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

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2001

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

Commission File Number: 0-22963

BIG DOG HOLDINGS, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 52-1868665
(State or jurisdiction of (IRS employer
incorporation or organization) identification no.)

121 GRAY AVENUE
SANTA BARBARA, CALIFORNIA 93101
(Address of principal executive offices) (zip code)

(805) 963-8727
(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.

X Yes No
--- ----

The number of shares outstanding of the registrant's common stock, par value
$.01 per share, at May 1, 2001 was 9,686,284 shares.

BIG DOG HOLDINGS, INC

INDEX TO FORM 10-Q

PAGE
NO.

PART I. FINANCIAL INFORMATION........................................... ..3

ITEM 1: FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS
March 31, 2001 and December 31, 2000...............................3

CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended March 31, 2001 and 2000.........................4

CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended March 31, 2001 and 2000.........................5

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.........................6

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS..........................................7

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.........9

PART II. OTHER INFORMATION..................................................9

ITEM 1: LEGAL PROCEEDINGS..................................................9

ITEM 2: CHANGES IN SECURITIES..............................................9

ITEM 3: DEFAULTS UPON SENIOR SECURITIES....................................9

ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................9

ITEM 5: OTHER INFORMATION..................................................9

ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K...................................9

SIGNATURES ...........................................................10

PART 1. .........FINANCIAL INFORMATION
ITEM 1: .........FINANCIAL STATEMENTS

BIG DOG HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS

March 31, December 31,
2001 2000
------------------ ------------------
(Unaudited)
ASSETS

CURRENT ASSETS:
Cash and cash equivalents........................................ $ 1,187,000 $ 4,376,000
Accounts receivable, net......................................... 961,000 539,000
Inventories...................................................... 34,685,000 26,759,000
Prepaid expenses and other current assets........................ 381,000 549,000
Deferred income taxes............................................ 3,173,000 1,429,000
------------------ ------------------
Total current assets........................................... 40,387,000 33,652,000
PROPERTY AND EQUIPMENT, Net......................................... 8,438,000 9,072,000
INTANGIBLE ASSETS, Net.............................................. 149,000 145,000
OTHER ASSETS........................................................ 400,000 411,000
------------------ ------------------
TOTAL............................................................... $ 49,374,000 $ 43,280,000
================== ==================

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings............................................ $ 18,500,000 $ 6,000,000
Accounts payable................................................. 4,590,000 4,553,000
Income taxes payable............................................. 108,000 1,826,000
Accrued expenses and other current liabilities................... 1,997,000 3,720,000
------------------ ------------------
Total current liabilities...................................... 25,195,000 16,099,000
DEFERRED RENT....................................................... 786,000 863,000
DEFERRED GAIN ON SALE-LEASEBACK..................................... 446,000 459,000
------------------ ------------------
Total liabilities................................................ 26,427,000 17,421,000
------------------ ------------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value, 3,000,000 shares authorized, none
issued and outstanding......................................... $ --- $ ---
Common stock, $.01 par value, 30,000,000 shares authorized,
9,686,284 issued at March 31, 2001 and December 31, 2000....... 97,000 97,000

Additional paid-in capital....................................... 20,475,000 20,475,000
Retained earnings................................................ 9,581,000 12,367,000
Treasury stock, 1,233,220 and 1,202,200 shares at
March 31, 2001 and December 31, 2000........................... (7,206,000) (7,080,000)
------------------ ------------------
Total stockholders' equity..................................... 22,947,000 25,859,000
------------------ ------------------
TOTAL............................................................... $ 49,374,000 $ 43,280,000
================== ==================

See accompanying notes.

