<SUBMISSION>
<ACCESSION-NUMBER>0000935703-00-500015
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>3
<PERIOD>20000930
<FILING-DATE>20001114
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>DOLLAR TREE STORES INC
<CIK>0000935703
<ASSIGNED-SIC>5331
<IRS-NUMBER>541387365
<STATE-OF-INCORPORATION>VA
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>000-25464
<FILM-NUMBER>762597
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>500 VOLVO PARKWAY
<STREET2>NORFOLK COMMERCE PARK
<CITY>CHESAPEAKE
<STATE>VA
<ZIP>23320
<PHONE>7573215000
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>P.O. BOX 2500
<CITY>NORFOLK
<STATE>VA
<ZIP>23501-2500
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>0001.txt
<DESCRIPTION>THIRD QUARTER 2000 FORM 10Q
<TEXT>


                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 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 September 30, 2000


     ( ) Transition report pursuant to Section 13 or 15 (d) of the Securities
         Exchange Act of 1934

Commission File Number: 0-25464

                            DOLLAR TREE STORES, INC.
             (Exact name of registrant as specified in its charter)


          Virginia                               54-1387365
 (State or other jurisdiction of             (I.R.S. Employer
  incorporation or organization)              Identification No.)

                                500 Volvo Parkway
                           Chesapeake, Virginia 23320
                    (Address of principal executive offices)

                         Telephone Number (757) 321-5000
              (Registrant's telephone number, including area code)

     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 ( )

As of November 9, 2000, there were 107,919,754 shares of the Registrant's Common
Stock outstanding.

<PAGE>



                            DOLLAR TREE STORES, INC.

                                and SUBSIDIARIES

                                      INDEX



                          PART I. FINANCIAL INFORMATION

                                                                            Page
                                                                            ----

Item 1. Condensed Consolidated Financial Statements:

    Condensed Consolidated Balance Sheets
     September 30, 2000 and December 31, 1999............................    3

    Condensed Consolidated Income Statements
     Three months and nine months ended September 30, 2000 and 1999......    4

    Condensed Consolidated Statements of Cash Flows
     Nine months ended September 30, 2000 and 1999.......................    5

    Notes to Condensed Consolidated Financial Statements.................    6

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk......    16


                           PART II. OTHER INFORMATION

Item 1. Legal Proceedings...............................................    16

Item 6. Exhibits and Reports on Form 8-K................................    17

              Signatures................................................    18




                                       2
<PAGE>


<TABLE>
<CAPTION>

                            DOLLAR TREE STORES, INC.
                                AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (In thousands, except share data)

                                                                                         September 30,     December 31,
                                                                                             2000             1999
                                                                                             ----             ----
                                                                                         (Unaudited)
                      ASSETS
Current assets:
<S>                                                                                     <C>             <C>
     Cash and cash equivalents .....................................................    $     23,954    $    181,587
     Merchandise inventories .......................................................         350,055         192,838
     Deferred tax asset ............................................................           8,633           6,093
     Prepaid expenses and other current assets .....................................          25,049          14,588
                                                                                             -------         -------
         Total current assets ......................................................         407,691         395,106
                                                                                             -------         -------

Property and equipment, net ........................................................         201,100         157,368
Deferred tax asset .................................................................           1,136             470
Goodwill, net ......................................................................          40,881          42,394
Other assets, net ..................................................................          15,378          15,895
                                                                                             -------         -------
         TOTAL ASSETS ..............................................................    $    666,186    $    611,233
                                                                                             =======         =======


                LIABILITIES, PREFERRED STOCK AND SHAREHOLDERS' EQUITY
Current liabilities:
     Accounts payable ..............................................................    $     89,463    $     73,878
     Income taxes payable ..........................................................             201          29,193
     Other current liabilities .....................................................          27,061          34,942
     Current portion of long-term debt (notes 4 and 6) .............................          41,900          28,070
     Current installments of obligations
         under capital leases ......................................................           3,403           3,190
                                                                                             -------         -------
         Total current liabilities .................................................         162,028         169,273

Long-term debt, excluding current portion (note 4) .................................          18,000          49,138
Obligations under capital leases,
     excluding current installments ................................................          25,859          28,375
Common stock put warrants (note 3) .................................................            --             4,394
Other liabilities ..................................................................           8,397           8,644
                                                                                             -------         -------
         Total liabilities .........................................................         214,284         259,824

Cumulative convertible preferred stock (note 3) ....................................            --            35,171

Shareholders' equity (notes 3 and 5):

     Common stock, par value $0.01.  Authorized 450,000,000 shares,
        107,896,833 shares  issued and  outstanding  at September  30, 2000 and
        98,842,201 shares issued and outstanding at December 31, 1999 ..............           1,079             659
     Additional paid-in capital ....................................................         154,738          75,031
     Retained earnings .............................................................         296,085         240,548
                                                                                             -------         -------
         Total shareholders' equity ................................................         451,902         316,238
                                                                                             -------         -------
         TOTAL LIABILITIES, PREFERRED STOCK AND
              SHAREHOLDERS' EQUITY .................................................    $    666,186    $    611,233
                                                                                             =======         =======


      See accompanying Notes to Condensed Consolidated Financial Statements

</TABLE>

                                       3
<PAGE>


<TABLE>
<CAPTION>

                            DOLLAR TREE STORES, INC.
                                AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED INCOME STATEMENTS
                      (In thousands, except per share data)
                                   (Unaudited)

                                                                Three Months Ended             Nine Months Ended
                                                                   September 30,                 September 30,
                                                            -------------------------     --------------------------
                                                               2000            1999           2000            1999
                                                               ----            ----           ----            ----

<S>                                                      <C>             <C>             <C>             <C>
Net sales ...........................................    $   377,318     $   298,868     $ 1,088,932     $   845,107
Cost of sales .......................................        238,328         191,546         698,324         544,326
Merger related costs (note 3) .......................           --              --             1,100             443
                                                             -------         -------       ---------         -------
         Gross profit ...............................        138,990         107,322         389,508         300,338
                                                             -------         -------       ---------         -------

Selling, general and administrative expenses:
     Operating expenses .............................         92,023          71,523         261,381         202,894
     Merger related expenses (note 3) ...............           --              --             3,266             607
     Depreciation and amortization ..................         10,638           7,879          28,887          22,233
         Total selling, general
           and administrative expenses ..............        102,661          79,402         293,534         225,734
                                                             -------         -------       ---------         -------
         Operating income ...........................         36,329          27,920          95,974          74,604
Interest income .....................................            715             207           3,812             881
Interest expense ....................................         (1,514)         (1,974)         (5,729)         (4,837)
                                                             -------         -------       ---------         -------
         Income before income taxes .................         35,530          26,153          94,057          70,648
Provision for income taxes ..........................         13,680          10,168          36,720          24,949
                                                             -------         -------       ---------         -------
         Income before extraordinary item ...........         21,850          15,985          57,337          45,699
Loss on debt extinguishment, net of
   tax benefit of $242 (note 4) .....................           --              --               387            --
                                                             -------         -------       ---------         -------
         Net income .................................         21,850          15,985          56,950          45,699
Preferred stock dividends and accretion..............           --             3,902           1,413           5,084
                                                             -------         -------       ---------         -------
         Net income available to
           common shareholders ......................    $    21,850     $    12,083     $    55,537     $    40,615
                                                             =======         =======       =========         =======
Pro forma income data (note 2):
     Net income available to common
       shareholders .................................    $    21,850     $    12,083     $    55,537     $    40,615
     Pro forma adjustment for C-corporation
       income taxes .................................           --              --              --               505
                                                             -------         -------       ---------         -------
     Pro forma net income available to
       common shareholders ..........................    $    21,850     $    12,083     $    55,537     $    40,110
                                                             =======         =======       =========         =======

Basic pro forma net income per common share:
     Pro forma income before extraordinary
       item .........................................    $      0.21     $      0.12     $      0.55     $      0.41
     Pro forma net income ...........................           0.21            0.12            0.54            0.41

Diluted pro forma net income per common share:
     Pro forma income before extraordinary
       item .........................................    $      0.19     $      0.11     $      0.50     $      0.37
     Pro forma net income ...........................           0.19            0.11            0.50            0.37


      See accompanying Notes to Condensed Consolidated Financial Statements

</TABLE>

                                       4
<PAGE>

<TABLE>
<CAPTION>


                            DOLLAR TREE STORES, INC.
                                AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)


                                                                            Nine Months Ended
                                                                              September 30,
                                                                         -----------------------
                                                                         2000               1999
                                                                         ----               ----
Cash flows from operating activities:
<S>                                                                   <C>                <C>
 Net income                                                           $  56,950          $  45,699
                                                                       --------           --------
 Adjustments to reconcile net income to net cash
  used in operating activities:
     Depreciation and amortization ..............................        28,887             22,233
     Loss on disposal of property and equipment .................           743                483
     Extraordinary loss on early extinguishment of debt .........           629               --
     Lease loss accrual .........................................          (340)              (316)
     Provision for deferred income taxes ........................        (3,206)             1,713
     Accretion of common stock put warrants to
       redemption value .........................................          --                  282
     Tax benefit on exercise of stock options ...................        15,901              5,293
     Changes in assets and liabilities increasing
       (decreasing) cash and cash equivalents:
       Merchandise inventories ..................................      (157,217)          (121,521)
       Prepaid expenses and other current assets ................       (11,090)            (1,317)
       Other assets, net ........................................           155                501
       Accounts payable .........................................        15,585             22,556
       Income taxes payable .....................................       (28,992)           (21,730)
       Other current liabilities ................................        (7,980)            (6,779)
       Other liabilities ........................................           192               (350)
                                                                       --------           --------
        Total adjustments .......................................      (146,733)           (98,952)
                                                                       --------           --------
         Net cash used in operating activities ..................       (89,783)           (53,253)
                                                                       --------           --------

Cash flows from investing activities:
 Capital expenditures ...........................................       (71,618)           (41,148)
 Proceeds from sale of property and equipment ...................           199                 99
                                                                       --------           --------
         Net cash used in investing activities ..................       (71,419)           (41,049)
                                                                       --------           --------

Cash flows from financing activities:
 Distributions paid .............................................          --              (60,934)
 Proceeds from long-term debt ...................................          --               39,400
 Repayment of long-term debt and facility fees ..................       (27,708)           (18,511)
 Proceeds from revolving credit facilities ......................        33,300             47,350
 Repayment of revolving credit facilities .......................       (22,900)           (35,600)
 Proceeds from sale-leaseback transaction .......................          --               21,605
 Principal payments under capital lease obligations .............        (2,371)              (382)
 Proceeds from issuance of preferred stock and common
  stock put warrants ............................................          --               32,156
 Proceeds from stock issued pursuant to
  stock-based compensation plans ................................        23,248              6,584
                                                                       --------           --------
         Net cash provided by financing
           activities ...........................................         3,569             31,668
                                                                       --------           --------

Net decrease in cash and cash equivalents .......................      (157,633)           (62,634)
Cash and cash equivalents at beginning of period ................       181,587             84,714
                                                                       --------           --------
Cash and cash equivalents at end of period ......................     $  23,954          $  22,080
                                                                       ========           ========


      See accompanying Notes to Condensed Consolidated Financial Statements
</TABLE>

                                       5
<PAGE>




                            DOLLAR TREE STORES, INC.

