon under the Plan may not be sold, transferred, assigned, or
otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution, or pursuant to a domestic relations order, nor shall
the Employer make any payment under the Plan to any assignee or creditor of a
Participant.

         13.3     Severability.  In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.

         13.4     Gender and Number.  Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular, and the singular shall include the plural.

         13.5     Costs of the Plan.  All costs of implementing and
administering the Plan shall be borne by the Employer.

         13.6     Successors.  All obligations of the Employer under the Plan
shall be binding on any successor to the Employer, whether the existence of such
successor is the result of a direct or indirect purchase, merger, consolidation,
or otherwise, of all or substantially all of the business and/or assets of the
Employer.

         13.7     Applicable Law.  Except to the extent preempted by applicable
federal law, the Plan shall be governed by and construed in accordance with the
laws of the state of Texas.

                                   ARTICLE 14
                           ADMINISTRATIVE INFORMATION

         14.1     Plan Sponsor and Administrator.  The Plan described herein is
                  sponsored by:

                                D.R. Horton, Inc.
                         1901 Ascension Blvd., Suite 100
                             Arlington, Texas 76006

         The Company is the plan administrator and named fiduciary.  Prior to a
Change in Control, the Company has been granted complete fiduciary discretion
and authority to administer, operate, and interpret the Plan and make final
decisions on such issues as eligibility, payment of benefits, claims, and claims
appeals, unless such decisions have been delegated to another party.  However,
many day-to-day questions can be answered by the Benefits Department.

                                       15
<PAGE>

         The agent for the service of legal process for the Plan is
         the Company.

         14.2     Plan Type and Plan Year.  Documents and reports for the Plan
are filed with the United States Internal Revenue Service and the Department of
Labor under Employer Identification Number: 75-2386963.

         The official Plan name is the D.R. Horton Deferred Compensation Plan,
which, for government purposes, is intended to be an unfunded pension plan
maintained by an employer for a select group of management or highly compensated
employees.  Plan records are maintained on an annual basis and December 31 is
the end of the plan year.

         14.3     Plan Funding.  The Plan is unfunded and unsecured and benefits
are paid solely from the Employer's general assets.

                                   ARTICLE 15
                                  ERISA RIGHTS

         Certain rights and protections are provided to Plan participants under
the Employee Retirement Income Security Act of 1974 (ERISA).  These ERISA rights
include the following:

         (a)      Any Plan participant may contact the Benefits Department to
                  examine all Plan documents without charge.  These may include
                  the Plan descriptions and all other documents filed with the
                  United States Department of Labor.

         (b)      Copies of Plan documents and other information may be obtained
                  by writing to the Committee.  A reasonable charge may be
                  assessed for these copies.

         (c)      Each Plan participant has the right to receive a written
                  summary of the Plan's annual financial reports, if any.
                  However, this type of plan is not required to have either an
                  annual financial report or a summary annual report.

         (d)      An employee may not be discharged or discriminated against
                  to prevent his obtaining a benefit or exercising his ERISA
                  rights.

         (e)      If a claim for a benefit is denied, in whole or in part, a
                  written explanation from the Committee or a delegated
                  representative will be provided.  Each participant has the
                  right to have the plan administrator review and reconsider any
                  denied claim.

         The named fiduciary for this Plan is the Company.

         Under certain circumstances, outside assistance may be necessary to
resolve disputes between a Participant and Plan officials.  For example:

         (a)      If a claim for benefits is denied or ignored, in whole or in
                  part, after a final review, the claim may be submitted to
                  binding arbitration (or, after a Change in Control, to either
                  arbitration or a court, at the Participant's election).

                                       16
<PAGE>


         (b)      If a participant is discriminated against for pursuing a
                  benefit or exercising his ERISA rights, the participant may
                  seek help from the United States Department of Labor or file
                  an arbitration claim (or, after a Change in Control, either
                  an arbitration claim or a lawsuit, at the Participant's
                  election).

         For further information about this statement or about ERISA rights,
contact the Benefits Department.  Or, you may contact the nearest area office of
the Pension and Welfare Benefits Administration, United States Department of
Labor, listed in your telephone directory or the Division of Technical
Assistance and Inquires, Pension and Welfare Benefits Administration, U.S.
Department of Labor, 200 Constitution Avenue N.W., Washington D.C. 20210.
You may also obtain certain publications about your rights and responsibilities
under ERISA by calling the publications hotline of the Pension and Welfare
Benefits Administration.

