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

FORM 10-K

[X] Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

For the fiscal year ended January 26, 1997

[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

For the transition period from to .

Commission File Number 34-1-10952

DUTY FREE INTERNATIONAL, INC.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)

MARYLAND 52-1292246
- ------------------------------- -------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation organization)

63 Copps Hill Road Ridgefield, Connecticut 06877
- --------------------------------------- ----------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (203) 431-6057

Securities registered pursuant to Section 12(b) of the Act:

Title of class: Common Stock, $.01 par value per share

Name of exchange on which registered: New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in a definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.

X Number of shares of Common Stock of the registrant outstanding as
of March 31, 1997: 27,308,380 shares.

Page 1 of 54

Exhibit Index Begins on Page 17

The aggregate market value of the voting stock held by non-affiliates of the
registrant based upon the closing price of $14.625 per share for the
registrant's common stock as reported by the New York Stock Exchange as of March
31, 1997 was approximately $337,451,000.

DOCUMENTS INCORPORATED BY REFERENCE Part
- ----------------------------------- ----

1997 ANNUAL REPORT TO STOCKHOLDERS I, II, IV

PROXY STATEMENT FOR THE 1997 ANNUAL
MEETING OF STOCKHOLDERS I, III

PART I

ITEM 1. BUSINESS

General

The duty free industry is a multi-billion dollar world-wide
industry. Duty free merchandise generally consists of well-known brands of
luxury goods, such as liquor, perfumes and cosmetics, tobacco products, gifts
and other items which are often subject to high rates of taxation when sold in
domestic markets for domestic consumption. Duty free merchandise sold in the
United States includes imported liquor, tobacco products and luxury goods, as
well as domestic products, sold free of federal duties, excise taxes and state
and local sales taxes. Such merchandise is also generally exempt, within certain
allowances, from import duties and taxes at the traveler's destination.

The duty free industry developed in the United States after
World War II as international travel increased. This increase encouraged the
development of a system which allows a traveler to buy merchandise free of all
duties and sales and excise taxes imposed on domestically consumed goods. In
general, travelers can save 20% to 60% on the purchase of duty free merchandise
in the United States, compared to the retail price of the same merchandise in
the country of their destination. Most countries have allowances on the import
of duty free goods. Changes in the duty free allowances of foreign countries or
in the eligibility requirements for duty free purchases, as well as changes in
tax and duty rates imposed by foreign jurisdictions, affect sales of duty free
merchandise in United States duty free shops. As a result of the generally high
taxes and duties imposed in certain foreign countries, it may be more economical
for some travelers to exceed these allowances and pay the import duties imposed
by the country of their destination.

Duty Free International, Inc. (the "Company") operates in
several distinct markets of the duty free industry. The Company is the leading
operator of duty free stores along the United States/Canada and United
States/Mexico borders, one of the leading operators of duty free and retail
stores in international airports in the United States and Puerto Rico, and is a
prime concessionaire and supplier of merchandise to international airlines'
inflight duty free shops. The Company is also the largest supplier of duty free
merchandise to foreign diplomats in the United States and is a major supplier of
merchandise to merchant and cruise ships from ports in the Northeast United
States and Miami, Florida.

Sales to the diplomatic community are based on reciprocal
agreements between countries, under which duty free purchasing privileges are
given to foreign diplomats serving in the host country. In the United States,
all orders placed by foreign diplomats for duty free merchandise must be
approved by both the Treasury and State Departments to confirm the diplomat's
eligibility for such purchases.

Organization and Operations

The Company was formed as a Maryland corporation in 1983 to
acquire 19 border stores and one airport store. Since its founding, the Company
has grown to be one of the world's largest chains of duty free stores operating
approximately 176 stores and employing over 2,000 people serving locations in
the United States, Puerto Rico, the Caribbean and on international airlines'
inflight duty free shops. The Company has grown by expanding into additional
airport and United States border locations, and by business acquisitions.

The Company is organized into four operating divisions: the
Border Division, the Airport Division, the Diplomatic and Wholesale Division and
the Inflight Division.

Border Division

The Border Division operates the largest chain of duty free
stores along the United States/Canada and United States/Mexico borders. The
Division operates a total of 67 stores.