                                AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

     The condensed consolidated financial statements at September 30, 2000, and
for the three- and nine-month periods then ended, are unaudited and reflect all
adjustments (consisting only of normal recurring adjustments) which are, in the
opinion of management, necessary for a fair presentation of the financial
position and operating results for the interim periods.

     The condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto, for
the year ended December 31, 1999 filed on Form 8-K on November 9, 2000. These
consolidated financial statements should be read with management's discussion
and analysis of financial condition and results of operations for the year ended
December 31, 1999, contained in the Dollar Tree Stores, Inc. (the Company)
Prospectus dated August 3, 2000. These filings restate the consolidated
financial statements to give retroactive effect to the pooling of interests with
Dollar Express, Inc. The results of operations for the three- and nine-month
periods ended September 30, 2000 are not necessarily indicative of the results
to be expected for the entire year ending December 31, 2000.

<TABLE>
<CAPTION>
2. PRO FORMA NET INCOME PER COMMON SHARE

     The following table sets forth the calculation of pro forma basic and pro
forma diluted income before extraordinary item per common share:

                                                              Three months ended            Nine months ended
                                                                September 30,                  September 30,
                                                              ------------------            -----------------
                                                              2000          1999            2000         1999
                                                              ----          ----            ----         ----
                                                                     (In thousands, except per share data)
Pro forma basic income before extraordinary
 item per common share:
<S>                                                        <C>            <C>             <C>          <C>
     Income before extraordinary item.................     $ 21,850       $ 15,985        $ 57,337     $ 45,699
     Less: Preferred stock dividends and
        accretion ....................................         -             3,902           1,413        5,084
                                                            -------        -------         -------      -------
     Income before extraordinary item
        available to common shareholders..............       21,850         12,083          55,924       40,615
     Pro forma adjustment for C-corporation
        income taxes..................................         -              -               -             505
                                                            -------        -------         -------      -------
     Pro forma income before extraordinary
        item available to common
        shareholders..................................     $ 21,850       $ 12,083        $ 55,924     $ 40,110
                                                            =======        =======         =======      =======
     Weighted average number of
        common shares outstanding.....................      106,115         98,604         102,254       98,330
                                                            =======        =======         =======      =======
               Pro forma basic income before
                  extraordinary item per common
                  share...............................     $   0.21       $   0.12        $   0.55     $   0.41
                                                            =======        =======         =======      =======



                                       6
<PAGE>
<CAPTION>




                                                              Three months ended            Nine months ended
                                                                 September 30,                September 30,
                                                              ------------------            -----------------
                                                              2000          1999            2000         1999
                                                              ----          ----            ----         ----
                                                                     (In thousands, except per share data)
Pro forma diluted income before extraordinary
 item per common share:
     Pro forma income before extraordinary
        item available to common
<S>                                                        <C>            <C>             <C>          <C>
        shareholders..................................     $ 21,850       $ 12,083        $ 55,924     $ 40,110
                                                            =======        =======         =======      =======
     Weighted average number of
        common shares outstanding.....................      106,115         98,604         102,254       98,330
     Dilutive effect of stock options and
        warrants (as determined by applying
        the treasury stock method)....................        7,384          9,474           9,044        9,504
                                                            -------        -------         -------      -------
     Weighted average number of common
        shares and dilutive potential
        common shares outstanding.....................      113,499        108,078         111,298      107,834
                                                            =======        =======         =======      =======
               Pro forma diluted income before
                  extraordinary item per common
                  share...............................     $   0.19       $   0.11        $   0.50     $   0.37
                                                            =======        =======         =======      =======
</TABLE>

3. DOLLAR EXPRESS ACQUISITION

     On May 5, 2000, the Company completed its merger with privately-held,
Philadelphia-based Dollar Express, Inc. (Dollar Express), which operated 107
single-price point stores under the name "Dollar Express." These stores offer
variety merchandise at a fixed price of $1.00 and are located in six states in
the Mid-Atlantic region. Dollar Express also operated 25 multi-price point
stores under the name "Spain's Cards & Gifts" in the Philadelphia area. The
Company issued 0.8772 shares of its common stock for each share of Dollar
Express's outstanding common stock. The Company issued 8,771,928 shares of its
common stock for all of the outstanding shares of Dollar Express's common stock,
which included converting all of Dollar Express's cumulative manditorily
redeemable preferred shares into common shares on a one-for-one basis. Stock
options to purchase 260,000 shares of Dollar Express's common stock were
converted into options to purchase 228,072 common shares of the Company. As a
result of the merger, which was accounted for as a pooling of interests, the
Company's consolidated financial statements have been restated to retroactively
combine Dollar Express's financial statements as if the merger had occurred at
the beginning of the earliest period presented.

     Prior to February 5, 1999, Dollar Express was treated as an S-corporation
for federal and state income tax purposes. As such, income of Dollar Express for
periods prior to February 5, 1999 was taxable to the Dollar Express
shareholders, rather than to Dollar Express. Effective February 5, 1999, Dollar
Express converted from an S-corporation to a C-corporation and recorded the
related cumulative deferred tax benefit of $2.2 million in the first quarter of
1999.

     In connection with the merger, the Company incurred approximately $4.4
million ($3.1 million after taxes, which decreased year-to-date pro forma
diluted net income per common share by $0.03) of merger related costs and
expenses, consisting primarily of write downs of inventory and professional
fees. These expenses were charged to operations during the quarter ended June
30, 2000.

                                       7
<PAGE>

     With the consummation of the merger, Dollar Express's preferred stock was
converted to common shares of Dollar Express and then into Dollar Tree common
shares. In addition, Dollar Express's common stock put warrants were terminated.
The book value of the preferred stock and common stock put warrants were
credited to additional paid-in capital during the three months ended June 30,
2000.

4. LONG-TERM DEBT

     In May 2000, the Company retired and terminated Dollar Express's $40.0
million term loan and revolving credit facility. This retirement resulted in an
after-tax extraordinary loss of $387,000 to write off the related unamortized
deferred financing fees.

5. STOCK DIVIDEND

     On May 25, 2000, the Board of Directors authorized a stock dividend,
payable June 19, 2000 to shareholders of record as of June 12, 2000, whereby the
Company issued one-half share for each outstanding share of common stock. As a
result, all share and per share data in these condensed consolidated financial
statements and accompanying notes have been retroactively adjusted to reflect
this dividend, having the effect of a 3-for-2 stock split.

6.  INTEREST RATE SWAP AGREEMENTS

     On September 8, 2000, the Company entered into a $10.0 million interest
rate swap agreement (swap) to manage the risk associated with interest rate
fluctuations on a portion of its Stockton, California distribution center lease.
The swap creates the economic equivalent of a fixed rate lease by converting the
variable interest rate to a fixed rate. Under this agreement, the Company pays
interest to a financial institution at a fixed rate of 6.45%. In exchange, the
financial institution pays the Company at a variable interest rate, which
approximates the floating rate on the lease agreement, excluding the credit
spread. The interest rate on the swap is subject to adjustment monthly. For
months in which the interest rate, as calculated under the agreement, is greater
than 7.41% (the knockout rate), no payments are made by either party. The swap
is effective through June 2004.

     In addition, effective September 1, 2000, the Company amended its existing
interest rate swap agreement related to its Taxable Variable Rate Demand Revenue
Bonds to reduce the fixed rate of interest under the swap from 4.99% to 4.88%.
The knockout rate provision of the swap was reduced from 8.28% to 7.75%.

7.  LEASES

     During August 2000, the Company amended its existing operating lease
agreement related to the Stockton distribution center for the purpose of
financing construction costs to build a new $40.0 million distribution center in
Briar Creek, Pennsylvania. The facility will replace the existing leased
facilities located in Philadelphia, Pennsylvania. Under this agreement, the
lessor purchases the property, pays for the construction costs and subsequently
leases the facility to the Company. The lease expires in June 2004. The lease
provides for a residual value guarantee and includes a purchase option based on
the outstanding cost of the property plus any unpaid interest and rent under the
lease agreement. When the assets are placed into service, the Company will
estimate its liability under the residual value guarantee and, if necessary,
record additional rent expense on a straight-line basis over the remaining lease
term.



                                       8
<PAGE>

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

INTRODUCTORY NOTE: Unless otherwise stated, references to "we," "our" and "us"
generally refer to Dollar Tree Stores, Inc. and its direct and indirect
subsidiaries on a consolidated basis.

A WARNING ABOUT FORWARD-LOOKING STATEMENTS: This document contains
"forward-looking statements" as that term is used in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements address future events,
developments or results and typically use words such as believe, anticipate,
expect, intend, plan or estimate. For example, our forward-looking statements
include statements regarding:

     o    our anticipated comparable store net sales;

     o    our growth plans, including our plans to add, expand or relocate
          stores;

     o    the integration of Dollar Express into our business;

     o    the possible effect of inflation and other economic changes on our
          future costs and profitability, including the possible effect of
          changes in shipping rates, freight costs, fuel costs, minimum wage
          rates and wage related costs;

     o    our cash needs, including our ability to fund our future capital
          expenditures and working capital requirements;

     o    the capabilities of, and the cost of improving, our distribution
          systems and supply chain processes; and

     o    the future availability and cost of quality merchandise that can be
          profitably sold for $1.00.