         IN WITNESS WHEREOF, D.R. Horton, Inc. has caused this document to be
executed by its duly authorized officer on June 21, 2002, effective as of the
date set forth above.


                         D.R. HORTON, INC.


                         By:   Donald J. Tomnitz
                            -----------------------------------

                         Its: Vice Chairman, President and CEO
                            -----------------------------------









                                       17

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>exhibit102.txt
<DESCRIPTION>1991 STOCK INCENTIVE PLAN, AMENDED AND RESTATED
<TEXT>
                                D.R. HORTON, INC.
                            1991 STOCK INCENTIVE PLAN
                   (As Amended and Restated February 21, 2002)

         1.       Purpose.  The  purpose of this Plan is to  attract  and retain
directors,  officers,  key employees and other agents and  consultants  for D.R.
Horton,  Inc.  (the  "Company")  and its  Subsidiaries  and to  provide  to such
persons incentives and rewards for superior performance.

         2.       Definitions.  As used in this Plan,

                 "Appreciation   Right"  means  a  right  granted  pursuant  to
         Paragraph 5 of this Plan.

                  "Award"  means an  Appreciation  Right,  an Option  Right,  an
         award  of  Performance  Shares,  a  Performance  Unit  or an  award  of
         Restricted Stock.

                  "Board" means the Board of Directors of the Company.

                  "Code" means the Internal  Revenue Code of 1986,  as in effect
         from time to time.

                  "Committee"  means  the  committee  to  which  the  Board  has
         delegated its  authority to administer  this Plan pursuant to Paragraph
         13 of this Plan.

                  "Common  Stock"  means the  Common  Stock,  par value $.01 per
         share,  of the Company or any  security  into which such  Common  Stock
         may be  changed  by  reason  of any  transaction  or  event of the type
         described in Paragraph 10 of this Plan.

                  "Company  Security"  means  any  security  (as  that  term  is
         defined in  Section 2(1)  of the Securities Act of 1933) of the Company
         other than Common Stock.

                  "Date of  Grant"  means  the date  specified  by the  Board on
         which  a grant  of  Option  Rights,  Appreciation  Rights,  Performance
         Units or  Performance  Shares  or a grant or sale of  Restricted  Stock
         shall become  effective  (which date shall not be earlier than the date
         on which the Board takes action with respect thereto).

                  "ERISA" means the Employee  Retirement  Income Security Act of
         1974, as in effect from time to time.

                  "Fair Market  Value"  means the value of any Company  Security
         as  determined  by the Board in its sole  discretion  as of the date of
         any such determination.

                  "Grant  Price"  means the  price per share of Common  Stock at
         which an  Appreciation  Right  not  granted  in  tandem  with an Option
         Right is granted.


<PAGE>
                  "Management   Objectives"   means  the  objectives,   if  any,
         established  by the Board that are to be  achieved  with  respect to an
         Award  granted  under this  Plan,  which may be  described  in terms of
         Company-wide  objectives,  in terms of  objectives  that are related to
         performance  of  the  division,  Subsidiary,   department  or  function
         within the Company or a Subsidiary in which the  Participant  receiving
         the Award is employed  or in other  terms,  and which  shall  relate to
         the Performance  Period  determined by the Board.  The Board may adjust
         Management  Objectives and any minimum  acceptable level of achievement
         with respect to any  Management  Objectives if, in the sole judgment of
         the Board,  events or  transactions  have occurred  which are unrelated
         to the  performance  of the  Participant  and result in a distortion of
         the  Management   Objectives  or  such  minimum   acceptable  level  of
         achievement.

                  "Market  Value per Share" means,  at any date,  the average of
         the  inside  bid and asked  price of the  Common  Stock at the close of
         trading  on that  date in the  principal  market  in which  the  Common
         Stock is  traded,  or, if no market for the Common  Stock  exists,  the
         price  determined  by the Board in its sole  discretion  at the time of
         any such determination.

                  "Option  Price" means the price per share  payable on exercise
         of an Option Right.