UETA, Inc. ("UETA" or the "Southern Border Division") operates
31 duty free stores along the Mexican border in the states of Texas, Arizona and
California. The Southern Border Division provides Mexican/American border
traffic with access to luxury items such as premium watches, fragrances and
cosmetics, top quality liquor and tobacco products, beer, wine, gourmet foods,
designer jewelry and other high quality gifts. UETA is the exclusive duty free
distributor on the United States side of the Mexican border for liquor brands
produced by United Distillers Group (Duty Free) Ltd. The Southern Border
Division intends to continue to increase customer awareness of the value of duty
free shopping through marketing and advertising, and to adjust product
assortment in order to meet the preferences of duty free shoppers. In fiscal
1998, UETA will open its first store on the Mexican side of the United
States/Mexico border. Economic factors, such as the value of the Mexican peso
versus the U.S. dollar and the Mexican economy have had and will continue to
have a significant effect on UETA's net sales and earnings.

AMMEX Tax and Duty Free Shops, Inc. and AMMEX Tax and Duty Free
Shops West, Inc. (collectively, "AMMEX" or the "Northern Border Division")
operates 36 duty free and retail stores along the Canadian border in the states
of New York, Vermont, Maine, Washington, Michigan, Idaho, Montana, North Dakota
and Minnesota. The duty free stores sell a wide variety of quality, brand-name
merchandise to individuals traveling from the United States to Canada, a
majority of whom are Canadians returning home. Retail locations carry groceries,
snacks, souvenirs and gift items. The Northern Border Division also operates
currency exchanges and gas stations at several high volume border locations.
AMMEX's objectives have been to attract a greater percentage of the eligible
travelers crossing the border into Canada and to sell more goods to each
customer by remodeling and expanding stores and through sales training,
merchandising, advertising and promotion. Economic factors, such as the Canadian
economy, certain Canadian domestic taxes, and the value of the Canadian dollar
versus the U.S. dollar have had and will continue to have a significant effect
upon the Northern Border Division's net sales and earnings.

Airport Division

Fenton Hill American, Limited (the "Airport Division") operates
109 duty free and retail stores in 14 international airports, and in the
Caribbean and South Florida markets. During fiscal 1997, the Airport Division
opened an additional seven stores at Chicago's O'Hare International Airport, and
opened a 5,000 square-foot duty free store at the new Delta Flight Center at the
John F. Kennedy International Airport in New York. The Airport Division's retail
mix currently includes duty free shops, which sell premium merchandise such as
top-quality liquor and tobacco products and exclusive fragrances and cosmetics,
and specialty stores such as The Athlete's Foot (branded athletic-wear),
Bodyography (natural personal care products), The Sports Section (regional
sports-theme shops), news and gift shops, bookstores and gourmet food and
confectionery outlets.

The Airport Division also operates a number of stores not
located in airports. It serves cruise ship passengers and airport bound
customers through 12 shops located in Miami and Orlando, Florida. In Washington,
D.C., the Airport Division operates a luxury gift store which serves the
diplomatic community. This division also operates 12 retail stores on the
Caribbean islands of St. Thomas, Aruba, Bonaire, Curacao and St. Maarten.

During the past several years, the Airport Division has grown
through acquisitions, obtaining new airport concessions and expanding existing
locations. With the potential for expansion of the Company's current airport
stores, as well as for development of other new specialty retailing concepts,
the Company believes that it will continue to find opportunities for new airport
locations and other airport retail and duty free businesses. The Airport
Division's sales volume and its overall

results of operations can be affected by factors relating to the airline
industry over which the Company has no control, including which airlines operate
at particular terminals, which routes are serviced by those airlines, levels of
airline passenger traffic, and economic and other conditions affecting the
airline industry in general.

Diplomatic and Wholesale Division

The Diplomatic and Wholesale Division is the leading domestic
supplier of duty free merchandise to the foreign diplomatic community in the
United States, principally embassies, consulates and United Nations missions in
Washington, D.C. and New York City. Foreign diplomats with official status and
foreign military personnel in training throughout the United States can order
duty free merchandise directly from the division's salespersons or from its
catalog. The Diplomatic and Wholesale Division is also a supplier of merchandise
to merchant and cruise ships from ports in the northeastern United States and
Miami.

The Diplomatic and Wholesale Division owns and operates a
110,000 square foot warehouse/distribution center in Glen Burnie, Maryland, and
a 140,000 square foot warehouse/distribution center in South Miami, Florida.
During fiscal 1997, the Diplomatic and Wholesale Division continued to
de-emphasize low gross margin sales in order to provide greater distribution
capabilities to the Company's stores, thus providing more resources for the
Company's higher profit operations.

