DAYTON POWER & LIGHT CO - 10-K Annual Report

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

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

For the fiscal year ended December 31, 1995
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 1-2385

THE DAYTON POWER AND LIGHT COMPANY
(Exact name of registrant as specified in its charter)

OHIO 31-0258470
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

Courthouse Plaza Southwest, Dayton, Ohio 45402
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: 513-224-6000

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

Name of each exchange on
Title of each class which registered
------------------- ------------------------
First Mortgage Bonds
8% Series Due 2003 New York Stock Exchange

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

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

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
---- ----
Number of shares of registrant's common stock outstanding as of
February 29, 1996, all of which were held by DPL Inc.,
was 41,172,173.

PART I

Item 1 - Business*
- ------------------------------------------------------------------------------

THE COMPANY

The Dayton Power and Light Company (the "Company") is a
public utility incorporated under the laws of Ohio in 1911.
Located in West Central Ohio, it furnishes electric service to
476,000 retail customers in a 24 county service area of
approximately 6,000 square miles and furnishes natural gas
service to 294,000 customers in 16 counties. In addition, the
Company provides steam heating service in downtown Dayton, Ohio.
The Company serves an estimated population of 1.2 million.
Principal industries served include electrical machinery,
automotive and other transportation equipment, non-electrical
machinery, agriculture, paper, rubber and plastic products. The
Company's sales reflect the general economic conditions and
seasonal weather patterns of the area. In 1995, electric
revenues increased 9% with a 5% growth in sales to business
customers reflecting the continued strength of the West Central
Ohio economy. Higher sales to other public utilities and
increased residential sales due to weather conditions also
contributed to the revenue increase. Gas revenues and gas
purchased for resale decreased 6% and 12%, respectively, in 1995,
as lower gas costs offset the 4% growth in volumes. During 1995,
cooling degree days were 15% above the twenty year average and 9%
above 1994. Heating degree days in 1995 were 3% above the thirty
year average and 5% above 1994. Sales patterns will change in
future years as weather and the economy fluctuate. The Company
employed 2,908 persons as of December 31, 1995, of which 2,424
are full-time employees and 484 are part-time employees.

All of the outstanding shares of common stock of the Company
are held by DPL Inc., which became the Company's corporate
parent, effective April 21, 1986. Subsidiaries of the Company
include MacGregor Park, Inc., an owner and developer of real
estate; DP&L Community Urban Redevelopment Corporation, an agent
for the Company in the office space leasing business of an eleven
story building owned by the Company; and Miami Valley Equipment,
Inc., which owns equipment and has made investments in non-
utility interests.

The Company's principal executive and business office is
located at Courthouse Plaza Southwest, Dayton, Ohio 45402 -
telephone (513)224-6000.

Information relating to industry segments is contained in
Item 8 - Note 12 of Notes to Consolidated Financial Statements on
Page II-23 of this document, which Note is incorporated herein by
reference.

* Unless otherwise indicated, the information given in
"Item 1 - BUSINESS" is current as of March 21, 1996. No
representation is made that there have not been subsequent
changes to such information.

I-1

COMPETITION

The Company competes with privately and municipally owned
electric utilities and rural electric cooperatives, natural gas
suppliers and other alternate fuel suppliers. The Company
competes on the basis of price and service.

Like other utilities, the Company from time to time may have
electric generating capacity available for sale to other
utilities. The Company competes with other utilities to sell
electricity provided by such capacity. The ability of the
Company to sell this electricity will depend on how the Company's
price, terms and conditions compare to those of other utilities.
In addition, from time to time, the Company makes power purchases
from neighboring utilities.

In an increasingly competitive energy environment,
cogenerated power may be used by customers to meet their own
power needs. Cogeneration is the dual use of a form of energy,
typically steam, for an industrial process and for the generation
of electricity. The Public Utilities Regulatory Policies Act of
1978 ("PURPA") provides regulations that govern the purchase of
excess electric energy from cogeneration and small power
production facilities that have obtained qualifying status under
PURPA.

The National Energy Policy Act of 1992, which reformed the
Public Utilities Holding Company Act, allows the federal
government to mandate access by others to a utility's electric
transmission system and may accelerate wholesale competition in
the supply of electricity.

The Company provides transmission and other wholesale
electric services to 12 municipal customers which distribute
electricity within their corporate limits. In 1994, 11 of these
municipal customers signed new 20-year service agreements which
were approved by the Federal Energy Regulatory Commission
("FERC") in June 1995. The twelfth municipal customer signed a
20-year agreement, approved by FERC in February 1995, that allows
the Company to supply 97% of its power requirements. In addition
to these municipal customers, the Company maintains an
interconnection agreement with one municipality which has the
capability to generate all or a portion of its energy
requirements. Sales to municipalities represented 1.2% of total
electricity sales in 1995.

In October 1994, the Public Utilities Commission of Ohio
("PUCO") initiated roundtable discussions on the introduction of
competition in the electric industry. The "Electric Competition
Series" is a result of the Ohio Energy Strategy issued in April
1994. To date, roundtable discussions have focused largely on
short-term initiatives

I-2

that are possible under the current regulatory framework. On
February 15, 1996, the PUCO issued guidelines for interruptible
service, including services that accommodate the attainment and
delivery of replacement electricity during periods when the
utility faces constraints on its own resources. Furthermore,
legislative proposals at the federal level are pending concerning
wholesale and retail wheeling which are designed to increase
competition. These factors increase the risk that the Company's
production plant and/or regulatory assets may not be fully
recovered in rates.

On March 29, 1995, FERC issued a Notice of Proposed
Rulemaking ("NOPR") seeking comments on an initiative to create a
more competitive wholesale electric power market. In its NOPR,
FERC announced its intent to require all electric utilities that
own or control transmission facilities to file open-access
transmission service tariffs. Open-access transmission tariffs
provide third parties with non-discriminatory transmission
service comparable to what the utility provides itself. In this
proposed rulemaking, FERC also states that it will enact a
principle that will entitle utilities to full recovery of
legitimate and verifiable stranded costs on both the state and
federal level. On December 13, 1995, FERC issued a NOPR that
prescribes rules for establishing and governing real-time
information networks ("RINs"). According to the NOPR, RINs would
provide potential wholesale transmission customers with
information about a utility's transmission system that would
enable them to obtain open-access, non-discriminatory
transmission service. Comments on this NOPR were due to FERC by
February 5, 1996. Final rules on these matters are expected in
1996.

General deregulation of the natural gas industry has
continued to prompt the influence of market competition as the
driving force behind natural gas procurement. The evolution of
an efficient natural gas spot market in combination with open
access interstate transportation pipelines has provided the
Company, as well as its end-use customers, with an array of
procurement options. Customers with alternate fuel capability
can continue to choose between natural gas and their alternate
fuel based upon overall economics. Therefore, demand for natural
gas purchased from the Company or purchased elsewhere and
transported to the end-use customer by the Company could
fluctuate based on the economics of each in comparison with
changes in alternate fuel prices. For the Company, price
competition and reliability among both natural gas suppliers and
interstate pipeline sources are major factors affecting
procurement decisions.

I-3

CONSTRUCTION AND FINANCING PROGRAM OF THE COMPANY

1996-2000 Construction Program

The estimated construction additions for the years 1996-2000
are set forth below:

Estimated
1996 1997 1998 1999 2000 1996-2000
---- ---- ---- ---- ---- ---------
millions
Electric generation and
transmission commonly owned
with neighboring utilities.... $ 29 $ 32 $ 34 $ 35 $ 37 $167
Other electric generation and
transmission facilities ...... 37 36 36 37 36 182
Electric distribution........... 34 36 35 35 35 175
General......................... 3 2 3 3 4 15
Gas, steam and other facilities. 14 14 14 15 15 72
---- ---- ---- ---- ---- ----
Total construction......... $117 $120 $122 $125 $127 $611

Estimated construction additions over the next five years
average $122 million annually which is less than the projected
depreciation expense over the same period.

The construction program includes plans for the construction
of a series of 75 MW combustion turbine generating units. The
first unit was completed under budget and ahead of schedule in
May 1995. The next unit is scheduled for completion in 1997.

Construction plans are subject to continuing review and are
expected to be revised in light of changes in financial and
economic conditions, load forecasts, legislative and regulatory
developments and changing environmental standards, among other
factors. The Company's ability to complete its capital projects
and the reliability of future service will be affected by its
financial condition, the availability of external funds at
reasonable cost and adequate and timely rate recovery.

See ENVIRONMENTAL CONSIDERATIONS for a description of
environmental control projects and regulatory proceedings which
may change the level of future construction additions. The
potential impact of these events on the Company's operations
cannot be estimated at this time.

I-4

1996-2000 Financing Program

The Company will require a total of $67 million during the
next five years for bond maturities and sinking funds in addition
to any funds needed for the construction program.

At year-end 1995, the Company had a cash and temporary
investment balance of $39 million. Proceeds from temporary cash
investments, together with internally generated cash and future
outside financings, will provide for the funding of the
construction program, sinking funds and general corporate
requirements.

In September 1995, a new series of Air Quality Development
Revenue Refunding Bonds was issued in principal amount of
$110 million with an interest rate of 6.10%. Proceeds from the
financing were used to redeem a similar principal amount of First
Mortgage Bonds with an interest rate of 9.50%.

In March 1994, DPL Inc. issued 3,200,000 shares of common
stock through a public offering. Proceeds from the sale were
used in connection with the redemption of all outstanding shares
of the Company's Preferred Stock Series D, E, F, H and I.

In November 1989, DPL Inc. entered into a revolving credit
agreement ("the Credit Agreement") with a consortium of banks
renewable through 1999 which allows total borrowings by DPL Inc.
and its subsidiaries of $200 million. The Company has authority
from the PUCO to issue short-term debt up to $200 million with a
maximum debt limit of $300 million including loans from DPL Inc.
under the terms of the Credit Agreement. At December 31, 1995,
DPL Inc. had no outstanding borrowings under this Credit
Agreement. The Company also has $97 million available in short-
term informal lines of credit. At year-end, the Company had no
borrowings outstanding from these lines of credit and no
commercial paper outstanding.

Under the Company's First and Refunding Mortgage, First
Mortgage Bonds may be issued on the basis of (i) 60% of unfunded
property additions, subject to net earnings, as defined, being at
least two times interest on all First Mortgage Bonds outstanding
and to be outstanding, and (ii) 100% of retired First Mortgage
Bonds. The Company anticipates that, during 1996-2000, it will
be able to issue sufficient First Mortgage Bonds to satisfy its
long-term debt requirements in connection with the financing of
its construction and refunding programs discussed above.

The maximum amount of First Mortgage Bonds which may be
issued in the future will fluctuate depending upon interest
rates, the amounts of bondable property additions, earnings and
retired First Mortgage Bonds. There are no coverage tests for
the issuance of preferred stock under the Company's Amended
Articles of Incorporation.

I-5

ELECTRIC OPERATIONS AND FUEL SUPPLY

The Company's present winter generating capability is
3,148,000 KW. Of this capability, 2,843,000 KW (approximately
90%) is derived from coal-fired steam generating stations and the
balance consists of combustion turbine and diesel-powered peaking
units. Approximately 87% (2,472,000 KW) of the existing steam
generating capability is provided by certain units owned as
tenants in common with Cincinnati Gas & Electric Company ("CG&E")
or with CG&E and Columbus Southern Power Company ("CSP"). Under
the agreements among the companies, each company owns a specified
undivided share of each facility, is entitled to its share of
capacity and energy output, and has a capital and operating cost
responsibility proportionate to its ownership share.

The remaining steam generating capability (371,000 KW) is
derived from a generating station owned solely by the Company.
The Company's all time net peak load was 2,961,000 KW, which
occurred in August 1995. The present summer generating
capability is 3,092,000 KW.