                  "Option  Right"  means the right to purchase a share of Common
         Stock upon  exercise of an option  granted  pursuant to  Paragraph 4 of
         this Plan.

                  "Participant"  means a person who is  selected by the Board to
         receive  benefits  under  this Plan and who is at the time a  director,
         officer,  key  employee,  consultant  or agent of the Company or any of
         its  Subsidiaries,  or who has agreed to  commence  serving in any such
         capacity  within  90 days of the  Date of  Grant.  Notwithstanding  the
         foregoing,  no  non-employee  director of the Company shall be eligible
         to  receive  any  benefit  under  this Plan if he or she would  thereby
         cease  to be a  "non-employee  director"  as that  term is  defined  in
         Rule 16b-3.

                  "Performance  Period" means,  in respect of an Award, a period
         of  time   established   by  the  Board  within  which  the  Management
         Objectives relating to such Award are to be achieved.

                  "Performance  Shares"  means  shares of Common  Stock  granted
         pursuant to Paragraph 8 of this Plan.

                  "Performance  Unit" means a unit of  specified  dollar  amount
         established  by the Board and awarded  pursuant to  Paragraph 7 of this
         Plan.

                  "Restricted  Stock" means  shares of Common  Stock  granted or
         sold  pursuant  to  Paragraph  6 of this Plan as to which  neither  the
         substantial  risk  of  forfeiture  nor  the  restrictions  on  transfer
         referred to therein has expired.


                                       2
<PAGE>


                  "Rule 16b-3" means Rule 16b-3 of the  Securities  and Exchange
         Commission  (or any  successor  rule to the same  effect)  as in effect
         from time to time.

                  "Spread"  means the  excess of the  Market  Value per Share on
         the date when an  Appreciation  Right is exercised  over (a) the Option
         Price  provided  for in the related  Option Right or (b) if there is no
         tandem Option Right,  the Grant Price provided for in the  Appreciation
         Right,  multiplied  by the number of shares of Common  Stock in respect
         of which the Appreciation Right is exercised.

                  "Subsidiary"  means any  corporation,  trust,  joint  venture,
         partnership or other  unincorporated  entity in which, at the time, the
         Company owns or controls,  directly or  indirectly,  (i) in the case of
         a  corporation,  not less than 50% of the total  combined  voting power
         represented  by all  classes of stock  issued by such  corporation,  or
         (ii) in the  case of a  trust,  joint  venture,  partnership  or  other
         unincorporated  entity,  not less than 50% of the  beneficial  interest
         of such entity.

         3.       Shares  Available  Under Plan.  The shares of Common Stock and
any other  Company  Security  which may be (a) sold upon the  exercise of Option
Rights,  (b) delivered upon the exercise of Appreciation Rights,  (c) granted or
sold as Restricted Stock and released from  substantial  risks of forfeiture and
restrictions   on  transfer   thereof  or   (d) delivered   in  payment  of  any
Performance  Units or as  Performance  Shares  (or in lieu  thereof),  shall not
exceed in the aggregate  9,640,373 shares,  subject to adjustment as provided in
Paragraph  10 of this Plan.  Such shares may be shares of  original  issuance or
treasury  shares  or a  combination  of  the  foregoing.  Upon  exercise  of any
Appreciation  Rights,  there shall be deemed to have been  delivered  under this
Plan for  purposes  of this  Paragraph  3 the  number of shares of Common  Stock
covered by the Appreciation  Rights or the related Option Rights,  regardless of
whether  such  Appreciation  Rights  were paid in cash,  Company  Securities  or
shares of Common Stock.  Subject to the  provisions  of the preceding  sentence,
any shares of Common  Stock which are subject to Option  Rights or  Appreciation
Rights  or are  awarded  or  sold  as  Restricted  Stock  that  are  terminated,
unexercised,  forfeited  or  surrendered  or which  expire for any  reason  will
again  be  available  for  issuance   under  this  Plan.   Notwithstanding   the
foregoing,  the number of shares of Common  Stock  underlying  Awards  made to a
single Participant during a calendar year shall not exceed 300,000.