Inflight Division

The Inflight Division ("Inflight") is a leading concession
operator and supplier of on-board duty free merchandise to international
airlines through on-board concessions and wholesale programs, and is a major
supplier of international airlines' first class and premium class amenity kits.
Currently, Inflight operates the on-board duty free concessions for 24 airlines.
Inflight`s concession programs fully operate the on-board duty free concessions
for airlines. Inflight purchases products and manages every aspect of duty free
sales on the airlines' flights, including magazine and videotape promotions.
With a percentage of total sales paid in royalties to the airline, this program
provides airlines with a risk-free means of incrementally increasing their
earnings. The division's wholesale program provides merchandise for duty free
programs which airlines run on their international flights. The carrier runs all
promotions, manages the program and owns the inventory which is bought from
Inflight. Inflight has exclusive distribution agreements for various parts of
the world with many world recognized brand names in the luxury products
industry, including Chanel, Christian Dior, Hermes, Mont Blanc, Yves Saint
Laurent, Elizabeth Arden and Lancaster. Additionally, it maintains warehouse and
station locations throughout the U.S., Pacific Rim, Europe and South America. In
fiscal 1997, the Inflight Division began operating the on-board duty free
concession programs for Air Canada and Canadian International. In the future,
the Company will continue to pursue other on-board duty free concession
contracts with international airlines not served by the Company. The Company
believes Inflight will be a significant contributor to its growth as air travel
grows and airlines continue to outsource non-core services.

The Inflight Division's sales volume and results of operations
can be affected by factors relating to the airline industry over which the
Company has no control, including levels of international airline passenger
traffic, economic and other conditions affecting the airline industry in
general, and the value of foreign currencies versus the U.S. dollar.

Regulation

Duty free stores and operations are specifically authorized and
recognized as a separate class of bonded warehouse by the Duty Free Sales
Enterprises Act of 1988, which was enacted by the United States Congress as part
of the Omnibus Trade and Competitiveness Act of 1988.

Duty free merchandise is shipped by domestic and foreign
suppliers "in bond" (without taxes or duties) to bonded warehouses in the United
States. Bonded warehouses are subject to supervision by the United States
Customs Service ("Customs Service") and may only be used to store merchandise
which has not entered the domestic market. Because the United States collects no
taxes or duties on merchandise sold by duty free stores and other duty free
operations, all merchandise shipped from a bonded warehouse to a duty free store
or other duty free location remains "under bond" and therefore subject to a high
degree of regulation by the Customs Service and by the Bureau of Alcohol,
Tobacco and Firearms (the "Bureau"), each of which are agencies of the United
States Department of the Treasury.

The Bureau also requires corporations to which it issues
permits to notify it in the event of a change in the officers or directors of
the corporate operator or if there is a change in the corporate operator's
ownership. The Bureau requires certain background information on any stockholder
who acquires 10% or more of the common stock of a corporate operator and will
not permit ownership by any such stockholder it deems unacceptable. The Company
therefore has established the right to require the redemption or the prompt
disposition, under certain circumstances, of all or any portion of the shares of
Common Stock owned by a stockholder which totals to more than 9% of the
outstanding Common Stock.

Suppliers, Distribution and Inventory Control

The Company purchases products from numerous vendors, including
manufacturers and distributors. As is typical throughout the duty free industry,
the Company does not have any significant long-term or exclusive purchase
commitments. Management believes that alternative sources of supply are
available for each category of merchandise purchased by the Company.

Merchandise is generally shipped directly from vendors to the
bonded warehouses and distribution centers located in Glen Burnie, Maryland,
Laredo, Texas and Miami, Florida. However, certain merchandise is shipped
directly to the Company's regional bonded warehouses and store locations. To
control inventory levels, management uses various automated replenishment
systems. Frequent shipments are made to the Border, Airport, and Inflight
Divisions' warehouses or stores to assure fully stocked displays and stockrooms.
Merchandise is delivered daily by truck to the diplomatic communities in
Washington, D.C. and New York City. The Company's trucks are also used to supply
duty free merchandise to merchant and passenger ships.

