FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


(Mark One)
  x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
 --- ACT OF 1934
For the Quarterly Period Ended    March 31, 2003
                               ------------------

                                       OR

    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
 --- ACT OF 1934
For the Transition Period From                     To
                               -------------------    -------------------


Commission file number   1-14122


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

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

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

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


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

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

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


Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

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

Common stock, $.01 par value --      146,915,960     shares as of May  6, 2003
                                --------------------

                         This report contains 37 pages.








                                      INDEX

                                D.R. HORTON, INC.





                                                                         
PART I.     FINANCIAL INFORMATION.                                               Page
-------     ----------------------                                              ------

ITEM 1.     Financial Statements.
            Consolidated Balance Sheets-- March 31, 2003 and September 30, 2002.     3
            Consolidated Statements of Income-- Three Months and Six Months
                Ended March 31, 2003 and 2002.                                       4
            Consolidated Statements of Cash Flows-- Six Months Ended March 31,
                2003 and 2002.                                                       5
            Notes to Consolidated Financial Statements.                           6-18
ITEM 2.     Management's Discussion and Analysis of Results of Operations and
                Financial Condition.                                             19-27
ITEM 3.     Quantitative and Qualitative Disclosures about Market Risk.             28
ITEM 4.     Controls and Procedures.                                                29

PART II.    OTHER INFORMATION.
--------    -----------------
ITEM 2.     Changes in Securities and Use of Proceeds.                              30
ITEM 4.     Submission of Matters to a Vote of Security Holders.                    30
ITEM 5.     Other Information.                                                      31
ITEM 6.     Exhibits and Reports on Form 8-K.                                       32

SIGNATURES.                                                                         33
-----------

CERTIFICATIONS.
---------------
            Certification of Chief Executive Officer Pursuant to Section 302 (a)
                of the Sarbanes-Oxley Act of 2002.                               34-35
            Certification of Chief Financial Officer Pursuant to Section 302 (a)
                of the Sarbanes-Oxley Act of 2002.                               36-37















ITEM 1.  FINANCIAL STATEMENTS

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




                                                                   March 31,  September 30,
                                                                     2003         2002
                                                                 ------------ ------------
                                                                      (In thousands)
                                                                  (Unaudited)
                                     ASSETS
                                                                      
Homebuilding:
Cash and cash equivalents ....................................    $  161,139 $   92,106
Inventories:
 Finished homes and construction in progress .................     2,407,594  2,035,221
 Residential lots - developed and under development ..........     2,321,784  2,297,545
 Land held for development ...................................         6,801     10,303
                                                                  ---------- ----------
                                                                   4,736,179  4,343,069
Property and equipment (net) .................................        77,035     71,895
Earnest money deposits and other assets ......................       371,891    430,415
Excess of cost over net assets acquired ......................       581,230    579,230
                                                                  ---------- ----------
                                                                   5,927,474  5,516,715
                                                                  ---------- ----------
Financial Services:
Cash and cash equivalents ....................................        26,339     12,238
Mortgage loans held for sale .................................       424,674    464,088
Other assets .................................................        20,462     24,486
                                                                  ---------- ----------
                                                                     471,475    500,812
                                                                  ---------- ----------
                                                                  $6,398,949 $6,017,527
                                                                  ========== ==========

                                  LIABILITIES
Homebuilding:
Accounts payable and other liabilities .......................    $  803,555 $  834,048
Notes payable ................................................     2,763,264  2,486,976
                                                                  ---------- ----------
                                                                   3,566,819  3,321,024
                                                                  ---------- ----------

Financial Services:
Accounts payable and other liabilities .......................        14,442     14,340
Notes payable to financial institutions ......................       325,613    391,355
                                                                  ---------- ----------
                                                                     340,055    405,695
                                                                  ---------- ----------
                                                                   3,906,874  3,726,719
                                                                  ---------- ----------
Minority interests ...........................................        26,039     20,945
                                                                  ---------- ----------

                              STOCKHOLDERS' EQUITY

Preferred stock, $.10 par value, 30,000,000 shares authorized,
 no shares issued ............................................           --         --
Common stock, $.01 par value, 400,000,000 shares authorized,
 146,874,543 shares at March 31, 2003 and 146,505,091 shares
 at September 30, 2002, issued and outstanding ...............         1,469      1,465
Additional capital ...........................................     1,353,537  1,349,630
Unearned compensation ........................................        (3,273)    (4,453)
Retained earnings ............................................     1,143,825    923,221
Treasury stock, 1,672,500 shares at March 31, 2003 and no
 shares at September 30, 2002, at cost .......................       (29,522)       --
                                                                  ----------  ---------
                                                                   2,466,036  2,269,863
                                                                  ----------  ---------
                                                                  $6,398,949 $6,017,527
                                                                  ========== ==========




          See accompanying notes to consolidated financial statements.

                                       -3-





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




                                                         Three Months              Six Months
                                                        Ended March  31,        Ended March  31,
                                                     ----------------------  ----------------------
                                                         2003       2002        2003        2002
                                                     ----------------------  ----------------------
                                                          (In thousands, except per share data)
                                                                       (Unaudited)
                                                                            
Homebuilding:
Revenues
 Home sales ......................................   $1,777,829  $1,534,357  $3,444,278  $2,660,095
 Land/lot sales ..................................       90,952      41,843     131,196      51,073
                                                     ----------  ----------  ----------  ----------
                                                      1,868,781   1,576,200   3,575,474   2,711,168
                                                     ----------  ----------  ----------  ----------
Cost of sales
 Home sales ......................................    1,419,537   1,258,842   2,753,295   2,157,740
 Land/lot sales ..................................       76,868      36,203     111,650      44,110
                                                     ----------  ----------  ----------  ----------
                                                      1,496,405   1,295,045   2,864,945   2,201,850
                                                     ----------  ----------  ----------  ----------
Gross profit
 Home sales ......................................      358,292     275,515     690,983     502,355
 Land/lot sales ..................................       14,084       5,640      19,546       6,963
                                                     ----------  ----------  ----------  ----------
                                                        372,376     281,155     710,529     509,318

Selling, general and administrative expense ......      187,285     149,494     366,466     267,911
Interest expense .................................            7       2,563         354       3,759
Other (income)/expense ...........................          (71)     (2,426)       (276)        146
                                                     ----------  ----------  ----------  ----------
                                                        185,155     131,524     343,985     237,502
                                                     ----------  ----------  ----------  ----------
Financial Services:
Revenues .........................................       39,766      23,865      78,007      48,787
General and administrative expense ...............       22,235      14,918      44,242      30,041
Interest expense .................................        1,482         999       3,549       2,335
Other (income) ...................................       (4,982)     (2,818)    (10,910)     (5,862)
                                                     ----------  ----------  ----------  ----------
                                                         21,031      10,766      41,126      22,273
                                                     ----------  ----------  ----------  ----------
  INCOME BEFORE INCOME TAXES .....................      206,186     142,290     385,111     259,775
Provision for income taxes .......................       78,351      53,359     145,448      97,416
                                                     ----------  ----------  ----------  ----------
  NET INCOME .....................................   $  127,835  $   88,931  $  239,663  $  162,359
                                                     ==========  ==========  ==========  ==========

Net income per share:
  Basic ..........................................   $     0.87  $     0.69  $     1.64  $     1.33
  Diluted ........................................   $     0.86  $     0.64  $     1.62  $     1.26
                                                     ==========  ==========  ==========  ==========

Weighted average number of shares of stock
  Basic ..........................................      146,327     128,897     146,426     122,095
  Diluted ........................................      148,218     141,473     148,362     129,415
                                                     ==========  ==========  ==========  ==========

  Cash dividends per share .......................   $     0.07  $     0.06  $     0.13  $     0.11
                                                     ==========  ==========  ==========  ==========










          See accompanying notes to consolidated financial statements.

                                       -4-





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



                                                                                    Six Months
                                                                                  Ended March 31,
                                                                              -----------------------
                                                                                 2003         2002
                                                                              ----------   ----------
                                                                                  (In thousands)
                                                                                    (Unaudited)
                                                                                    
OPERATING ACTIVITIES
 Net income ...............................................................   $  239,663   $  162,359
 Adjustments to reconcile net income to net cash provided by (used in)
  operating activities:
 Depreciation and amortization ............................................       18,784       11,024
 Amortization of debt premiums and fees ...................................        3,559        4,476
 Changes in operating assets and liabilities:
  Increase in inventories .................................................     (358,234)    (116,046)
  Decrease (increase) in earnest money deposits and other assets ..........       62,164      (45,592)
  Decrease in mortgage loans held for sale ................................       39,414       20,495
  Decrease in accounts payable and other liabilities ......................      (25,045)     (97,586)
                                                                              ----------   ----------

NET CASH USED IN OPERATING ACTIVITIES .....................................      (19,695)     (60,870)
                                                                              ----------   ----------

INVESTING ACTIVITIES
 Net purchases of property and equipment ..................................      (22,199)     (15,725)
 Distributions from venture capital entities ..............................         --            500
 Net cash paid for acquisitions ...........................................         --       (152,573)
                                                                              ----------   ----------

NET CASH USED IN INVESTING ACTIVITIES .....................................      (22,199)    (167,798)
                                                                              ----------   ----------

FINANCING ACTIVITIES
 Proceeds from notes payable ..............................................    1,066,160    1,555,000
 Issuance of senior notes payable .........................................      214,206         --
 Repayment of notes payable ...............................................   (1,110,417)  (1,377,974)
 Proceeds from stock associated with certain employee benefit plans .......        3,660       10,564
 Purchase of treasury stock ...............................................      (29,522)        --
 Payment of cash dividends ................................................      (19,059)      (8,476)
                                                                              ----------   ----------

NET CASH PROVIDED BY FINANCING ACTIVITIES .................................      125,028      179,114
                                                                              ----------   ----------

INCREASE (DECREASE) IN CASH ...............................................       83,134      (49,554)
 Cash at beginning of period ..............................................      104,344      239,280
                                                                              ----------   ----------
 Cash at end of period ....................................................   $  187,478   $  189,726
                                                                              ==========   ==========













          See accompanying notes to consolidated financial statements.

                                       -5-




                       D.R. HORTON, INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
                                  March 31,2003

NOTE A - BASIS OF PRESENTATION

The  accompanying  unaudited,  consolidated  financial  statements  include  the
accounts of D.R. Horton, Inc. and its subsidiaries (the "Company"). Intercompany
accounts and transactions have been eliminated in consolidation.  The statements
have been prepared in accordance with generally accepted  accounting  principles
for  interim  financial  information  and  the  instructions  to Form  10-Q  and
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements.  In the opinion of management,  all adjustments considered
necessary for a fair presentation have been included.  Operating results for the
three-month  and  six-month  periods  ended March 31,  2003 are not  necessarily
indicative of the results that may be expected for the year ending September 30,
2003.

Business - The Company is a national  builder  that is engaged  primarily in the
construction  and sale of  single-family  housing in 44 markets and 20 states in
the United States.  The Company designs,  builds and sells detached and attached
single-family houses on lots developed by the Company and on finished lots which
it purchases, ready for home construction.  Periodically, the Company sells lots
it has developed.  The Company also provides title agency and mortgage brokerage
services  to its home  buyers.  The  Company  does not  retain  or  service  the
mortgages  that it  originates  but,  rather,  sells the  mortgages  and related
servicing rights to investors.

NOTE B - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In January  2003,  the FASB  issued  Interpretation  No. 46,  "Consolidation  of
Variable  Interest  Entities."  Interpretation  No. 46 provides guidance for the
financial  accounting and reporting of certain variable interest  entities.  The
Interpretation clarifies the application of Accounting Research Bulletin No. 51,
"Consolidated  Financial  Statements",  to certain business entities that either
have equity investors with no voting rights or have equity investors that do not
provide  sufficient  financial  resources  for the  entities  to  support  their
activities.  The Interpretation  requires  consolidation of such entities by any
company  that is subject to a  majority  of the risk of loss from the  entities'
activities  or is  entitled  to receive a  majority  of the  entities'  residual
returns or both.  Furthermore,  disclosures about significant  variable interest
entities are required even if the company is not required to  consolidate  them.
The  Interpretation  applies to all variable  interest  entities  created  after
January 31, 2003, and the consolidation  requirements apply to older entities in
the first fiscal year or interim period  beginning after June 15, 2003.  Certain
of the disclosure  requirements  apply in all financial  statements  filed after
January 31, 2003.  The Company has reviewed all of its  unconsolidated  business
relationships  and believes that it has no  significant  investments in variable
interest  entities at March 31, 2003.  Moreover,  the Company believes that full
adoption  of  Interpretation  No. 46 as  required in fiscal 2003 will not have a
material effect on its financial position, results of operations or cash flows.