BIG DOG HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

Three Months Ended
March 31,
-----------------------------------------
2001 2000
-------------------- -------------------

NET SALES........................................................... $ 16,986,000 $ 16,586,000
COST OF GOODS SOLD.................................................. 7,880,000 7,430,000
-------------------- -------------------
GROSS PROFIT........................................................ 9,106,000 9,156,000
-------------------- -------------------
OPERATING EXPENSES:
Selling, marketing and distribution.............................. 12,172,000 11,786,000
General and administrative....................................... 1,223,000 1,329,000
-------------------- -------------------
Total operating expenses....................................... 13,395,000 13,115,000
-------------------- -------------------
LOSS FROM OPERATIONS................................................ (4,289,000) (3,959,000)
INTEREST EXPENSE (INCOME), Net...................................... 241,000 (171,000)
-------------------- -------------------
LOSS BEFORE BENEFIT FROM INCOME TAXES............................... (4,530,000) (3,788,000)
BENEFIT FROM INCOME TAXES........................................... (1,744,000) (1,458,000)
-------------------- -------------------
NET LOSS............................................................ $ (2,786,000) $ (2,330,000)
==================== ===================
NET LOSS PER SHARE
BASIC AND DILUTED................................................ $ (0.33) $ (0.19)
==================== ===================
WEIGHTED AVERAGE SHARES OUTSTANDING
BASIC AND DILUTED................................................ 8,459,000 12,000,000
==================== ===================

See accompanying notes.

BIG DOG HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Three Months Ended
March 31,
--------------------------------------
2001 2000
----------------- -----------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss..................................................................... $ (2,786,000) $ (2,330,000)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization.............................................. 867,000 993,000
Provision for losses on receivables........................................ 8,000 11,000
Deferred income taxes...................................................... (1,744,000) (1,458,000)
Changes in operating assets and liabilities:
Receivables.............................................................. (430,000) (421,000)
Inventories.............................................................. (7,926,000) (7,291,000)
Prepaid expenses and other assets........................................ 168,000 (19,000)
Accounts payable......................................................... 37,000 (1,412,000)
Income taxes payable..................................................... (1,718,000) (1,732,000)
Accrued expenses and other current liabilities........................... (1,723,000) (1,634,000)
Deferred rent............................................................ (77,000) (9,000)
Deferred gain on sale-leaseback.......................................... (13,000) (13,000)
----------------- -----------------
Net cash used in operating activities.................................. (15,337,000) (15,315,000)
----------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures......................................................... (226,000) (415,000)
Other ....................................................................... --- (4,000)
----------------- -----------------
Net cash used in investing activities.................................. (226,000) (419,000)
----------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividend payment............................................................. --- (1,200,000)
Repurchase of common stock................................................... (126,000) ---
Short-term borrowings, net................................................... 12,500,000 ---
----------------- -----------------
------------------ -----------------
Net cash provided by (used in) financing activities.................... 12,374,000 (1,200,000)
------------------ -----------------
NET DECREASE IN CASH............................................................ (3,189,000) (16,934,000)
CASH, BEGINNING OF PERIOD....................................................... 4,376,000 17,925,000
----------------- -----------------
CASH, END OF PERIOD............................................................. $ 1,187,000 $ 991,000
================= =================

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for:
Interest................................................................... $ 208,000 ---
Income taxes............................................................... $ 1,718,000 $ 1,732,000

See accompanying notes.

BIG DOG HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1. Basis of Presentation:

The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Rule 10-01 of Regulations
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements.

In the opinion of management, all adjustments, consisting only of
normal recurring entries necessary for a fair presentation have been included.
Operating results for the three-month period ended March 31, 2001 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 2001. For further information, refer to the financial statements
and footnotes thereto for Big Dog Holdings, Inc. and its wholly owned
subsidiary, Big Dog USA, Inc. (the "Company") included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2000.