Duty free inventory is strictly controlled to comply with
Customs Service regulations. The Company must keep detailed records documenting
the receipt and sale of all duty free merchandise. Failure to maintain such
records may result in payment of penalties and all taxes and duties which would
have been imposed on the domestic sale of such merchandise. The Company's
computerized inventory control system allows it to identify product needs, to
arrange for prompt reorders from vendors, and to support compliance with the
Customs Service record-keeping requirements. Slow moving products also can be
identified and more appropriate product mixes maintained. The Company rarely
experiences problems with obsolescence, because most inventory turns frequently
and most products have a relatively long shelf-life.

The Company's suppliers provide significant sales support in a
variety of ways, including in-store displays, gift-with-purchase items,
advertisements, brochures, printed shopping bags, staff training, signs and
sales personnel. In addition, some distributors and manufacturers rent space in
certain duty free stores for the display of transparencies containing product
advertisements.

Many suppliers also purchase advertising space in the catalogs produced by the
various divisions. Some suppliers also rent space in the Company's warehouses
and pay a fee for processing shipments of their merchandise.

Economic Conditions and Exchange Rates

The principal customers of the Company are residents of foreign
countries whose purchases of duty free merchandise may be affected by trends in
the economies of foreign countries and changes in the value of the U.S. dollar
relative to their own currencies. Any significant increase in the value of the
U.S. dollar relative to the currencies of foreign countries, particularly Canada
and Mexico, could have an adverse impact on the number of travelers visiting the
United States and the dollar amount of duty free purchases made by them from the
Company. A significant increase in gasoline prices or a shortage of fuel may
also reduce the number of international travelers and thereby adversely affect
the Company's sales. In addition, the Company imports a significant portion of
its products from Western Europe and Canada at prices negotiated either in U.S.
dollars or foreign currencies. As a result, the Company's costs are affected by
fluctuations in the value of the U.S. dollar in relation to major Western
European and Canadian currencies. A decrease in the purchasing power of the U.S.
dollar relative to other currencies causes a corresponding increase in the
purchase price of products. The Company enters into foreign exchange forward
contracts as a hedge against a portion of its exposure to currency fluctuations
on commitments to purchase merchandise.

Competition

The Airport Division can experience significant competition
when negotiating or bidding for new concession leases or renewal of existing
leases in those locations where the operating authority requires such
negotiating or bidding. Competitors bid for the exclusive right to operate in a
particular airport or, in the case of some larger airports, in a particular
airport terminal servicing one or more airlines. The Company's lease and
concession agreements for duty free stores at the New York City airports are
consistent with airport leases in the region in that they are terminable by the
lessor upon 30 days notice, and also may be subject to re-bid at the end of the
operator's lease at which time sealed bids are submitted by prospective
operators or negotiations are undertaken with the authority. Most of Inflight's
concession contracts are subject to 30 to 120 day cancellation clauses
exercisable by the Company or the airline.

Approximately four other companies operate duty free stores in
the United States along the Canadian border. A small number of regional duty
free companies operate along the Mexican border and compete with the Company.
Large discount chains that are not duty free operators, such as Price Club and
Sam's Club, compete with the Company for customers crossing the United
States/Mexico border. Approximately 15 companies operate duty free stores at
airports in the United States. The largest such company is Duty Free Shoppers
Group, Ltd. which is the largest duty free operator in the world. The Inflight
Division has one major competitor operating international airlines' on-board
duty free concessions. The majority of international airlines operate their own
on-board duty free concessions. There are a large number of competitors offering
wholesale merchandise to international airlines. The principal competition for
diplomatic sales consists of purchases made directly from European suppliers.
There are no material competitors currently operating in the principal ports
serviced by the Diplomatic and Wholesale Division except for Miami, Florida.
There are significant competitors which can make sales to the Company's
passenger and merchant vessel customers when those customers visit ports not
serviced by the Company.

ITEM 2. PROPERTIES

The Border Division operates 67 duty free and retail stores.
Five of the stores are owned and operated by agents who receive commissions
based on sales. The Company owns 39 of its border stores and leases 23 border
stores. The Airport Division leases 109 store locations. The Company's leases
for its stores at the New York City airports are terminable by the lessor upon
30 days notice. The leases at certain border and most airport locations provide
for base monthly rentals and typically require payment of additional rent based
on a percentage of sales. Inflight has relatively small warehouse, distribution
and administrative facilities in New York, Singapore, Hong Kong and the United
Kingdom.