NOTE C - SEGMENT INFORMATION

The Company's financial reporting segments consist of homebuilding and financial
services.  The Company's  homebuilding  operations comprise the most substantial
part of its business,  with  approximately 98% of consolidated  revenues for the
three-months  and  six-months  ended March 31, 2003 and 2002.  The  homebuilding
reporting  segment is  comprised  of the  aggregate  of the  Company's  regional
homebuilding  operating segments and generates the majority of its revenues from
the sale of  completed  homes,  with a lesser  amount  from the sale of land and
lots.  Approximately 92% of its home sales revenues were generated from the sale
of  detached  homes for the three  and six  months  ended  March 31,  2003.  The
financial  services segment  generates its revenues from originating and selling
mortgages and collecting fees for title insurance agency and closing services.

Effective  with its  fiscal  year  beginning  October  1,  2002,  the  Company's
wholly-owned  mortgage subsidiary is required by Statement of Position 01-6 (SOP
01-6), of the Accounting Standards Executive Committee of the American Institute
of Certified Public Accountants,  to disclose the minimum net worth requirements
by  regulatory  agencies,  secondary  market  investors  and  states in which it
conducts   business.   Currently,   the  largest  of  these  minimum  net  worth
requirements is $1.0 million, which is insignificant compared to the $35 million
minimum net worth required by the mortgage  subsidiary's  warehouse credit line.
At March 31, 2003, the mortgage subsidiary's total equity was $115.6 million.

NOTE D - EARNINGS PER SHARE

Basic  earnings  per share for the three  months and six months  ended March 31,
2003 and 2002 is based on the weighted

                                       -6-




                       D.R. HORTON, INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
                                  March 31,2003

average number of shares of common stock outstanding. Diluted earnings per share
is based on the weighted  average  number of shares of common stock and dilutive
securities outstanding.

The following  table sets forth the weighted  average number of shares of common
stock and dilutive  securities  outstanding used in the computation of basic and
diluted earnings per share (in thousands):



                                                              Three Months Ended     Six Months Ended
                                                                    March 31,            March 31,
                                                             --------------------- ---------------------
                                                                2003       2002       2003       2002
                                                             ---------- ---------- ---------- ----------

                                                                                 
Numerator:
 Net income ................................................ $  127,835 $   88,931 $  239,663 $  162,359
Effect of dilutive securities:
 Interest expense and amortization of issuance costs
 associated with zero coupon convertible senior notes,
 net of applicable income taxes ............................       --        1,042       --        1,042
                                                             ---------- ---------- ---------- ----------
 Numerator for diluted earnings per share after assumed
 conversions ............................................... $  127,835 $   89,973 $  239,663 $  163,401
                                                             ========== ========== ========== ==========

Denominator:
 Denominator for basic earnings per share--
  weighted average shares ..................................    146,327    128,897    146,426    122,095
Effect of dilutive securities:
 Zero coupon convertible senior notes ......................       --       10,000       --        5,000
 Employee stock options ....................................      1,891      2,576      1,936      2,320
                                                             ---------- ---------- ---------- ----------
 Denominator for diluted earnings per share--
  adjusted weighted average shares .........................    148,218    141,473    148,362    129,415
                                                             ========== ========== ========== ==========




Options to purchase approximately 2,723,000 and 2,709,000 shares of common stock
at various prices were outstanding  during the three months and six months ended
March 31,  2003,  respectively,  but were not  included  in the  computation  of
diluted  earnings per share  because the  exercise  prices were greater than the
average market price of the common shares and, therefore,  their effect would be
antidilutive.  All options  outstanding  during the three  months and six months
ended March 31, 2002 were included in the  computation  of diluted  earnings per
share.

                                       -7-




                       D.R. HORTON, INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
                                  March 31,2003

NOTE E - DEBT



The Company's notes payable consist of the following (in thousands):


                                                                  March 31, September 30,
                                                                    2003        2002
                                                                 ---------- -------------
                                                                       
Homebuilding:
 Unsecured:
  Revolving credit facility due 2006 .......................     $   50,000   $     --
  8 3/8% Senior notes due 2004, net ........................        149,538      149,339
  10 1/2% Senior notes due 2005, net .......................        199,623      199,559
  10% Senior notes due 2006, net ...........................        147,903      147,802
  7 1/2% Senior notes due 2007, net ........................        215,000         --
  9% Senior notes due 2008, net ............................        102,155      102,427
  8% Senior notes due 2009, net ............................        383,535      383,438
  9 3/8% Senior notes due 2009, net ........................        244,965      246,057
  9 3/4% Senior subordinated notes due 2010, net ...........        149,037      148,994
  9 3/8% Senior subordinated notes due 2011, net ...........        199,721      199,710
  7 7/8% Senior notes due 2011, net ........................        198,499      198,437
  10 1/2% Senior subordinated notes due 2011, net ..........        152,520      153,284
  8 1/2% Senior notes due 2012, net ........................        248,065      247,995
  Zero coupon convertible senior notes due 2021, net .......        212,548      209,144
Other secured ..............................................        110,155      100,790
                                                                 ----------   ----------
                                                                 $2,763,264   $2,486,976
                                                                 ==========   ==========

Financial Services:
 Mortgage warehouse facility due 2003 ......................     $  155,613   $  242,355
 Commercial paper conduit facility due 2005 ................        170,000      149,000
                                                                 ----------   ----------
                                                                 $  325,613   $  391,355
                                                                 ==========   ==========



Homebuilding:

The Company has an $805 million unsecured  revolving credit facility,  including
$125 million  which may be used for letters of credit.  The facility  matures in
January  2006,  and  is  guaranteed  by  substantially   all  of  the  Company's
subsidiaries  other than its financial  services  subsidiaries.  Borrowings bear
daily  interest at rates based upon the London  Interbank  Offered  Rate (LIBOR)
plus a spread based upon the Company's ratio of debt to tangible net worth.  The
interest rate applicable to the revolving  credit facility at March 31, 2003 was
2.9%. In addition to the stated  interest rates,  the revolving  credit facility
requires the Company to pay certain fees.

The revolving credit facility and the indentures related to the Company's Senior
and Senior  Subordinated  Notes contain covenants which,  taken together,  limit
amounts  of  debt  that  may  be  incurred,   investments  in  inventory,  stock
repurchases,  cash dividends and other restricted  payments,  asset dispositions
and creation of liens,  and require  certain  levels of tangible  net worth.  At
March 31, 2003,  these  covenants  limit the  additional  homebuilding  debt the
Company could incur to $1,327.5 million, which included $633.3 million available
under the revolving credit facility.

On December 3, 2002, the Company issued $215 million  principal amount of 7 1/2%
Senior Notes.  The notes,  which are due December 1, 2007, with interest payable
semi-annually,  represent unsecured  obligations of the Company. The Company may
redeem up to 35% of the amount  originally  issued  with the  proceeds of public
offerings at a redemption  price equal to 107.5% of the principal amount through
December 1, 2005, plus accrued interest.  The annual effective  interest rate of
the notes,  after giving effect to the amortization of deferred financing costs,
is 7.6%.

On April 17, 2003,  the Company issued $200 million  principal  amount of 6 7/8%
Senior  Notes.  The notes,  which are due May 1,  2013,  with  interest  payable
semi-annually,  represent unsecured  obligations of the Company. The Company may
redeem up to 35% of the amount  originally  issued  with the  proceeds of public
offerings  at a  redemption  price  equal to 106.875%  of the  principal  amount


                                       -8-




                       D.R. HORTON, INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
                                  March 31,2003

through May 1, 2006, plus accrued interest.  The annual effective  interest rate
of the notes,  after giving  effect to the  amortization  of deferred  financing
costs, is 7.0%.

On April 18,  2003,  the Company  called for full  redemption  of the 10% Senior
Notes due 2006 at an aggregate redemption price of approximately $150.1 million,
including accrued interest. The Company will use a part of the proceeds of the 6
7/8% Senior Notes to redeem the called notes.  Concurrent  with the  redemption,
the  Company  will  record  interest  expense  of  approximately  $1.3  million,
representing  unaccreted discount and unamortized debt issuance costs associated
with the redeemed notes.

Financial Services:

The  Company's  mortgage  subsidiary  has  a  $190  million,  one-year  mortgage
warehouse line payable to financial  institutions,  maturing August 12, 2003, at
the 30-day LIBOR rate plus a fixed premium.  The Company's  mortgage  subsidiary
also has a $200 million  commercial  paper conduit credit facility which expires
in July 2005, the terms of which are renewable  annually by the sponsoring bank.
The current total borrowing capacity of our mortgage  subsidiary under these two
credit  facilities is $390 million.  These two credit  facilities are secured by
mortgage loans held for sale and are not guaranteed by D.R. Horton,  Inc. or any
of the  guarantors  of the Senior and Senior  Subordinated  Notes.  The interest
rates of the  mortgage  warehouse  line  payable at March 31, 2003 and 2002 were
2.4% and 2.9%,  respectively.  The interest rate on the commercial paper conduit
facility at March 31, 2003 was 1.9%.

NOTE F - INTEREST

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





                                                   Three Months Ended          Six Months Ended
                                                        March 31,                  March 31,
                                                ------------------------     ---------------------
                                                   2003           2002         2003         2002
                                                ---------      ---------     --------    ---------

                                                                             
Capitalized interest, beginning of period.....   $170,405      $ 110,126     $153,536    $  96,910
Interest incurred - homebuilding..............     60,265         46,535      117,000       83,247
Interest expensed:
 Directly - homebuilding......................         (7)        (2,563)        (354)      (3,759)
 Amortized to cost of sales...................    (49,709)       (29,446)     (89,228)     (51,746)
                                                 --------      ---------     --------    ---------
Capitalized interest, end of period...........   $180,954      $ 124,652     $180,954    $ 124,652
                                                 ========      =========     ========    =========




NOTE G - WARRANTY

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure  Requirements for Guarantees,  Including  Indirect  Guarantees of
Indebtedness of Others",  which is effective as to disclosure  requirements  for
all  financial  statements  for periods  ending after  December  15, 2002.  With
respect to the product warranty disclosure  requirements  contained therein, the
Company provides its home buyers a one-year  comprehensive  limited warranty for
all parts  and labor and a  ten-year  limited  warranty  for major  construction
defects.  Since the Company subcontracts its homebuilding work to subcontractors
who  provide  it with an  indemnity  and a  certificate  of  insurance  prior to
receiving  payments for their work, claims relating to workmanship and materials
are  generally  the  primary  responsibility  of  the  subcontractors.  Warranty
reserves  have  been  established  by  charging  cost of sales and  crediting  a
warranty liability for each home delivered. The amounts charged are estimated by
management to be adequate to cover  expected  warranty-  related costs under all
unexpired warranty obligation periods.  The Company's warranty cost accruals are
based  upon  historical  warranty  cost  experience  in each  market in which it
operates and are adjusted as appropriate to reflect qualitative risks associated
with the types of homes built and the geographic areas in which they are built.