GENERATING FACILITIES
MW Rating
--------------
Operating Company
Station Ownership* Company Location Portion Total
------- ---------- --------- ---------- ------- -----

Coal Units
- ----------

Hutchings W Company Miamisburg, OH 371 371
Killen C Company Wrightsville, OH 402 600
Stuart C Company Aberdeen, OH 820 2,340
Conesville-Unit 4 C CSP Conesville, OH 129 780
Beckjord-Unit 6 C CG&E New Richmond, OH 210 420
Miami Fort-Units 7&8 C CG&E North Bend, OH 360 1,000
East Bend-Unit 2 C CG&E Rabbit Hash, KY 186 600
Zimmer C CG&E Moscow, OH 365 1,300

Combustion Turbines or Diesel
- -----------------------------

Hutchings W Company Miamisburg, OH 32 32
Yankee Street W Company Centerville, OH 144 144
Monument W Company Dayton, OH 12 12
Tait W Company Dayton, OH 10 10
Sidney W Company Sidney, OH 12 12
Tait Gas Turbine 1 W Company Moraine, OH 95 95

*W = Wholly Owned
C = Commonly Owned

I-6

In order to transmit energy to their respective systems from
their commonly owned generating units, the companies have
constructed and own, as tenants in common, 847 circuit miles of
345,000-volt transmission lines. The Company has several
interconnections with other companies for the purchase, sale and
interchange of electricity.

The Company derived over 99% of its electric output from
coal-fired units in 1995. The remainder was derived from units
burning oil or natural gas which were used to meet peak demands.

The Company estimates that approximately 65-85% of its coal
requirements for the period 1996-2000 will be obtained through
long-term contracts, with the balance to be obtained by spot
market purchases. The Company has been informed by CG&E and CSP
through the procurement plans for the commonly owned units
operated by them that sufficient coal supplies will be available
during the same planning horizon.

The prices to be paid by the Company under its long-term
coal contracts are subject to adjustment in accordance with
various indices. Each contract has features that will limit
price escalations in any given year.

The total average price per million British Thermal Units
("MMBTU") of coal received was $1.35/MMBTU in 1995, $1.39/MMBTU
in 1994 and $1.46/MMBTU in 1993.

The average fuel cost per kWh generated of all fuel burned
for electric generation (coal, gas and oil) for the year was
1.36 cents which represents a decrease from 1.42 cents in 1994 and
1.43 cents in 1993. Through the operation of a fuel cost adjustment
clause applicable to electric sales, the increases and decreases in fuel
costs are reflected in customer rates on a timely basis. See
RATE REGULATION AND GOVERNMENT LEGISLATION and ENVIRONMENTAL
CONSIDERATIONS.

GAS OPERATIONS AND GAS SUPPLY

The Company has long-term firm pipeline transportation
agreements with ANR Gas Pipeline Company ("ANR"), Texas Gas
Transmission Corporation ("Texas Gas"), Panhandle Eastern Pipe
Line Company ("Panhandle"), Columbia Gas Transmission Corporation
("Columbia") and Columbia Gulf Transmission Corporation for
varying terms, up to late 2004. Along with firm transportation
services, the Company has approximately 16 billion cubic feet of
firm storage service with various pipelines. The Company also
maintains and operates four propane-air plants with a daily rated
capacity of approximately 70,000 thousand cubic feet ("MCF") of
natural gas.

I-7

In addition, the Company is interconnected with CNG
Transmission Corporation. Interconnections with interstate
pipelines provide the Company the opportunity to purchase
competitively-priced natural gas supplies and pipeline services.
The Company purchases its natural gas supplies using a portfolio
approach that minimizes price risks and ensures sufficient firm
supplies, at peak demand times. The portfolio consists of long-
term, short-term and spot supply agreements. In 1995, firm
agreements provided approximately 50% of total supply, with the
remaining supplies purchased on a spot/short-term basis.

In 1995, the Company purchased natural gas at an average
price of $2.79 per MCF, compared to $3.34 per MCF in 1994 and
$3.65 per MCF in 1993. Through the operation of a natural gas
cost adjustment clause applicable to gas sales, increases and
decreases in the Company's natural gas costs are reflected in
customer rates on a timely basis. SEE RATE REGULATION AND
GOVERNMENT LEGISLATION.

The PUCO supports open access, nondiscriminatory
transportation of natural gas by the state's local distribution
companies for end-use customers. The PUCO has guidelines to
provide a standardized structure for end-use transportation
programs which requires a tariff providing the prices, terms and
conditions for such service. The Company has an approved tariff
and provides transportation service to approximately 300 end-use
customers, delivering a total quantity of nearly 16,376,000 MCF
per year.

On July 31, 1991, Columbia Gas System Inc. and Columbia, one
of the Company's major pipeline suppliers, filed separate
Chapter 11 petitions in U.S. Bankruptcy Court. Columbia's
reorganization plan was approved by the United States Bankruptcy
Court for the District of Delaware on November 15, 1995 and
became effective November 28, 1995. On the effective date,
Columbia made distributions to customers, including the Company,
for refunds and other claims made by customers against Columbia,
as provided in the Customer Settlement Agreement approved by FERC
on June 15, 1995. The resolution of the bankruptcy was favorable
to the Company, the shareholders of DPL Inc. and its customers.

On June 24, 1994, in Baltimore Gas & Electric Company v.
FERC, the U.S. Court of Appeals for the District of Columbia
Circuit decided in favor of Columbia's customers, including the
Company, by holding that a 1985 settlement between the parties
prohibited Columbia from collecting pre-1987 upstream take-or-pay
costs from its customers. FERC has approved a settlement of this
issue as a part of the bankruptcy settlement which was favorable
to the Company, the shareholders of DPL Inc. and its customers.

On October 6, 1994, the PUCO authorized the Company's plan
to use pipeline supplier refunds to partially offset transition
cost billings to natural gas customers. This approval has helped
stabilize gas costs while ensuring the Company's full recovery of
transition costs.

I-8

RATE REGULATION AND GOVERNMENT LEGISLATION

The Company's sales of electricity, natural gas and steam to
retail customers are subject to rate regulation by the PUCO and
various municipalities. The Company's wholesale electric rates
to municipal corporations and other distributors of electric
energy are subject to regulation by FERC under the Federal Power
Act.

Ohio law establishes the process for determining rates
charged by public utilities. Regulation of rates encompasses the
timing of applications, the effective date of rate increases, the
cost basis upon which the rates are based and other related
matters. Ohio law also establishes the Office of the Ohio
Consumers' Counsel (the "OCC"), which has the authority to
represent residential consumers in state and federal judicial and
administrative rate proceedings.

The Company's electric and natural gas rate schedules
contain certain recovery and adjustment clauses subject to
periodic audits by, and proceedings before, the PUCO. Electric
fuel and gas costs are expensed as recovered through rates.

Ohio legislation extends the jurisdiction of the PUCO to the
records and accounts of certain public utility holding company
systems, including DPL Inc. The legislation extends the PUCO's
supervisory powers to a holding company system's general
condition and capitalization, among other matters, to the extent
that they relate to the costs associated with the provision of
public utility service. Additionally, the legislation requires
PUCO approval of (i) certain transactions and transfers of assets
between public utilities and entities within the same holding
company system, and (ii) prohibits investments by a holding
company in subsidiaries which are not public utilities in an
amount in excess of 15% of the aggregate capitalization of the
holding company on a consolidated basis at the time such
investments are made.

As a part of a 1992 PUCO-approved settlement agreement
("Agreement") among the Company and various consumer groups, the
third and final phase of an electric rate increase of 6.4% took
effect in January 1994. Deferrals (including carrying charges)
during the phase-in period are being recovered in current rates.

In addition, the Company agreed to undertake cost-effective
demand-side management ("DSM") programs with an average annual
cost of $15 million for 1992-1995. These costs are deferred and
are being recovered at approximately $9 million per year.

I-9

The Agreement and a subsequent stipulation in 1995 (the
"1995 stipulation") allowed accelerated recovery of DSM costs
and, thereafter, production plant costs in the event that the
Company return on equity exceeds a baseline 13% (subject to
upward adjustment). If the return exceeds the baseline return by
one to two percent, one-half of the excess will be used to
accelerate recovery of these costs. If the return is greater
than two percent over the baseline, the entire excess will be
used for such purpose. The 1995 stipulation also included
commitments to demand reduction programs through 2001.

Deferred interest charges on the William H. Zimmer
Generating Station ("Zimmer") are being amortized at
approximately $3 million per year over the projected life of the
asset.

Regulatory deferrals on the balance sheet were:

Dec. 31 Dec. 31
1995 1994
------- -------
--millions--

Phase-in $ 61.4 $ 75.9
DSM 36.2 31.9
Deferred interest-Zimmer 58.1 61.0
------ ------
Total $155.7 $168.8
====== ======

In 1989 the PUCO approved rules for the implementation of a
comprehensive Integrated Resource Planning ("IRP") program for
all investor-owned electric utilities in Ohio. Under this
program, each utility is required to file an IRP as part of its
Long Term Forecast Report ("LTFR"). The IRP requires each
utility to evaluate available demand-side resource options in
addition to supply-side options to determine the most cost-
effective means for satisfying customer requirements. The rules
currently allow a utility to apply for deferred recovery of DSM
program expenditures and lost revenues between LTFR proceedings.
Ultimate recovery of expenditures is contingent on review and
approval of such programs as cost-effective and consistent with
the most recent IRP proceeding. The rules also allow utilities
to submit alternative proposals for the recovery of DSM programs
and related costs.

In 1991 the PUCO issued a Finding and Order which encourages
electric utilities to undertake the competitive bidding of new
supply-side energy projects. The policy also encourages
utilities to provide transmission grid access to those supply-
side energy providers awarded bids by utilities. Electric
utilities are permitted to bid on their own proposals. The PUCO
has issued for comment proposed rules for competitive bidding but
has not issued final rules at this time.

I-10

The Company has in place a percentage of income payment plan
("PIPP") for eligible low-income households as required by the
PUCO. This plan prohibits disconnections for nonpayment of
customer bills if eligible low-income households pay a specified
percentage of their household income toward their utility bill.
The PUCO has approved a surcharge by way of a temporary base rate
tariff rider which allows companies to recover arrearages
accumulated under PIPP.

The Company initiated a competitive bidding process in
January 1993 for the construction of up to 140 MW of electric
peaking capacity and energy by 1997. Through an Ohio Power
Siting Board ("OPSB") investigative process, the Company's self-
built option was evaluated to be the least cost option. On
March 7, 1994, the OPSB approved the Company's applications for
up to three combustion turbines and two natural gas supply lines
for the proposed site. The first combustion turbine was
completed in May 1995 and became operational June 1, 1995.

On May 31, 1995 and June 1, 1995, respectively, the Company
filed its electric and natural gas LTFR with the PUCO. An IRP
filed as part of the electric LTFR included plans for the
construction of a series of 75 MW combustion turbine generating
units. The electric LTFR was approved by the PUCO on October 5,
1995. The natural gas LTFR was approved by the PUCO on
November 22, 1995.

Ronda H. Fergus was appointed to serve as a PUCO
commissioner for a five-year term, which commenced April 11,
1995. Commissioner Fergus was previously chief of the
telecommunications section of the Utilities Department at the
PUCO.

On January 25, 1996, Governor Voinovich reappointed Chairman
Craig A. Glazer to the PUCO for a five year term, pending
approval by the Senate of the State of Ohio. Chairman Glazer's
next term will commence after the expiration of his current term
on April 10, 1996 and extend until April 10, 2001.