The Company owns a 110,000 square foot office/distribution
center near the Baltimore/Washington International Airport in Glen Burnie,
Maryland , leases a 145,000 square foot distribution center in Laredo, Texas,
and owns a 140,000 square foot administrative, warehouse and distribution
facility in South Miami, Florida. The Company also owns or leases other smaller
regional warehouse facilities. The Company owns its 33,000 square foot
headquarters in Ridgefield, Connecticut which is partially subleased. The
Company believes its facilities are adequate for current operations.

ITEM 3. LEGAL PROCEEDINGS

Certain former stockholders of UETA, Inc. and certain
stockholders of Overseas Trading Corporation (1987) Limited, an affiliate of
UETA, Inc., commenced an action against the Company and certain of its directors
and officers, in the Superior Court, New Castle County, Delaware. In their
complaint which was filed on or about December 19, 1994, plaintiffs allege that
the Company and its officers and directors made false and misleading statements
and omissions in connection with the Company's issuance of its common stock in
connection with its acquisition in April 1992 of UETA, Inc. and of certain
assets of Overseas Trading Corporation (1987) Limited, all in violation of state
statutory and common law. The relief sought includes unspecified amounts of
actual and punitive damages. The Company and its officers and directors intend
to defend this action vigorously. Certain of the plaintiffs in this action had
filed a similar complaint (on or about May 30, 1994) against the same defendants
in the Superior Court of the State of Arizona, Pima County. This action was
dismissed by court order on November 17, 1994, pursuant to stipulation of the
parties, without prejudice to the commencement by those plaintiffs of an action
in the courts of the State of Delaware.

Certain other former stockholders of UETA, Inc. commenced an
action against the Company in the District Court, 285th Judicial District, Bexar
County, Texas. In their complaint which was filed on or about June 14, 1994,
these plaintiffs also allege that the Company made false and misleading
statements and omissions in connection with the Company's acquisition of UETA,
Inc. and the Company's issuance of its common stock in connection therewith to
these plaintiffs. The relief sought includes unspecified amounts of actual and
punitive damages and rescission of the transaction and/or rescissionary damages
in an unspecified amount. On April 24, 1996, the District Court dismissed the
action. The plaintiffs have appealed this order to the Texas Court of Appeals,
Fourth District (San Antonio). In April 1995, the plaintiffs commenced an action
in the Superior Court, New Castle County, Delaware against the Company and each
of its directors and officers who were named as defendants in the aforementioned
Delaware action. In their complaint, the plaintiffs allege against the Company
and its officers and directors essentially the same claims under state statutory
and common law as they have alleged in their Texas action. The relief sought in
this action includes an unspecified amount of damages, including actual and/or
recessionary damages and punitive damages. The Company and its officers and
directors intend to defend these actions vigorously.

On July 8, 1994, the Company commenced an action against each
of the plaintiffs in the foregoing Arizona and Texas actions in the Court of
Chancery, New Castle County, Delaware for injunctive and declaratory relief as
well as damages based upon their commencement of the above-referenced actions in
the Arizona and Texas state courts, rather than in the courts of the state of
Delaware as stipulated in the agreements executed in connection with the
acquisition of UETA, Inc. The relief sought by the Company in its complaint also
includes a request for an order enjoining each of the plaintiffs in the
foregoing actions from litigating any claims arising from the acquisition of
UETA, Inc. in any forum other than the courts of the state of Delaware. Motions
to dismiss the Company's complaint have been made by all the defendants named in
this action and the Company moved for summary judgment on certain of its causes
of action.

Currently, the legal proceedings described above are not
expected to have a material effect on the Company's financial condition, results
of operations, liquidity or cash flows.

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

None

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Incorporated by reference to the 1997 Annual Report to Stockholders, page 13.

ITEM 6. SELECTED FINANCIAL DATA

Incorporated by reference to the 1997 Annual Report to Stockholders, inside
front cover.

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

Incorporated by reference to the 1997 Annual Report to Stockholders, pages
10-13.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Incorporated by reference to the 1997 Annual Report to Stockholders as set forth
in Part IV Item 14, and the supplementary data on the inside front cover of such
annual report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

None

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Incorporated by reference to the Company's Proxy Statement with respect to its
1997 Annual Meeting of Stockholders, pages 2 - 4.