     These forward-looking statements are subject to numerous risks and
uncertainties which may affect us including:

     o    possible difficulties in meeting our expansion goals and anticipated
          comparable store net sales;

     o    possible delays, costs and other difficulties in integrating Dollar
          Express with our business;

     o    possible increases in merchandise costs, shipping rates, freight
          costs, wage levels, inflation, competition and other adverse economic
          factors;

     o    our exposure to changes in our foreign trade relations and import
          tariffs and restrictions, particularly those affecting China; and

     o    the capacity and performance of our distribution system and our
          ability to expand its capacity in time to support our net sales
          growth.

                                       9
<PAGE>

     For a discussion of the risks, uncertainties and assumptions that could
affect our future events, developments or results, you should carefully review
the "Risk Factors," "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Business" sections in our prospectus filed
August 3, 2000 and our Annual Report on Form 10-K filed March 17, 2000. Also,
carefully review "Risk Factors" in our most recent prospectus filed November 9,
2000.

     In light of these risks, uncertainties and assumptions, the future events,
developments or results described by our forward-looking statements in this
document could turn out to be materially different from those we discuss or
imply. We have no obligation to publicly update or revise our forward-looking
statements after the date of this quarterly report and you should not expect us
to do so.

Results of Operations

The Three Months Ended September 30, 2000 Compared To The Three Months Ended
September 30, 1999

     Net Sales. Net sales increased 26.2% to $377.3 million for the three months
ended September 30, 2000 from $298.9 million for the three months ended
September 30, 1999. We attribute this $78.4 million increase in net sales to two
factors:

     o    Approximately 77% of the increase came from stores opened in 2000 and
          1999, which are not included in our comparable store net sales
          calculation.

     o    Approximately 23% of the increase came from comparable store net sales
          growth. Comparable store net sales increased 5.3% for the third
          quarter of 2000.

We believe our comparable store net sales increased because we expanded and
relocated stores, improved the variety and selection of our merchandise and
offered more consumable products as a component of our domestic merchandise. We
include expanded and relocated stores in the calculation of our comparable store
net sales.

     During the third quarter of 2000 we opened 49 new stores and closed six
stores, compared to 59 new stores opened and one store closed in the third
quarter of 1999. We expanded and relocated 31 stores during third quarter 2000
compared to 29 stores in the same period in 1999. We continue to open a number
of larger stores in the 8,000 to 12,000 total square foot range and increase the
number of store relocations and expansions. During the third quarter of 2000, we
added 5.6% to our total square footage, compared to increasing total square
footage by 7.5% in the same period last year. We expect to increase our total
square footage by 28% for calendar year 2000 and will add 50 to 52 stores in the
fourth quarter. Our management anticipates that future net sales growth will
come mostly from square footage growth related to new store openings and
expansion of existing stores. We expect that our future comparable store net
sales increases, if any, will be lower than those we have experienced in the
past.

     Gross Profit. Gross profit increased $31.7 million in the third quarter of
2000 compared to the same period in 1999, an increase of 29.5%. Our gross profit
as a percentage of net sales is called our gross profit margin. Our gross profit
margin increased 0.9% to 36.8% in the third quarter of 2000 compared to the
third quarter of 1999. We believe this improvement resulted from improved
pricing from vendors and a larger mix of import merchandise in third quarter



                                       10
<PAGE>

2000. This improvement was partially offset by an increase in freight costs
caused primarily by our changing merchandise mix, higher trans-Pacific shipping
rates imposed in May 1999 and an increase in domestic fuel costs. The changing
merchandise mix, which included an increase in consumable merchandise, required
more shipments to deliver the same amount of merchandise in 2000 as compared to
1999. Gross margin was also affected by a slight increase in shrink. These
increases were partially offset by leverage of occupancy and distribution costs
resulting from increased comparable store net sales.

     We do not expect increased trans-Pacific shipping costs resulting from the
May 1999 rate increase to have a material effect on our fourth quarter 2000
results. We do, however, expect domestic freight costs to continue to increase
partially as a result of current domestic fuel rates. If fuel costs remain at
current levels, we believe that our domestic freight expense will increase by
approximately $0.6 million in the fourth quarter 2000 compared to the same
period in 1999.

     Selling, General and Administrative Expenses. Selling, general and
administrative expenses, excluding depreciation and amortization, increased by
$20.5 million in the third quarter of 2000 compared to the same period in 1999,
an increase of 28.7%. Expressed as a percentage of net sales, selling, general
and administrative expenses, excluding depreciation and amortization, was 24.4%
for the three months ended September 30, 2000 compared to 23.9% for the three
months ended September 30, 1999. The increase was due to slight increases in
store and corporate operating expenses primarily related to the integration of
Dollar Express. We incurred approximately $1.7 million of integration expenses
to:

     o    train store personnel on new systems, policies, and procedures;

     o    prepare the stores for the fourth quarter selling season;

     o    improve benefits;

     o    conduct physical inventories; and

     o    pay severance.

Depreciation and amortization increased by $2.8 million to 2.8% as a percentage
of net sales, for the three months ended September 30, 2000 compared to 2.6% for
the three months ended September 30, 1999. The increase as a percentage of net
sales was caused by $0.6 million of accelerated depreciation expense to phase
out some of Dollar Express's computer systems and store registers. We expect to
record an additional $0.6 million during the fourth quarter because we plan to
replace Dollar Express's warehouse management system with our own in January
2001.

     Increases in expenses, such as wages and rents, could negatively influence
our operating results, because we cannot pass on increased expenses to our
customers by increasing our merchandise prices. For example, if the minimum wage
were to increase by $1.00 per hour, we believe that our annual payroll expenses
would increase by approximately 2.0% to 2.5% of operating expenses unless we
realize offsetting cost reductions. Consequently, our future success depends, in
large part, on our ability to control our costs.

                                       11
<PAGE>

     Operating Income. Our operating income increased by $8.4 million during the
third quarter of 2000 compared to the third quarter of 1999, an increase of
30.1%. As a percentage of net sales, operating income increased to 9.6% in the
third quarter of 2000 compared to 9.3% in the same period of 1999. This increase
was caused by the increase in gross profit partially offset by increases in
selling, general and administrative expenses.

     Interest Income/Expense. Interest income increased to $0.7 million in the
third quarter of 2000 from $0.2 million in the third quarter of 1999. This
increase resulted from higher levels of cash and cash equivalents throughout the
three months ended September 30, 2000 compared with the three months ended
September 30, 1999. Interest expense decreased to $1.5 million in the third
quarter of 2000 from $2.0 million in the third quarter of 1999. This decrease
resulted from the payoff of Dollar Express's debt during the second quarter of
2000 partially offset by increased interest expense related to our capital lease
obligation for the sale-leaseback transaction entered into in the third quarter
of 1999.

     Income Taxes. Our effective tax rate decreased to 38.5% for the third
quarter of 2000 from 38.9% for the third quarter of 1999. The rate decreased
because Dollar Express's effective rate in 1999 was higher than Dollar Tree's.

The Nine Months Ended September 30, 2000 Compared To The Nine Months Ended
September 30, 1999

     Net Sales. Net sales increased 28.9% to $1,088.9 million for the nine
months ended September 30, 2000 from $845.1 million for the nine months ended
September 30, 1999. We attribute this $243.8 million increase in net sales to
two factors:

     o    Approximately 75% of the increase came from stores opened in 2000 and
          1999, which are not included in our comparable store net sales
          calculation.

     o    Approximately 25% of the increase came from comparable store net sales
          growth. Comparable store net sales increased 7.7% for the nine months
          ended September 30, 2000.

We believe comparable store net sales increased because we expanded and
relocated stores, improved the variety and selection of our merchandise and
offered more consumable products as a component of our domestic merchandise.

     We opened 181 new stores and closed eleven stores during the first nine
months of 2000, compared to 181 new stores opened and five stores closed in the
first nine months of 1999. In addition, we expanded and relocated 83 stores in
the first nine months of 2000 compared to 59 stores in 1999. Our net new stores
and expanded and relocated stores added approximately 1.7 million gross square
feet in 2000.

     Gross Profit. Gross profit increased by $89.2 million in the first nine
months of 2000 compared to the same period in 1999, an increase of 29.7%. Our
gross profit margin increased 0.3% to 35.8% in the first nine months of 2000
compared to the first nine months of 1999. Excluding merger related costs, our
year-to-date gross profit margin increased 0.3% to 35.9% in 2000 compared to the
same period in 1999. We believe this improvement resulted from improved pricing
from vendors and a larger mix of import merchandise in 2000. This improvement
was partially offset by an increase in freight costs caused primarily by our
changing merchandise mix, higher trans-Pacific shipping rates imposed in May
1999 and an increase in domestic fuel costs.  The changing merchandise mix,


                                       12
<PAGE>

which included an increase in consumable merchandise, required more shipments to
deliver the same amount of merchandise in 2000 as compared to 1999. Gross margin
was also affected by a slight increase in shrink. These increases were partially
offset by leverage of occupancy costs resulting from increased comparable store
net sales.

     Selling, General and Administrative Expenses. Selling, general and
administrative expenses, excluding depreciation and amortization, increased by
$61.1 million in the first nine months of 2000 compared to the same period in
1999, an increase of 30.0%. Expressed as a percentage of net sales, selling,
general and administrative expenses, excluding depreciation and amortization,
was 24.3% for the nine months ended September 30, 2000 compared to 24.1% for the
nine months ended September 30, 1999. Excluding merger related expenses,
selling, general and administrative expenses, excluding depreciation and
amortization, remained constant at 24.0% as a percentage of net sales in the
first nine months of 2000 compared to the same period in the prior year. This
was the result of slight increases in store and corporate operating expenses
offset by leverage of payroll expenses. The increase in store and corporate
operating expenses related primarily to the integration of Dollar Express, as
discussed above. Depreciation and amortization increased by $6.7 million, and
increased 0.1% as a percentage of net sales to 2.7%. This increase primarily
resulted from the accelerated depreciation in connection with the phase out of
some of Dollar Express's computer systems and store registers.

     Operating Income. Our operating income increased by $21.4 million during
the first nine months of 2000 compared to the same period in 1999, an increase
of 28.6%. As a percentage of net sales, operating income remained constant at
8.8% in the first nine months of 2000 compared to the same period in 1999. If
you exclude merger related costs and expenses, operating income increased to
$100.3 million in 2000 from $75.7 million in 1999 and increased as a percentage
of net sales to 9.2% from 9.0%. The increase was a result of the factors
discussed above.