ENVIRONMENTAL CONSIDERATIONS

The operations of the Company, including the commonly owned
facilities operated by the Company, CG&E and CSP, are subject to
federal, state, and local regulation as to air and water quality,
disposal of solid waste and other environmental matters,
including the location, construction and initial operation of new
electric generating facilities and most electric transmission
lines. The Company expended $4 million for environmental control
facilities during 1995. The possibility exists that current
environmental regulations could be revised which could change the
level of estimated 1996-2000 construction expenditures. See
CONSTRUCTION AND FINANCING PROGRAM OF THE COMPANY.

I-11

Air Quality

The Clean Air Act Amendments of 1990 (the "Act") have
limited sulfur dioxide and nitrogen oxide emissions nationwide.
The Act restricts emissions in two phases. Phase I compliance
requirements became effective on January 1, 1995 and Phase II
requirements will become effective on January 1, 2000.
Compliance by the Company has not caused any material changes in
the Company's costs or operations.

The Company's environmental compliance plan ("ECP") was
approved by the PUCO on May 6, 1993. Phase I requirements are
being met by switching to lower sulfur coal at several commonly
owned electric generating facilities and increasing existing
scrubber removal efficiency. Total capital expenditures to
comply with Phase I of the Act were approximately $5.5 million.
Phase II requirements can be met primarily by switching to lower
sulfur coal at all non-scrubbed coal-fired electric generating
units. Overall compliance is projected to have a minimal 1% to
2% approximate price impact. Costs to comply with the Act are
eligible for recovery in fuel hearings and other regulatory
proceedings.

As required by Ohio law, in April 1995, the PUCO initiated
proceedings to conduct a review of the Company's ECP. On
November 9, 1995, the PUCO approved the continued prudency of the
Company's ECP and the related update report.

Land Use

The Company and numerous other parties have been notified by
the United States Environmental Protection Agency ("U.S. EPA") or
the Ohio Environmental Protection Agency ("Ohio EPA") that it
considers them Potentially Responsible Parties ("PRPs") for clean-
up at four Superfund sites in Ohio: the Sanitary Landfill Site
on Cardington Road in Montgomery County, Ohio; the United Scrap
Lead Site in Miami County, Ohio; the Powell Road Landfill in
Huber Heights, Montgomery County, Ohio; and the North Sanitary
(a.k.a. Valleycrest) Landfill in Dayton, Montgomery County, Ohio.

The Company received notification from the U.S. EPA in July
1987 for the Cardington Road site. The Company has not joined
the PRP group formed at that site because of the absence of any
known evidence that the Company contributed hazardous substances
to this site. The Record of Decision issued by the U.S. EPA
identifies the chosen clean-up alternative at a cost estimate of
$8.1 million. The final resolution will not have a material
effect on the Company's financial position, earnings or cashflow.

I-12

The Company received notification from the U.S. EPA in
September 1987 for the United Scrap Lead Site. The Company has
joined a PRP group for this site, which is actively conferring
with the U.S. EPA. The initial Record of Decision issued by the
U.S. EPA estimating clean-up costs at $27.1 million has been
amended. The amended alternative estimates clean-up costs at
$32 million. The Company is one of over 200 parties to this
site, and its estimated contribution to the site is less than
.01%. Nearly 60 PRPs are actively working to settle the case.
The Company is participating in the sponsorship of a study to
evaluate alternatives to the U.S. EPA's clean-up plan. The U.S.
EPA is also currently considering a proposal for a less expensive
clean-up method. The final resolution will not have a material
effect on the Company's financial position, earnings or cashflow.

The Company and numerous other parties received notification
from the U.S. EPA on May 21, 1993 that it considers them PRPs for
clean-up of hazardous substances at the Powell Road Landfill Site
in Huber Heights, Ohio. The Company has joined the PRP group for
the site. On October 1, 1993, the U.S. EPA issued its Record of
Decision identifying a cost estimate of $20.5 million for the
chosen remedy. The Company is one of over 200 PRPs to this site,
and its estimated contribution is less than 1%. The final
resolution will not have a material effect on the Company's
financial position, earnings or cashflow.

The Company and numerous other parties received notification
from the Ohio EPA on July 27, 1994 that it considers them PRPs
for clean-up of hazardous substances at the North Sanitary
Landfill site in Dayton, Ohio. The Company has not joined the
PRP group formed for the site because the available information
does not demonstrate that the Company contributed wastes to the
site. The final resolution will not have a material effect on
the Company's financial position, earnings or cashflow.

I-13

THE DAYTON POWER AND LIGHT COMPANY
OPERATING STATISTICS
ELECTRIC OPERATIONS

Years Ended December 31,
------------------------
1995 1994 1993
---- ---- ----
Electric Output (millions of kWh)
General -
Coal-fired units................ 15,679 14,483 14,729
Other units..................... 29 27 17
Power purchases.................... 2,115 897 1,107
Exchanged and transmitted power.... 1 3 (7)
Company use and line losses........ (1,010) (1,191) (1,170)
--------- -------- --------
Total........................... 16,814 14,219 14,676
========= ======== ========
Electric Sales (millions of kWh)
Residential........................ 4,871 4,465 4,558
Commercial......................... 3,425 3,068 3,006
Industrial......................... 4,401 4,388 4,089
Public authorities and railroads... 1,378 1,333 1,356
Private utilities and wholesale.... 2,739 965 1,667
--------- -------- --------
Total........................... 16,814 14,219 14,676
========= ======== ========
Electric Customers at End of Period
Residential........................ 425,347 420,487 416,508
Commercial......................... 42,582 41,647 40,606
Industrial......................... 2,017 2,400 2,387
Public authorities and railroads... 5,573 5,320 5,287
Other.............................. 17 18 17
---------- -------- --------
Total........................... 475,536 469,872 464,805
========== ======== ========
Operating Revenues (thousands)
Residential........................ $422,153 $390,531 $373,760
Commercial......................... 237,799 218,046 200,124
Industrial......................... 224,135 228,546 205,996
Public authorities and railroads... 78,225 75,387 72,859
Private utilities and wholesale.... 57,799 24,273 38,491
Other.............................. 9,807 9,110 10,090
---------- -------- --------
Total........................... $1,029,918 $945,893 $901,320
========== ======== ========
Residential Statistics
(per customer-average)
Sales - kWh........................ 11,518 10,676 10,998
Revenue............................ $ 998.27 $ 933.70 $ 901.91
Rate per kWh (month of December)
(cents)........................... 8.01 8.68 7.99

I-14

THE DAYTON POWER AND LIGHT COMPANY
OPERATING STATISTICS
GAS OPERATIONS

Years Ended December 31,
------------------------
1995 1994 1993
---- ---- ----
Gas Output (thousands of MCF)
Direct market purchases.......... 44,376 43,140 44,284
Liquefied petroleum gas.......... 18 144 58
Company use and unaccounted for.. (1,594) (1,227) (1,164)
Transportation gas received...... 16,870 15,141 13,704
-------- -------- --------
Total......................... 59,670 57,198 56,882
======== ======== ========
Gas Sales (thousands of MCF)
Residential...................... 29,397 27,911 28,786
Commercial....................... 8,307 8,081 8,468
Industrial....................... 2,584 3,150 3,056
Public authorities............... 3,006 2,909 3,171
Transportation gas delivered .... 16,376 15,147 13,401
-------- -------- --------
Total......................... 59,670 57,198 56,882
======== ======== ========
Gas Customers at End of Period
Residential...................... 269,694 266,116 262,834
Commercial....................... 21,451 21,060 20,853
Industrial....................... 1,574 1,528 1,527
Public authorities............... 1,423 1,317 1,333
-------- -------- --------
Total 294,142 290,021 286,547
======== ======== ========

Operating Revenues (thousands)
Residential...................... $149,006 $157,193 $161,254
Commercial....................... 39,047 42,382 44,321
Industrial....................... 11,447 14,949 14,890
Public authorities............... 12,589 14,165 15,248
Other............................ 9,950 8,433 9,366
-------- -------- --------
Total......................... $222,039 $237,122 $245,079
======== ======== ========

Residential Statistics
(per customer-average)
Sales - MCF...................... 109.8 105.7 110.2
Revenue.......................... $ 556.72 $ 595.30 $ 617.33
Rate per MCF (month of December). $ 4.44 $ 5.57 $ 5.66

I-15

Item 2 - Properties
- ------------------------------------------------------------------------------

Electric

Information relating to the Company's electric properties is
contained in Item 1 - BUSINESS, THE COMPANY (page I-1),
CONSTRUCTION AND FINANCING PROGRAM OF THE COMPANY (pages I-4 and
I-5), ELECTRIC OPERATIONS AND FUEL SUPPLY (pages I-6 and I-7) and
Item 8 - Notes 2 and 5 of Notes to Consolidated Financial
Statements on pages II-14 and II-18, respectively, which pages
are incorporated herein by reference.

Gas

Information relating to the Company's gas properties is
contained in Item 1 - BUSINESS, THE COMPANY (page I-1), and GAS
OPERATIONS AND GAS SUPPLY (pages I-7 and I-8), which pages are
incorporated herein by reference.

Steam

The Company owns two steam generating plants and the steam
distribution facility serving downtown Dayton, Ohio.

Other

The Company owns a number of area service buildings located
in various operating centers.

Substantially all property and plant of the Company is
subject to the lien of the Mortgage securing the Company's First
Mortgage Bonds.

Item 3 - Legal Proceedings
- ------------------------------------------------------------------------------

Information relating to legal proceedings involving the
Company is contained in Item 1 - BUSINESS, THE COMPANY (page I-
1), COMPETITION (Pages I-2 and I-3) ELECTRIC OPERATIONS AND FUEL
SUPPLY (pages I-6 and I-7), GAS OPERATIONS AND GAS SUPPLY (pages
I-7 and I-8), RATE REGULATION AND GOVERNMENT LEGISLATION (pages I-
9 through I-11), ENVIRONMENTAL CONSIDERATIONS (pages I-11 through
I-13) and Item 8 - Note 2 of Notes to Consolidated Financial
Statements on page II-14, which pages are incorporated herein by
reference.

Item 4 - Submission Of Matters To A Vote Of Security Holders
- ------------------------------------------------------------------------------

None.

I-16

PART II

Item 5 - Market For Registrant's Common Equity And Related Stockholder
Matters
- ------------------------------------------------------------------------------

The Company's common stock is held solely by DPL Inc.
and as a result is not listed for trading on any stock exchange.

The information required by this item of Form 10-K is
set forth in Item 8 - Selected Quarterly Information on page II-
24 and the Financial and Statistical Summary on page II-25, which
pages are incorporated herein by reference.

The Company's Mortgage restricts the payment of
dividends on the Company's Common Stock under certain conditions.
In addition, so long as any Preferred Stock is outstanding, the
Company's Amended Articles of Incorporation contain provisions
restricting the payment of cash dividends on any of its Common
Stock if, after giving effect to such dividend, the aggregate of
all such dividends distributed subsequent to December 31, 1946
exceeds the net income of the Company available for dividends on
its Common Stock subsequent to December 31, 1946, plus
$1,200,000. As of year end, all earnings reinvested in the
business of the Company were available for Common Stock
dividends.

The Credit Agreement requires that the aggregate assets
of the Company and its subsidiaries constitute not less than 60%
of the total consolidated assets of DPL Inc., and that the
Company maintain common shareholder's equity (as defined in the
Credit Agreement) at least equal to $550 million.

Item 6 - Selected Financial Data
- ------------------------------------------------------------------------------

The information required by this item of Form 10-K is
set forth in Item 8 - Financial and Statistical Summary on page
II-25, which page is incorporated herein by reference.