         4.       Option  Rights.  The  Board  may,  from  time to time and upon
such  terms and  conditions  as it may  determine,  authorize  the  granting  to
Participants  of options to  purchase  shares of Common  Stock.  Each such grant
may  utilize  any or all of the  authorizations,  and shall be subject to all of
the limitations, contained in the following provisions:

                  (a)      Each  grant  shall  specify  the  number of shares of
         Common   Stock  to  which  it  pertains.   Notwithstanding   any  other
         provision of the Plan, the aggregate  Fair Market Value  (determined at
         the time of grant of the Option  Rights) of Common  Stock with  respect
         to  which a  Participant  may be  granted  Option  Rights  intended  to
         qualify for favorable tax  treatment  under Code Section  421(a) in any
         calendar year shall not exceed $100,000.

                                       3
<PAGE>

                  (b)      Each grant  shall  specify  the Option  Price,  which
         shall  not be less than 50% of the  Market  Value per Share on the Date
         of Grant;  provided,  however,  that the foregoing limitation shall not
         apply  with  respect  to  Option  Rights  granted  for the  purpose  of
         issuing  or   assuming   an  Option   Right,   pursuant  to  a  merger,
         consolidation,   acquisition  of  property  or  stock,  other  business
         combination,  separation,  reorganization or liquidation, in the manner
         described in Code Section 424(a).

                  (c)      Each  grant  shall  specify  that  the  Option  Price
         shall be payable  (i) in cash or by check  acceptable  to the  Company,
         (ii) by the  transfer to the Company of shares of Common  Stock  having
         an aggregate  Market  Value per Share at the time of exercise  equal to
         the aggregate  Option Price or (iii) by a  combination  of such methods
         of payment.  Any grant may provide for  deferred  payment of the Option
         Price from the proceeds of sale  through a broker on the exercise  date
         of some or all of the shares to which such exercise relates.

                  (d)      Successive   grants   may  be   made   to  the   same
         Participant  whether or not any  Option  Rights  previously  granted to
         such Participant remain unexercised.

                  (e)      Each  grant  shall  specify  the  required  period or
         periods of continuous  service by the  Participant  with the Company or
         any Subsidiary  and/or the Management  Objectives to be achieved before
         the Option Rights or installments thereof will become exercisable.

                  (f)      Each grant the  exercise  of which,  or the timing of
         the  exercise  of  which,  is  dependent,  in whole or in part,  on the
         achievement  of  Management  Objectives  may specify a minimum level of
         achievement  in respect of the specified  Management  Objectives  below
         which  no  Options  Rights  will be  exercisable  and  may set  forth a
         formula or other  method for  determining  the number of Option  Rights
         that will be  exercisable  if  performance  is at or above such minimum
         but short of full achievement of the Management Objectives.

                  (g)      Option   Rights   granted  under  this  Plan  may  be
         (i) options  which are intended to qualify under particular  provisions
         of the Code,  (ii) options  which are not  intended  to so  qualify  or
         (iii) combinations of the foregoing.

                  (h)      No Option  Right shall be  exercisable  more than ten
         years from the Date of Grant.

                  (i)      Each grant of Option  Rights  shall be  evidenced  by
         an  agreement  executed  on behalf of the  Company by any  officer  and
         delivered   to  the   Participant   and   containing   such  terms  and
         provisions, consistent with this Plan, as the Board may approve.


                                       4
<PAGE>


         5.       Appreciation   Rights.   The  Board  may  also  authorize  the
granting to any  Participant of  Appreciation  Rights.  Appreciation  Rights may
be granted in tandem  with Option  Rights or separate  and apart from a grant of
Option Rights.  An  Appreciation  Right shall be a right of the  Participant who
has been  granted  such Award to  receive  from the  Company  upon  exercise  an
amount  which  shall be  determined  by the Board at the Date of Grant and shall
be expressed as a percentage of the Spread (not  exceeding  100%) at the time of
exercise.  An  Appreciation  Right granted in tandem with an Option Right may be
exercised  only by  surrender  of the  related  Option  Right.  Each grant of an
Appreciation  Right may utilize any or all of the  authorizations,  and shall be
subject to all of the limitations, contained in the following provisions:

                  (a)      Each grant shall  state  whether it is made in tandem
         with Option  Rights and, if not made in tandem with any Option  Rights,
         shall  specify  the  number of shares of  Common  Stock in  respect  of
         which it is made.