     Interest Income/Expense. Interest income increased to $3.8 million in the
first nine months of 2000 from $0.9 million in the first nine months of 1999.
This increase resulted from higher levels of cash and cash equivalents
throughout the nine months ended September 30, 2000 compared with the nine
months ended September 30, 1999. Interest expense increased to $5.7 million in
the first nine months of 2000 from $4.8 million in the first nine months of
1999. This increase primarily related to our capital lease obligation for the
sale-leaseback transaction entered into in the third quarter of 1999 partially
offset by a decrease in interest related to the Dollar Express line of credit
and term loan that we repaid in May 2000.

     Income Taxes. Our effective tax rate increased to 39.0% for the nine months
ended September 30, 2000 from 35.3% for the nine months ended September 30,
1999. This rate increased primarily because of the $2.2 million deferred tax
benefit recorded in connection with Dollar Express's conversion from an S- to
C-corporation for income tax purposes on February 5, 1999. In addition, the rate
increased because of the higher amount of non-deductible merger related expenses
in the first nine months of 2000 compared with the corresponding period in 1999.

                                       13
<PAGE>

Liquidity and Capital Resources

     Our business requires capital to open new stores and operate existing
stores. Our working capital requirements for existing stores are seasonal in
nature and typically reach their peak in the months of September and October.
Historically, we have satisfied our seasonal working capital requirements for
existing stores and funded our store expansion program from internally generated
funds and borrowings under our credit facilities.

     The following table compares cash-related information for the nine months
ended September 30, 2000 and 1999:

                                             Nine months ended September 30,
                                             -------------------------------
                                                 2000              1999
                                                 ----              ----
                                                     (in millions)
     Net cash provided by (used in):
       Operating activities                    $(89.8)           $(53.3)
       Investing activities                     (71.4)            (41.0)
       Financing activities                       3.6              31.7

     The $36.5 million increase in cash used for operating activities was
primarily the result of an increase in expenditures for inventory. The
significant increase in inventory levels during the first nine months of 2000
reflects the purchase of inventory necessary to support new stores and increased
sales at existing stores compared to 1999.

     Cash used in investing activities is generally expended to open new stores.
The $30.4 million increase in capital expenditures for the nine months ended
September 30, 2000 compared to the same period in 1999 was primarily the result
of the following:

     o    an increase in the average size of new stores opened in 2000;

     o    an increase in the number of relocations and expansions;

     o    the expansion of the Store Support Center;

     o    improvement in our supply chain processes; and

     o    installation of new registers and back-office equipment in the Dollar
          Express stores.

     The $28.1 million decrease in cash provided by financing activities was
primarily the result of the following:

     o    We did not receive any proceeds from the issuance of equity, excluding
          stock-based compensation plans, in 2000 compared to the $32.2 million
          received in the first half of 1999 related to the issuance of Dollar
          Express's preferred stock and common stock put warrants.

     o    We made net repayments of approximately $17.3 million in the first
          nine months of 2000 due to repayment of Dollar Express's term loan and
          revolving credit facility and the first principal payment on the
          senior notes compared to net borrowings of approximately $32.6 million
          in the first nine months of 1999 related primarily to draw downs on
          Dollar Express's term loan and revolving credit facility.

                                       14
<PAGE>

     o    We received $16.7 million more cash pursuant to stock-based
          compensation plans in the first nine months of 2000 compared to the
          first nine months of 1999 because of increased stock option exercises.

     o    We did not pay any distributions in 2000 compared to the $61.0 million
          of distributions paid in the first nine months of 1999 to the former
          shareholders of Dollar Express and Only $One, the company we acquired
          in June 1999.

     o    We received $21.6 million related to the sale-leaseback transaction in
          September of 1999.

     At September 30, 2000, our borrowings under our senior notes and bonds were
$43.0 million and we had $118.1 million available through our bank facility. Of
the amount available, approximately $35.7 million was committed to letters of
credit issued for the routine purchase of imported merchandise.

Funding Requirements

Planned Capital Expenditures and Working Capital Requirements

     Including the Dollar Express acquisition, our total planned capital
expenditures for 2000 are approximately $90.0 million. During 2000 and through
the second quarter of 2001, we expect to upgrade some of the Dollar Express
stores by installing new checkouts, adding display fixtures and improving store
layouts and merchandise displays. We believe that we can adequately fund our
planned capital expenditures and working capital requirements for the next few
years from cash provided by operations and seasonal borrowings under our credit
facility.

Operating Leases

     In August 2000, we amended our existing operating lease agreement related
to our Stockton distribution center to finance the construction of a new $40.0
million distribution center in Briar Creek, Pennsylvania. Under the agreement,
the lessor is required to purchase the property, pay the construction costs and
lease the facility to us. This fully automated facility will replace our current
Philadelphia distribution center and we expect it to be operational in the first
quarter of 2002. Under the lease agreement for the Philadelphia distribution
center, we are liable for annual rent and pass-through costs of approximately
$525,000 through December 2002. As a result, we may record a charge to cover our
remaining liability under the lease if we are unable to obtain an acceptable
sublease when we relocate the distribution center.

Supply Chain Improvements

     Within the next year, we expect to implement new supply chain systems and
test our new point-of-sale equipment in approximately ten stores. During the
third quarter of 2001 and throughout 2002, we expect to install point-of-sale
registers in up to 500 of our stores. We expect that the point-of-sale data will
allow us to track sales by merchandise category and geographic region and assist
in planning for future purchases and allocation of inventory. In addition,
through 2001 we will be installing new systems to assist in purchasing,
distribution center replenishment and inventory planning and allocation. Our
supply chain management project is expected to cost approximately $23.0 million
to $26.0 million over the next two years.

                                       15
<PAGE>

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     We are exposed to various types of market risk in the normal course of our
business, including the impact of interest rate changes and foreign currency
rate fluctuations. We may enter into interest rate swaps to manage our exposure
to interest rate changes, and we may employ other risk management strategies,
including the use of foreign currency forward contracts. We do not enter into
derivative instruments for any purpose other than cash flow hedging purposes. We
do not hold derivatives for trading purposes.

Interest Rate Risk

     Effective September 1, 2000, we amended our existing interest rate swap
agreement related to our Taxable Variable Rate Demand Revenue Bonds. As amended,
we pay the financial institution at a fixed rate of 4.88% and receive variable
interest at a rate approximating the variable rate on the bonds, thereby
creating the economic equivalent of fixed rate bonds. No payments are made by
either party under the swap for monthly periods in which the variable interest
rate is greater than 7.75%. As a result, we will not experience a negative cash
flow or income statement impact under the swap unless the variable interest rate
decreases to less than 4.88%.

     On September 8, 2000, we entered into a derivative instrument in the form
of a $10.0 million interest rate swap to manage the risk associated with
fluctuations in cash flows resulting from changes in the interest rates on the
Stockton lease. The interest rate swap reduces the interest rate exposure on
this variable-rate lease. Under the terms of the swap, we pay the bank at a
fixed rate of 6.45% and receive variable interest at a rate approximating the
floating rate of the lease, thereby creating the economic equivalent of fixed
rate lease payments. No payments are made by either party under the swap for
monthly periods in which the variable interest rate is greater than 7.41%. As a
result, we will not experience a negative cash flow or income statement impact
under the swap unless the variable interest rate decreases to less than 6.45%.

Foreign Currency Risk

     There have been no material changes to our market risk exposures resulting
from foreign currency transactions during the nine months ended September 30,
2000.

                           PART II. OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS.

     We are defendants in ordinary routine litigation and proceedings incidental
to our business. From time to time, the Consumer Products Safety Commission
requires us to recall products. We are currently in the process of recalling one
product. On occasion, products we sell may be alleged to cause injuries, but
there are no pending or threatened injury claims. Some products we sell may also
be alleged to infringe the intellectual property rights of others. We are
currently defending claims by parties who have alleged that products we sold
violated their intellectual property rights. We do not believe that any of these
matters are individually or in the aggregate material to us.


                                       16
<PAGE>


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

(a)  Exhibits.

     10.1 Amendment No. 1 to Certain Operative Agreements, dated August 28,2000.

     27.1 Financial Data Schedule.

(b) Reports on Form 8-K:

     The following reports on Form 8-K were filed during the third quarter of
2000:

     1.   Report on Form 8-K filed July 12, 2000, included Supplemental
          Consolidated Financial Statements of Dollar Tree Stores, Inc. and
          subsidiaries as of December 31, 1999 and 1998 and for the years ended
          December 31, 1999, 1998 and 1997 and the Supplemental Condensed
          Consolidated Financial Statements as of March 31, 2000 and for the
          three months ended March 31, 2000 and 1999.

     2.   Report on Form 8-K, filed July 20, 2000, included a press release
          regarding earnings for the quarter ended June 30, 2000. In addition,
          the report included the reporting of 30-day post-merger financial
          results.

     Also, in the fourth quarter of 2000, we filed two reports on Form 8-K:

     1.   Report on Form 8-K, filed October 25, 2000, included a press release
          regarding earnings for the quarter ended September 30, 2000.

     2.   Report on Form 8-K, filed November 9, 2000, included the Consolidated
          Financial Statements of Dollar Tree Stores, Inc. and subsidiaries as
          of December 31, 1999 and 1998 and for the years ended December 31,
          1999, 1998 and 1997.


                                       17
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

DATE:  November 13, 2000

                                DOLLAR TREE STORES, INC.