II-1

Item 7 - Management's Discussion And Analysis Of Financial Condition
And Results Of Operations
- -------------------------------------------------------------------------

The Dayton Power and Light Company

Performance Highlights 1995 1994 1993
- ----------------------------------------------------------------
CAPITAL INVESTMENT PERFORMANCE:

Capital Structure (millions)
Common shareholder's equity.... $ 1,190.5 1,160.3 1,049.2
Preferred stock................ $ 22.9 22.9 112.9
Long-term debt ................ $ 991.5 1,003.7 1,012.9
------- ------- -------
Total...................... $ 2,204.9 2,186.9 2,175.0

OPERATING PERFORMANCE:

Electric--
Sales (millions of kWh)
Residential.................... 4,871 4,465 4,558
Commercial..................... 3,425 3,068 3,006
Industrial..................... 4,401 4,388 4,089
Other.......................... 4,117 2,298 3,023
------ ------ ------
Total 16,814 14,219 14,676

Revenues (millions)
Residential.................... $ 422.2 390.5 373.8
Commercial..................... $ 237.8 218.1 200.1
Industrial..................... $ 224.1 228.5 206.0
Other.......................... $ 145.8 108.8 121.4
------- ----- -----
Total...................... $ 1,029.9 945.9 901.3
Average price per kWh--retail
and wholesale customers
(calendar year) (cents)......... 6.07 6.59 6.07

Gas--
Sales (thousands of MCF)
Residential.................... 29,397 27,911 28,786
Commercial..................... 8,307 8,081 8,468
Industrial..................... 2,584 3,150 3,056
Other.......................... 19,382 18,056 16,572
------ ------ ------
Total...................... 59,670 57,198 56,882

Revenues (millions)
Residential.................... $ 149.0 157.2 161.3
Commercial..................... $ 39.0 42.4 44.3
Industrial..................... $ 11.4 14.9 14.9
Other.......................... $ 22.6 22.6 24.6
----- ----- -----
Total...................... $ 222.0 237.1 245.1

Average price per MCF--
all customers (calendar year)... $ 4.90 5.44 5.42

II-2

Results of Operations

The 1995 earnings on common stock are $159 million
compared to $148 million in 1994 and $135 million in 1993. The
return on equity of regulated business was 13.2% in 1995,
compared to 13.1% in 1994.

In 1995, electric revenues increased 9% with a 5%
growth in sales to business customers reflecting the continued
strength of the West Central Ohio economy. Higher sales to other
public utilities and increased residential sales due to weather
conditions also contributed to the revenue increase. Fuel and
purchased power expense increased 17% primarily related to the
increased electric sales. In 1994, electric revenues increased
5% with a 2% increase in retail sales. Implementation of the
last step of the electric rate increase phase-in of 6.4% also
caused 1994 revenues to increase. (See Financial Statement
Note 2.)

Gas revenues and gas purchased for resale decreased 6%
and 12%, respectively, in 1995, as lower gas costs offset the 4%
growth in volumes. Gas revenues decreased 3% in 1994. An
overall sales increase of 1% reflected strong sales to
transportation gas customers despite mild temperatures in late
1994.

Operation and maintenance expenses increased 12% in
1995 over 1994 primarily due to higher compensation and benefit
expenses, computer system development and bond redemption costs.
Operation and maintenance expense decreased 10% in 1994 from 1993
principally due to bond redemption costs incurred in 1993.

Regulatory assets recorded during the phase-in of
electric rates are being amortized and recovered in current
rates. In addition, deferred interest charges on the William H.
Zimmer Generating Station ("Zimmer") are being amortized at $3
million per year over the projected life of the asset.

A 1992 PUCO-approved settlement agreement and a
subsequent stipulation in 1995 allowed accelerated recovery of
demand-side management costs and, thereafter, production plant
costs in the event that the Company return on equity exceeds a
baseline 13% (subject to upward adjustment). If the return
exceeds the baseline return by one to two percent, one-half of
the excess will be used to accelerate recovery of these costs.
If the return is greater than two percent over the baseline, the
entire excess will be used for such purpose.

Preferred stock dividends decreased $4 million in 1995
and 1994 due to redemptions of several series of preferred stock
in 1994.

Total income taxes increased slightly in 1995 after a
29% increase in 1994 resulting from higher pre-tax earnings.

II-3

Credit Ratings

In March 1995, the Company's senior debt credit rating
was upgraded to "Aa3" from "A1" by Moody's Investors Service.
This marks the third credit rating increase from Moody's since
1992 and the highest credit rating with the agency since 1974.
The Moody's upgrade follows upgrades in 1994 by both Duff &
Phelps and Standard & Poor's ("S&P"). Duff & Phelps now rates the
Company's senior debt as "AA" and S&P as "AA-". Duff & Phelps
had previously upgraded the Company's credit ratings in 1993.
All of these upgrades are considered investment grade and reflect
the Company's strong financial performance, cost reductions and
competitive position.

Construction Program and Financing

Construction additions were $79 million, $94 million
and $79 million in 1995, 1994 and 1993, respectively.

During 1995, total cash provided by operating
activities was $261 million. At year-end, cash and temporary
cash investments were $39 million.

In September 1995, a new series of Air Quality
Development Revenue Refunding Bonds was issued in principal
amount of $110 million with an interest rate of 6.10%. Proceeds
from the financing were used to redeem a similar principal amount
of first mortgage bonds with an interest rate of 9.5%.

In March 1994, DPL Inc. issued 3,200,000 shares of
common stock through a public offering. Proceeds from the sale
were used in connection with the redemption of all outstanding
shares of the Company's Preferred Stock Series D, E, F, H and I.

The capital program for the five years ending 2000
consists of construction costs of $611 million, which includes a
series of 75 MW combustion turbine generating units, and debt
maturities and sinking fund payments of $67 million.

Issuance of additional amounts of first mortgage bonds
by the Company is limited by provisions of its mortgage. The
amounts and timing of future financings will depend upon market
and other conditions, rate increases, levels of sales and
construction plans. The Company anticipates that it has
sufficient capacity to issue first mortgage bonds to satisfy its
requirements in connection with its capital program during 1996-
2000.

II-4

In addition, DPL Inc. has a revolving credit agreement,
renewable through 1999, which allows total borrowings by DPL Inc.
and its subsidiaries of $200 million. At year-end 1995, there
were no borrowings outstanding under this credit agreement.

The Company also has $97 million available in short-
term lines of credit. At year-end, the Company had no borrowings
outstanding from these lines of credit and no commercial paper
outstanding.

Issues and Financial Risks

As a public utility, the Company is subject to
processes which determine the rates it charges for energy
services. Regulators determine which costs are eligible for
recovery in the rate setting process and when the recovery will
occur. They also establish the rate of return on utility
investments which are valued under Ohio law based on historical
costs.

The utility industry is subject to inflationary
pressures similar to those experienced by other capital-intensive
industries. Because rates for regulated services are based on
historical costs, cash flows may not cover the total future costs
of providing services. Projected construction costs over the
next five years approximate projected depreciation over the same
period.

In March 1995, FERC issued a Notice of Proposed
Rulemaking ("NOPR") that seeks comments on FERC's initiative to
create a more competitive wholesale electric power market. In
this NOPR, FERC states its intention to require all electric
utilities that own or control transmission facilities to file
open access transmission tariffs. Open access transmission
tariffs provide third parties non-discriminatory transmission
service comparable to what the utility provides itself. In this
proposed rulemaking, FERC also states that it will enact a
principle that will entitle utilities to full recovery of
legitimate and verifiable stranded costs on both the state and
federal level.

The PUCO is holding roundtable discussions on the
introduction of competition in the electric industry.
Furthermore, legislative proposals have been introduced in Ohio
concerning wholesale and retail wheeling which are designed to
increase competition. These factors increase the risk that the
Company's production plant and/or regulatory assets may not be
fully recovered in rates.

A stipulation approved by the PUCO allows accelerated
recovery of demand-side management and production plant costs to
the extent that future Company income exceeds the allowed return.

II-5

The Federal Environmental Protection Agency ("U.S.
EPA") has notified numerous parties, including the Company, that
they are considered "Potentially Responsible Parties" for clean
up of four hazardous waste sites in Ohio. The U.S. EPA has
estimated total costs of $61 million for its preferred clean-up
plans at three of these sites and has not established an
estimated cost for the fourth site. The final resolution of
these investigations will not have a material effect on the
Company's financial position, earnings or cash flow.

Also, DPL Inc. partially insures against losses for
business risks through its wholly-owned captive insurance company
and third party carriers.

Income Statement Highlights

$ in Millions 1995 1994 1993
- -----------------------------------------------------------------

Electric utility:
Revenues............................. $1,030 $946 $901
Fuel and purchased power............. 256 218 225
----- --- ---
Net revenues..................... 774 728 676

Gas Utility:
Revenues............................. 222 237 245
Gas purchased for resale............. 133 151 156
--- --- ---
Net revenues..................... 89 86 89

Interest and other income.............. 12 9 12
Operation and maintenance expense...... 271 243 270
Amortization (deferral) of regulatory
assets, net.......................... 15 11 (26)
Income taxes........................... 98 96 76
Earnings on common stock............... 159 148 135

II-6

Item 8 - Financial Statements And Supplementary Data
- ------------------------------------------------------------------------------

Index to Consolidated Financial Statements Page No.
- ------------------------------------------ --------

Consolidated Statement of Results of
Operations for the three years in the
period ended December 31, 1995................. II-8

Consolidated Statement of Cash Flows
for the three years in the period ended
December 31, 1995.............................. II-9

Consolidated Balance Sheet as of
December 31, 1995 and 1994..................... II-10 - II-11

Notes to Consolidated Financial Statements..... II-12 - II-23

Reports of Independent Accountants............. II-26 - II-27

Index to Supplemental Information Page No.
- --------------------------------- --------

Selected Quarterly Information................. II-24

Fianancial and Statistical Summary............. II-25

II-7

The Dayton Power and Light Company

CONSOLIDATED STATEMENT OF RESULTS OF OPERATIONS
- ----------------------------------------------------------------------------
For the years ended December 31,
$ in millions 1995 1994 1993
- ----------------------------------------------------------------------------
INCOME
Utility service revenues--
Electric........................... $1,029.9 $ 945.9 $ 901.3
Gas................................ 222.0 237.1 245.1
Steam.............................. 5.6 7.3 7.3
-------- -------- --------
Total utility service revenues.. 1,257.5 1,190.3 1,153.7

Interest and other income............ 11.8 9.4 12.0
-------- -------- --------
Total income.................... 1,269.3 1,199.7 1,165.7
-------- -------- --------
EXPENSES
Fuel and purchased power............. 257.5 220.7 226.6
Gas purchased for resale............. 133.2 150.8 156.4
Operation and maintenance (Note 1)... 271.3 242.8 270.4
Depreciation and amortization
(Note 1)............................ 115.4 111.9 109.0
General taxes........................ 124.9 120.6 111.7
Interest expense..................... 94.4 93.5 97.4
Amortization (deferral) of
regulatory assets, net (Note 2)..... 15.4 10.9 (25.8)
-------- -------- --------
Total expenses.................. 1,012.1 951.2 945.7
-------- -------- --------
INCOME BEFORE INCOME TAXES........... 257.2 248.5 220.0

Income taxes (Notes 1 and 3)......... 97.8 96.1 76.4
-------- -------- --------
NET INCOME........................... 159.4 152.4 143.6

Preferred dividends (Note 9)......... 0.9 4.7 8.7
-------- -------- --------
EARNINGS ON COMMON STOCK............. $ 158.5 $ 147.7 $ 134.9
======== ======== ========

See Notes to Consolidated Financial Statements.