                                       -9-




                       D.R. HORTON, INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
                                  March 31,2003

Changes in the Company's warranty liability are as follows (in thousands):


                                           Three Months Ended  Six Months Ended
                                             March 31, 2003      March 31, 2003
                                           ------------------  ----------------

Warranty liability, beginning of period....     $42,349             $39,471
 Warranties issued.........................       8,970              17,167
 Settlements made..........................      (5,197)            (10,516)
                                                -------             -------
Warranty liability, end of period..........     $46,122             $46,122
                                                =======             =======


NOTE H - STOCK-BASED COMPENSATION

On January 1, 2003,  the  Company  adopted  Statement  of  Financial  Accounting
Standards  ("SFAS")  No.  148,   "Accounting  for  Stock-Based   Compensation  -
Transition and  Disclosure,"  which amended the disclosure  requirements of SFAS
No.  123,  "Accounting  for  Stock-Based  Compensation,"  to  require  prominent
disclosures in both annual and interim financial  statements about the method of
accounting for stock-based  employee  compensation  and the effect of the method
used on reported  results.  The Company has elected to follow APB Opinion No. 25
in  accounting  for its  employee  stock  options.  The  exercise  price  of the
Company's employee stock options equals the market price of the underlying stock
on the date of grant,  and therefore no  compensation  expense is recognized for
the  initial  grants.  If  compensation  cost  for  the  Company's   stock-based
compensation  plan had been  determined  based on the fair  value  method at the
grant date,  as  prescribed  in SFAS No. 123, the  Company's  net income and net
earnings per share would have been as follows (in  thousands,  except  per-share
amounts):




                                                       Three Months Ended       Six Months Ended
                                                            March 31,               March 31,
                                                     ----------------------  ----------------------
                                                         2003       2002        2003        2002
                                                     ----------- ----------  ----------  ----------

                                                                             
Net income, as reported ..........................   $  127,835  $   88,931  $  239,663  $  162,359

Pro forma effect of expensing
 stock options (net of related tax effects) ......       (1,060)       (567)     (2,137)     (1,136)
                                                     ----------  ----------  ----------  ----------
Pro forma net income .............................   $  126,775  $   88,364  $  237,526  $  161,223
                                                     ==========  ==========  ==========  ==========

Reported basic net income per share ..............   $     0.87  $     0.69  $     1.64  $     1.33
Pro forma effect of expensing stock options ......         --          --         (0.02)      (0.01)
                                                     ----------  ----------  ----------  ----------
Pro forma basic net income per share .............   $     0.87  $     0.69  $     1.62  $     1.32
                                                     ==========  ==========  ==========  ==========

Reported diluted net income per share ............   $     0.86  $     0.64  $     1.62  $     1.26
Pro forma effect of expensing stock options ......         --         (0.01)      (0.02)      (0.01)
                                                     ----------  ----------  ----------  ----------
Pro forma diluted net income per share ...........   $     0.86  $     0.63  $     1.60  $     1.25
                                                     ==========  ==========  ==========  ==========





                                      -10-




                       D.R. HORTON, INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
                                  March 31,2003


NOTE I - SUMMARIZED FINANCIAL INFORMATION

The 7 1/2%,  7 7/8%,  8%, 8 3/8%,  8 1/2%,  9%, 9 3/8%,  10% and 10 1/2%  Senior
Notes,  the 9 3/8%, 9 3/4% and 10 1/2% Senior  Subordinated  Notes, and the Zero
Coupon Convertible Senior Notes are fully and unconditionally  guaranteed,  on a
joint  and  several  basis,  by  all  of  the  Company's   direct  and  indirect
subsidiaries   (Guarantor   Subsidiaries),   other   than   financial   services
subsidiaries  and  certain  other  inconsequential  subsidiaries  (collectively,
Non-Guarantor Subsidiaries). Each of the Guarantor Subsidiaries is wholly-owned.
In lieu of providing  separate  audited  financial  statements for the Guarantor
Subsidiaries,  consolidated  condensed financial statements are presented below.
Separate  financial  statements and other  disclosures  concerning the Guarantor
Subsidiaries are not presented  because  management has determined that they are
not material to investors.



                                   Consolidating Balance Sheet
                                         March 31, 2003

                                                                                     Non-Guarantor
                                                                                     Subsidiaries
                                                                                ----------------------
                                                        D.R.      Guarantor      Financial              Intercompany
                                                    Horton, Inc. Subsidiaries    Services      Other    Eliminations     Total
                                                    ------------ ------------   -----------  ---------  ------------   -----------
                          ASSETS                                                      (In thousands)

                                                                                                    
Homebuilding:
 Cash and cash equivalents ........................  $      --    $   149,836   $      --    $  11,303  $       --     $   161,139
 Advances to/investments in unconsolidated
  subsidiaries ....................................    4,486,565      190,734          --         --      (4,677,299)         --
 Inventories ......................................      808,364    3,838,807          --       89,254          (246)    4,736,179
 Property and equipment (net) .....................       12,186       58,694          --        6,155          --          77,035
 Earnest money deposits and other assets ..........      155,136      207,866          --        8,889          --         371,891
 Excess of cost over net assets acquired ..........         --        581,230          --         --            --         581,230
                                                     -----------  -----------   -----------  ---------  ------------   -----------
                                                       5,462,251    5,027,167          --      115,601    (4,677,545)    5,927,474
                                                     -----------  -----------   -----------  ---------  ------------   -----------
Financial Services:
 Cash and cash equivalents ........................         --           --          26,339       --            --          26,339
 Mortgage loans held for sale .....................         --           --         424,674       --            --         424,674
 Other assets .....................................         --           --          20,462       --            --          20,462
                                                     -----------  -----------   -----------  ---------  ------------   -----------
                                                            --           --         471,475       --            --         471,475
                                                     -----------  -----------   ---------  ------------   -----------  -----------
Total Assets ......................................  $ 5,462,251  $ 5,027,167   $   471,475  $ 115,601  $ (4,677,545)  $ 6,398,949
                                                     ===========  ===========   ===========  =========  ============   ===========

                LIABILITIES & EQUITY
Homebuilding:
 Accounts payable and other liabilities ...........  $   288,324  $   501,251   $      --    $  13,980  $       --     $   803,555
 Advances from parent/unconsolidated subsidiaries .         --      2,832,135          --       52,082    (2,884,217)         --
 Notes payable ....................................    2,707,891       33,734          --       21,639          --       2,763,264
                                                     -----------  -----------   -----------  ---------  ------------   -----------
                                                       2,996,215    3,367,120          --       87,701    (2,884,217)    3,566,819
                                                     -----------  -----------   -----------  ---------  ------------   -----------
Financial Services:
Accounts payable and other liabilities ...........          --           --          14,442       --            --          14,442
Advances from parent/unconsolidated subsidiaries .          --           --          20,938       --         (20,938)         --
Notes payable ....................................          --           --         325,613       --            --         325,613
                                                     -----------  -----------   -----------  ---------  ------------   -----------
                                                            --           --         360,993       --         (20,938)      340,055
                                                     -----------  -----------   -----------  ---------  ------------   -----------
Total Liabilities ................................     2,996,215    3,367,120       360,993     87,701    (2,905,155)    3,906,874
                                                     -----------  -----------   -----------  ---------  ------------   -----------

Minority interests ...............................          --           --              28     26,011          --          26,039
                                                     -----------  -----------   -----------  ---------  ------------   -----------
Stockholders' Equity .............................     2,466,036    1,660,047       110,454      1,889    (1,772,390)    2,466,036
                                                     -----------  -----------   -----------  ---------  ------------   -----------
Total Liabilities & Equity .......................   $ 5,462,251  $ 5,027,167   $   471,475  $ 115,601  $ (4,677,545)  $ 6,398,949
                                                     ===========  ===========   ===========  =========  ============   ===========






                                      -11-



                       D.R. HORTON, INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
                                  March 31,2003

NOTE I - SUMMARIZED FINANCIAL INFORMATION - (Continued)



                                   Consolidating Balance Sheet
                                       September 30, 2002
                                                                                    Non-Guarantor
                                                                                     Subsidiaries
                                                                                ----------------------
                                                         D.R.       Guarantor    Financial              Intercompany
                                                     Horton, Inc. Subsidiaries   Services      Other    Eliminations     Total
                                                    ------------- ------------  -----------  ---------  -------------  -----------
                                                                                     (In thousands)

                           ASSETS
                                                                                                    
Homebuilding:
 Cash and cash equivalents ........................  $      --    $    80,273   $      --    $  11,833  $       --     $    92,106
 Advances to/investments in unconsolidated
  subsidiaries ....................................    4,126,233      260,725          --           68    (4,387,026)         --
 Inventories ......................................      689,111    3,566,280          --       88,048          (370)    4,343,069
 Property and equipment (net) .....................       10,826       55,424          --        5,645          --          71,895
 Earnest money deposits and other assets ..........      209,990      212,685          --       12,408        (4,668)      430,415
 Excess of cost over net assets acquired ..........         --        579,230          --         --            --         579,230
                                                     -----------  -----------   -----------  ---------  ------------   -----------
                                                       5,036,160    4,754,617          --      118,002    (4,392,064)    5,516,715
                                                     -----------  -----------   -----------  ---------  ------------   -----------

Financial services:
 Cash and cash equivalents ........................         --           --          12,238       --            --          12,238
 Mortgage loans held for sale .....................         --           --         464,088       --            --         464,088
 Other assets .....................................         --           --          24,486       --            --          24,486
                                                     -----------  -----------   -----------  ---------  ------------   -----------
                                                            --           --         500,812       --            --         500,812
                                                     -----------  -----------   -----------  ---------  ------------   -----------
Total Assets ......................................  $ 5,036,160  $ 4,754,617   $   500,812  $ 118,002  $ (4,392,064)  $ 6,017,527
                                                     ===========  ===========   ===========  =========  ============   ===========

                   LIABILITIES & EQUITY
Homebuilding:
 Accounts payable and other liabilities ...........  $   341,405  $   483,252   $      --    $   9,415  $        (24)  $   834,048
 Advances from parent/unconsolidated subsidiaries .         --      3,019,521          --       50,370    (3,069,891)         --
 Notes payable ....................................    2,424,892       30,491          --       36,237        (4,644)    2,486,976
                                                     -----------  -----------   -----------  ---------  ------------   -----------
                                                       2,766,297    3,533,264          --       96,022    (3,074,559)    3,321,024
                                                     -----------  -----------   -----------  ---------  ------------   -----------
Financial services:
 Accounts payable and other liabilities ...........         --           --          14,340       --            --          14,340
 Advances from parent/unconsolidated subsidiaries .         --           --          25,386       --         (25,386)         --
 Notes payable ....................................         --           --         391,355       --            --         391,355
                                                     -----------  -----------   -----------  ---------  ------------   -----------
                                                            --           --         431,081       --         (25,386)      405,695
                                                     -----------  -----------   -----------  ---------  ------------   -----------
Total Liabilities .................................    2,766,297    3,533,264       431,081     96,022    (3,099,945)    3,726,719
                                                     -----------  -----------   -----------  ---------  ------------   -----------

Minority interests ................................         --           --              26     20,919          --          20,945
                                                     -----------  -----------   -----------  ---------  ------------   -----------
Stockholders' Equity ..............................    2,269,863    1,221,353        69,705      1,061    (1,292,119)    2,269,863
                                                     -----------  -----------   -----------  ---------  ------------   -----------
Total Liabilities & Equity ........................  $ 5,036,160  $ 4,754,617   $   500,812  $ 118,002  $ (4,392,064)  $ 6,017,527
                                                     ===========  ===========   ===========  =========  ============   ===========




                                      -12-




                       D.R. HORTON, INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
                                  March 31,2003

NOTE I - SUMMARIZED FINANCIAL INFORMATION - (Continued)





                                Consolidating Statement of Income
                                Three Months Ended March 31, 2003

                                                                                    Non-Guarantor
                                                                                    Subsidiaries
                                                                                ---------------------
                                                         D.R.       Guarantor    Financial            Intercompany
                                                     Horton, Inc.  Subsidiaries  Services     Other   Eliminations   Total
                                                     ------------  ------------ ----------  --------- ------------ -----------
                                                                                    (In thousands)
                                                                                                
Homebuilding:
Revenues:
 Home sales .......................................   $   256,090  $  1,469,744  $    --    $  51,995  $      --   $ 1,777,829
 Land/lot sales ...................................         2,519        88,433       --         --           --        90,952
                                                      -----------  ------------  ---------  ---------  ----------- -----------
                                                          258,609     1,558,177       --       51,995         --     1,868,781
                                                      -----------  ------------  ---------  ---------  ----------- -----------
Cost of sales:
 Home sales .......................................       200,810     1,179,041       --       39,773          (87)  1,419,537
 Land/lot sales ...................................         6,912        69,956       --         --           --        76,868
                                                      -----------  ------------  ---------  ---------  ----------- -----------
                                                          207,722     1,248,997       --       39,773          (87)  1,496,405
                                                      -----------  ------------  ---------  ---------  ----------- -----------
Gross profit:
 Home sales .......................................        55,280       290,703       --       12,222           87     358,292
 Land/lot sales ...................................        (4,393)       18,477       --         --           --        14,084
                                                      -----------  ------------  ---------  ---------  ----------- -----------
                                                           50,887       309,180       --       12,222           87     372,376