                             By: /s/ Frederick C. Coble
                                ------------------------
                                Frederick C. Coble
                                Senior Vice President,
                                Chief Financial Officer
                                (principal financial and accounting officer)

                                       18
<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>AMENDMENT NO. 1 TO CERTAIN OPERATIVE AGREEMENTS
<TEXT>


                 AMENDMENT NO. 1 TO CERTAIN OPERATIVE AGREEMENTS

          THIS AMENDMENT NO. 1 (this "Amendment") dated as of August 28, 2000,
is by and among DOLLAR TREE DISTRIBUTION, INC., a Virginia corporation
("Dollar Tree"); DOLLAR TREE STORES, INC., a Virginia corporation ("DTSI"),
DOLLAR TREE MANAGEMENT, INC., a Virginia corporation ("DTMI"), and DT
KEYSTONE DISTRIBUTION, R.L.L.L.P., a Virginia registered limited liability
limited partnership ("DTKD") (individually, DTSI, DTMI and DTKD may be
referred to as a "Guarantor"; collectively, DTSI, DTMI and DTKD may be
referred to as the "Guarantors"); FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a national banking association, not individually, but solely
as the Owner Trustee under the DTSD Realty Trust 1999-1 (the "Owner
Trustee", the "Borrower" or the "Lessor"); and FIRST UNION NATIONAL BANK, a
national banking association, as Lender and as Holder (the "Bank").
Capitalized terms used in this Amendment, but not otherwise defined herein,
shall have the meanings set forth in Appendix A to the Participation
Agreement (hereinafter defined).

                               W I T N E S S E T H

         WHEREAS,  the parties to this  Amendment  are  parties to that certain
Participation Agreement dated as of June 2, 1999 (as amended, modified,
supplemented, restated and/or replaced from time to time, the "Participation
Agreement"), certain of the parties to this Amendment are parties to that
certain Credit Agreement dated as of June 2, 1999 (as amended, modified,
supplemented, restated and/or replaced from time to time, the "Credit
Agreement"), certain of the parties to this Amendment are parties to that
certain Trust Agreement dated as of June 2, 1999 (as amended, modified,
supplemented, restated and/or replaced from time to time, the "Trust
Agreement"), certain of the parties to this Amendment are parties to that
certain Security Agreement dated as of June 2, 1999 (as amended, modified,
supplemented, restated and/or replaced from time to time, the "Security
Agreement"), certain of the parties to this Amendment are parties to that
certain Agency Agreement dated as of June 2, 1999 (as amended, modified,
supplemented, restated and/or replaced from time to time, the "Agency
Agreement"), certain of the parties to this Amendment are parties to that
certain Lease Agreement dated as of June 2, 1999 (as amended, modified,
supplemented, restated and/or replaced from time to time, the "Lease Agreement")
and certain of the parties to this Amendment are parties to the other Operative
Agreements relating to an $18 million end loaded lease financing facility (the
"Facility") that has been established in favor of Dollar Tree;

         WHEREAS, the Credit Parties have requested certain modifications to the
Participation Agreement, the Security Agreement, the Lease, the Agency Agreement
and the other Operative Agreements in connection with the Lessee's request to
increase the size of the Facility from $18 million to $58 million;

         WHEREAS, the Financing Parties have agreed to the requested
modifications on the terms and conditions set forth herein;

<PAGE>

         NOW,  THEREFORE,  IN  CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:

                           A. PARTICIPATION AGREEMENT
                              -----------------------

         1.    Appendix A to the Participation Agreement is hereby amended to
               modify the following defined terms as follows:

               "Closing Costs" shall mean all costs and expenses incident to any
sale, lease, exchange, redeployment or other disposition of a Property,
including without limitation reasonable attorneys' fees and escrow fees,
recording fees, broker's fees, any out-of-pocket fees, costs (including breakage
costs) or expenses incurred reasonably, or payable under the Operative
Agreements, by any Financing Party in connection with the same and with the
release of any Operative Agreement, and all applicable transfer taxes which may
be imposed by reason of such sale, lease, exchange, redeployment or other
disposition and the delivery of any and all instruments in connection therewith.

               "Company Obligations" shall mean the obligations of Dollar Tree,
in any and all capacities under and with respect to the Operative Agreements and
each Property of which it is a Lessee and with respect to any other Lessee, the
obligations of such Lessee with respect to each Property of which it is a
Lessee; provided, no Person shall be deemed to be a Guarantor with respect to
any obligations with respect to any Property if such Person is the Lessee with
respect to such Property; provided, further, with respect to obligations of the
"Lessee" or the "Construction Agent" or any "Credit Party" under and with
respect to the Operative Agreements that do not relate to a particular Property,
such obligations shall be deemed to be "Company Obligations" of all Lessees and
Construction Agents, and all Lessees and Construction Agents shall be jointly
and severally liable for the direct performance of such obligations.

               "Construction Agent" shall mean, with respect to any Property,
the Credit Party designated as lessee in the Lease Supplement respecting such
Property, as the construction agent under the Agency Agreement respecting such
Property.

               "Construction Period Termination Date" shall mean (a) the earlier
of (i) the date that the Commitments have been terminated in their entirety in
accordance with the terms of Section 2.5(a) of the Credit Agreement or (ii)
September 4, 2001 or (b) such later date as shall be agreed to by the Bank.

               "Guarantors" shall mean the various parties to the Participation
Agreement from time to time, as guarantors of the payment and performance
obligations of any Construction Agent and any Lessee with respect to the
Operative Agreements and the Properties; provided, no Person shall be deemed to
be a Guarantor with respect to any obligations under and with respect to the
Operative Agreements in connection with any Property if such Person is the
Lessee with respect to such Property; provided, further, that Dollar Tree shall
not be deemed to be a Guarantor with respect to any obligations of Dollar Tree
under and with respect to the Operative Agreements in its capacity as
Construction Agent.


                                       2
<PAGE>

               "Holder Commitments" shall mean $1,740,000, as such amount may be
increased or decreased from time to time in accordance with the provisions of
the Operative Agreements.

               "Lender Commitments" shall mean $56,260,000, as such amount may
be increased or decreased from time to time in accordance with the provisions of
the Operative Agreements.

               "Lessee" shall mean, with respect to any Property, the Credit
Party designated as lessee on the applicable Lease Supplement respecting such
Property.

               "Limited Recourse Amount" shall mean with respect to any
Property, an amount equal to the Termination Value with respect to such Property
on each Payment Date, less the Maximum Residual Guarantee Amount as of such date
with respect to such Property.

               "Marketing Period" shall mean, if the Lessee that has executed a
Lease Supplement respecting a particular Property has given a Sale Notice in
accordance with Section 20.1 of the Lease, the period commencing on the date
such Sale Notice is given and ending on the date on which such Property is sold
pursuant to Article XXII of the Lease.

               "Maximum Residual Guarantee Amount" shall mean, with respect to
any Property, an amount equal to the product of the aggregate Property Cost for
such Property times eighty-three percent (83%).

               "Remarketing Fee" shall mean a remarketing fee equal to
$1,290,000 payable to the Bank in accordance with Section 22.1(b) of the Lease;
provided, in the event all of the Properties have been either purchased by the
applicable Lessee or sold to a third party that is not an Affiliate of any
Credit Party on or prior to the Expiration Date, the Bank shall not be entitled
to the Remarketing Fee.

         2.    The following is hereby added as Section 8.9 of the Participation
Agreement:

         8.9   Appointment of Dollar Tree as Agent for each Lessee and each
               Construction Agent.
               -----------------------------------------------------------------

         Each Lessee and each Construction Agent hereby appoints Dollar Tree to
act as its agent for all purposes under this Agreement and the other Operative
Agreements (including, without limitation, with respect to all matters related
to the borrowing and repayment of Loans and Holder Advances). Each Lessee and
each Construction Agent acknowledges and agrees that (a) Dollar Tree may execute
such documents on behalf of any Lessee or Construction Agent as Dollar Tree
deems appropriate in its sole discretion and each Lessee and each Construction
Agent shall be bound by and obligated by all of the terms of any such document
executed by Dollar Tree on its behalf, (b) any notice or other communication
delivered by the Bank or any other Financing Party hereunder to Dollar Tree
shall be deemed to have been delivered to each Lessee and each Construction
Agent and (c) the Bank and each of the other Financing Parties shall accept (and
shall be permitted to rely on) any document or agreement executed by Dollar Tree


                                       3
<PAGE>

on behalf of any Lessee or Construction Agent. Each Financing Party agrees that
any notice required to be given to any Lessee or Construction Agent (other than
Dollar Tree) shall also be given to Dollar Tree in its capacity as agent under
this Section 8.9.

         3.    The last paragraph of Section 12.2 of the Participation Agreement
is hereby amended to read as follows:

         Each Lessee and each Construction Agent hereby agrees that Dollar Tree
shall be appointed as its exclusive agent to receive all notices delivered
pursuant hereto on its behalf, and Dollar Tree hereby accepts such appointment
as agent and agrees to accept such delivery on behalf of each Lessee and each
Construction Agent. Except as limited by the immediately preceding sentence,
from time to time any party may designate additional parties and/or another
address for notice purposes by notice to each of the other parties hereto. Each
notice hereunder shall be effective upon receipt or refusal thereof.

                               B. LEASE AGREEMENT.
                                  ---------------

         1.    The introductory paragraph of the Lease is hereby amended to read
               as follows:

         THIS LEASE AGREEMENT dated as of June 2, 1999 (as amended, modified,
extended, supplemented, restated and/or replaced from time to time, this
"Lease") is between FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national
banking association, having its principal office at 79 South Main Street, Salt
Lake City, Utah 84111, not individually, but solely as the Owner Trustee under
the DTSD Realty Estate Trust 1999-1, as lessor (the "Lessor"), DOLLAR TREE
DISTRIBUTION, INC., a Virginia corporation, having its principal place of
business at 500 Volvo Parkway, Chesapeake, Virginia 23320, and each of the
various Credit Parties deemed to be a party hereto from time to time, as lessee
with respect to one or more Properties.

         2.    Section 1.1 of the Lease is hereby amended to read as follows:

         1.1   Definitions.

         For purposes of this Lease, capitalized terms used in this Lease and
not otherwise defined herein shall have the meanings assigned to them in
Appendix A to that certain Participation Agreement dated as of June 2, 1999
(as amended, modified, extended, supplemented, restated and/or replaced from
time to time in accordance with the applicable provisions thereof, the
"Participation Agreement") among Dollar Tree Distribution, Inc., the various
parties thereto from time to time, as the Guarantors, Lessor and First Union
National Bank, as Lender and as Holder. Unless otherwise indicated, references
in this Lease to articles, sections, paragraphs, clauses, appendices, schedules
and exhibits are to the same contained in this Lease.