II-8

The Dayton Power and Light Company

CONSOLIDATED STATEMENT OF CASH FLOWS

- ------------------------------------------------------------------------------
For the years ended December 31,
$ in millions 1995 1994 1993
- ------------------------------------------------------------------------------
OPERATING ACTIVITIES
Cash received from utility customers.... $1,205.9 $1,201.4 $1,140.0
Other operating cash receipts........... 11.0 9.9 13.0
Cash paid for:
Fuel and purchased power............. (249.8) (226.0) (216.6)
Purchased gas........................ (131.7) (142.8) (146.9)
Operation and maintenance labor...... (87.5) (88.3) (80.3)
Nonlabor operating expenditures...... (164.4) (168.9) (218.4)
Interest (net of amounts capitalized) (92.1) (92.4) (86.9)
Income taxes......................... (106.4) (100.7) (46.6)
Property, excise and payroll taxes... (123.9) (121.1) (111.1)
-------- -------- --------
Net cash provided by operating
activities (Note 11)................. 261.1 271.1 246.2
-------- -------- --------
INVESTING ACTIVITIES
Net cash used for property
expenditures......................... (78.9) (94.4) (88.6)
-------- -------- --------
FINANCING ACTIVITIES
Dividends paid on common stock.......... (132.6) (103.7) (107.8)
Dividends paid on preferred stock....... (0.9) (5.4) (8.8)
Retirement of long-term debt............ (126.7) (9.2) (439.2)
Retirement of preferred stock........... - (94.2) (8.5)
Issuance of long-term debt.............. 108.8 - 446.0
Retirement of short-term debt........... - (25.0) (37.0)
Capital contribution.................... - 63.1 -
-------- -------- --------

Net cash used for financing activities.. (151.4) (174.4) (155.3)
-------- -------- --------
Cash and temporary cash investments--

Net change........................... 30.8 2.3 2.3
Balance at beginning of year......... 8.3 6.0 3.7
-------- -------- --------
Balance at end of year............... $ 39.1 $ 8.3 $ 6.0
======== ======== ========

See Notes to Consolidated Financial Statements.

II-9

The Dayton Power and Light Company

CONSOLIDATED BALANCE SHEET
- ------------------------------------------------------------------------------
At December 31,
$ in millions 1995 1994
- ------------------------------------------------------------------------------
ASSETS
Property
Electric property........................... $3,064.6 $2,961.5
Gas property................................ 265.4 251.8
Steam and other property.................... 23.9 38.6
Construction work in progress............... 22.9 68.5
-------- --------
3,376.8 3,320.4

Less--
Accumulated depreciation and amortization. (1,134.6) (1,043.8)
-------- --------
Net property........................... 2,242.2 2,276.6
-------- --------

Current Assets
Cash and temporary cash investments
(at cost)................................. 39.1 8.3
Accounts receivable, less provision for
uncollectible accounts of $6.5 and $7.8,
respectively.............................. 144.5 99.8
Inventories, at average cost................ 81.6 83.3
Taxes applicable to subsequent years........ 82.4 78.3
Prepaid utility excise tax.................. 18.1 17.9
Prepayments and other....................... 27.7 11.7
-------- --------
Total current assets...................... 393.4 299.3
-------- --------

Other Assets
Income taxes recoverable through future
revenues (Note 1)......................... 238.6 249.3
Regulatory assets (Note 2).................. 155.7 168.8
Other assets................................ 174.4 153.0
-------- --------
Total other assets........................ 568.7 571.1
-------- --------
TOTAL ASSETS................................ $3,204.3 $3,147.0
======== ========

II-10

The Dayton Power and Light Company

CONSOLIDATED BALANCE SHEET
(continued)

- ------------------------------------------------------------------------------
At December 31,
$ in millions 1995 1994
- ------------------------------------------------------------------------------

CAPITALIZATION AND LIABILITIES
Capitalization
Common shareholder's equity--(Note 8)
Common stock.......................... $ 0.4 $ 0.4
Other paid-in capital................. 738.7 738.5
Earnings reinvested in the business... 451.4 421.4
-------- --------
Total common shareholder's equity.. 1,190.5 1,160.3
-------- --------

Preferred stock (Note 9)................ 22.9 22.9
Long-term debt (Note 7)................. 991.5 1,003.7
-------- --------
Total capitalization............... 2,204.9 2,186.9
-------- --------

Current Liabilities
Accounts payable........................ 97.0 75.6
Accrued taxes........................... 115.9 123.5
Accrued interest........................ 21.7 20.7
Other................................... 47.6 36.4
-------- --------
Total current liabilities.......... 282.2 256.2
-------- --------
Deferred Credits And Other
Deferred taxes (Note 3)................. 532.1 530.6
Unamortized investment tax credit....... 79.4 81.2
Other................................... 105.7 92.1
-------- --------
Total deferred credits and other... 717.2 703.9
-------- --------
TOTAL CAPITALIZATION AND LIABILITIES.... $3,204.3 $3,147.0
======== ========

See Notes to Consolidated Financial Statements.

II-11

The Dayton Power and Light Company

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary Of Significant Accounting Policies

Principles Of Consolidation and Nature of Operations

The accounts of the Company and its wholly-owned subsidiaries are
included in the accompanying consolidated financial statements.
The consolidated financial statements principally reflect the
results of operations and financial condition of the Company.
The Company is a public utility primarily engaged in the business
of selling electric energy and natural gas to residential,
commercial, industrial and governmental customers in a 6,000
square mile area of West Central Ohio. The majority of the
Company's earnings come from electricity and natural gas sales.
Earnings from other operations currently do not have a material
financial impact on the consolidated results.

Revenues And Fuel

Revenues include amounts charged to customers through fuel and
gas recovery clauses, which are adjusted periodically for changes
in such costs. Related costs that are recoverable or refundable
in future periods are deferred along with the related income tax
effects. Also included in revenues are amounts charged to
customers through a surcharge for recovery of arrearages from
certain eligible low-income households.

The Company records revenue for services provided but not yet
billed to more closely match revenues with expenses. Accounts
receivable on the Consolidated Balance Sheet includes unbilled
revenue of (in millions) $40.7 in 1995 and $13.1 in 1994.

Operation And Maintenance

Operation and maintenance expenses include $4.7 million in 1995
and $22.8 million in 1993 of redemption premiums and other costs
relating to the refinancing of bond issues.

Property, Maintenance And Depreciation

Property is shown at its original cost. Cost includes direct
labor and material and allocable overhead costs.

II-12

When a unit of property is retired, the original cost of that
property plus the cost of removal less any salvage value is
charged to accumulated depreciation. Maintenance costs and
replacements of minor items of property are charged to expense.

Depreciation expense is calculated using the straight-line
method, which depreciates the cost of property over its estimated
useful life, at a rate of 3.4%.

The Financial Accounting Standards Board issued Statement
No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed of," which is required to be
adopted by 1996. The implementation of this Statement will not
have a material impact on the Company's financial statements.

Income Taxes

Income taxes are deferred under the liability method. Deferred
income taxes are provided for all temporary differences between
the financial statement basis and the tax basis of assets and
liabilities using the enacted tax rate. Additional deferred
income taxes and offsetting regulatory assets or liabilities are
recorded to recognize that the income taxes will be
recoverable/refundable through future revenues. Investment tax
credits, previously deferred, are being amortized over the lives
of the related properties.

Consolidated Statement Of Cash Flows

The temporary cash investments presented on this Statement
consist of liquid investments with an original maturity of three
months or less.

Reclassifications

Reclassifications have been made in certain prior years' amounts
to conform to the current reporting presentation.

Estimates

The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions related to future events.

II-13

2. Regulatory Matters

Regulatory assets on the Consolidated Balance Sheet were:

At December 31,
1995 1994
---- ----
--millions--

a. Phase-in $ 61.4 $ 75.9
b. DSM 36.2 31.9
c. Deferred interest 58.1 61.0
------ ------
Total $155.7 $168.8
====== ======

a. As part of a 1992 PUCO-approved settlement agreement
("Agreement") among the Company and various consumer groups, the
third and final phase of an electric rate increase of 6.4% took
effect in January 1994. Deferrals (including carrying charges)
during the phase-in period are being recovered in current rates.

b. As part of the Agreement, the Company undertook
cost-effective demand-side management ("DSM") programs with an
average annual cost of $15 million for 1992-1995. These costs
are deferred and are being recovered at approximately $9 million
per year.

The Agreement, as updated by a subsequent stipulation
approved by the PUCO in 1995, allowed accelerated recovery of DSM
costs and, thereafter, production plant costs in the event that
the Company return on equity exceeds a baseline 13% (subject to
upward adjustment). If the return exceeds the baseline return by
one to two percent, one-half of the excess will be used to
accelerate recovery of these costs. If the return is greater
than two percent over the baseline, the entire excess will be
used for such purpose.

c. Interest charges related to Zimmer which were
previously deferred pursuant to PUCO approval are being amortized
at $2.8 million per year over the projected life of the asset.

II-14

3. Income Taxes

For the years ended December 31,
$ in millions 1995 1994 1993
- ------------------------------------------------------------------------------

COMPUTATION OF TAX EXPENSE

Statutory income tax rate............... 35% 35% 35%
Federal income tax (statutory rates
applied to pre-tax income before
preferred dividends)................. $90.0 $87.0 $77.0

Increases (decreases) in tax from -
Regulatory assets.................... 3.3 2.2 (6.1)
Depreciation......................... 10.8 10.4 10.2
Investment tax credit amortized...... (3.0) (3.7) (3.0)
Other, net........................... (3.3) 0.2 (1.7)
-----------------------
Total tax expense................ $97.8 $96.1 $76.4
=======================

COMPONENTS OF TAX EXPENSE

Taxes currently payable................. $93.1 $103.4 $54.3
Deferred taxes--
Regulatory assets.................... (1.7) 1.6 7.1
Liberalized depreciation and
amortization....................... 13.9 16.9 17.6
Property taxes....................... - (6.1) (6.1)
Fuel and gas costs................... (3.1) (12.7) 5.8
Other................................ (2.6) (3.4) 0.2
Deferred investment tax credit, net..... (1.8) (3.6) (2.5)
-----------------------
Total tax expense................ $97.8 $96.1 $76.4
=======================

COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES

At December 31,
$ in millions 1995 1994
--------------------------------------------------

NON-CURRENT LIABILITIES

Depreciation/property basis..... $(449.7) $(437.0)
Income taxes recoverable........ (82.9) (88.9)
Regulatory assets............... (52.3) (57.0)
Investment tax credit........... 27.8 28.4
Other........................... 25.0 23.9
------- -------
Net non-current liability.... $(532.1) $(530.6)
======= =======
Net Current Asset............... $ 6.1 $ 2.3
======= =======

II-15

4. Pensions And Postretirement Benefits

Pensions
Substantially all Company employees participate in pension plans
paid for by the Company. Employee benefits are based on their
years of service, age at retirement and, for salaried employees,
their compensation. The plans are funded in amounts actuarially
determined to provide for these benefits.

In developing the amounts in the following tables, an interest
rate of 6.25% was used in 1995 and 1994 and 6.0% in 1993. Actual
returns on plan assets for 1995, 1994 and 1993 were 25.6%, 0.9%
and 6.2%, respectively. Increases in compensation levels
approximating 5% were used for all years.

The following table presents the components of pension cost
(portions of which were capitalized):

$ in millions 1995 1994 1993
- ------------- -----------------------

Service cost - benefits earned........... $ 6.2 $ 6.1 $ 5.4
Interest cost............................ 14.4 13.4 12.0
Expected return on plan assets of
7.5% in each year...................... (17.8) (18.2) (16.9)
Net amortization......................... (0.9) (1.5) (2.0)
-----------------------
Net pension cost......................... $ 1.9 $ (0.2) $ (1.5)
=======================

The following table sets forth the plans' funded status and
amounts recorded in Other assets on the Consolidated Balance
Sheet at December 31:

$ in millions 1995 1994
- ------------- ---------------

Plan assets at fair value (a)............... $298.3 $247.6
Actuarial present value of projected
benefit obligation........................ 245.5 229.9
---------------
Plan assets in excess of projected
benefit obligation........................ 52.8 17.7

Unamortized transition obligation........... (19.6) (23.8)
Prior service cost.......................... 18.1 20.2
Changes in plan assumptions and actuarial...
gains and losses.......................... (5.0) 32.8
---------------
Net pension assets.......................... $ 46.3 $ 46.9
===============

Vested benefit obligation................... $190.1 $179.7
Accumulated benefit obligation without
projected wage increases.................. $227.7 $211.1

(a) Invested in fixed income investments, equities including
$27.0 million and $22.4 million of DPL Inc. common stock in
1995 and 1994, respectively, and guaranteed investment
contracts.