Selling, general and administrative expense .......        54,118       127,491       --        3,060        2,616     187,285
Interest expense ..................................          --            (480)      --          487         --             7
Other expense (income) ............................      (209,417)       (1,426)      --          894      209,878         (71)
                                                      -----------  ------------  ---------  ---------  ----------- -----------
                                                          206,186       183,595       --        7,781     (212,407)    185,155
                                                      -----------  ------------  ---------  ---------  ----------- -----------

Financial services:
Revenues ..........................................          --            --       39,766       --           --        39,766
General and administrative expense ................          --            --       24,851       --         (2,616)     22,235
Interest expense ..................................          --            --        1,482       --           --         1,482
Other (income) ....................................          --            --       (4,982)      --           --        (4,982)
                                                      -----------  ------------  ---------  ---------  ----------- -----------
                                                             --            --       18,415       --          2,616      21,031
                                                      -----------  ------------  ---------  ---------  ----------- -----------
Income before income taxes ........................       206,186       183,595     18,415      7,781     (209,791)    206,186
Provision for income taxes ........................        78,351        69,758      7,002      2,945      (79,705)     78,351
                                                      -----------  ------------  ---------  ---------  ----------- -----------
Net income ........................................   $   127,835  $    113,837  $  11,413  $   4,836  $  (130,086)$   127,835
                                                      ===========  ============  =========  =========  =========== ===========




                                      -13-




                       D.R. HORTON, INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
                                  March 31,2003

NOTE I - SUMMARIZED FINANCIAL INFORMATION - (Continued)





                                Consolidating Statement of Income
                                 Six Months Ended March 31, 2003

                                                                                     Non-Guarantor
                                                                                     Subsidiaries
                                                                                ---------------------
                                                         D.R.       Guarantor    Financial            Intercompany
                                                     Horton, Inc.  Subsidiaries  Services     Other   Eliminations   Total
                                                     ------------  ------------  ---------  --------- ------------ -----------
                                                                                    (In thousands)
                                                                                                
Homebuilding:
Revenues:
 Home sales .......................................   $   452,975  $  2,916,732  $    --    $  74,571  $      --   $ 3,444,278
 Land/lot sales ...................................         5,784       125,412       --         --           --       131,196
                                                      -----------  ------------  ---------  ---------  ----------- -----------
                                                          458,759     3,042,144       --       74,571         --     3,575,474
                                                      -----------  ------------  ---------  ---------  ----------- -----------
Cost of sales:
 Home sales .......................................       349,126     2,347,750       --       56,609         (190)  2,753,295
 Land/lot sales ...................................        10,261       101,389       --         --           --       111,650
                                                      -----------  ------------  ---------  ---------  ----------- -----------
                                                          359,387     2,449,139       --       56,609         (190)  2,864,945
                                                      -----------  ------------  ---------  ---------  ----------- -----------
Gross profit:
 Home sales .......................................       103,849       568,982       --       17,962          190     690,983
 Land/lot sales ...................................        (4,477)       24,023       --         --           --        19,546
                                                      -----------  ------------  ---------  ---------  ----------- -----------
                                                           99,372       593,005       --       17,962          190     710,529

Selling, general and administrative expense .......        98,601       256,779       --        5,904        5,182     366,466
Interest expense ..................................          --            (463)      --          817         --           354
Other expense (income) ............................      (384,340)       (3,239)      --        1,398      385,905        (276)
                                                      -----------  ------------  ---------  ---------  ----------- -----------
                                                          385,111       339,928       --        9,843     (390,897)    343,985
                                                      -----------  ------------  ---------  ---------  ----------- -----------

Financial services:
Revenues ..........................................          --            --       78,007       --           --        78,007
General and administrative expense ................          --            --       49,424       --         (5,182)     44,242
Interest expense ..................................          --            --        3,549       --           --         3,549
Other (income) ....................................          --            --      (10,910)      --           --       (10,910)
                                                      -----------  ------------  ---------  ---------  ----------- -----------
                                                             --            --       35,944       --          5,182      41,126
                                                      -----------  ------------  ---------  ---------  ----------- -----------
Income before income taxes ........................       385,111       339,928     35,944      9,843     (385,715)    385,111
Provision for income taxes ........................       145,448       128,383     13,575      3,718     (145,676)    145,448
                                                      -----------  ------------  ---------  ---------  ----------- -----------
Net income ........................................   $   239,663  $    211,545  $  22,369  $   6,125  $  (240,039)$   239,663
                                                      ===========  ============  =========  =========  =========== ===========




                                      -14-




                       D.R. HORTON, INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
                                  March 31,2003

NOTE I - SUMMARIZED FINANCIAL INFORMATION - (Continued)





                                Consolidating Statement of Income
                                Three Months Ended March 31, 2002

                                                                                    Non-Guarantor
                                                                                    Subsidiaries
                                                                                ---------------------
                                                          D.R.      Guarantor    Financial            Intercompany
                                                      Horton, Inc. Subsidiaries  Services     Other   Eliminations    Total
                                                     ------------- ------------  ---------  --------- ------------ -----------
                                                                                    (In thousands)
                                                                                                
Homebuilding:
Revenues:
 Home sales .......................................   $   222,514  $  1,284,294  $    --    $  27,549  $      --   $ 1,534,357
 Land/lot sales ...................................           799        41,044       --         --           --        41,843
                                                      -----------  ------------  ---------  ---------  ----------- -----------
                                                          223,313     1,325,338       --       27,549         --     1,576,200
                                                      -----------  ------------  ---------  ---------  ----------- -----------
Cost of sales:
 Home sales .......................................       173,909     1,061,771       --       23,201          (39)  1,258,842
 Land/lot sales ...................................          (254)       36,457       --         --           --        36,203
                                                      -----------  ------------  ---------  ---------  ----------- -----------
                                                          173,655     1,098,228       --       23,201          (39)  1,295,045
                                                      -----------  ------------  ---------  ---------  ----------- -----------
Gross profit:
 Home sales .......................................        48,605       222,523       --        4,348           39     275,515
 Land/lot sales ...................................         1,053         4,587       --         --           --         5,640
                                                      -----------  ------------  ---------  ---------  ----------- -----------
                                                           49,658       227,110       --        4,348           39     281,155

Selling, general and administrative expense .......        42,449       103,512       --        2,012        1,521     149,494
Interest expense ..................................         1,873           689       --            1         --         2,563
Other expense (income) ............................      (136,954)       (1,067)      --        1,598      133,997      (2,426)
                                                      -----------  ------------  ---------  ---------  ----------- -----------
                                                          142,290       123,976       --          737     (135,479)    131,524
                                                      -----------  ------------  ---------  ---------  ----------- -----------

Financial services:
Revenues ..........................................          --            --       23,865       --           --        23,865
General and administrative expense ................          --            --       16,439       --         (1,521)     14,918
Interest expense ..................................          --            --          999       --           --           999
Other (income) ....................................          --            --       (2,818)      --           --        (2,818)
                                                      -----------  ------------  ---------  ---------  ----------- -----------
                                                             --            --        9,245       --          1,521      10,766
                                                      -----------  ------------  ---------  ---------  ----------- -----------
Income before income taxes ........................       142,290       123,976      9,245        737     (133,958)    142,290
Provision for income taxes ........................        53,359        46,491      3,467        277      (50,235)     53,359
                                                      -----------  ------------  ---------  ---------  ----------- -----------
Net income ........................................   $    88,931  $     77,485  $   5,778  $     460  $   (83,723)$    88,931
                                                      ===========  ============  =========  =========  =========== ===========







                                      -15-




                       D.R. HORTON, INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
                                  March 31,2003

NOTE I - SUMMARIZED FINANCIAL INFORMATION - (Continued)





                                Consolidating Statement of Income
                                 Six Months Ended March 31, 2002

                                                                                    Non-Guarantor
                                                                                     Subsidiaries
                                                                                ---------------------
                                                          D.R.       Guarantor   Financial            Intercompany
                                                      Horton, Inc.  Subsidiaries Services     Other   Eliminations   Total
                                                      ------------ ------------- ---------  --------- ------------ -----------
                                                                                    (In thousands)
                                                                                                
Homebuilding:
Revenues:
 Home sales .......................................   $   401,551  $  2,222,539  $    --    $  36,005  $      --   $ 2,660,095
 Land/lot sales ...................................         1,460        49,613       --         --           --        51,073
                                                      -----------  ------------  ---------  ---------  ----------- -----------
                                                          403,011     2,272,152       --       36,005         --     2,711,168
                                                      -----------  ------------  ---------  ---------  ----------- -----------
Cost of sales:
 Home sales .......................................       318,327     1,809,962       --       29,666         (215)  2,157,740
 Land/lot sales ...................................           505        43,605       --         --           --        44,110
                                                      -----------  ------------  ---------  ---------  ----------- -----------
                                                          318,832     1,853,567       --       29,666         (215)  2,201,850
                                                      -----------  ------------  ---------  ---------  ----------- -----------
Gross profit:
 Home sales .......................................        83,224       412,577       --        6,339          215     502,355
 Land/lot sales ...................................           955         6,008       --         --           --         6,963
                                                      -----------  ------------  ---------  ---------  ----------- -----------
                                                           84,179       418,585       --        6,339          215     509,318

Selling, general and administrative expense .......        73,045       188,453       --        3,307        3,106     267,911
Interest expense ..................................         2,911           846       --           12          (10)      3,759
Other expense (income) ............................      (251,552)       (1,874)      --        6,389      247,183         146
                                                      -----------  ------------  ---------  ---------  ----------- -----------
                                                          259,775       231,160       --       (3,369)    (250,064)    237,502
                                                      -----------  ------------  ---------  ---------  ----------- -----------

Financial services:
Revenues ..........................................          --            --       48,787       --           --        48,787
General and administrative expense ................          --            --       33,147       --         (3,106)     30,041
Interest expense ..................................          --            --        2,335       --           --         2,335
Other (income) ....................................          --            --       (5,862)      --           --        (5,862)
                                                      -----------  ------------  ---------  ---------  ----------- -----------
                                                             --            --       19,167       --          3,106      22,273
                                                      -----------  ------------  ---------  ---------  ----------- -----------
Income before income taxes ........................       259,775       231,160     19,167     (3,369)    (246,958)    259,775
Provision for income taxes ........................        97,416        86,685      7,188     (1,263)     (92,610)     97,416
                                                      -----------  ------------  ---------  ---------  ----------- -----------
Net income ........................................   $   162,359  $    144,475  $  11,979  $  (2,106) $  (154,348)$   162,359
                                                      ===========  ============  =========  =========  =========== ===========



                                      -16-




                       D.R. HORTON, INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
                                  March 31,2003

NOTE I - SUMMARIZED FINANCIAL INFORMATION - (Continued)





                              Consolidating Statement of Cash Flows
                                 Six Months Ended March 31, 2003

                                                                                        Non-Guarantor
                                                                                        Subsidiaries
                                                                                    --------------------
                                                              D.R.      Guarantor    Financial           Intercompany
                                                          Horton, Inc. Subsidiaries  Services    Other   Eliminations   Total
                                                          ------------ ------------ ---------- --------- ------------ -----------
                                                                                       (In thousands)
                                                                                                   