                  (b)      Each grant made in tandem  with Option  Rights  shall
         specify  the  Option  Price  and each  grant  not made in  tandem  with
         Option  Rights  shall  specify  the Grant  Price,  which in either case
         shall  not be less than 50% of the  Market  Value per Share on the Date
         of Grant;  provided,  however,  that the  foregoing  limitation  on the
         Option   Price  and  Grant  Price  shall  not  apply  with  respect  to
         Appreciation  Rights  granted  for the purpose of issuing or assuming a
         grant of  Appreciation  Rights,  pursuant  to a merger,  consolidation,
         acquisition  of  property  or  stock,   other   business   combination,
         separation,  reorganization or liquidation,  in the manner described in
         Code Section 424(a).

                  (c)      Any grant may  specify  that the  amount  payable  on
         exercise  of an  Appreciation  Right  may be  paid  by the  Company  in
         (i) cash,  (ii) shares of Common Stock having an aggregate Market Value
         per  Share  equal to the  Spread,  (iii) Company  Securities  having an
         aggregate   Fair   Market   Value  equal  to  the  Spread  or  (iv) any
         combination   thereof,   as   determined  by  the  Board  in  its  sole
         discretion at the time of payment.

                  (d)      Any grant may  specify  that the  amount  payable  on
         exercise of an  Appreciation  Right (valuing shares of Common Stock for
         this  purpose at their  Market  Value per Share at the date of exercise
         and valuing  Company  Securities  for this purpose at their Fair Market
         Value at the date of  exercise)  may not exceed a maximum  specified by
         the Board at the Date of Grant.

                  (e)      Each  grant  shall  specify  the  required  period or
         periods of continuous  service by the  Participant  with the Company or
         any Subsidiary and/or  Management  Objectives to be achieved before the
         Appreciation  Rights or installments  thereof will become  exercisable,
         and shall provide that no  Appreciation  Right may be exercised  except
         at a time when the Spread is positive  and,  with  respect to any grant
         made in tandem with Option  Rights,  when the related  Option  Right is
         also exercisable.


                                       5
<PAGE>


                  (f)      Each grant the  exercise  of which,  or the timing of
         the  exercise  of  which,  is  dependent,  in whole or in part,  on the
         achievement  of  Management  Objectives  may specify a minimum level of
         achievement  in respect of the specified  Management  Objectives  below
         which no  Appreciation  Rights will be exercisable  and may set forth a
         formula or other  method  for  determining  the number of  Appreciation
         Rights  that will be  exercisable  if  performance  is at or above such
         minimum but short of full achievement of the Management Objectives.

                  (g)      Each  grant  of  an   Appreciation   Right  shall  be
         evidenced  by a  notification  executed on behalf of the Company by any
         officer and  delivered  to and  accepted by the  Participant  receiving
         the grant, which  notification shall describe such Appreciation  Right,
         identify  any Option  Right  granted in tandem  with such  Appreciation
         Right,  state that such Appreciation  Right is subject to all the terms
         and   conditions  of  this  Plan  and  contain  such  other  terms  and
         provisions, consistent with this Plan, as the Board may approve.

         6.       Restricted  Stock.  The Board may also  authorize the granting
or sale to  Participants  of  Restricted  Stock.  Each  such  grant  or sale may
utilize  any or all of the  authorizations,  and shall be  subject to all of the
limitations, contained in the following provisions:

                  (a)      Each  such   grant  or  sale  shall   constitute   an
         immediate  transfer of the  ownership  of shares of Common Stock to the
         Participant   in   consideration   of  the   performance  of  services,
         entitling  such  Participant  to voting,  dividend and other  ownership
         rights,   but  subject  to  the  substantial  risk  of  forfeiture  and
         restrictions on transfer hereinafter referred to.

                  (b)      Each  such   grant  or  sale  may  be  made   without
         additional  consideration  or in  consideration  of a  payment  by such
         Participant  that is less than the  Market  Value per Share at the Date
         of Grant.