II-16

Postretirement Benefits
Qualified employees who retired prior to 1987 and their
dependents are eligible for health care and life insurance
benefits. The unamortized transition obligation associated with
these benefits is being amortized over the approximate average
remaining life expectancy of the retired employees. Active
employees are eligible for life insurance benefits, and this
unamortized transition obligation is being amortized over the
average remaining service period.

In 1995, the Company funded $12.0 million of the union-eligible
health benefit using a Voluntary Employee Beneficiary Association
Trust.

The following table presents the components of postretirement
benefit cost:

$ in millions 1995 1994 1993
- ------------- ---- ---- ----

Interest cost............................ $3.6 $3.7 $3.7
Net amortization......................... 2.9 3.0 3.0
---- ---- ----
Postretirement benefit cost.............. $6.5 $6.7 $6.7
==== ==== ====

The assumed health care cost trend rate used in measuring the
accumulated postretirement benefit obligation is 10% for 1995 and
decreases to 5% by 2005. A one percentage point increase in each
future year's assumed health care trend rate would increase
postretirement benefit cost by $0.3 million annually and would
increase the accumulated postretirement benefit obligation by
$3.4 million. The weighted average discount rate used in
determining the accumulated postretirement benefit obligation was
6.25% in 1995 and 1994 and 6.0% in 1993.

The following table sets forth the accumulated postretirement
benefit amounts at December 31:

$ in millions 1995 1994
- ------------- ---- ----

Accumulated postretirement benefit obligation:

- retirees and dependents................... $43.2 $61.4
- active employees.......................... 1.0 1.1
----- -----
Total................................... 44.2 62.5
Plan assets at fair value (a).................. 12.0 -
----- -----
Projected benefit obligation in excess of
plan assets.................................. 32.2 62.5
Unamortized transition obligation.............. (21.8) (24.8)
Actuarial gains and losses..................... 22.1 3.0
----- -----
Accrued postretirement benefit liability....... $32.5 $40.7
===== =====

(a) Invested in money market securities.

II-17

5. Commonly Owned Facilities

The Company owns certain electric generating and transmission
facilities as tenants in common with other Ohio utilities. Each
utility is obligated to pay its ownership share of construction
and operation costs of each facility. As of December 31, 1995,
the Company had $4.3 million of commonly owned facilities under
construction. The Company's share of expenses is included in the
Consolidated Statement of Results of Operations.

The following table presents the Company's share of the commonly
owned facilities at December 31, 1995:

Company Share Investment
--------------------- ----------
Production Gross Plant in
Ownership Capacity Service
(%) (MW) ($ in millions)
- ------------------------------------------------------------------------------

Production Units:
Beckjord Unit 6............... 50.0 210 54
Conesville Unit 4............. 16.5 129 30
East Bend Station............. 31.0 186 149
Killen Station................ 67.0 402 406
Miami Fort Units 7 & 8........ 36.0 360 116
Stuart Station................ 35.0 820 242
Zimmer Station................ 28.1 365 985
Transmission
(at varying percentages)....... 67

6. Notes Payable And Compensating Balances

DPL Inc., the Company's parent company, has $200 million
available through a revolving credit agreement. This agreement
with a consortium of banks is renewable through 1999. Commitment
fees are approximately $250,000 per year, depending upon the
aggregate unused balance of the loan.

At December 31, 1995, DPL Inc. had no outstanding borrowings
under this credit agreement.

The Company also has $96.6 million available in short-term
informal lines of credit. To support these lines of credit, the
Company is required to maintain average daily compensating
balances of approximately $700,000 and also pay $94,000 per year
in fees.

At year-end, the Company had no borrowings from these lines of
credit and no commercial paper outstanding.

II-18

7. Long-Term Debt

At December 31,
$ in millions 1995 1994
- ------------------------------------------------------------------------------

First mortgage bonds maturing:
1997 5-5/8%............................ $ 40.0 $ 40.0
1998 6.75% and 6.87% (a)............... 25.0 26.4
1999-2003 8.00% and 8.16% (a)............... 40.0 43.0
2022-2026 8.14%............................. 671.0 671.0
Pollution control series maturing
through 2027 - 6.43% and 7.97% (a)........ 107.9 218.4
------------------
883.9 998.8

Unamortized debt discount and premium (net). (2.4) (2.5)
------------------
881.5 996.3

Guarantee of Air Quality Development Obligations
6.10% Series Due 2030............................ 110.0 -

Mortgage note - 10.0%............................ - 7.4
------------------
Total....................................... $991.5 $1,003.7
==================

(a) Weighted average interest rates for 1995 and 1994,
respectively.

The amounts of maturities and mandatory redemptions for first
mortgage bonds are (in millions) $0.5 in 1996, $40.4 in 1997,
$25.4 in 1998, $0.4 in 1999 and $0.4 in 2000. Substantially all
property of the Company is subject to the mortgage lien securing
the first mortgage bonds.

During 1995, $110 million of a new series of Air Quality
Development Revenue Refunding Bonds was issued due 2030, with an
interest rate of 6.10%. Proceeds of the financing were used to
redeem a similar principal amount of first mortgage bonds that
secured a series of pollution control bonds with an interest rate
of 9.5%.

II-19

8. Common Shareholder's Equity

Common Stock (a)
------------------ Earnings
Outstanding Other Paid-in Reinvested in
$ in millions Shares Amount Capital the Business Total
- ---------------------------------------------------------------------------------------

1993:
Beginning Balance.......... 41,172,173 $ 0.4 $675.0 $346.6 $1,022.0
Net income................ 143.6 143.6
Common stock dividends.... (107.7) (107.7)
Preferred stock dividends. (8.7) (8.7)
Other..................... 0.2 (0.2) -
----------------------------------------------------------

Ending balance............. 41,172,173 $ 0.4 $675.2 $373.6 $1,049.2

1994:
Net income................ 152.4 152.4
Common stock dividends.... (103.7) (103.7)
Preferred stock dividends. (4.7) (4.7)
Contribution to capital... 63.1 - 63.1
Other..................... 0.2 3.8 4.0
----------------------------------------------------------

Ending balance............. 41,172,173 $ 0.4 $738.5 $421.4 $1,160.3

1995:
Net income................ 159.4 159.4
Common stock dividends.... (132.6) (132.6)
Preferred stock dividends. (0.9) (0.9)
Other..................... 0.2 4.1 4.3
----------------------------------------------------------

Ending balance............. 41,172,173 $ 0.4 $738.7 $451.4 $1,190.5
==========================================================

(a) 50,000,000 shares authorized.

II-20

9. Preferred Stock

$25 par value, 4,000,000 shares authorized, no shares
outstanding; and $100 par value, 4,000,000 shares authorized,
228,508 shares without mandatory redemption provisions
outstanding.

Current Current Par Value
Series/ Redemption Shares At December 31, 1995 and 1994
Rate Price Outstanding ($ in millions)
- ------------------------------------------------------------------------------

A 3.75% $102.50 93,280 $ 9.3
B 3.75% $103.00 69,398 7.0
C 3.90% $101.00 65,830 6.6
------- -----
Total 228,508 $22.9
======= =====

The shares may be redeemed at the option of the Company at the
per share prices indicated, plus cumulative accrued dividends.

10. Fair Value of Financial Instruments

At December 31,
1995 1994
--------------- ---------------
$ in millions Fair Value Cost Fair Value Cost
- ----------------------------------------------------------------------------
$ $ $ $
Assets (a)

Available for sale securities 40.1 27.6 31.2 25.1
Held to maturity securities, 78.2 76.8 44.3 44.8
including short term cash investments
of $31.6 in 1995 and $13.3 in 1994

Liabilities (b)

Debt 1,076.2 992.0 960.0 1,008.5

(a) Maturities range from 1996 to 2005.
(b) Includes current maturities.

Available for sale marketable equity securities are carried at
market; the remaining financial instruments are carried at cost.
The fair value is based upon quoted market prices or securities
with similar characteristics.

II-21

11. Reconciliation Of Net Income To Net Cash Provided By Operating Activities

For the years ended December 31,
$ in millions 1995 1994 1993
- ------------------------------------------------------------------------------

Net income................................... $159.4 $152.4 $143.6
Adjustments for non-cash items:
Depreciation and amortization............. 115.4 111.9 109.0
Deferred income taxes..................... 4.4 (7.3) 22.1
Amortization (deferral) of
regulatory assets, net................... 15.4 10.9 (25.8)
Changes in working capital:
Accounts receivable....................... (44.7) 30.3 (3.8)
Accounts payable.......................... 21.4 (41.1) 23.4
Deferred gas costs........................ 1.7 28.7 (7.9)
Accrued interest.......................... 1.0 (0.4) 8.7
Other..................................... (4.9) 7.7 11.7
DSM deferred costs........................... (9.1) (14.4) (20.3)
Other operating activities................... 1.1 (7.6) (14.5)
--------------------------
Net cash provided by operating activities.... $261.1 $271.1 $246.2
==========================

II-22

12. Financial Information By Business Segments

For the years ended December 31,
$ in millions 1995 1994 1993
- ------------------------------------------------------------------------

Utility service revenues
Electric........................... $1,029.9 $ 945.9 $ 901.3
Gas................................ 222.0 237.1 245.1
Other.............................. 5.6 7.3 7.3
----------------------------
Total utility service revenues.......... 1,257.5 1,190.3 1,153.7
Interest and other income............... 11.8 9.4 12.0
----------------------------
Total income.......................... $1,269.3 $1,199.7 $1,165.7
============================

Operating profit before tax
Electric........................... $ 335.8 $ 325.2 $ 310.8
Gas................................ 18.9 10.3 19.9
Other.............................. (4.4) (0.7) 0.9
----------------------------
Total operating profit before tax....... 350.3 334.8 331.6
Other income, net (a)................... 1.3 7.3 (14.2)
Interest expense........................ (94.4) (93.5) (97.4)
----------------------------
Income before income taxes............ $ 257.2 $ 248.6 $ 220.0
============================

Depreciation and amortization
Electric........................... $ 108.1 $ 104.8 $ 102.4
Gas................................ 6.4 6.2 5.7
Other.............................. 0.9 0.9 0.9
----------------------------
Total depreciation and amortization... $ 115.4 $ 111.9 $ 109.0
============================

Construction additions
Electric........................... $ 66.6 $ 82.1 $ 66.3
Gas................................ 11.7 11.6 11.9
Other.............................. 0.6 0.3 0.3
----------------------------
Total construction additions.......... $ 78.9 $ 94.0 $ 78.5
============================

Assets
Electric........................... $2,763.1 $2,772.3 $2,822.5
Gas................................ 223.7 201.7 236.0
Other (b).......................... 217.5 173.0 152.8
----------------------------
Total assets at year-end.............. $3,204.3 $3,147.0 $3,211.3
============================

(a) Includes primarily interest income less bond redemption
costs in 1995 and 1993.
(b) Includes primarily cash, temporary cash investments and
certain deferred items.