NOTE 2. Short-term Borrowings

The Company has a $25.0 million revolving credit facility ("Credit
Agreement") with Bank of America and other lenders. The Credit Agreement has a
three-year term and has scheduled annual commitment reductions. The maximum
commitment balance is $25.0 million, $20.0 million and $15.0 million on December
31, 2001, June 30, 2002 and December 31, 2002, respectively. The Credit
Agreement is secured by substantially all assets of the Company, requires the
compliance of various financial affirmative and negative covenants and prohibits
the payment of dividends. The Company was not in compliance with the debt
coverage ratio and has obtained a waiver for such non-compliance for the quarter
ended March 31, 2001. This Credit Agreement provides for a performance-pricing
structured interest charge, ranging from LIBOR plus 1.75% to 2.75%, based on the
results of certain financial ratios. As of March 31, 2001, the Company had $18.5
million outstanding under this Credit Agreement. The Company had no outstanding
letters of credit as of March 31, 2001.

NOTE 3. Stockholder's Equity

In March 1998, the Company announced that its Board authorized the
repurchase of up to $10,000,000 of its common stock. Between January 1, 2001 and
May 1, 2001, the Company repurchased 31,020 shares of common stock.

NOTE 4. Recently Issued Accounting Standards

In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities." SFAS No. 133 establishes
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts and for hedging
activities. The statement requires that the Company recognize all derivatives
as either assets or liabilities in the balance sheet and measure those
instruments at fair value. The Company adopted SFAS No. 133 effective
January 1, 2001. The adoption of SFAS No. 133 did not have an impact on the
Company's financial statements.

In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin ("SAB") No. 101 which summarizes certain of the staff's
views in applying accounting principals generally accepted in the United States
of America to revenue recognition in financial statements. The application of
SAB No. 101 did not have a material impact on the Company's financial position
or results of operations.

ITEM 2:

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

Management's discussion and analysis should be read in conjunction with
the Company's financial statements and notes related thereto. Certain minor
differences in the amounts below result from rounding of the amounts shown in
the consolidated financial statements.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2001 and 2000

NET SALES. Net sales consist of sales from the Company's stores,
catalog, internet website, and wholesale accounts, all net of returns and
allowances. Net sales increased to $17.0 million for the three months ended
March 31, 2001 from $16.6 million for the same period in 2000, an increase of
$0.4 million, or 2.4%. Of the increase, $0.8 million was attributable to stores
not yet qualifying as comparable stores and $0.2 million to an increase in
catalog and internet sales, net of $0.3 million from a 1.8% comparable stores
sales decrease, and $0.3 million from a decrease in the Company's wholesale
business.

GROSS PROFIT. Gross profit decreased to $9.1 million for the three
months ended March 31, 2001 from $9.2 million for the same period in 2000, a
decrease of $0.1 million, or 1.1%. As a percentage of net sales, gross profit
decreased to 53.6% in the three months ended March 31, 2001 from 55.2% in the
same period in 2000. This 1.6% decrease was primarily due to increased sales
promotions during the first quarter of 2001.

SELLING, MARKETING AND DISTRIBUTION EXPENSES. Selling, marketing and
distribution expenses consist of expenses associated with creating, distributing
and selling products through all channels of distribution, including occupancy,
payroll and catalog costs. Selling, marketing and distribution expenses
increased to $12.2 million in the three months ended March 31, 2001 from $11.8
million in the same period for 2000, an increase of $0.4 million, or 3.4%. As a
percentage of net sales, these expenses increased to 71.7% in the three months
ended March 31, 2001 from 71.1% in the same period in 2000, an increase of 0.6%.
The increase in selling, marketing and distribution expenses is attributable to
additional operating costs of $0.1 million related to the 10 new stores open in
the first quarter 2001. Additionally, in the first quarter 2000, these expenses
were offset by insurance proceeds of approximately $0.3 million.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative
expenses consist of administrative salaries, corporate occupancy costs and other
corporate expenses. General and administrative expenses decreased to $1.2
million for the three months ended March 31, 2001 from $1.3 million for the same
period 2000, a decrease of $0.1 million, or 7.7%. As a percentage of net sales,
these expenses decreased to 7.2% in the three months ended March 31, 2001 from
8.0% in the same period in 2000. The decrease in general and administrative
expenses is primarily attributable of the decrease in depreciation expenses and
the reduction of professional service fees.