                                       4
<PAGE>

         3.    Section 7.1 of the Lease is hereby amended to read as follows:

         7.1   Ownership of the Properties.

               (a) Lessor and each Lessee intend that (i) for financial
          accounting purposes with respect to each Lessee (A) this Lease will be
          treated as an "operating lease" pursuant to Statement of Financial
          Accounting Standards No. 13, as amended, (B) Lessor will be treated as
          the owner and lessor of each Property and (C) the Lessee that has
          executed a Lease Supplement respecting a particular Property will be
          treated as the lessee of such Property, but (ii) for federal and all
          state and local income tax purposes and bankruptcy purposes (A) this
          Lease will be treated as a financing arrangement and (B) the Lessee
          that has executed a Lease Supplement respecting a particular Property
          will be treated as the owner of such Property and will be entitled to
          all tax benefits ordinarily available to owners of property similar to
          such Property for such tax purposes. Notwithstanding the foregoing,
          neither party hereto has made, or shall be deemed to have made, any
          representation or warranty as to the availability of any of the
          foregoing treatments under applicable accounting rules, tax,
          bankruptcy, regulatory, commercial or real estate law or under any
          other set of rules. The applicable Lessee shall claim the cost
          recovery deductions associated with each Property, and Lessor shall
          not, to the extent not prohibited by Law, take on its tax return a
          position inconsistent with such Lessee's claim of such deductions.

               (b) In order to secure the obligations of any Lessee now existing
          or hereafter arising under any and all Operative Agreements, each
          Lessee hereby conveys, grants, assigns, transfers, hypothecates,
          mortgages and sets over to Lessor, for the benefit of all Financing
          Parties, a first priority security interest (but subject to the
          security interest in the assets granted by Lessee in favor of the
          Agent in accordance with the Security Documents) in and lien on all
          right, title and interest of such Lessee (now owned or hereafter
          acquired) in and to all Properties, to the extent such is personal
          property and irrevocably grants and conveys a lien, deed of trust and
          mortgage on all right, title and interest of such Lessee (now owned or
          hereafter acquired) in and to all Properties to the extent such is
          real property. Lessor and each Lessee further intend and agree that,
          for the purpose of securing the obligations of any Lessee and/or the
          Construction Agent now existing or hereafter arising under the
          Operative Agreements, (i) the Lease and each Lease Supplement shall be
          a security agreement and financing statement respecting each of the
          Properties and all proceeds (including without limitation insurance
          proceeds thereof) to the extent such is personal property and an
          irrevocable grant and conveyance of a lien, deed of trust and mortgage
          on each of the Properties and all proceeds (including without
          limitation insurance proceeds thereof) to the extent such is real
          property; (ii) the acquisition of title (or to the extent applicable,
          a leasehold interest pursuant to a Ground Lease) in each Property
          referenced in Article II constitutes a grant by each Lessee to Lessor
          of a security interest, lien, deed of trust and mortgage in all of
          such Lessee's right, title and interest in and to each Property and
          all proceeds (including without limitation insurance proceeds thereof)
          of the conversion, voluntary or involuntary, of the foregoing into
          cash, investments, securities or other property, whether in the form
          of cash, investments, securities or other property, and an assignment
          of all rents, profits and income produced by each Property; and (iii)
          notifications to Persons holding such property, and acknowledgments,
          receipts or confirmations from financial intermediaries, bankers or
          agents (as applicable) of any Lessee shall be deemed to have been
          given for the purpose of perfecting such lien, security interest,
          mortgage lien and deed of trust under applicable law. Each Lessee


                                       5
<PAGE>

          shall promptly take such actions as Lessor may reasonably request
          (including without limitation the filing of Uniform Commercial Code
          Financing Statements, Uniform Commercial Code Fixture Filings and
          memoranda (or short forms) of this Lease and the various Lease
          Supplements) to ensure that the lien, security interest, mortgage lien
          and deed of trust in each Property and the other items referenced
          above will be deemed to be a perfected lien, security interest,
          mortgage lien and deed of trust of first priority under applicable law
          and will be maintained as such throughout the Term.

         4.    Section 20.1 of the Lease is hereby amended to read as follows:

         20.1  Purchase Option or Sale Option-General Provisions.

               Not less than one hundred eighty (180) days (or respecting the
Purchase Option only, not less than sixty (60) days) and no more than two
hundred forty (240) days prior to the third annual anniversary of the date of
this Lease, the Expiration Date or, respecting the Purchase Option only, any
Payment Date (such third annual anniversary date, such Expiration Date or,
respecting the Purchase Option only, any such Payment Date being hereinafter
referred to as the "Election Date"), the applicable Lessee respecting one or
more Properties may give Lessor irrevocable written notice (the "Election
Notice") that such Lessee is electing to exercise either (a) the option to
purchase one or more Properties on the applicable Election Date (the "Purchase
Option") or (b) with respect to an Election Notice given in connection with the
third annual anniversary of the date of this Lease or the Expiration Date only,
the option to remarket one or more of such Properties to a Person other than
Lessee or any Affiliate of Lessee and cause a sale of such Properties to occur
on the applicable Election Date pursuant to the terms of Section 22.1 (the "Sale
Option"). If the applicable Lessee does not give an Election Notice indicating
the Purchase Option or the Sale Option at least one hundred eighty (180) days
and not more than two hundred forty (240) days prior to the Expiration Date,
then the applicable Lessee shall be deemed to have elected for the Purchase
Option to apply with respect to all Properties for which the Lessee has executed
a Lease Supplement on the Expiration Date. If the applicable Lessee shall elect
(or be deemed to have elected) to exercise the Purchase Option for one or more
Properties then the applicable Lessee shall pay to Lessor on the date on which
such purchase is scheduled to occur an amount equal to the Termination Value for
the affected Property or Properties (which the parties do not intend to be a
"bargain" purchase price) and, upon receipt of such amounts and satisfaction of
such obligations, Lessor shall transfer to the applicable Lessee all of Lessor's
right, title and interest in and to such Property or Properties in accordance
with Section 20.2.

         5.    Section 20.2 of the Lease is hereby amended to read as follows:

         20.2  Lessee Purchase Option.

               Provided,  no Default or Event of Default  shall have occurred
and be continuing (other than those that will be cured by the payment of the
Termination Value for one or more of the Properties) and provided, that the
Election Notice has been appropriately given specifying the Purchase Option, the
applicable Lessee shall purchase the Property or Properties identified (or
deemed to be identified) in the applicable Election Notice on the applicable


                                       6
<PAGE>

Election Date at a price equal to the Termination Value for such Property or
Properties (which the parties do not intend to be a "bargain" purchase price).

               Subject to Section 19.2, in connection with any termination of
this Lease with respect to any Property pursuant to the terms of Section 16.2,
or in connection with a particular Lessee's exercise of its Purchase Option,
upon the date on which this Lease is to terminate with respect to one or more
Properties, and upon tender by Lessee of the amounts set forth in Section
16.2(b) or this Section 20.2, as applicable, Lessor shall execute, acknowledge
(where required) and deliver to such Lessee, at such Lessee's cost and expense,
each of the following: (a) a termination or assignment (as requested by the
applicable Lessee) of each applicable Ground Lease and special or limited
warranty Deeds conveying each affected Property (to the extent it is real
property not subject to a Ground Lease) to the applicable Lessee free and clear
of the Lien of this Lease, the Lien of the Credit Documents and any Lessor
Liens; (b) a Bill of Sale conveying each affected Property (to the extent it is
personal property) to the applicable Lessee free and clear of the Lien of this
Lease, the Lien of the Credit Documents and any Lessor Liens; (c) any real
estate tax affidavit or other document required by law to be executed and filed
in order to record the applicable Deed and/or the applicable Ground Lease
termination; and (d) FIRPTA affidavits. All of the foregoing documentation must
be in form and substance reasonably satisfactory to Lessor. The applicable
Property shall be conveyed to the applicable Lessee "AS-IS, WHERE-IS" and in
then present physical condition.

               If  any  Property  is  the  subject  of  remediation   efforts
respecting Hazardous Substances at the applicable Election Date which could
materially and adversely impact the Fair Market Sales Value of such Property
(with materiality determined in Lessor's discretion), then the applicable Lessee
shall be obligated to purchase each such Property pursuant to Section 20.2.

               On the applicable  Election Date on which a particular  Lessee
has elected to exercise its Purchase Option, such Lessee shall pay (or cause to
be paid) to Lessor, the Bank and all other parties, as appropriate, the sum of
all costs and expenses incurred by any such party in connection with the
election by such Lessee to exercise its Purchase Option and all Rent and all
other amounts then due and payable or accrued under this Lease and/or any other
Operative Agreement.

         6.    Section 20.3 of the Lease is hereby amended to read as follows:

         20.3  Third Party Sale Option.

               (a) Provided, that (i) no Default or Event of Default shall have
          occurred and be continuing and (ii) the Election Notice has been
          appropriately given specifying the Sale Option, the applicable Lessee
          shall undertake to cause a sale of the applicable Property or
          Properties on the applicable Election Date (all as specified in the
          Election Notice), in accordance with the provisions of Section 22.1
          hereof. Such Election Date on which a sale is required may be
          hereafter referred to as the "Sale Date".

               (b) In the event a particular Lessee exercises the Sale Option
          then, as soon as practicable and in all events not less than sixty


                                       7
<PAGE>

          (60) days prior to the Sale Date, such Lessee at its expense shall
          cause to be delivered to Lessor a Phase I environmental site
          assessment for each such Property recently prepared (no more than
          thirty (30) days old prior to the Sale Date) by an independent
          recognized professional reasonably acceptable to Lessor and in form,
          scope and content reasonably satisfactory to Lessor. In the event that
          Lessor shall not have received such environmental site assessment by
          the date sixty (60) days prior to the Sale Date or in the event that
          such environmental assessment shall reveal the existence of any
          material violation of Environmental Laws, other material Environmental
          Violation or potential material Environmental Violation (with
          materiality determined in each case by Lessor in its reasonable
          discretion), then such Lessee on the Sale Date shall pay to Lessor an
          amount equal to the Termination Value for the applicable Property or
          Properties and any and all other amounts due and owing hereunder. Upon
          receipt of such payment and all other amounts due under the Operative
          Agreements, Lessor shall transfer to such Lessee all of Lessor's
          right, title and interest in and to all the Properties in accordance
          with Section 19.1.

         7.    The following is hereby added as Section 20.4 of the Lease:

         20.4  Appointment of Dollar Tree as Agent for the Lessees with Respect
               to the Purchase Option or the Sale Option.