II-23

SELECTED QUARTERLY INFORMATION

March 31, June 30, September 30, December 31,
$ in millions 1995 1994 1995 1994 1995 1994 1995 1994
- --------------------------------------------------------------------------------------
$ $ $ $ $ $ $ $

Utility service revenues.... 356.2 372.7 266.5 257.9 300.7 264.0 334.1 295.7
Income before income taxes.. 94.2 93.1 51.8 56.5 65.0 57.3 46.2 41.6
Net income.................. 59.3 56.2 33.8 35.9 38.9 34.6 27.4 25.7
Earnings on common stock.... 59.1 54.1 33.5 33.7 38.7 34.4 27.2 25.5
Dividends paid.............. 33.2 29.0 33.1 20.5 33.2 24.6 33.1 29.6

II-24

FINANCIAL AND STATISTICAL SUMMARY

1995 1994 1993 1992 1991
- ----------------------------------------------------------------------------------

For the years ended December 31,

Utility service revenues (millions).. $1,257.5 1,190.3 1,153.7 1,019.8 998.0
Earnings on common stock (millions).. $ 158.5 147.7 134.9 132.6 117.7
Earnings per share of common stock... $ 3.85 3.59 3.28 3.22 2.86
Dividends paid (millions)............ $ 132.6 103.7 107.8 103.6 111.8

Electric sales (millions of kWh)--
Residential........................ 4,871 4,465 4,558 4,260 4,571
Commercial......................... 3,425 3,068 3,006 2,896 2,945
Industrial......................... 4,401 4,388 4,089 3,938 3,949
Other.............................. 4,117 2,298 3,023 2,960 1,850
------- ------- ------- ------- -------
Total........................... 16,814 14,219 14,676 14,054 13,315

Gas sales (thousands of MCF)--
Residential........................ 29,397 27,911 28,786 27,723 26,594
Commercial......................... 8,307 8,081 8,468 8,642 8,368
Industrial......................... 2,584 3,150 3,056 4,914 6,014
Other.............................. 3,006 2,909 3,171 3,402 3,187
------- ------- ------- ------- -------
Transported gas.................... 16,376 15,147 13,401 10,811 8,494

Total........................... 59,670 57,198 56,882 55,492 52,657

At December 31,

Total assets (millions).............. $3,204.3 3,147.0 3,211.3 2,866.7 2,851.5
Long-term debt and preferred stock...
with mandatory redemption
provisions (millions).............. $ 991.5 1,003.7 1,042.9 990.6 1,039.2

First mortgage bond ratings--
Duff & Phelps, Inc................. AA AA AA- A+ BBB+
Standards & Poor's Corporation..... AA- AA- A A BBB+
Moody's Investor Service........... Aa3 A1 A2 A2 A3

Number of Preferred Shareholders..... 733 795 1,873 1,969 2,034

II-25

Report of Independent Accountants
---------------------------------

To the Board of Directors of The Dayton Power and Light Company

In our opinion, the consolidated financial statements listed
in the index, appearing under Item 8 on page II-7 of this Form 10-
K, present fairly, in all material respects, the financial
position of The Dayton Power and Light Company (the "Company") and
its subsidiaries at December 31, 1995 and 1994, and the results of
their operations and their cash flows for each of the three years
in the period ended December 31, 1995, in conformity with
generally accepted accounting principles. These consolidated
financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these
consolidated financial statements based on our audits. We
conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
consolidated financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the
opinion expressed above.

Price Waterhouse LLP

Price Waterhouse LLP
Dayton, Ohio
January 18, 1996

II-26

Report of Independent Accountants
on Financial Statement Schedule
---------------------------------

To the Board of Directors of The Dayton Power and Light Company

Our audits of the consolidated financial statements of The Dayton
Power and Light Company and its subsidiaries referred to in our
report dated January 18, 1996 appearing on page II-26 of this Annual
Report on Form 10-K also included an audit of the Financial Statement
Schedule listed in Item 14(a) of this Form 10-K. In our opinion,
this Financial Statement Schedule presents fairly, in all material
respects, the information set forth therein when read in conjunction
with the related consolidated financial statements.

Price Waterhouse LLP

Price Waterhouse LLP
Dayton, Ohio
January 18, 1996

II-27

Item 9 - Changes In And Disagreements With Accountants On Accounting And
Financial Disclosure.
- ------------------------------------------------------------------------------

None.

PART III

Item 10 - Directors And Executive Officers Of The Registrant
- ------------------------------------------------------------------------------

Directors of the Registrant

The Board is presently authorized to consist of nine
directors. These nine directors are also directors of DPL Inc.,
the holding company of the Company. Nine directors are to be
elected this year to serve until the Annual Meeting of
Shareholders in 1997 or until their successors are duly elected
and qualified. Should any nominee become unable to accept
nomination or election, the Board will vote for the election of
such other person as a director as the present directors may
recommend in the place of such nominee.

The following information regarding the nominees is
based on information furnished by them:

Director
Principal Occupation and Other Information Since
- ------------------------------------------------------------------------------
THOMAS J. DANIS, Age 46 1989
Former Chairman and Chief Executive Officer,
The Danis Companies, Dayton, Ohio,
construction, real estate and environmental services.
Director: CSR America Inc.
Trustee: University of Dayton, Dayton Foundation,
Miami Valley Research Park Foundation.

JAMES F. DICKE, II, Age 50 1990
President, Crown Equipment Corporation, New Bremen, Ohio,
international manufacturer and distributor of electric lift
trucks and material handling products.
Director: Regional Boys and Girls Clubs of America,
Plaid Holdings Corp.
Vice Chairman: Trinity University Board of Trustees
Secretary: Culver Educational Foundation.

III-1

PETER H. FORSTER, Age 53 1979
Chairman and Chief Executive Officer, DPL Inc.;
Chairman, The Dayton Power and Light Company.
Chairman: Miami Valley Research Foundation.
Director: Bank One, Dayton, NA, Amcast Industrial Corp.,
Comair Holdings, Inc.
Trustee: F. M. Tait Foundation, Arts Center Foundation.

ERNIE GREEN, Age 57 1991
President and Chief Executive Officer, Ernie Green
Industries, Dayton, Ohio, automotive components manufacturer.
Director: Bank One, Dayton, NA, Day-Med Health
Maintenance Plan, Inc., WPTD-TV, The Duriron Company,
Acordia, Inc., Eaton Corp.
Trustee: Central State University.

JANE G. HALEY, Age 65 1978
President and Chief Executive Officer, Gosiger, Inc.,
Dayton, Ohio, national importer and distributor of machine
tools.
Director: Society Bank, NA, Advisory Board, Dayton, Ohio.
Trustee: University of Dayton, Chaminade-Julienne
High School, Dayton, Ohio, Miami Valley Economic
Development Coalition.
Member: Area Progress Council.

ALLEN M. HILL, Age 50 1989
President and Chief Operating Officer, DPL Inc.;
President and Chief Executive Officer, The Dayton
Power and Light Company.
Chairman: Dayton Business Committee.
Director: Citizens Federal Bank, F.S.B.,
Dayton Boys/Girls Club, Ohio Electric Utility Institute.
Trustee: The University of Dayton, Hipple Cancer Research
Center, MedAmerica Health Systems Corp.

III-2

W AUGUST HILLENBRAND, Age 55 1992
President and Chief Executive Officer, Hillenbrand
Industries, Batesville, Indiana, a diversified
public holding company with five wholly-owned and
autonomously operated subsidiaries manufacturing
caskets, hospital furniture, hospital supplies,
high-tech security locks and providing funeral planning
services.
Director: Forecorp, Inc., Forethought Life Insurance
Company.
Trustee: Denison University, National Committee for
Quality Health Care, Batesville Girl Scouts.

DAVID R. HOLMES, Age 55 1994
Chairman, President and Chief Executive Officer,
The Reynolds and Reynolds Company, Dayton, Ohio,
information management systems.
Director: Bank One, Dayton, NA.
Advisor: J. L. Kellogg Graduate School of Management,
Northwestern University.
Member: Dayton Business Committee, Area Progress Council,
Downtown Dayton Partnership.

BURNELL R. ROBERTS, Age 68 1987
Chairman, Sweetheart Holdings, Inc.
Retired Chairman of the Board and Chief Executive
Officer, The Mead Corporation, Dayton, Ohio,
forest products producer.
Director: Armco, Inc., The Perkin-Elmer Corporation,
Rayonier, Inc., Universal Protective Plastics, Inc.,
Day International Group, Inc.

III-3

EXECUTIVE OFFICERS OF THE REGISTRANT
(As of March 1, 1996)

Business Experience,
Last Five Years
(Positions with Registrant
Name Age Unless Otherwise Indicated) Dates
- ---------------- --- ---------------------------- -----------------

Peter H. Forster 53 Chairman 4/06/92 - 3/01/96
Chairman and Chief Executive 9/26/95 - 3/01/96
Officer, DPL Inc.
Chairman, President and Chief 4/05/88 - 9/26/95
Executive Officer, DPL Inc.
Chairman and Chief Executive 8/02/88 - 4/06/92
Officer

Allen M. Hill 50 President and Chief Executive 4/06/92 - 3/01/96
Officer
President and Chief Operating 9/26/95 - 3/01/96
Officer, DPL Inc.
President and Chief Operating 8/02/88 - 4/06/92
Officer

Paul R. Anderson 53 Controller 4/12/81 - 3/01/96

Stephen P. Bramlage 49 Assistant Vice President 1/01/94 - 3/01/96
Director, Service Operations 10/29/89 - 1/01/94

Robert M. Combs 50 Vice President 5/09/94 - 3/01/96
Treasurer 3/17/93 - 5/09/94
Director, J. M. Stuart 9/16/91 - 3/17/93
Electric Generating Station
United States Navy
Production Officer, 8/01/88 - 9/16/91
Charleston Naval Shipyard

Georgene H. Dawson 46 Assistant Vice President 1/01/94 - 3/01/96
Director, Service Operations 4/03/92 - 1/01/94
Service Center Manager 6/11/89 - 4/03/92

Jeanne S. Holihan 39 Assistant Vice President 3/17/93 - 3/01/96
Treasurer 11/06/90 - 3/17/93

III-4

EXECUTIVE OFFICERS OF THE REGISTRANT
(As of March 1, 1996)

Business Experience,
Last Five Years
(Positions with Registrant
Name Age Unless Otherwise Indicated) Dates
- ----------------- --- --------------------------- -------------------

Thomas M. Jenkins 44 Group Vice President 6/27/95 - 3/01/96
Group Vice President and
Treasurer, DPL Inc.
Group Vice President and 5/09/94 - 6/27/95
Treasurer, DPL Inc. and
the Company
Group Vice President and 11/06/90 - 5/09/94
Treasurer, DPL Inc.
Group Vice President

Stephen F. Koziar, Jr. 51 Group Vice President and 1/31/95 - 3/01/96
Secretary, DPL Inc. and
the Company
Group Vice President, 12/10/87 - 1/31/95
DPL Inc. and the Company

Judy W. Lansaw 44 Group Vice President, 1/31/95 - 3/01/96
DPL Inc. and the Company
Group Vice President and 12/07/93 - 1/31/95
Secretary, DPL Inc. and
the Company
Vice President and 8/01/89 - 12/07/93
Secretary, DPL Inc. and
the Company

Arthur G. Meyer 46 Treasurer 6/27/95 - 3/01/96
Director, Financial Activities 5/09/94 - 6/27/95
Manager, South Dayton 1/31/94 - 5/09/94
Service Center
Associate General Counsel 7/13/92 - 1/31/94
President, Dayton Business 2/01/89 - 7/13/92
Committee

Bryce W. Nickel 39 Assistant Vice President 1/01/94 - 3/01/96
Director, Service Operations 10/29/89 - 1/01/94

H. Ted Santo 45 Group Vice President 12/08/92 - 3/01/96
Vice President 2/28/88 - 12/08/92

III-5

Item 11 - Executive Compensation
- ------------------------------------------------------------------------------

COMPENSATION OF DIRECTORS

Directors of the Company who are not employees receive
$12,000 annually for services as a director, $600 for attendance
at a Board meeting, and $500 for attendance at a committee
meeting or operating session, of DPL Inc. and the Company.
Members of the Executive Committee of DPL Inc. receive $2,000
annually for services on that committee. Each committee chairman
receives an additional $1,600 annually. Directors who are not
employees of the Company also participate in a Directors'
Deferred Stock Compensation Plan (the "Stock Plan") under which a
number of DPL Inc. common shares are awarded to directors each
year. All shares awarded under the Stock Plan are transferred to
a grantor trust (the "Master Trust") maintained by DPL Inc. to
secure its obligations under various directors' and officers'
deferred and incentive compensation plans. Receipt of the shares
or cash equal to the value thereof is deferred until the
participant retires as a director or until such other time as
designated by the participant and approved by the Compensation
and Management Review Committee (the "Committee") of DPL Inc. In
the event of a change of control (as defined in the Stock Plan),
the authority and discretion which is exercisable by the
Committee, will be exercised by the trustees of the Master Trust.
In April 1995, each non-employee director was awarded
1,600 shares.