                  (c)      Each  such  grant  or sale  shall  provide  that  the
         shares of  Restricted  Stock  covered  by such  grant or sale  shall be
         subject,  for a period  to be  determined  by the  Board at the Date of
         Grant,  to a  "substantial  risk of  forfeiture"  within the meaning of
         Section  83 of the Code and the  regulations  of the  Internal  Revenue
         Service thereunder.

                  (d)      Each such grant or sale  shall  provide  that  during
         the  period  for  which  such  substantial  risk  of  forfeiture  is to
         continue,   the  transferability  of  the  Restricted  Stock  shall  be
         prohibited or  restricted  in a manner and to the extent  prescribed by
         the  Board  at the  Date of  Grant  (which  restrictions  may  include,
         without   limiting  the   generality  of  the   foregoing,   rights  of
         repurchase  or first  refusal in the Company or  provisions  subjecting
         the  Restricted  Stock to a continuing  substantial  risk of forfeiture
         in the hands of any transferee).

                  (e)      Each  grant  or sale of  Restricted  Stock  shall  be
         evidenced  by an  agreement  executed  on behalf of the  Company by any
         officer and  delivered  to and  accepted by the  Participant  and shall
         contain such terms and  provisions,  consistent  with this Plan, as the
         Board may approve.

                                       6
<PAGE>


         7.       Performance   Units.   The  Board  may  also   authorize   the
                  -------------------
granting of Performance  Units which will become  payable to a Participant  upon
achievement  of  specified  Management  Objectives.  Each such grant may utilize
any  or  all  of  the  authorizations,  and  shall  be  subject  to  all  of the
limitations, contained in the following provisions:

                  (a)      Each grant shall  specify  the number of  Performance
         Units to which it pertains.

                  (b)      Each grant shall  specify the  Management  Objectives
         that are to be achieved by the Participant.

                  (c)      Each grant shall specify a minimum  acceptable  level
         of  achievement  in  respect  of the  specified  Management  Objectives
         below  which no  payment  will be made and may set forth a  formula  or
         other  method for  determining  the amount of the payment to be made if
         performance  is at or above such minimum but short of full  achievement
         of the Management  Objectives.

                  (d)      Each  grant  shall  specify  the time and  manner  of
         payment of Performance  Units which have become payable,  which payment
         may be  made  in  (i) cash,  (ii) shares  of  Common  Stock  having  an
         aggregate  Market Value per Share equal to the  aggregate  value of the
         Performance Units which have become payable,  (iii) Company  Securities
         having an aggregate  Fair Market Value equal to the aggregate  value of
         the   Performance   Units  which  have   become   payable  or  (iv) any
         combination   thereof,   as   determined  by  the  Board  in  its  sole
         discretion at the time of payment.

                  (e)      Each grant of a  Performance  Unit shall be evidenced
         by a  notification  executed  on behalf of the  Company by any  officer
         and delivered to and accepted by the  Participant,  which  notification
         shall  describe  the  Performance  Units,  state that such  Performance
         Units are  subject to all the terms and  conditions  of this Plan,  and
         contain  such other terms and  provisions,  consistent  with this Plan,
         as the Board may approve.

         8.       Performance   Shares.   The  Board  may  also   authorize  the
granting to  Participants  of  Performance  Shares.  Each such grant may utilize
any  or  all  of  the  authorizations,  and  shall  be  subject  to  all  of the
limitations, contained in the following provisions:

                  (a)      Each grant shall  specify  the number of  Performance
         Shares to which it pertains.

                  (b)      Each grant shall  specify the  Management  Objectives
         that are to be achieved by the Participant.

                                       7
<PAGE>
                  (c)      Each grant shall specify a minimum  acceptable  level
         of  achievement  in  respect  of the  specified  Management  Objectives
         below which no delivery  of  Performance  Shares will occur and may set
         forth  a  formula  or  other  method  for  determining  the  number  of
         Performance  Shares to be delivered if  performance is at or above such
         minimum but short of full achievement of the Management Objectives.

                  (d)      Each  grant  shall  specify  the time and  manner  of
         delivery of  Performance  Shares which have been earned,  provided that
         in  lieu  of  the  delivery  of  all or  any  Performance  Shares,  the
         Participant  may receive  (i) cash in an amount equal to the  aggregate
         Market  Value  per  Share  of  the  Performance  Shares,   (ii) Company
         Securities   having  an  aggregate  Fair  Market  Value  equal  to  the
         aggregate  Market  Value  per  Share  of  the  Performance   Shares  or
         (iii) any  combination  thereof, as determined by the Board in its sole
         discretion at the time of payment.