ITEM 11. EXECUTIVE COMPENSATION

Incorporated by reference to the Company's Proxy Statement with respect to its
1997 Annual Meeting of Stockholders, pages 5 - 9.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Incorporated by reference to the Company's Proxy Statement with respect to its
1997 Annual Meeting of Stockholders, pages 11 and 12.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Incorporated by reference to the Company's Proxy Statement with respect to its
1997 Annual Meeting of Stockholders, page 7.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)

1. Financial Statements (Incorporated by reference to the 1997 Annual
Report to Stockholders, pages 14-24 and 9):

- Consolidated Balance Sheets as of January 26, 1997 and January 28,
1996.

- Consolidated Statements of Operations, Stockholders' Equity,
and Cash Flows for each of the years in the three-year period
ended January 26, 1997.

- Notes to the Consolidated Financial Statements.

- Independent Auditors' Report.

2. Financial Statement Schedules filed as part of this report:

- Independent Auditors' Report.

- Schedule II - Valuation and Qualifying Accounts for each of
the years in the three-year period ended January 26, 1997.

- All other schedules have been omitted because the required
information is not significant or is not applicable.

3. Exhibits:

3.1 - Charter of the Company.(2)

3.2 - By-Laws of the Company as amended to October 18, 1993. (5)

4.1 - Senior Indenture between Duty Free International, Inc.
and The Chase Manhattan Bank, N.A., as trustee, dated as of
January 15, 1994.(5)

4.2 - Form of 7% Note Due 2004. (4)

10.1 - Agreement by and between United Distillers Group (Duty Free) Ltd.
and Overseas Trading Corporation. (6)

10.2 - Agreement dated January 1, 1989 by and between United Distillers
Group (Duty Free) Ltd. and Samuel Meisel and Company, Inc.(1)

10.3 - Credit Agreement dated as of May 26, 1995 among Duty Free
International, Inc., the Banks signatory thereto
and the Chase Manhattan Bank, N.A. as agent. (7)

10.4 - 1989 Stock Option Plan for Duty Free International, Inc.,
and related form of stock option agreement as amended and
restated effective February 11, 1993 (6) and May 20, 1994 (8)
(compensatory plan).

10.5 - Incentive Compensation Plan (1) (compensatory plan).

10.6 - Indemnity Agreement by and between Duty Free International, Inc.
and Jack Africk.(1)

12.1 - Ratios of Earnings to Fixed Charges. (3)

13.1 - 1997 Annual Report to Stockholders.(3)

21.1 - Subsidiaries.(3)

23.1 - Consent of KPMG Peat Marwick LLP.(3)

24.1 - Powers of Attorney for Jack Africk, David H. Bernstein, John A.
Couri, Carl Reimerdes, Susan H. Stackhouse, Stephen M. Waters, and
Lowell P. Weicker, Jr. (3)

27.1 - Financial Data Schedule.(3)

Notes: (1) Previously filed as an Exhibit to the Registration Statement
of the Company on Form S-1, File No. 33-27842 declared
effective May 11, 1989.

(2) Previously filed as an Exhibit to the Company's Registration
Statement on Form S-1, File No. 33-43071, declared effective
November 29, 1991.

(3) Filed herewith.

(4) Previously filed as an Exhibit to the Company's Current Report
on Form 8-K dated January 15, 1994.

(5) Previously filed as an Exhibit to the Company's Current Report
on Form 8-K dated December 27, 1993.

(6) Previously filed as an Exhibit to the Company's Annual Report
on Form 10-K dated April 27, 1993.

(7) Previously filed as an Exhibit to the Company's Annual Report
on Form 10-K dated April 19, 1996.

(8) Previously filed as an Exhibit to the Company's Annual Report
on Form 10-K dated April 20, 1995.

(b) Reports on Form 8-K:

(i) The Company did not file a Current Report on Form 8-K during the
quarter ended January 26, 1997.

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, this 18th day of April,
1997.

DUTY FREE INTERNATIONAL, INC.

By: /s/ Alfred Carfora
----------------------
Alfred Carfora
President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

Signature Title Date
--------- ----- ----

* Director April 18, 1997
-----------------------
Jack Africk

* Director April 18, 1997
-----------------------
David H. Bernstein

/s/ Alfred Carfora Director, President and Chief April 18, 1997
--------------------- Executive Officer
Alfred Carfora

* Director April 18, 1997
-----------------------
John A. Couri

/s/ Gerald F. Egan Vice President of Finance, April 18, 1997
------------------- Treasurer, Secretary and Chief
Gerald F. Egan Financial Officer**

* Director, Vice President April 18, 1997
------------------------
Carl Reimerdes

* Director April 18, 1997
----------------------------
Susan H. Stackhouse

* Director April 18, 1997
--------------------------
Stephen M. Waters

* Director April 18, 1997
-------------------------------
Lowell P. Weicker, Jr.