OPERATING ACTIVITIES
Net income ............................................   $   239,663  $    211,545 $  22,369  $  6,125  $  (240,039) $  239,663
Adjustments to reconcile net income to net cash
 provided by (used in) operating activities:
 Depreciation and amortization ........................         2,592        14,625       854       713         --        18,784
 Amortization of debt premiums and fees ...............         3,559          --        --        --           --         3,559
 Changes in operating assets and liabilities:
  Increase in inventories .............................      (106,422)     (250,482)     --      (1,206)        (124)   (358,234)
  (Increase) decrease in earnest money
   deposits and other assets ..........................        54,223         5,003     4,087     3,519       (4,668)     62,164
  Decrease in mortgage loans held for sale ............          --            --      39,414      --           --        39,414
  Increase (decrease) in accounts payable
   and other liabilities ..............................       (52,829)       17,999       104     9,657           24     (25,045)
                                                          -----------  ------------ ---------  --------  -----------  ----------
Net cash provided by (used in) operating
activities ............................................       140,786        (1,310)   66,828    18,808     (244,807)    (19,695)
                                                          -----------  ------------ ---------  --------  -----------  ----------
INVESTING ACTIVITIES
Net purchases of property and equipment ...............        (2,773)      (17,286)     (917)   (1,223)        --       (22,199)
                                                          -----------  ------------ ---------  --------  -----------  ----------
Net cash used in investing activities .................        (2,773)      (17,286)     (917)   (1,223)        --       (22,199)
                                                          -----------  ------------ ---------  --------  -----------  ----------
FINANCING ACTIVITIES
Net change in notes payable ...........................       252,105        (6,516)  (65,742)   (9,898)        --       169,949
Increase (decrease) in intercompany advances ..........      (345,197)       94,675    13,932    (8,217)     244,807        --
Purchase of treasury stock ............................       (29,522)         --        --        --           --       (29,522)
Proceeds from stock associated with certain
 employee benefit plans ...............................         3,660          --        --        --           --         3,660
Cash dividends paid ...................................       (19,059)         --        --        --           --       (19,059)
                                                          -----------  ------------ ---------  --------  -----------  ----------
Net cash provided by (used in) financing
 activities ...........................................      (138,013)       88,159   (51,810)  (18,115)     244,807     125,028
                                                          -----------  ------------ ---------  --------  -----------  ----------
Increase (decrease) in cash ...........................          --          69,563    14,101      (530)        --        83,134
Cash at beginning of period ...........................          --          80,273    12,238    11,833         --       104,344
                                                          -----------  ------------ ---------  --------  -----------  ----------
Cash at end of period .................................   $      --    $    149,836 $  26,339  $ 11,303  $      --    $  187,478
                                                          ===========  ============ =========  ========  ===========  ==========





                                      -17-




                       D.R. HORTON, INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
                                  March 31,2003

NOTE I - SUMMARIZED FINANCIAL INFORMATION - (Continued)





                              Consolidating Statement of Cash Flows
                                 Six Months Ended March 31, 2002

                                                                                        Non-Guarantor
                                                                                        Subsidiaries
                                                                                    --------------------
                                                              D.R.      Guarantor    Financial           Intercompany
                                                          Horton, Inc. Subsidiaries  Services    Other   Eliminations   Total
                                                          ------------ ------------ ---------- --------- ------------ ----------
                                                                                       (In thousands)

                                                                                                   
OPERATING ACTIVITIES
Net income ............................................   $   162,359  $    144,475 $  11,979  $ (2,106) $  (154,348) $  162,359
Adjustments to reconcile net income to net cash
 provided by (used in) operating activities:
 Depreciation and amortization ........................         1,728         8,404       678       214         --        11,024
 Amortization of debt premiums and fees ...............         4,476          --        --        --           --         4,476
 Changes in operating assets and liabilities:
  Increase in inventories .............................       (56,648)      (18,539)     --     (40,844)         (15)   (116,046)
  (Increase) decrease in earnest money
   deposits and other assets ..........................       (24,378)      (19,820)    2,716       379       (4,489)    (45,592)
  Decrease in mortgage loans held for sale ............          --            --      20,495      --           --        20,495
  Increase (decrease) in accounts payable
   and other liabilities ..............................       (47,192)      (67,646)     (416)   17,637           31     (97,586)
                                                          -----------  ------------ ---------  --------  -----------  ----------
Net cash provided by (used in) operating
 activities ...........................................        40,345        46,874    35,452   (24,720)    (158,821)    (60,870)
                                                          -----------  ------------ ---------  --------  -----------  ----------
INVESTING ACTIVITIES
Net (purchases) dispositions of property and
 equipment ............................................        (3,055)      (12,007)     (699)       36         --       (15,725)
Distributions from venture capital entities ...........          --            --        --         500         --           500
Net cash paid for acquisitions ........................          --        (152,573)     --        --           --      (152,573)
                                                          -----------  ------------ ---------  --------  -----------  ----------
Net cash provided by (used in) investing
 activities ...........................................        (3,055)     (164,580)     (699)      536         --      (167,798)
                                                          -----------  ------------ ---------  --------  -----------  ----------
FINANCING ACTIVITIES
Net change in notes payable ...........................       472,144      (260,634)  (34,484)   (4,457)       4,457     177,026
Increase (decrease) in intercompany advances ..........      (511,522)      450,349     6,241    40,458       14,474        --
Proceeds from stock associated with certain
 employee benefit plans ...............................        10,564          --        --        --           --        10,564
Cash dividends/distributions paid .....................        (8,476)     (139,890)     --        --        139,890      (8,476)
                                                          -----------  ------------ ---------  --------  -----------  ----------
Net cash provided by (used in) financing
 activities ...........................................       (37,290)       49,825   (28,243)   36,001      158,821     179,114
                                                          -----------  ------------ ---------  --------  -----------  ----------
Increase (decrease) in cash ...........................          --         (67,881)    6,510    11,817         --       (49,554)
Cash at beginning of period ...........................          --         230,481     6,975     1,824         --       239,280
                                                          -----------  ------------ ---------  --------  -----------  ----------
Cash at end of period .................................   $      --    $    162,600 $  13,485  $ 13,641  $      --    $  189,726
                                                          ===========  ============ =========  ========  ===========  ==========



                                      -18-





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

CRITICAL ACCOUNTING POLICIES

We  believe  that  there  have  been  no  significant  changes  to our  critical
accounting  policies  during the six months ended March 31, 2003, as compared to
those  we  disclosed  in  Management's  Discussion  and  Analysis  of  Financial
Condition and Results of  Operations  included in the Annual Report on Form 10-K
for the year ended September 30, 2002.

RESULTS OF OPERATIONS - CONSOLIDATED

We provide  homebuilding  services  in 20 states and 44 markets  through  our 48
homebuilding  divisions.  Through our  financial  services  operations,  we also
provide  mortgage  banking  and  title  agency  services  in many of these  same
markets. On February 21, 2002, Schuler Homes, Inc.  ("Schuler") merged into D.R.
Horton, Inc., with D.R. Horton the surviving corporation.

Three Months Ended March 31, 2003 Compared to Three Months Ended March 31, 2002

Consolidated  revenues  for the three  months  ended March 31,  2003,  increased
19.3%, to $1,908.5  million,  from $1,600.1 million for the comparable period of
2002, due to increases in both  homebuilding  and financial  services  revenues.
Approximately  $142.5  million of the  increase  in  homebuilding  revenues  was
attributable  to revenues  generated  by Schuler  prior to the February 21, 2003
anniversary date of the acquisition.

Income before income taxes for the three months ended March 31, 2003,  increased
44.9%, to $206.2 million, from $142.3 million for the comparable period of 2002.
As a percentage  of revenues,  income  before  income taxes for the three months
ended March 31, 2003,  increased 1.9 percentage  points,  to 10.8% from 8.9% for
the  comparable  period  of  2002,  primarily  due to the  effects  of  purchase
accounting  adjustments  related to the Schuler  acquisition in the three months
ended March 31, 2002.

The  consolidated  provision for income taxes increased  46.8%, to $78.4 million
for the three  months  ended  March 31,  2003,  from $53.4  million for the same
period of 2002, due to the corresponding  increase in income before income taxes
and an increase in the effective  income tax rate. The effective income tax rate
for the three months ended March 31, 2003 increased to 38.0%, from 37.5% for the
comparable  period of 2002,  due to increases  in pre-tax  income in states with
higher tax rates.

Six Months Ended March 31, 2003 Compared to Six Months Ended March 31, 2002

Consolidated  revenues for the six months ended March 31, 2003, increased 32.4%,
to $3,653.5  million,  from $2,760.0 million for the comparable  period of 2002,
due  to  increases  in  both  homebuilding  and  financial   services  revenues.
Approximately  $498.6  million of the  increase  in  homebuilding  revenues  was
attributable  to revenues  generated  by Schuler  prior to the February 21, 2003
anniversary date of the acquisition.

Income  before  income taxes for the six months ended March 31, 2003,  increased
48.2%, to $385.1 million, from $259.8 million for the comparable period of 2002.
As a percentage of revenues, income before income taxes for the six months ended
March 31, 2003,  increased  1.1  percentage  points,  to 10.5% from 9.4% for the
comparable period of 2002,  primarily due to the effects of purchase  accounting
adjustments related to the Schuler acquisition in the six months ended March 31,
2002.

The  consolidated  provision for income taxes increased 49.3%, to $145.4 million
for the six months ended March 31, 2003,  from $97.4 million for the same period
of 2002, due to the corresponding  increase in income before income taxes and an
increase in the effective income tax rate. The effective income tax rate for the
six  months  ended  March  31,  2003  increased  to  37.8%,  from  37.5% for the
comparable  period of 2002,  due to increases  in pre-tax  income in states with
higher tax rates.






                                      -19-




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




RESULTS OF OPERATIONS - HOMEBUILDING

The following tables set forth certain operating and financial data for our
homebuilding activities ($ in millions):




                                                     Percentages of Homebuilding Revenues
                                                   ----------------------------------------
                                                   Three Months Ended    Six Months Ended
                                                        March 31,           March 31,
                                                   ------------------  --------------------
                                                     2003      2002      2003        2002
                                                   --------  --------  --------    --------
                                                                      
Costs and expenses:
Cost of sales ....................................     80.1%     82.2%     80.1%       81.2%
Selling, general and administrative expense ......     10.0       9.5      10.3         9.9
Interest expense .................................     --         0.2      --           0.1
                                                   --------  --------  --------    --------
Total costs and expenses .........................     90.1      91.9      90.4        91.2
Other (income) expense ...........................     --        (0.2)     --          --
                                                   --------  --------  --------    --------
Income before income taxes .......................      9.9%      8.3%      9.6%        8.8%
                                                   ========  ========  ========    ========






Homes Closed                            Three Months Ended March 31,                Six Months Ended March 31,
                                 -----------------------------------------  ------------------------------------------
                                        2003                  2002                  2003                  2002
                                 -------------------  --------------------  --------------------   -------------------
                                   Homes                Homes                 Homes                  Homes
                                  Closed    Revenues   Closed     Revenues   Closed     Revenues    Closed    Revenues
                                 --------   --------  ---------   --------  ---------   --------   --------   --------

                                                                                     
Mid-Atlantic .................        743   $  154.5        633   $  138.6      1,408   $  288.7      1,228   $  263.7
Midwest ......................        441      107.6        388       95.4        867      217.1        851      214.1
Southeast ....................        979      167.7        790      135.7      1,926      325.0      1,678      290.6
Southwest ....................      3,277      552.3      2,338      403.9      6,357    1,070.2      4,909      836.5
West .........................      2,448      795.7      2,490      760.8      4,844    1,543.3      3,664    1,055.2
                                 --------   --------   --------   --------   --------   --------   --------   --------
                                    7,888   $1,777.8      6,639   $1,534.4     15,402   $3,444.3     12,330   $2,660.1
                                 ========   ========   ========   ========   ========   ========   ========   ========






Net New Sales Orders                   Three Months Ended March 31,                  Six Months Ended March 31,
                                 -----------------------------------------   -----------------------------------------
                                         2003                  2002                 2003                  2002
                                 -------------------   -------------------   -------------------   -------------------
                                   Homes                 Homes                 Homes                 Homes
                                   Sold        $         Sold        $         Sold        $         Sold        $
                                 --------   --------   --------   --------   --------   --------   --------   --------

                                                                                     
Mid-Atlantic .................        993   $  215.1        883   $  182.6      1,714   $  361.0      1,511   $  310.7
Midwest ......................        522      140.7        463      117.4        951      247.6        851      214.3
Southeast ....................      1,152      215.5        969      158.4      2,101      385.4      1,704      276.7
Southwest ....................      4,473      740.2      3,685      613.9      7,244    1,209.1      6,017      993.2
West .........................      3,408    1,128.0      2,617      761.1      5,790    1,934.9      3,678    1,060.0
                                 --------   --------   --------   --------   --------   --------   --------   --------
                                   10,548   $2,439.5      8,617   $1,833.4     17,800   $4,138.0     13,761   $2,854.9
                                 ========   ========   ========   ========   ========   ========   ========   ========





Sales  Backlog                                       March 31, 2003      March 31, 2002
                                                   ------------------  -------------------
                                                     Homes       $      Homes        $
                                                   --------  --------  --------   --------
                                                                     
Mid-Atlantic .....................................    1,559  $  337.2     1,105   $  237.4
Midwest ..........................................    1,000     269.0       918      263.0
Southeast ........................................    1,844     335.1     1,490      239.6
Southwest ........................................    6,073   1,026.6     5,410      910.2
West .............................................    4,619   1,551.0     3,475    1,013.5
                                                   --------  --------  --------   --------
                                                     15,095  $3,518.9    12,398   $2,663.7
                                                   ========  ========  ========   ========



                                      -20-




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


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

Three Months Ended March 31, 2003 Compared to Three Months Ended March 31, 2002

Revenues from  homebuilding  activities  increased  18.6%,  to $1,868.8  million
(7,888 homes  closed) for the three months ended March 31, 2003,  from  $1,576.2
million  (6,639 homes closed) for the comparable  period of 2002.  Revenues from
home  sales  increased  in all  five  of our  market  regions,  with  percentage
increases  ranging from 4.6% in the West region to 36.7% in the  Southwest.  The
increases in both  revenues and homes closed were due to strong  housing  demand
throughout  the  majority  of our  markets,  and  the  acquisition  of  Schuler.
Excluding the  activities of Schuler prior to the February 21, 2003  anniversary
date of the acquisition, home sales revenues increased 6.9%, to $1,640.3 million
(7,441 homes  closed) for the three months ended March 31, 2003,  from  $1,534.4
million  (6,639 homes closed) for the comparable  period of 2002.  Revenues from
the sale of land and lots  increased by $49.1  million,  to $91.0 million in the
three months ended March 31, 2003.