                  (e)      Each grant of  Performance  Shares shall be evidenced
         by a  notification  executed  on behalf of the  Company by any  officer
         and delivered to and accepted by the  Participant,  which  notification
         shall state that such  Performance  Shares are subject to all the terms
         and   conditions  of  this  Plan  and  contain  such  other  terms  and
         provisions, consistent with this Plan, as the Board may approve.

         9.       Transferability.   No  Option   Right,   Appreciation   Right,
Performance  Unit that has not become payable or Performance  Share that has not
been  delivered  shall be  transferable  by a Participant  other than by will or
the laws of descent  and  distribution.  Option  Rights or  Appreciation  Rights
shall be exercisable  during the Participant's  lifetime only by the Participant
or by the Participant's guardian or legal representative.

         10.      Adjustments.   The  Board  may  make  or   provide   for  such
adjustments  in the maximum  number of shares  specified in  Paragraph 3 of this
Plan,  in the numbers of shares of Common Stock  covered by  outstanding  Option
Rights,  Appreciation Rights,  awards of Restricted Stock, awards of Performance
Units and awards of Performance Shares granted  hereunder,  and/or in the Option
Price or Grant Price applicable to such Option Rights and  Appreciation  Rights,
as the Board in its sole  discretion,  exercised in good faith, may determine is
equitably  required  to  prevent  dilution  or  enlargement  of  the  rights  of
Participants  that otherwise would result from any stock dividend,  stock split,
combination  of  shares,   recapitalization  or  other  change  in  the  capital
structure  of the  Company,  merger,  consolidation,  spin-off,  reorganization,
partial or  complete  liquidation,  issuance  of rights or  warrants to purchase
securities  or any  other  corporate  transaction  or  event  having  an  effect
similar to any of the foregoing.

         11.      Fractional  Shares.  The  Company  shall  not be  required  to
issue any fractional share of Common Stock or of any Company  Security  pursuant
to this Plan.  The Board may provide for the  elimination  of  fractions  or for
the settlement of fractions in cash.


                                       8
<PAGE>


         12.      Withholding   Taxes.   To  the  extent  that  the  Company  is
required to withhold federal,  state,  local or foreign taxes in connection with
any payment  made or benefit  realized by a  Participant  or other  person under
this Plan,  and the amounts  available to the Company for such  withholding  are
insufficient,  it shall be a  condition  to the  receipt of such  payment or the
realization  of such  benefit  that the  Participant  or such other  person make
arrangements  satisfactory  to the  Company  for  payment of the balance of such
taxes  required to be withheld,  which  arrangements  in the  discretion  of the
Board may include relinquishment of a portion of such benefit.

         13.      Administration   of  the  Plan.   (a)   This   Plan  shall  be
administered  by the  Board,  which  may from time to time  delegate  all or any
part of its  authority  under  this  Plan to a  committee  of not less  than two
non-employee  directors  appointed  by  the  Board,  each  of  whom  shall  be a
"non-employee  director" within the meaning of Rule 16b-3 (the "Committee").  To
the extent of such  delegation,  references  herein to the "Board" shall include
the Committee.  A majority of the Committee shall  constitute a quorum,  and the
action  of the  members  of the  Committee  present  at any  meeting  at which a
quorum is present,  or acts unanimously  approved in writing,  shall be the acts
of the Committee.

                  (b)       The  interpretation  and  construction  by the Board
of any  provision  of this Plan or of any  agreement,  notification  or document
evidencing  the grant of an Award and any  determination  by the Board  pursuant
to any  provision  of  this  Plan  or of any  such  agreement,  notification  or
document  shall  be  final  and  conclusive.  No  member  of  the  Board  or the
Committee  shall be liable  for any such  action or  determination  made in good
faith.