*By: /s/ Alfred Carfora
Alfred Carfora
Attorney-in-fact

**Principal Financial and Accounting Officer

DUTY FREE INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENT SCHEDULES

Page
----

Independent Auditors' Report 15

Schedule II - Valuation and Qualifying Accounts for
the three-year period ended January 26, 1997. 16

All other schedules are omitted because they are not applicable, or not
required, or because the required information is included in the consolidated
financial statements or notes thereto.

INDEPENDENT AUDITORS' REPORT
----------------------------

The Board of Directors
Duty Free International, Inc.:

Under date of February 28, 1997, we reported on the consolidated balance sheets
of Duty Free International, Inc. and subsidiaries as of January 26, 1997 and
January 28, 1996, and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the years in the three-year
period ended January 26, 1997. In connection with our audits of the
aforementioned consolidated financial statements, we have also audited the
related financial statement schedule "Schedule II - Valuation and Qualifying
Accounts". The financial statement schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion on this
financial statement schedule based on our audits.

In our opinion, the financial statement schedule, when considered in relation to
the basic consolidated financial statements taken as a whole, present fairly, in
all material respects, the information set forth therein.

KPMG PEAT MARWICK LLP
Baltimore, Maryland
February 28, 1997

DUTY FREE INTERNATIONAL, INC. AND SUBSIDIARIES

Schedule II - Valuation and Qualifying Accounts

Additions
Charged to
Balance at Charged to other Balance at
beginning costs and accounts- end of
Description of period expenses describe Deductions(1) period
----------- --------- -------- -------- ------------- ------

Year ended January 26, 1997:
Allowance for
doubtful accounts $735,000 $1,228,000 $ -- $(1,327,000) $636,000
======== ========== =========== =========== ========

Year ended January 28, 1996:
Allowance for
doubtful accounts $795,000 $ 618,000 $ -- $ (678,000) $735,000
======= ======= ============ ========= =======

Year ended January 29, 1995:
Allowance for
doubtful accounts $740,000 $ 462,000 $280,000 (2) $ (687,000) $795,000
======= ======= ======= ========= =======

(1) Uncollectible accounts written off, net of recoveries.

(2) Allowance for doubtful accounts recorded in connection with the acquisition
of Inflight Sales Group Limited on May 1, 1994.

DUTY FREE INTERNATIONAL, INC. AND SUBSIDIARIES
EXHIBIT INDEX

Sequential
Exhibit Page
No. Description of Exhibit Number

3.1 - Charter of the Company.(2)

3.2 - By-Laws of the Company as amended to October 18, 1993. (5)

4.1 - Senior Indenture between Duty Free International, Inc. and The
Chase Manhattan Bank, N.A., as trustee, dated as of January 15,
1994. (5)

4.2 - Form of 7% Note Due 2004. (4)

10.1 - Agreement by and between United Distillers Group (Duty Free) Ltd.
and Overseas Trading Corporation. (6)

10.2 - Agreement dated January 1, 1989 by and between United Distillers
Group (Duty Free) Ltd. and Samuel Meisel and Company, Inc.(1)

10.3 - Credit Agreement dated as of May 26, 1995 among Duty Free
International, Inc., the Banks signatory thereto and the Chase
Manhattan Bank, N.A. as agent. (7)

10.4 - 1989 Stock Option Plan for Duty Free International, Inc., and
related form of stock option agreement as amended and restated
effective February 11, 1993 (6) and May 20, 1994 (8) (compensatory
plan).

10.5 - Incentive Compensation Plan (1) (compensatory plan).

10.6 - Indemnity Agreement by and between Duty Free International, Inc.
and Jack Africk.(1)

12.1 - Ratios of Earnings to Fixed Charges. (3) 19

13.1 - 1997 Annual Report to Stockholders.(3) 20 - 45

21.1 - Subsidiaries.(3) 46

23.1 - Consent of KPMG Peat Marwick LLP.(3) 47

24.1 - Powers of Attorney for Jack Africk, David H. Bernstein, John A.
Couri, Carl Reimerdes, Susan H. Stackhouse, Stephen M. Waters, and
Lowell P. Weicker, Jr. (3) 48 - 54

27.1 - Financial Data Schedule.(3) N/A