INTEREST EXPENSE. Interest expense increased to $0.2 million in the
three months ended March 31, 2001 from $0.2 million interest income in the same
period in 2000, principally due to interest on the $18.5 million outstanding
short-term borrowings.

LIQUIDITY AND CAPITAL RESOURCES

During the first quarter of 2001, the Company's primary uses of cash
were for merchandise inventories, and income taxes. The Company satisfied its
cash requirements primarily from existing cash balances and short-term
borrowings under its credit agreement.

Cash used in operating activities for the first three months ended
March 31, 2001 and 2000 remained constant at $15.3 million.

Cash used in investment activities for the three months ended March 31,
2001 and 2000 were $0.2 million and $0.4 million, respectively. Cash flows used
in investment activities in the first quarter of 2001 and 2000 primarily related
to capital additions to the Company's existing stores.

Cash provided by financing activities in the three months ended March
31, 2001 were $12.4 million compared to $1.2 million of cash used in financing
activities in the same period in 2000. In the first quarter 2001, the Company
borrowed $12.5 million under its borrowing agreement and used $0.1 million to
repurchase common stock. In the first quarter of 2000, the Company paid an
annual dividend of $0.10 per share to stockholders for a total dividend payment
of $1.2 million.

SEASONALITY

The Company believes its seasonality is somewhat different than many
apparel retailers since a significant number of the Company's stores are located
in tourist areas and outdoor malls that have different visitation patterns than
urban and suburban retail centers. The third and fourth quarters (consisting of
the summer vacation, back-to-school and Christmas seasons) have historically
accounted for the largest percentage of the Company's annual sales and profits.
The Company has historically incurred operating losses in its first quarter and
may be expected to do so in the foreseeable future.

STATEMENT REGARDING FORWARD LOOKING DISCLOSURE

Certain sections of this Quarterly Report on Form 10-Q, including the
preceding "Management's Discussion and Analysis of Financial Condition and
Results of Operations," contain various forward looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E
of the Securities Exchange Act of 1934, as amended, which represents the
Company's expectations or beliefs concerning future events. These forward
looking statements involve risk and uncertainties, and the Company cautions that
these statements are further qualified by important factors that could cause
actual results to differ materially from those in the forward looking
statements. Primary factors that could cause actual results to differ include
those listed in the Company's Form 10-K for the year ended December 31, 2000
filed with the Securities and Exchange Commission.

ITEM 3:

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company does not believe it has material exposure to losses from
market-rate sensitive instruments. The Company has not invested in derivative
financial instruments. The Company has a Credit Agreement with a
performance-pricing structured interest charge, ranging from LIBOR plus 1.75% to
2.75%, based on the results of certain financial ratios. See "Item 2.
Management's Discussion and Analysis of Financial Condition and Results of
Operations-Liquidity and Capital Resources." The Company had $18.5 million
borrowings under this arrangement as of March 31, 2001.

PART II. OTHER INFORMATION

ITEM 1: LEGAL PROCEEDINGS
Not applicable

ITEM 2: CHANGES IN SECURITIES
Not applicable

ITEM 3: DEFAULTS UPON SENIOR SECURITIES
Not applicable

ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable

ITEM 5: OTHER INFORMATION
Not applicable

ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Not applicable...

(b) Reports on Form 8-K
Not applicable

SIGNATURES

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

BIG DOG HOLDINGS, INC.

May 11, 2000 /s/ ANDREW D. FESHBACH
----------------------
Andrew D. Feshbach
President and Chief Executive Officer
(Principal Executive Officer)

May 11, 2000 /s/ ROBERTA J. MORRIS
---------------------
Roberta J. Morris
Chief Financial Officer and Treasurer
(Principal Financial Officer