The average  selling  price of homes closed  during the three months ended March
31, 2003 was $225,400,  down 2.5% from $231,100 for the same period in 2002. The
decrease in average selling price was primarily due to relatively fewer closings
in the West region, which has the highest average selling price.

The value of net new sales orders  increased  33.1%, to $2,439.5 million (10,548
homes) for the three months ended March 31, 2003,  from $1,833.4  million (8,617
homes) for the same period of 2002. The value of net new sales orders  increased
in all of our five market regions,  with percentage increases ranging from 17.8%
in the  Mid-Atlantic  region to 48.2% in the West region.  The increases in both
net new  sales  orders  and  their  value  were  due to  strong  housing  demand
throughout  the  majority of our markets and the merger with Schuler in February
2002. On a consolidated basis,  excluding the activities of Schuler prior to the
February  21, 2003  anniversary  date of the  acquisition,  the value of net new
sales orders  increased  18.9%, to $2,180.4  million (9,777 homes) for the three
months  ended  March 31,  2003,  from  $1,833.4  million  (8,617  homes) for the
comparable  period of 2002.  The  average  price of a net new sales order in the
three  months  ended  March 31,  2003 was  $231,300,  up 8.7% from the  $212,800
average in the comparable  period of 2002. The increase in average selling price
was  primarily due to increased  sales orders in the West region,  which has the
highest average selling price.

At March 31, 2003, the value of our backlog of sales orders was $3,518.9 million
(15,095 homes), up 32.1% from $2,663.7 million (12,398 homes) at March 31, 2002.
The value of our  backlog of sales  orders  increased  in all five of our market
regions, with percentage increases ranging from 2.3% in the Midwest to region to
53.0% in the West region.  The average sales price of homes in sales backlog was
$233,100 at March 31, 2003,  up 8.5% from the average price of $214,800 at March
31, 2002 due to the increase in sales  orders in the West region,  which has the
highest average selling price.

Cost of sales increased by 15.5%, to $1,496.4 million for the three months ended
March 31, 2003,  from $1,295.0  million for the  comparable  period of 2002. The
increase  in cost  of  sales  was  primarily  attributable  to the  increase  in
revenues.  Cost of home sales as a percentage of home sales  revenues  decreased
2.2 percentage  points to 79.8% for the three months ended March 31, 2003,  from
82.0%  for the  comparable  period  of  2002.  A  significant  portion  of costs
associated with the sales of inventory acquired in the Schuler acquisition, with
lower  gross  margins  as a  result  of  purchase  accounting  adjustments  that
increased  the  acquired  inventory  to  its  fair  value  as  of  the  date  of
acquisition,  was  recognized in the three months ended March 31, 2002.  For the
same  reason,  total  homebuilding  cost  of  sales  as a  percentage  of  total
homebuilding  revenues  decreased 2.1 percentage  points,  to 80.1% in the three
months ended March 31, 2003, from 82.2% in the comparable period of 2002.

                                      -21-




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


Selling, general and administrative (SG&A) expenses from homebuilding activities
increased by 25.3%,  to $187.3 million in the three months ended March 31, 2003,
from  $149.5  million  in the  comparable  period of 2002.  As a  percentage  of
homebuilding  revenues,  SG&A expenses  increased 0.5 percentage point, to 10.0%
for the three months ended March 31, 2003, from 9.5% in the comparable period of
2002, due primarily to the fixed costs leverage  achieved by the large amount of
home closings revenues generated by the Schuler operating  divisions between the
Schuler acquisition date, February 21, 2002, and March 31, 2002.

Interest  expense  associated  with  homebuilding   activities  decreased  to  a
negligible amount in the three months ended March 31, 2003, from $2.6 million in
the comparable  period of 2002. Due to the declining  interest rate  environment
experienced  throughout fiscal 2003, our total interest costs as a percentage of
average  interest-bearing debt declined. Also, throughout the three months ended
March 31, 2003, inventory under construction or development grew at a more rapid
pace  than  interest-  bearing  debt.  Therefore,  virtually  all of  the  total
homebuilding  interest  incurred  was  capitalized  to  inventory in the current
quarter.  During both periods,  we expensed the portion of incurred interest and
other financing  costs which could not be capitalized to inventory.  Capitalized
interest  and other  financing  costs are  included in cost of sales at the time
homes are closed.

Other income  associated  with  homebuilding  activities was $0.1 million in the
three months ended March 31,  2003,  compared to $2.4 million in the  comparable
period of 2002.  The income in both  quarters was  primarily due to increases in
the fair value of our interest rate swap agreements.

Six Months Ended March 31, 2003 Compared to Six Months Ended March 31, 2002

Revenues from  homebuilding  activities  increased  31.9%,  to $3,575.5  million
(15,402  homes  closed) for the six months ended March 31, 2003,  from  $2,711.2
million (12,330 homes closed) for the comparable  period of 2002.  Revenues from
home  sales  increased  in  all of  the  Company's  five  market  regions,  with
percentage  increases  ranging  from 1.4% in the Midwest  region to 46.3% in the
West region. The increases in total homebuilding revenues and revenues from home
sales were due to strong housing demand  throughout the majority of our markets,
and the acquisition of Schuler. Excluding the activities of Schuler prior to the
February  21, 2003  anniversary  date of the  acquisition,  home sales  revenues
increased  11.5% to $2,966.2  million  (13,878  homes closed) for the six months
ended March 31,  2003,  from  $2,660.1  million  (12,330  homes  closed) for the
comparable period of 2002.  Revenues from the sale of land and lots increased by
$80.1 million, to $131.2 million in the six months ended March 31, 2003.

The average  selling price of homes closed during the six months ended March 31,
2003 was  $223,600,  up 3.7% from  $215,700  for the same  period  in 2002.  The
increase in average selling price was primarily due to the Schuler  acquisition.
Schuler's  operations are  concentrated  on the West Coast and in Hawaii,  where
average home  selling  prices are  significantly  higher than in the rest of the
United States.

The value of net new sales orders  increased  44.9%, to $4,138.0 million (17,800
homes) for the six months ended March 31, 2003,  from $2,854.9  million  (13,761
homes) for the same period of 2002. The value of net new sales orders  increased
in all of the Company's five market regions,  with percentage  increases ranging
from 15.5% in the  Mid-West  region to 82.5% in the West region.  Excluding  the
activities  of Schuler  prior to the February 21, 2003  anniversary  date of the
acquisition,  the value of net new sales  orders  increased  20.1%,  to $3,428.5
million  (15,781  homes) for the six months ended March 31, 2003,  from $2,854.9
million (13,761 homes) for the comparable period of 2002. The average price of a
net new sales  orders in the six months  ended March 31, 2003 was  $232,500,  up
12.0% over the $207,500  average in the six months ended March 31, 2002,  due to
increased sales orders in the West region, which has the highest average selling
price.

Cost of sales  increased  30.1%,  to $2,864.9  million for the six months  ended
March 31, 2003,  from $2,201.9  million for the  comparable  period of 2002. The
increase  in cost  of  sales  was  primarily  attributable  to the  increase  in
revenues.  Cost of home sales as a percentage of home sales  revenues  decreased
1.2 percentage  points,  to 79.9% for the six months ended March 31, 2003,  from
81.1%  for the  comparable  period  of  2002.  A  significant  portion  of costs
associated with the sales of inventory acquired in the Schuler acquisition, with

                                      -22-




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




lower  gross  margins  as a  result  of  purchase  accounting  adjustments  that
increased  the  acquired  inventory  to  its  fair  value  as  of  the  date  of
acquisition, was recognized in the six months ended March 31, 2002. For the same
reason,  total  homebuilding cost of sales as a percentage of total homebuilding
revenues decreased 1.1 percentage points, to 80.1% in the six months ended March
31, 2003, from 81.2% in the comparable period of 2002.

Selling, general and administrative (SG&A) expenses from homebuilding activities
increased  by 36.8%,  to $366.5  million in the six months ended March 31, 2003,
from  $267.9  million  in the  comparable  period of 2002.  As a  percentage  of
homebuilding revenues, SG&A expenses increased to 10.3% for the six months ended
March 31, 2003,  from 9.9% for the  comparable  period of 2002, due primarily to
the fixed costs leverage  achieved by the large amount of home closings revenues
generated by the Schuler  operating  divisions  between the Schuler  acquisition
date, February 21, 2002, and March 31, 2002.

Interest  expense  associated  with  homebuilding  activities  decreased to $0.4
million  in the six  months  ended  March 31,  2003,  from $3.8  million  in the
comparable  period  of 2002.  Due to the  declining  interest  rate  environment
experienced  throughout fiscal 2003, our total interest costs as a percentage of
average  interest-bearing  debt declined.  Also, throughout the six months ended
March 31, 2003, inventory under construction or development grew at a more rapid
pace  than  interest-bearing  debt.  Therefore,   virtually  all  of  the  total
homebuilding  interest  incurred was  capitalized to inventory in the six months
ended March 31, 2003.  During both periods,  the Company expensed the portion of
incurred  interest  and other  financing  costs  which  could not be  charged to
inventory.  The  Company  follows  a policy  of  capitalizing  interest  only on
inventory  under  construction or  development.  Capitalized  interest and other
financing costs are included in cost of sales at the time of home closings.

Other income associated with homebuilding activities was $0.3 million in the six
months  ended March 31, 2003,  compared to other  expense of $0.1 million in the
comparable  period of 2002. The expense in 2002 was primarily due to write-downs
to estimated fair value of the carrying  amounts of our  investments in start-up
and emerging growth  companies,  offset in part by an increase in the fair value
of our interest rate swap agreements during the period.

RESULTS OF OPERATIONS - FINANCIAL SERVICES

Financial  services  include  mortgage  financing and title insurance agency and
closing services,  primarily related to purchases of homes we build and sell. We
provide mortgage services in Arizona,  California,  Colorado,  Florida, Georgia,
Illinois, Maryland, Minnesota, Nevada, New Mexico, North Carolina, Oregon, South
Carolina,  Texas,  Virginia and Washington.  We provide title agency and closing
services in Arizona, Florida, Georgia, Maryland,  Minnesota, Texas, Virginia and
Washington.  The following table summarizes  financial and other information for
our financial services operations:




                                                             Three Months Ended   Six Months Ended
                                                                  March 31,           March 31,
                                                             ------------------  ------------------
                                                               2003      2002      2003      2002
                                                             --------  --------  --------  --------
                                                                         ($ in thousands)
                                                                              
Number of loans originated .................................    6,374     4,024    12,602     8,447
                                                             --------  --------  --------  --------
Loan origination fees ...................................... $  7,200  $  4,175  $ 13,932  $  8,818
Sale of servicing rights and gains from sale of mortgages ..   21,046    11,239    41,180    24,300
Other revenues .............................................    3,873     2,894     7,508     4,633
                                                             --------  --------  --------  --------
Total mortgage banking revenues ............................   32,119    18,308    62,620    37,751
Title policy premiums, net .................................    7,647     5,557    15,387    11,036
                                                             --------  --------  --------  --------
Total revenues .............................................   39,766    23,865    78,007    48,787
General and administrative expense .........................   22,235    14,918    44,242    30,041
Interest expense ...........................................    1,482       999     3,549     2,335
Interest/other (income) ....................................   (4,982)   (2,818)  (10,910)   (5,862)
                                                             --------  --------  --------  --------
Income before income taxes ................................. $ 21,031  $ 10,766  $ 41,126  $ 22,273
                                                             ========  ========  ========  ========




                                      -23-




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




Three Months Ended March 31, 2003 Compared to Three Months Ended March 31, 2002

Revenues from the financial  services segment  increased 66.6%, to $39.8 million
in the three months ended March 31, 2003,  from $23.9 million in the  comparable
period of 2002. The increase in financial services revenues was due to the rapid
expansion of our mortgage loan and title  services  provided to customers of our
homebuilding  segment.  General  and  administrative  expenses  associated  with
financial  services  increased 49.0%, to $22.2 million in the three months ended
March 31,  2003,  from $14.9  million  in the  comparable  period of 2002.  As a
percentage of financial services revenues,  general and administrative  expenses
decreased 6.6  percentage  points,  to 55.9% in the three months ended March 31,
2003, from 62.5% in the comparable period in 2002, due primarily to efficiencies
realized with the increase in revenues in markets entered in 2002.