               Each Lessee hereby appoints Dollar Tree to act as its agent, and
Dollar Tree hereby accepts such appointment, for the purpose of providing the
Election Notice pursuant to Section 20.1 on behalf of each of the Lessees.

         8.    Section 22.1 of the Lease is hereby amended to read as follows:

         22.1  Sale Procedure.

               (a) During the Marketing Period, the Lessee that has executed a
          Lease Supplement respecting one or more Properties for which the Sale
          Option has been elected, on behalf of Lessor, shall obtain bids for
          the cash purchase of such Property or Properties in connection with a
          sale to one (1) or more third party purchasers to be consummated on
          the Sale Date for the highest price available, shall notify Lessor
          promptly of the name and address of each prospective purchaser and the
          cash price which each prospective purchaser shall have offered to pay
          for each such Property and shall provide Lessor with such additional
          information about the bids and the bid solicitation procedure as
          Lessor may reasonably request from time to time. All such prospective
          purchasers must be Persons other than the applicable Lessee or any
          Affiliate of the applicable Lessee.

               Lessor may reject any and all bids and may solicit and obtain
          bids by giving Lessee written notice to that effect; provided,
          however, that notwithstanding the foregoing, Lessor may not reject the
          bids for any Property submitted by the applicable Lessee if such bids,
          in the aggregate, are greater than or equal to the sum of the Limited
          Recourse Amount for such Property plus Closing Costs related to the
          sale of such Property, and represent bona fide offers from one (1) or
          more third party purchasers. If the highest price which a prospective
          purchaser or the prospective purchasers shall have offered to pay for


                                       8
<PAGE>

          a Property on the Sale Date is less than the sum of the Limited
          Recourse Amount for such Property plus Closing Costs related to the
          sale of such Property or if such bids do not represent bona fide
          offers from one (1) or more third parties or if there are no bids or
          if such Property is otherwise not sold on the Sale Date, Lessor may
          elect to retain such Property by giving the applicable Lessee prior
          written notice of Lessor's election to retain the same, and promptly
          upon receipt of such notice, the applicable Lessee shall surrender, or
          cause to be surrendered, each of the Properties specified in such
          notice in accordance with the terms and conditions of Section 10.1.
          Upon acceptance of any bid, Lessor agrees, at the applicable Lessee's
          request, to execute a contract of sale with respect to such sale, so
          long as the same is consistent with the terms of this Article 22 and
          provides by its terms that it is nonrecourse to Lessor.

               Unless Lessor shall have elected to retain one or more of the
          Properties pursuant to the provisions of the preceding paragraph, the
          applicable Lessee shall arrange for Lessor to sell each other Property
          for which the Sale Option has been elected and a bid has been accepted
          free and clear of the Lien of this Lease and any Lessor Liens
          attributable to Lessor, without recourse or warranty (of title or
          otherwise), for cash on the Sale Date to the purchaser or purchasers
          offering the highest cash sales price, as identified by the applicable
          Lessee or Lessor, as the case may be; provided, however, solely as to
          Lessor or the Trust Company, in its individual capacity, any Lessor
          Lien shall not constitute a Lessor Lien so long as Lessor or the Trust
          Company, in its individual capacity, is diligently and in good faith
          contesting, at the cost and expense of Lessor or the Trust Company, in
          its individual capacity, such Lessor Lien by appropriate proceedings
          in which event the applicable Sale Date, all without penalty or cost
          to the applicable Lessee, shall be delayed for the period of such
          contest. To effect such transfer and assignment, Lessor shall execute,
          acknowledge (where required) and deliver to the appropriate purchaser
          each of the following: (a) special or limited warranty Deeds conveying
          each such Property (to the extent it is real property titled to
          Lessor) and an assignment of the Ground Lease conveying the leasehold
          interest of Lessor in each such Property (to the extent it is real
          property and subject to a Ground Lease) to the appropriate purchaser
          free and clear of the Lien of this Lease, the Lien of the Credit
          Documents and any Lessor Liens; (b) a Bill of Sale conveying each such
          Property (to the extent it is personal property) titled to Lessor to
          the appropriate purchaser free and clear of the Lien of this Lease,
          the Lien of the Credit Documents and any Lessor Liens; (c) any real
          estate tax affidavit or other document required by law to be executed
          and filed in order to record each Deed and/or each Ground Lease
          assignment; and (d) FIRPTA affidavits, as appropriate. All of the
          foregoing documentation must be in form and substance reasonably
          satisfactory to Lessor. The applicable Lessee shall surrender the
          Properties so sold or subject to such documents to each purchaser in
          the condition specified in Section 10.1, or in such other condition as
          may be agreed between the applicable Lessee and such purchaser. The
          applicable Lessee shall not take or fail to take any action which
          would have the effect of unreasonably discouraging bona fide third
          party bids for any Property. In the event any Property for which the
          Sale Option has been elected has not been sold by the Expiration Date,
          each applicable Lessee shall continue to use its best efforts to
          market all remaining unsold Properties.

                                       9
<PAGE>

               (b) If any Property is sold on a Sale Date to a third party
          purchaser in accordance with the terms of Section 22.1(a) and the
          purchase price paid for such Property is less than the Property Cost
          for such Property (hereinafter such difference shall be referred to as
          the "Deficiency Balance"), then the Lessee that has executed a Lease
          Supplement with respect to such Property hereby unconditionally
          promises to pay to Lessor on the Sale Date the lesser of (i) the
          Deficiency Balance, or (ii) the Maximum Residual Guarantee Amount for
          such Property. On a Sale Date if Lessor receives any amount in excess
          of the Termination Value for such Property from a third party
          purchaser, then Lessor shall pay to the applicable Lessee any such
          excess amounts. If one or more of the Properties are retained by
          Lessor pursuant to an affirmative election made by Lessor pursuant to
          the provisions of Section 22.1(a) or if any Property for which the
          Sale Option has been elected is not sold on or prior to the Expiration
          Date, then the Lessee that has executed a Lease Supplement with
          respect to such Property hereby unconditionally promises to pay to
          Lessor on the Sale Date an amount equal to the Maximum Residual
          Guarantee Amount for each such Property so retained, together with any
          and all Rent and all other amounts then due and owing by such Lessee
          to the Financing Parties pursuant to the Operative Agreements. Each
          Lessee shall also pay to the Bank, on the Expiration Date, such
          Lessee's pro rata share of the Remarketing Fee (based on the ratio of
          the Property Cost allocable to such retained Properties for which such
          Lessee has executed a Lease Supplement to the aggregate Property Cost
          for all Properties so retained). The failure to pay the Deficiency
          Balance or the Maximum Residual Guarantee Amount, the Remarketing Fee
          or any such other amounts referenced in this Section 22.1(b) shall
          constitute a Lease Event of Default.

               Upon the sale to a third party purchaser (which is not a
          Subsidiary or Affiliate of any Credit Party) of any Property, provided
          that the Deficiency Balance or Maximum Residual Guarantee Amount, the
          Remarketing Fee and all such other amounts referenced in this Section
          22.1(b) have been paid, the proceeds from the sale of such Property
          will be applied in accordance with Section 22.2.

               (c) In the event that any Property is either sold to one (1) or
          more third party purchasers on the Sale Date or retained by Lessor in
          connection with an affirmative election made by Lessor pursuant to the
          provisions of Section 22.1(a), then in either case on the applicable
          Sale Date the applicable Lessee shall provide Lessor or such third
          party purchaser (unless otherwise agreed by such third party
          purchaser) with (i) all permits, certificates of occupancy,
          governmental licenses and authorizations necessary to use, operate,
          repair, access and maintain each such Property for the purpose it is
          being used by the applicable Lessee, and (ii) such manuals, permits,
          easements, licenses, intellectual property, know-how, rights-of-way
          and other rights and privileges in the nature of an easement as are
          reasonably necessary or desirable in connection with the use,
          operation, repair, access to or maintenance of each such Property for
          its intended purpose or otherwise as Lessor or such third party
          purchaser(s) shall reasonably request (and a royalty-free license or
          similar agreement to effectuate the foregoing on terms reasonably
          agreeable to Lessor or such third party purchaser(s), as applicable).
          All assignments, licenses, easements, agreements and other deliveries
          required by clauses (i) and (ii) of this paragraph (c) shall be in
          form reasonably satisfactory to Lessor or such third party
          purchaser(s), as applicable, and shall be fully assignable (including
          without limitation both primary assignments and assignments given in
          the nature of security) without payment of any fee, cost or other


                                       10
<PAGE>

          charge. The applicable Lessee shall also execute any documentation
          requested by Lessor or such third party purchaser(s), as applicable,
          evidencing the continuation or assignment of each Ground Lease.

               (d) Notwithstanding the foregoing provisions of this Section 22.1
          and the rights of each Lessee to remarket the Property or Properties
          with respect to which such Lessee has executed a Lease Supplement,
          Lessor and each other Financing Party at all times shall be permitted
          to market the Properties and solicit bids therefor.

         9.    Section 22.2 of the Lease is hereby amended to read as follows:

         22.2  Application of Proceeds of Sale.

               Lessor shall apply the proceeds of sale of each  Property sold
in the following order of priority:

               (a) FIRST, to pay or to reimburse Lessor (and/or the Bank, as the
          case may be) for the payment of Closing Costs;

               (b) SECOND, so long as the Credit Agreement is in effect and any
          Loans or Holder Advances or any amount is owing to the Financing
          Parties under any Operative Agreement, to the Bank to be allocated in
          accordance with Section 8.7 of the Participation Agreement; and

               (c) THIRD, to Lessee.


                              C. SECURITY AGREEMENT
                                 ------------------

         1.    The first paragraph of the Preliminary Statement to the Security
Agreement is hereby deleted and replaced with the following:

         Pursuant to the Credit Agreement,  the Bank has agreed to make Loans to
the Borrower in an aggregate amount not to exceed $56,260,000, upon the terms
and subject to the conditions set forth therein, to be evidenced by the Notes
issued by the Borrower under the Credit Agreement. Pursuant to the Trust
Agreement, the Bank has agreed to purchase the ownership interests of the Trust
created thereby in an aggregate amount not to exceed $1,740,000, upon the terms
and subject to the conditions set forth therein, to be evidenced by the
Certificates issued by the Borrower under the Trust Agreement. The Borrower is,
or shall be upon the date of the initial Advance with respect to each Property,
the legal and beneficial owner of such Property (except the Borrower may have a
ground leasehold interest in certain Properties pursuant to one (1) or more
Ground Leases).

