SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                    FORM 8-K

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

          Date of Report (Date of Earliest Event Reported) May 6, 2001

                      ULTRAMAR DIAMOND SHAMROCK CORPORATION
               (Exact Name of Registrant as Specified in Charter)


Delaware                   1-11154                     13-3663331
(State of                 (Commission File            (IRS Employer
Incorporation)               Number)                 Identification No.)


6000 North Loop 1604 West                       78249-1112
(Address of Principal Executive                 (Zip Code)
Offices)

                                 (210) 592-2000
                         (Registrant's Telephone Number,
                              Including Area Code)


Item 5.  Other Events

                  On May 7,  2001,  Valero  Energy  Corporation  ("Valero")  and
Ultramar  Diamond  Shamrock  Corporation  ("UDS")  issued a joint press  release
announcing that Valero and UDS entered into an agreement and plan of merger (the
"Merger Agreement"),  dated as of May 6, 2001, pursuant to which UDS will merger
with and into Valero (the "Merger"),  and held an investor presentation relating
to the Merger. A copy of the Merger Agreement is attached hereto as Exhibit 2.1,
a copy of the press release is attached hereto as Exhibit 99.1 and a copy of the
transaction summary presented at the investor presentation is attached hereto as
Exhibit 99.2.

Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits.

        (a)      Financial Statements.
                    (not applicable)

        (b)      Pro Forma Financial Information
                    (not applicable)

        (c)      Exhibits.

                        2.1  Agreement  and Plan of  Merger,  dated as of May 6,
                             2001, by and between Valero Energy  Corporation and
                             Ultramar Diamond Shamrock Corporation

                       99.1  Joint  Press  Release,  issued  on May 7,  2001  by
                             Valero  Energy  Corporation  and  Ultramar  Diamond
                             Shamrock Corporation  (incorporated by reference to
                             Ultramar  Diamond  Shamrock   Corporation's  filing
                             pursuant to Rule 425 of the Securities Act of 1933,
                             as amended, filed May 7, 2001)

                       99.2  Transaction Summary, disseminated on May 7, 2001 by
                             Ultramar  Diamond  Shamrock   Corporation   (incor-
                             porated by reference to Ultramar  Diamond  Shamrock
                             Corporation's  filing  pursuant  to Rule 425 of the
                             Securities Act of 1933, as amended,
                             filed  May 7, 2001)



                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
Ultramar Diamond  Shamrock  Corporation has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.



                                  ULTRAMAR DIAMOND SHAMROCK CORPORATION



                                  By: /s/ Todd Walker
                                          Todd Walker
                                      Corporate Secretary

Date:  May 10, 2001

                                Index of Exhibits

             2.1  Agreement  and Plan of  Merger,  dated as of May 6,
                  2001, by and between Valero Energy  Corporation and
                  Ultramar Diamond Shamrock Corporation

            99.1  Joint  Press  Release,  issued  on May 7,  2001  by
                  Valero  Energy  Corporation  and  Ultramar  Diamond
                  Shamrock Corporation  (incorporated by reference to
                  Ultramar  Diamond  Shamrock   Corporation's  filing
                  pursuant to Rule 425 of the Securities Act of 1933,
                  as amended, filed May 7, 2001)

            99.2  Transaction Summary, disseminated on May 7, 2001 by
                  Ultramar  Diamond  Shamrock   Corporation   (incor-
                  porated by reference to Ultramar  Diamond  Shamrock
                  Corporation's  filing  pursuant  to Rule 425 of the
                  Securities Act of 1933, as amended,
                  filed  May 7, 2001)