Six Months Ended March 31, 2003 Compared to Six Months Ended March 31, 2002

Revenues from the financial  services segment  increased 59.9%, to $78.0 million
in the six months ended March 31,  2003,  from $48.8  million in the  comparable
period of 2002. The increase in financial services revenues was due to the rapid
expansion  of the  Company's  mortgage  loan  and  title  services  provided  to
customers of the  Company's  homebuilding  segment.  General and  administrative
expenses associated with financial services increased 47.3%, to $44.2 million in
the six months ended March 31, 2003, from $30.0 million in the comparable period
of  2002.  As  a  percentage  of  financial  services   revenues,   general  and
administrative  expenses decreased by 4.9 percentage points, to 56.7% in the six
months ended March 31, 2003,  from 61.6% in the  comparable  period in 2002, due
primarily  to  efficiencies  realized  with the  increase in revenues in markets
entered in 2002.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2003, we had available cash and cash equivalents of $187.5 million.
Inventories  (including finished homes,  construction in progress, and developed
residential  lots and other land),  at March 31, 2003,  had  increased by $393.1
million since September 30, 2002, due to a general increase in business activity
and the expansion of operations in our market areas. The inventory  increase was
financed  largely  by  issuing  senior  notes  and by  retaining  earnings.  Our
revolving  credit facility had $50 million  outstanding at March 31, 2003 and no
amount  outstanding  at September  30,  2002.  Our ratio of  homebuilding  notes
payable (net of cash) to total capital at March 31, 2003 and September 30, 2002,
remained  constant at 51.3%.  The  stockholders'  equity to total  assets  ratio
increased  0.8  percentage  point,  to 38.5% at March 31,  2003,  from  37.7% at
September 30, 2002.

We have an $805 million,  unsecured  revolving credit  facility,  including $125
million which may be used for letters of credit. The facility matures in January
2006, and is guaranteed by substantially  all of our  wholly-owned  subsidiaries
other than those that make up our financial services segment. At March 31, 2003,
we had  outstanding  homebuilding  debt of  $2,763.3  million.  Under  the  debt
covenants  associated  with  the  revolving  credit  facility,   our  additional
borrowing  capacity  under it is limited to the lesser of the unused  portion of
the facility,  $633.3 million at March 31, 2003, or an amount determined under a
borrowing base arrangement.  Under the borrowing base limitation, the sum of our
senior debt and the amount  drawn under our  revolving  credit  facility may not
exceed  certain  percentages  of the  various  categories  of  our  unencumbered
inventory.  At March 31, 2003, the borrowing base arrangement would have limited
our additional  borrowing capacity from any source to $1,327.5 million. At March
31, 2003,  we were in  compliance  with all of the  covenants,  limitations  and
restrictions  that  form a part of our  public  debt  obligations  and our  bank
revolving  credit facility.  We have entered into multi-year  interest rate swap
agreements,  aggregating a notional amount of $200 million, that have the effect
of fixing the interest rate on a portion of the variable rate  revolving  credit
facility at 5.1%.

In the  normal  course of  business,  we provide  standby  letters of credit and
performance bonds,  issued by third parties, to secure performance under various
contracts.  At March  31,  2003,  outstanding  standby  letters  of  credit  and
performance  bonds,  the  majority of which  mature in less than one year,  were
$144.4 million and $1,044.2 million, respectively.


                                      -24-




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



At March 31, 2003,  our financial  services  segment had mortgage loans held for
sale of $424.7 million and loan  commitments  for $387.3 million at fixed rates.
We hedge the  interest  rate risk on these  mortgage  loans  and  mortgage  loan
commitments  through the use of  best-efforts  whole loan delivery  commitments,
forward  sales of  mortgage-backed  securities  and the  infrequent  purchase of
options on  financial  instruments.  We record  gains or losses  related to such
hedging  instruments in other income as their market values  change.  Such gains
and losses have not  significantly  affected our financial  services  results of
operations.

As of March  31,  2003,  our  financial  services  segment  had a $190  million,
one-year  mortgage  warehouse bank facility that matures on August 12, 2003, and
is secured by certain  mortgage  loans  held for sale.  The  mortgage  warehouse
facility  is  not  guaranteed  by  either  the  parent  company  or  any  of the
subsidiaries  that guarantee our homebuilding debt and is expected to be renewed
at  maturity in the  ordinary  course of  business.  At March 31,  2003,  $155.6
million had been drawn under the mortgage warehouse  facility.  Our wholly-owned
mortgage company completed a new $100 million  mortgage-backed  commercial paper
conduit  facility  ("CP  conduit  facility")  in July  2002.  The  facility  was
increased to $200 million in November 2002. Although the agreement governing the
CP conduit facility expires on July 3, 2005,  maintenance of the facility beyond
the first (and subsequent)  anniversary date(s) must be annually approved by the
sponsoring  bank.  The CP conduit  facility is also secured by certain  mortgage
loans held for sale and is not guaranteed by either the parent company or any of
the  subsidiaries  that guarantee our  homebuilding  debt. As of March 31, 2003,
$170.0 million had been drawn under the CP conduit facility.  The mortgage loans
pledged  to  secure  the  CP  conduit   facility  are  used  as  collateral  for
mortgage-backed  securities  sold in the secondary  commercial  paper markets at
rates that are more attractive than those  applicable to the mortgage  warehouse
facility.  All  mortgage  company  activities  are  financed  under the mortgage
warehouse  and CP conduit  facilities.  Both of the financial  services'  credit
facilities contain financial covenants with which we are in compliance.

Our  historical  strategy  of  internal  growth  and growth by  acquisition  has
required  significant  amounts  of cash.  It is  anticipated  that  future  home
construction,  lot and land  purchases and  acquisitions  will be funded through
internally  generated  funds,  existing  and future  credit  facilities  and the
issuance of new debt or equity  securities.  Under a currently  effective  shelf
registration  statement, we have approximately 15 million shares of common stock
issuable to effect,  in whole or in part,  possible future  acquisitions.  Under
another effective shelf registration  statement, we have, at April 17, 2003, the
capacity to issue new debt or equity  securities  amounting to $585 million.  In
the  future,  the  Company  intends to  continue  to  maintain  effective  shelf
registration statements that will facilitate access to the capital markets.

On December 3, 2002,  we issued $215 million of 7.5% Senior notes due 2007.  The
net  proceeds  from  this  offering  were  used to repay  borrowings  under  the
unsecured revolving credit facility. These notes are guaranteed by substantially
all  of  our  wholly-owned   subsidiaries  other  than  our  financial  services
subsidiaries.

On April 17, 2003,  we issued $200  million of 6 7/8% Senior notes due 2013.  On
May 23, 2003,  the majority of the net proceeds  from this offering will be used
to  redeem  the  approximately   $148.5  million   aggregate   principal  amount
outstanding  of our 10% senior notes due 2006, at a redemption  price of 100% of
the principal amount plus accrued interest.

On May 12,  2003,  the holders of our zero coupon  convertible  senior notes due
2021 had an  opportunity to require us to purchase their notes for cash at their
accreted  value of  $559.73  per  note on that  date.  None of the note  holders
exercised  this right,  but if all of the note holders had elected to require us
to purchase all of their notes,  we would have been  required to purchase  notes
having a total  accreted  value of $213.3 million on that date. A combination of
cash  resources  available  from  operations and under our revolving bank credit
facility would have been adequate to meet our  obligations  associated  with any
exercise of the rights of our  convertible  note holders to require us to redeem
their notes on May 12, 2003.  Also,  repaying any notes submitted for redemption
would not have had any significant  adverse effects on our financial  condition,
operations or cash flows, except that we would have been required to write off a
pro-rata portion of unamortized  debt issuance costs that totaled  approximately
$4.8 million on that date.  Beginning on May 12, 2003, and continuing  until the
notes  maturity  date on May 11,  2021,  we will have the right to call the zero
coupon convertible senior notes. To redeem any notes that may be called, we must
pay the holder of each note, at the holder's option,  either the note's accreted
value at the date of redemption  in cash, or 26.2391  shares of our common stock
for each $1,000 note redeemed.

                                      -25-




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



In March  2003,  we  repurchased  1,672,500  shares of our common  stock in open
market purchases at an aggregate  purchase price of $29.5 million.  At March 31,
2003,  the  Company  had  $33.5  million  remaining  on a  board  of  directors'
authorization for repurchases of our common stock.

During the three months ended March 31, 2003, our Board of Directors  declared a
quarterly  cash dividend of $0.07 per common  share,  which was paid on February
14, 2003 to stockholders of record on February 3, 2003.

Except  for  ordinary  expenditures  for  the  construction  of  homes  and  the
acquisition  of land and lots for  development  and sale of homes,  at March 31,
2003, we had no material commitments for capital expenditures.

                                      -26-




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




SAFE HARBOR STATEMENT

Certain  statements  contained in this report,  as well as in other materials we
have filed or will file with the Securities and Exchange Commission,  statements
made by us in periodic press  releases and oral  statements we make to analysts,
stockholders  and the press in the  course  of  presentations  about us,  may be
construed as  "forward-looking  statements" as defined in the Private Securities
Litigation  Reform  Act of  1995.  These  forward-looking  statements  typically
include words such as "anticipate",  "believe", "expect", "estimate",  "project"
and  "future".  Any or all of the  forward-looking  statements  included in this
report and in any other of our reports or public  statements  may turn out to be
inaccurate due to known or unknown risks and uncertainties.  As a result, actual
results may differ  materially from the results  discussed in and anticipated by
the forward- looking statements.  The following risks and uncertainties relevant
to our  business  include  factors we believe  could  adversely  affect us. They
include, but are not limited to:

        - changes in general economic, real estate and business conditions;
        - changes in interest rates and the availability of mortgage financing;
        - governmental regulations and environmental matters;
        - our substantial leverage;
        - competitive conditions within our industry;
        - the availability of capital; and
        - our ability to effect our growth strategies successfully.

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



                                      -27-





ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

Our  interest  rate swaps  were not  designated  as hedges  under  Statement  of
Financial  Accounting  Standards No. 133 when it was adopted on October 1, 2000.
We are exposed to market risk  associated with changes in the fair values of the
swaps, since any such changes must be reflected in our income statements.

Our financial  services segment is exposed to interest rate risk associated with
its  mortgage  loan  origination  services.  Mortgage  loans are funded at fixed
interest rates before they are committed to specific investors and interest rate
lock  commitments  (IRLC's) are extended to borrowers  who have applied for loan
funding and who meet certain defined credit and underwriting  criteria.  Forward
sales of  mortgage-backed  securities are designated as fair value hedges of the
risk of changes in the overall fair value of funded loans. Accordingly,  changes
in the value of the derivative  instruments are recognized in current  earnings,
as are the changes in the value of the funded loans.  The  effectiveness  of the
fair value hedge is continuously  monitored and any  ineffectiveness,  which for
the  three  and six  month  periods  ended  March  31,  2003 and  2002,  was not
significant,  is recognized in current  earnings.  The IRLC's are classified and
accounted for as  non-designated  derivative  instruments  with gains and losses
recorded  in current  earnings.  Interest  rate risk  associated  with IRLC's is
managed  through  the use of best-  efforts  whole  loan  delivery  commitments,
forward  sales of  mortgage-backed  securities  and the  infrequent  purchase of
options   on   financial   instruments.   These   instruments   are   considered
non-designated derivatives and are accounted for at fair market value with gains
and losses recorded in current earnings.  At March 31, 2003, total forward sales
of  mortgage  backed  securities  to  mitigate  interest  rate risk  related  to
uncommitted  mortgage loans held for sale and IRLC's were  approximately  $237.0
million, the duration of which was less than nine months.