                                       11
<PAGE>

         2.    Section 24 of the Security Agreement is hereby amended to read as
               follows:

         24.   EACH LESSEE AS A PARTY.

         EACH LESSEE HAS EXECUTED OR IS DEEMED TO HAVE  EXECUTED  THIS  SECURITY
AGREEMENT FOR THE PURPOSE OF SUBJECTING TO THE SECURITY INTERESTS GRANTED
HEREUNDER ALL OF ITS RIGHT, TITLE, ESTATE AND INTEREST, IF ANY, IN AND TO THE
TRUST PROPERTY TO SECURE ALL OBLIGATIONS OF ALL CREDIT PARTIES UNDER THE
OPERATIVE AGREEMENTS. ACCORDINGLY, EACH LESSEE HEREBY GRANTS TO THE BANK A
SECURITY INTEREST IN AND TO ALL OF ITS RIGHT, TITLE, ESTATE AND INTEREST, IF
ANY, IN AND TO THE TRUST PROPERTY (TO THE EXTENT SUCH LESSEE HAS ANY RIGHT,
TITLE OR INTEREST THEREIN AND WITHOUT REGARD TO ANY LANGUAGE IN SECTION 2 OR THE
DEFINITION OF "TRUST PROPERTY" OR ANY DEFINITION OF ANY ITEM CONSTITUTING THE
TRUST PROPERTY WHICH OTHERWISE WOULD LIMIT THE TRUST PROPERTY TO THE RIGHT,
TITLE AND INTEREST OF THE BORROWER THEREIN) TO SECURE ALL OBLIGATIONS OF ALL
CREDIT PARTIES UNDER THE OPERATIVE AGREEMENTS. EACH LESSEE ACKNOWLEDGES AND
AGREES THAT, UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, THE AGENT SHALL HAVE
THE RIGHT TO EXERCISE ANY OR ALL OF ITS REMEDIES HEREUNDER AS AGAINST ANY SUCH
RIGHT, TITLE, ESTATE OR INTEREST OF SUCH LESSEE IN OR TO THE TRUST PROPERTY.

                              D. AGENCY AGREEMENT.
                                 ----------------

         Paragraph A of the Preliminary Statement to the Agency Agreement is
hereby amended to read as follows:

         A. The Lessor and the Construction Agents are parties to that certain
Lease Agreement dated as of even date herewith (as amended, modified, extended,
supplemented, restated and/or replaced from time to time, the "Lease"), pursuant
to which each Construction Agent, in each case as lessee with respect to one or
more Properties, has agreed to lease certain Land, Improvements and Equipment
and/or to sublease a ground leasehold in certain Properties subject to one (1)
or more Ground Leases from the Lessor.

              E. OTHER OMNIBUS AMENDMENTS TO OPERATIVE AGREEMENTS.
                 ------------------------------------------------

         1.    Each Credit Party hereby agrees that, by its execution of this
Amendment, such Credit Party shall be deemed to have executed and shall be
deemed to be a party to each Operative Agreement in such capacity as is
necessary or desirable to effect the intent of the parties hereto with respect
to this Amendment.

         2.    Notwithstanding any term or provision in any Operative Agreement
to the contrary, all references to the "Lessee" or the "Construction Agent"
set forth in all Operative Agreements shall be deemed as of the Effective
Date to refer, with respect to any Property, to the Credit Party designated


                                       12
<PAGE>

as Lessee on the applicable Lease Supplement respecting such Property. The
parties hereto acknowledge and agree that DTKD shall be the sole Lessee and
Construction Agent with respect to any Property located in the Commonwealth
of Pennsylvania.

         3.    In the event Dollar Tree shall cease to be named as Lessee on one
or more Lease Supplements, Dollar Tree shall be deemed to be a Guarantor for all
purposes under the Operative Agreements (including, without limitation, for
purposes of the Guaranty under Section 6B of the Participation Agreement) as
though Dollar Tree were a party to the Participation Agreement in such capacity.

         4.    Notwithstanding any term or provision in any Operative Agreement
to the contrary, no Person shall be deemed to be a Guarantor under Section 6B of
the Participation Agreement or under any other Operative Agreement with respect
to any Company Obligations arising out of or in connection with any Property of
which such person is the Lessee and the Construction Agent; provided, however,
nothing herein shall be deemed or interpreted to relieve any Lessee or any
Construction Agent of any of its obligations as lessee or construction agent
with respect to such Property under the Lease, the Agency Agreement or under any
other Operative Agreement.

         5.    This Amendment shall be effective upon satisfaction of the
following conditions:

               (a) execution and delivery of this Amendment by the parties
          hereto and execution and delivery of such other documents, agreements
          or instruments deemed necessary or advisable by the Bank; and

               (b) receipt by the Bank of an Officer's and/or a Secretary's
          Certificate of each Credit Party (in form and in substance reasonably
          satisfactory to the Bank) certifying that a resolution has been
          adopted by such Credit Party's Board of Directors approving and
          authorizing the execution, delivery, and performance of this
          Amendment, specifying that no Default or Event of Default shall have
          occurred and be continuing, specifying that the representations and
          warranties of the Credit Parties set forth in the Participation
          Agreement are true and correct as of the effective date hereof (except
          for any such representations and warranties which relate solely to an
          earlier time) and certifying as to the incumbency of the officer of
          the Credit Parties executing this Amendment; and

               (c) receipt by the Bank of a legal opinion from counsel for the
          Credit Parties (in form and substance reasonably satisfactory to the
          Bank).

         6.    Except as modified hereby, all of the terms and provisions of the
Operative Agreements (including Schedules and Exhibits) shall remain in full
force and effect.

                                       13
<PAGE>

         7.    The Lessor agrees to pay or cause to be paid, in either case in
     accordance with Section 7.3 of the Participation Agreement, all reasonable
     costs and expenses of the Bank in connection with the preparation,
     execution and delivery of this Amendment, including without limitation the
     reasonable fees and expenses of Moore & Van Allen, PLLC.

         8.    This Amendment may be executed in any number of counterparts,
     each of which when so executed and delivered shall be deemed an original
     and it shall not be necessary in making proof of this Amendment to produce
     or account for more than one such counterpart. 9. This Amendment shall be
     deemed to be a contract made under, and for all purposes shall be construed
     in accordance with the laws of the State of North Carolina.

                  [Remainder of Page Intentionally Left Blank]

                                       14
<PAGE>

     IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Amendment to be duly executed and delivered as of the date first above
written.

                                DOLLAR TREE DISTRIBUTION, INC., as the
                                Lessee and as the Construction Agent

                                By:     /s/ Frederick C. Coble
                                       ---------------------------
                                Name:  Frederick C. Coble
                                       ---------------------------
                                Title: Sr. Vice President, CFO
                                       ---------------------------

                                DOLLAR TREE STORES, INC.,
                                as a Guarantor


                                By:    /s/ Frederick C. Coble
                                       ---------------------------
                                Name:  Frederick C. Coble
                                       ---------------------------
                                Title: Sr. Vice President, CFO
                                       ---------------------------

                                DOLLAR TREE MANAGEMENT, INC.,
                                as a Guarantor

                                By:    /s/ Frederick C. Coble
                                       ---------------------------
                                Name:  Frederick C. Coble
                                       ---------------------------
                                Title: Sr. Vice President, CFO
                                       ---------------------------

                                DT KEYSTONE DISTRIBUTION, R.L.L.L.P.,
                                as a Guarantor
                                       by DT Keystone Management, Inc., its
                                       general partner

                                By:    /s/ Frederick C. Coble
                                       ---------------------------
                                Name:  Frederick C. Coble
                                       ---------------------------
                                Title: Sr. Vice President
                                       ---------------------------

                           (Signature pages continue)


<PAGE>


                                FIRST SECURITY BANK, NATIONAL
                                ASSOCIATION, not individually, except as
                                expressly stated herein, but solely as the Owner
                                Trustee under then DTSD Realty Trust 1999-1

                                By:    /s/ DeAnn Madsen
                                       ---------------------------
                                Name:  Deann Madsen
                                       ---------------------------
                                Title: Trust Officer
                                       ---------------------------

                                FIRST UNION NATIONAL BANK, as the Holder
                                and as the Lender

                                By:    /s/ W. R. Garrett
                                       ---------------------------
                                Name:  Weston Garrett
                                       ---------------------------
                                Title: Vice President
                                       ---------------------------


                              (Signature pages end)
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-27.1
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>FDS - THIRD QUARTER 10Q
<TEXT>

<TABLE> <S> <C>


<ARTICLE>                     5
<LEGEND>
     THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM THE COMPANY'S
FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 2000 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER>                                      1,000

<S>                                         <C>
<PERIOD-TYPE>                                     9-MOS
<FISCAL-YEAR-END>                           DEC-31-2000
<PERIOD-END>                                SEP-30-2000
<CASH>                                           23,954
<SECURITIES>                                          0
<RECEIVABLES>                                         0
<ALLOWANCES>                                          0
<INVENTORY>                                     350,055
<CURRENT-ASSETS>                                407,691
<PP&E>                                          314,216
<DEPRECIATION>                                 (113,116)
<TOTAL-ASSETS>                                  666,186
<CURRENT-LIABILITIES>                           145,128
<BONDS>                                          89,162
<PREFERRED-MANDATORY>                                 0
<PREFERRED>                                           0
<COMMON>                                          1,079
<OTHER-SE>                                      450,823
<TOTAL-LIABILITY-AND-EQUITY>                    666,186
<SALES>                                       1,088,932
<TOTAL-REVENUES>                              1,088,932
<CGS>                                           699,424
<TOTAL-COSTS>                                   699,424
<OTHER-EXPENSES>                                293,534
<LOSS-PROVISION>                                      0
<INTEREST-EXPENSE>                                1,917
<INCOME-PRETAX>                                  94,057
<INCOME-TAX>                                     36,720
<INCOME-CONTINUING>                              57,337
<DISCONTINUED>                                        0
<EXTRAORDINARY>                                    (387)
<CHANGES>                                             0
<NET-INCOME>                                     56,950
<EPS-BASIC>                                        0.54
<EPS-DILUTED>                                      0.50




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