                  (c)      Notwithstanding  any other  provision  of this  Plan,
this Plan may be  administered  by the Chairman of the Board of the Company with
respect to matters  relating solely to  Participants  who are not subject to the
reporting  requirements  of  Section  16(a) of the  Securities  Exchange  Act of
1934, as amended,  and any references to the "Board" or the "Committee",  as the
case may be, shall include the Chairman of the Board;  provided,  however,  that
no such authority  shall be deemed to have been granted  hereunder to the extent
that  any  such  grant  shall  cause  the  disqualification  of this  Plan  from
reliance on the exemption provided by Rule 16b-3.

         14.      Amendments,  Etc.  (a) This Plan may be  amended  from time to
time by the Board but may not be amended by the Board without  further  approval
by the  stockholders  of the Company if such amendment would result in this Plan
no longer satisfying the requirements of Rule 16b-3.

                  (b)      The Board may, with the  concurrence  of the affected
Participant,  cancel  any  agreement  evidencing  any Award  granted  under this
Plan.  In the event of such  cancellation,  the Board may authorize the granting
of new  Awards  (which  may or may not cover the same  number of shares or units
which had been the  subject of the prior  Award) in such  manner,  at such price
and subject to the same terms,  conditions  and  discretions  as would have been
applicable under this Plan had the canceled Awards not been granted.


                                       9
<PAGE>


                  (c)      In case of  termination  of  employment  by reason of
death,  disability  or  retirement  under a retirement  plan of the Company or a
Subsidiary  of an Optionee who holds an Option Right or  Appreciation  Right not
immediately  exercisable  in full,  or any  Restricted  Stock  as to  which  the
substantial  risk of forfeiture or the  prohibition  or  restriction on transfer
has not lapsed,  or any  Performance  Units which have not become fully  payable
or any Performance  Shares that have not been  delivered,  the Board may, in its
sole   discretion,   accelerate   the  time  at  which  such  Option   Right  or
Appreciation  Right may be exercised or the time at which such  substantial risk
of forfeiture or  prohibition  or restriction on transfer will lapse or the time
at which such  Performance  Units will be deemed to have become fully payable or
Performance Shares will be delivered.

                  (d)      This Plan shall not confer upon any  Participant  any
right with  respect to  continuance  of  employment  or other  service  with the
Company  or any  Subsidiary,  nor shall it  interfere  in any way with any right
the  Company  or  any  Subsidiary   would   otherwise  have  to  terminate  such
Participant's employment or other service at any time.
















                                       10














</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<FILENAME>exhibit103.txt
<DESCRIPTION>AMENDMENT NO.1 TO 1991 STOCK INCENTIVE PLAN
<TEXT>
                                D.R. HORTON, INC.

                            1991 STOCK INCENTIVE PLAN

                         (As Restated February 21, 2002)

                                 AMENDMENT NO. 1

 As of March 4, 2002,  the Board of Directors of D.R.  Horton,  Inc.  declared a
three-for-two  stock  split  payable in shares of its  common  stock on April 9,
2002.  To give effect to such stock split,  the  Committee  has amended the D.R.
Horton, Inc. 1991 Stock Incentive Plan, as amended and restated (the "Plan"), in
the  following  respects:

        1.      The first  sentence of  Paragraph 3 of the Plan is
                hereby amended to read in its entirety as
                follows:

                The shares of Common Stock and any other Company Security which
         may be (a) sold upon the exercise of Option Rights, (b) delivered upon
         the exercise of Appreciation Rights, (c) granted or sold as Restricted
         Stock and released from substantial risks of forfeiture and
         restrictions on transfer thereof or (d) delivered in payment of any
         Performance Units or as Performance Shares (or in lieu thereof), shall
         not exceed in the aggregate 12,557,265 shares, subject to adjustment
         as provided in Paragraph 10 of this Plan.

         2.       In all other respects, the Plan as previously approved is
                  hereby ratified and confirmed.

April 9, 2002.

                                D.R. Horton, Inc.



                                By: /s/ Samuel R. Fuller
                                   ---------------------------------------
                                   Samuel R. Fuller, Executive Vice President,
                                   Treasurer and Chief Financial Officer


                                Attest:





<PAGE>


                                      /s/ Paul W. Buchschacher
                                   -----------------------------------------
                                   Paul W. Buchschacher, Assistant Secretary







</TEXT>
</DOCUMENT>
</SUBMISSION>