The following table shows, as of March 31, 2003, our long term debt obligations,
principal cash flows by scheduled maturity,  weighted average interest rates and
estimated fair market value. In addition,  the table shows the notional amounts,
weighted  average interest rates and estimated fair market value of our interest
rate swaps.




                                 Six Months                                                                      Fair
                                   Ended                                                                        market
                                September 30,              Year ended September 30,                            value at
                                               -------------------------------------------------
                                     2003       2004      2005        2006      2007    Thereafter    Total     3/31/03
                                  ---------  ---------  ---------  ---------  --------- ----------  ---------  ---------
                                                                    ($'s in millions)
                                                                                      
 Debt:
 Fixed rate ...................   $   34.7   $  172.8   $  216.2   $  153.9   $    1.1   $2,265.9   $2,844.6   $2,800.8
 Average interest rate ........       7.56%      8.42%     10.59%     10.11%      4.78%      8.08%      8.41%      --
 Variable rate ................   $  343.4   $    7.2       --     $   50.0       --         --     $  400.6   $  400.6
 Average interest rate ........       2.25%      3.95%      --         2.91%      --         --         2.36%      --
Interest Rate Swaps:
 Variable to fixed ............   $  200.0   $  200.0   $  200.0   $  200.0   $  200.0   $  200.0       --     $  (22.1)
 Average pay rate .............       5.10%      5.10%      5.10%      5.10%      5.10%      5.02%      --         --
 Average receive rate .........       90-day LIBOR






                                      -28-





ITEM 4.  CONTROLS AND PROCEDURES.

The  Company's   management  has  long  recognized  its   responsibilities   for
developing,  implementing  and monitoring  effective and efficient  controls and
procedures.  As part  of  those  responsibilities,  as of  March  31,  2003,  an
evaluation was performed under the supervision and with the participation of the
Company's  management,  including the Chief Executive  Officer ("CEO") and Chief
Financial  Officer ("CFO"),  of the effectiveness of the design and operation of
the Company's  disclosure controls and procedures as defined in Rule 13a - 14(c)
and Rule 15d - 14(c) under the  Securities  Exchange Act of 1934.  Based on that
evaluation, the CEO and CFO concluded that the Company's disclosure controls and
procedures  were  effective  in timely  alerting  them to  material  information
relating to the Company, including its consolidated subsidiaries, required to be
included in the  Company's  periodic  filings with the  Securities  and Exchange
Commission.  There have been no  significant  changes in the Company's  internal
controls or in other  factors that could  significantly  affect  these  controls
subsequent to March 31, 2003. Accordingly, there have been no corrective actions
taken as no significant  deficiencies  or material  weaknesses  were detected in
these controls.




                                      -29-





PART II.    OTHER INFORMATION

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS.

On January 30, 2003,  the Company held its Annual Meeting of  Stockholders  (the
"Annual Meeting"). At the Annual Meeting, the Company's stockholders approved an
amendment to the Company's Amended and Restated Certificate of Incorporation, as
amended,  to increase the number of  authorized  shares of Common Stock from 200
million to 400 million.


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

     (a) At the Company's  Annual Meeting,  the stockholders  re-elected  eleven
members of the Board of  Directors  of the Company to serve until the  Company's
next annual meeting of stockholders  and until their  respective  successors are
elected and qualified. The names of the eleven directors, the votes cast for and
the number of votes withheld were as follows:


Name                                  Votes For            Votes Withheld
--------------------                 -----------           --------------
Donald R. Horton                     112,485,401              27,220,263
Bradley S. Anderson                  133,533,061               6,172,603
Richard Beckwitt                     133,331,981               6,373,682
Samuel R. Fuller                     112,621,992              27,083,672
Richard I. Galland                   133,528,499               6,177,165
Richard L. Horton                    133,057,494               6,648,170
Terrill J. Horton                    133,071,894               6,633,770
Francine I. Neff                     133,569,536               6,136,128
James K. Schuler                     112,071,930              27,633,734
Scott J. Stone                       114,208,284              25,497,446
Donald J. Tomnitz                    112,060,506              27,645,158

     (b) At the Company's Annual Meeting,  a vote was taken for the approval and
adoption of a proposal to amend the Company's  Amended and Restated  Certificate
of  Incorporation,  as amended,  to increase the number of authorized  shares of
Common Stock from 200 million to 400 million.  The votes cast for this  proposal
were as follows:


        For:                         130,984,786
        Against:                       8,436,988
        Abstain:                         283,639







                                      -30-





ITEM 5.  OTHER INFORMATION.

On May 12, 2003,  the Company was advised by the paying  agent,  American  Stock
Transfer  &  Trust  Company,  that  none  of  the  holders  of the  Zero  Coupon
Convertible  Senior  Notes  presented  their  notes for  purchase by the Company
pursuant  to the  holders'  put option  which  commenced  on March 31,  2003 and
expired on May 12,  2003 at 5 p.m.  New York City  time.  At  expiration  of the
offer,  $381,113,000 of the Zero Coupon  Convertible Senior Notes at maturity in
2021 remain outstanding and subject to their existing terms.



                                      -31-





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


         (a) Exhibits.

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

             3.1(a)     Amendment to Amended and Restated Certificate of
                        Incorporation, as amended, of the Company, effective
                        February 6, 2003, is incorporated by reference from
                        Exhibit 3.1(a) to the Company's Quarterly Report on
                        Form 10-Q/A for the quarter ended December 31, 2002,
                        filed with the Commission on February 18, 2003.

             3.2        Amended and Restated Bylaws of the Company are
                        incorporated by reference from Exhibit 3.1 to the
                        Company's Quarterly Report on Form 10-Q for the quarter
                        ended December 31, 1998, filed with the Commission on
                        February 16, 1999.

             99.1 *     Certificate provided pursuant to 18 U.S.C. Section 1350,
                        as adopted pursuant to Section 906 of the Sarbanes-Oxley
                        Act of 2002, by the Company's Chief Executive Officer.

             99.2 *     Certificate provided pursuant to 18 U.S.C. Section 1350,
                        as adopted pursuant to Section 906 of the Sarbanes-Oxley
                        Act of 2002, by the Company's Chief Financial Officer.


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




         (b) Reports on Form 8-K.
             1.         On February 14, 2003, the Company filed a Current Report
                        on Form 8-K (Item 9), dated February 14, 2003, which
                        submitted to the Commission Section 906 certifications
                        made by the Chief Executive Officer and Chief Financial
                        Officer of the Company as required by the Sarbanes-Oxley
                        Act of 2002.

             2.         On February 18, 2003, the Company filed a Current Report
                        on Form 8-K (Item 9), dated February 18, 2003, which
                        submitted to the Commission Section 906 certifications
                        made by the Chief Executive Officer and Chief Financial
                        Officer of the Company as required by the Sarbanes-Oxley
                        Act of 2002.





                                      -32-





                                   SIGNATURES


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


                                   D.R. HORTON, INC.



Date: May 13, 2003                By      /s/ Samuel R. Fuller
                                    ------------------------------------------
                                    Samuel R. Fuller, on behalf of D.R. Horton,
                                    Inc. and as Executive Vice President,
                                    Treasurer and Chief Financial Officer
                                    (Principal Financial and Accounting Officer)


                                      -33-






CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO
SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002


I, Donald J. Tomnitz, certify that:


1.    I have reviewed this quarterly report on Form 10-Q of D.R. Horton, Inc.;


2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;


3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in this
      quarterly report;


4.    The registrant's other certifying officers and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
      have:


      a)   designed such disclosure controls and procedures to ensure that
           material information relating to the registrant, including its
           consolidated subsidiaries, is made known to us by others within those
           entities, particularly during the period in which this quarterly
           report is being prepared;


      b)   evaluated the effectiveness of the registrant's disclosure controls
           and procedures as of a date within 90 days prior to the filing date
           of this quarterly report (the "Evaluation Date"); and


      c)   presented in this quarterly report our conclusions about the
           effectiveness of the disclosure controls and procedures based on our
           evaluation as of the Evaluation Date;


5.    The registrant's other certifying officers and I have disclosed, based on
      our most recent evaluation, to the registrant's auditors and the audit
      committee of registrant's board of directors (or persons performing the
      equivalent functions):


      a)   all significant deficiencies in the design or operation of internal
           controls which could adversely affect the registrant's ability to
           record, process, summarize and report financial data and have
           identified for the registrant's auditors any material weaknesses in
           internal controls; and


      b)   any fraud, whether or not material, that involves management or other
           employees who have a significant role in the registrant's internal
           controls; and

                                      -34-



6.    The registrant's other certifying officers and I have indicated in this
      quarterly report whether there were significant changes in internal
      controls or in other factors that could significantly affect internal
      controls subsequent to the date of our most recent evaluation, including
      any corrective actions with regard to significant deficiencies and
      material weaknesses.

      Date: May 13, 2003                  /s/ Donald J. Tomnitz
                                         ------------------------------------
                                          By:  Donald  J. Tomnitz
                                               Vice Chairman, Chief Executive
                                               Officer and President






                                      -35-





I, Samuel R. Fuller, certify that:



1.    I have reviewed this quarterly report on Form 10-Q of D.R. Horton, Inc.;


2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;


3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in this
      quarterly report;


4.    The registrant's other certifying officers and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
      have:


      a)   designed such disclosure controls and procedures to ensure that
           material information relating to the registrant, including its
           consolidated subsidiaries, is made known to us by others within those
           entities, particularly during the period in which this quarterly
           report is being prepared;


      b)   evaluated the effectiveness of the registrant's disclosure controls
           and procedures as of a date within 90 days prior to the filing date
           of this quarterly report (the "Evaluation Date"); and


      c)   presented in this quarterly report our conclusions about the
           effectiveness of the disclosure controls and procedures based on our
           evaluation as of the Evaluation Date;


5.    The registrant's other certifying officers and I have disclosed, based on
      our most recent evaluation, to the registrant's auditors and the audit
      committee of registrant's board of directors (or persons performing the
      equivalent functions):


      a)   all significant deficiencies in the design or operation of internal
           controls which could adversely affect the registrant's ability to
           record, process, summarize and report financial data and have
           identified for the registrant's auditors any material weaknesses in
           internal controls; and


      b)   any fraud, whether or not material, that involves management or other
           employees who have a significant role in the registrant's internal
           controls; and



                                      -36-






6.    The registrant's other certifying officers and I have indicated in this
      quarterly report whether there were significant changes in internal
      controls or in other factors that could significantly affect internal
      controls subsequent to the date of our most recent evaluation, including
      any corrective actions with regard to significant deficiencies and
      material weaknesses.





      Date: May 13, 2003                  /s/ Samuel R. Fuller
                                         --------------------------------------
                                          By:  Samuel R. Fuller
                                               Executive Vice President,
                                               Treasurer and Chief Financial
                                               Officer




                                      -37-


Index to Exhibits


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

       3.1(a)    Amendment to Amended and Restated Certificate of Incorporation,
                 as amended, of the Company, effective February 6, 2003, is
                 incorporated by reference from Exhibit 3.1(a) to the Company's
                 Quarterly Report on Form 10-Q/A for the quarter ended December
                 31, 2002, filed with the Commission on February 18, 2003.

       3.2       Amended and Restated Bylaws of the Company are incorporated by
                 reference from Exhibit 3.1 to the Company's Quarterly Report on
                 Form 10-Q for the quarter ended December 31, 1998, filed with
                 the Commission on February 16, 1999.

      99.1 *     Certificate provided pursuant to 18 U.S.C. Section 1350,  as
                 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                 2002, by the Company's Chief Executive Officer.

      99.2 *     Certificate provided pursuant to 18 U.S.C. Section 1350,  as
                 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                 2002, by the Company's Chief Financial Officer.


*Filed herewith.