DPL Inc. maintains a Deferred Compensation Plan (the
"Compensation Plan") for non-employee directors of DPL Inc. and
the Company in which payment of directors' fees may be deferred.
The Compensation Plan also includes a supplementary deferred
income program which provides that DPL Inc. will match $5,000
annually of deferred directors' fees for a maximum of ten years.
Under the supplementary program, a $150,000 death benefit is
provided until such director ceases to participate in the
Compensation Plan. Under the standard deferred income program
directors are entitled to receive a lump sum payment or payments
in approximately equal installments over a ten-year period. A
director may elect payment in either cash or common shares.
Participants in the supplementary program are entitled to receive
deferred payments over a ten-year period in equal installments.
The Compensation Plan provides that in the event of a change in
control of DPL Inc., as defined in the Compensation Plan, all
benefits provided under the supplementary deferred income program
become immediately vested without the need for further
contributions by the participants and the discretion which, under
the Compensation Plan, is exercisable by the Chief Executive
Officer of DPL Inc. will be exercised by the trustees of the
Master Trust. If the consent of the Chief Executive Officer of
DPL Inc. is obtained, individuals who have attained the age of 55
and who are no longer directors of DPL Inc. or the Company may
receive a lump sum payment of amounts credited to them under the
supplementary deferred income program.

III-6

EXECUTIVE OFFICER COMPENSATION

Summary Compensation Table

Set forth below is certain information concerning the
compensation of the Chief Executive Officer and each of the other
five most highly compensated executive officers of the Company
for the last three fiscal years, for services rendered in all
capacities to the Company and its subsidiaries, DPL Inc., and the
other subsidiaries of DPL Inc.

Long-Term
Compensation
Annual ------------
Compensation Restricted
----------------- Stock Unit All Other
Name and Principal Salary Bonus (1) Awards (2) Compensation (3)
Position Year ($) ($) ($) ($)
- -----------------------------------------------------------------------------------

Peter H. Forster 1995 572,000 344,000 784,000 ('96-98) 1,000
Chairman 1994 526,000 318,000 708,000 ('95-97) 1,000
1993 496,000 298,000 580,000 ('94-96) 1,000

Allen M. Hill 1995 363,000 226,000 319,000 ('96-98) 1,000
President and Chief 1994 336,000 205,000 333,000 ('95-97) 1,000
Executive Officer 1993 315,000 193,000 249,000 ('94-96) 1,000

Stephen F. Koziar, Jr. 1995 209,000 94,000 141,000 ('96-98) 1,000
Group Vice President 1994 198,000 91,000 124,000 ('95-97) 1,000
and Secretary 1993 189,000 86,000 103,000 ('94-96) 1,000

Thomas M. Jenkins 1995 207,000 94,000 194,000 ('96-98) 1,000
Group Vice President 1994 188,000 87,000 239,000 ('95-97) 1,000
1993 172,000 81,000 188,000 ('94-96) 1,000

Judy W. Lansaw 1995 197,000 89,000 227,000 ('96-98) 1,000
Group Vice President 1994 175,000 79,000 191,000 ('95-97) 1,000
1993 160,000 68,000 116,000 ('94-96) 1,000

H. Ted Santo 1995 190,000 86,000 168,000 ('96-98) 1,000
Group Vice President 1994 173,000 81,000 142,000 ('95-97) 1,000
1993 151,000 73,000 192,000 ('94-96) 1,000

___________________________

(1) Amounts in this column represent awards made under the
Management Incentive Compensation Program ("MICP"). Awards
are based on achievement of specific predetermined operating
and management goals in the year indicated and paid in the
year earned or in the following year.

III-7

(2) Amounts shown in this column have not been paid, but are
contingent on performance and represent the dollar value of
restricted stock incentive units ("SIU's") awarded to the
named executive officer under the Management Stock
Incentive Plan ("MSIP") based on the closing price of a
DPL Inc. common share on the New York Stock Exchange--
Consolidated Transactions Tape on the date of award. The
SIU's awarded for 1993, 1994 and 1995 vest only to the
extent that the DPL Inc. average return on equity ("ROE")
over a three-year performance period is above the
Regulatory Research Associates industry median.

Depending on the performance of DPL Inc., these SIU's vest
in amounts ranging from 0% to 100% of the target award at
an ROE between 0 and 100 basis points above median ROE and
from 100% to 150% of target award at an ROE between 100 and
200 basis points above median ROE.

No units vest if the three-year average ROE is below 10%.
Amounts shown for 1993, 1994 and 1995 reflect target
awards. For each SIU which vests, a participant receives
the cash equivalent of one DPL Inc. common share plus
dividend equivalents from the date of award. Prior to
payout at retirement, an individual may elect to convert a
portion of vested SIU's to a cash equivalent and accrue
interest thereon. All payouts of vested SIU's under the
MSIP are deferred until retirement.

(3) Amounts in this column represent employer matching
contributions on behalf of each named executive under the
DPL Employee Savings Plan made to the DPL Inc. Employee
Stock Ownership Plan.

Certain Severance Pay Agreements

DPL Inc. entered into severance pay agreements with
each of Messrs. Forster, Hill, Koziar, Jenkins and Santo and Mrs.
Lansaw providing for the payment of severance benefits in the
event that the individual's employment with DPL Inc. or its
subsidiaries is terminated under specified circumstances within
three years after a change in control of DPL Inc. or DP&L
(generally, defined as the acquisition of 15% or more of the
voting securities or certain mergers or other business
combinations). The agreements entered into between 1987 and 1991
require the individuals to remain with DPL Inc. throughout the
period during which any change of control is pending in order to
help put in place the best plan for the shareholders. The
principal severance benefits under each agreement include payment
of the following: (i) the individual's full base salary and
accrued benefits through the date of termination and any awards
for any completed or partial period under the MICP and the
individual's award for the current period under the MICP (or for
a completed period if no award for that period has yet been
determined) fixed at an amount equal to his average annual award
for the preceding three years; (ii) 300% of the sum of the
individual's annual base salary at the rate in effect on the date
of termination (or, if higher, at the rate in effect as of the
time of the change in control) plus the average amount awarded to
the individual under the MICP for the three preceding years;
(iii) all awarded or earned but unpaid SIU's; and (iv) continuing
medical, life, and disability insurance. In the event any
payments under these agreements are subject to an excise tax
under the

III-8

Internal Revenue Code of 1986, the payments will be adjusted so
that the total payments received on an after-tax basis will equal
the amount the individual would have received without imposition
of the excise tax. The severance pay agreements are effective
for one year but are automatically renewed each year unless
DPL Inc. or the participant notifies the other one year in
advance of its or his intent not to renew. DPL Inc. has agreed
to secure its obligations under the severance pay agreements by
transferring required payments to the Master Trust.

Pension Plans

The following table sets forth the estimated total
annual benefits payable under the Company retirement income plan
and the supplemental executive retirement plan to executive
officers at normal retirement date (age 65) based upon years of
accredited service and final average annual compensation
(including base and incentive compensation) for the three highest
years during the last ten:

Total Annual Retirement Benefits for
Years of Accredited Service at Age 65
Final Average -------------------------------------
Annual Earnings 10 Years 15 Years 20-30 Years
--------------- -------------------------------------

$ 200,000 $ 52,500 $ 79,000 $105,000
400,000 109,500 164,000 219,000
600,000 166,500 250,000 333,000
800,000 223,500 335,000 447,000
1,000,000 280,500 421,000 561,000
1,200,000 337,500 506,000 675,000
1,400,000 394,500 592,000 789,000

The years of accredited service for the named executive
officers are Mr. Forster -- 30 yrs.; Mr. Hill -- 26 yrs.;
Mr. Koziar -- 26 yrs.; Mr. Jenkins -- 18 yrs.; Mrs. Lansaw --
16 yrs.; and Mr. Santo -- 20 yrs. Years of service under the
retirement income plan are capped at 30 years, however, the
retirement and supplemental plans, taken together, can provide
full benefits after 20 years of accredited service. Benefits are
computed on a straight-life annuity basis, are subject to
deduction for Social Security benefits and may be reduced by
benefits payable under retirement plans of other employers. For
each year an individual retires prior to age 62, benefits under
the supplemental plan are reduced by 3% or 21% for early
retirement at age 55.

III-9

Item 12 - Security Ownership Of Certain Beneficial Owners And Management
- ------------------------------------------------------------------------------

The Company's stock is beneficially owned by DPL Inc.

Set forth below is information concerning the
beneficial ownership of shares of Common Stock of DPL Inc. by
each director of the Company as of January 31, 1996.

Amount and Nature of
Name of Director Beneficial Ownership (1)
---------------- ------------------------

Thomas J. Danis 19,113 shares
James F. Dicke, II 57,629 shares
Peter H. Forster 21,533 shares
Ernie Green 17,261 shares
Jane G. Haley 29,128 shares
Allen M. Hill 20,700 shares
W August Hillenbrand 9,595 shares
David R. Holmes 3,431 shares
Burnell R. Roberts 18,738 shares

Set forth below is information concerning the
beneficial ownership of shares of Common Stock of DPL Inc. by
each executive officer of the Company named in the Summary
Compensation Table (other than executive officers who are
directors of the Company whose security ownership is found above)
as of January 31, 1996.

Amount and Nature of
Name of Executive Officer Beneficial Ownership (1)
------------------------- ------------------------

Stephen F. Koziar, Jr. 7,566 shares
Thomas M. Jenkins 5,244 shares
Judy W. Lansaw 2,029 shares
H. Ted Santo 2,009 shares

(1) The number of shares shown represents in each instance less
than 1% of the outstanding Common Shares of DPL Inc.

There were 228,728 shares or 0.21% of the total number of
Common Shares beneficially owned by all directors and
executive officers of DPL Inc. and the Company as a group at
January 31, 1996. The number of shares shown for the
directors includes Common Shares transferred to the Master
Trust for non-employee directors pursuant to the Directors'
Deferred Stock Compensation Plan.

Item 13 - Certain Relationships And Related Transactions
- ------------------------------------------------------------------------------

None.

III-10

PART IV

Item 14 - Exhibits, Financial Statement Schedule And Reports On Form 8-K
- ------------------------------------------------------------------------------

(a) Documents filed as part of the Form 10-K

1. Financial Statements
--------------------
See Item 8 - Index to Financial Statements on page II-7, which page
is incorporated herein by reference.

2. Financial Statement Schedule
----------------------------
For the three years in the period ended December 31, 1995:

Page No.
--------
Schedule II - Valuation and qualifying accounts IV-7

The information required to be submitted in Schedules I, III,
IV and V is omitted as not applicable or not required under rules of
Regulation S-X.

IV-1

3. Exhibits
--------

The following exhibits have been filed with the Securities
and Exchange Commission and are incorporated herein by
reference.
Incorporation by
Reference
---------------------

2 Copy of the Agreement of Merger among Exhibit A to the 1986
DPL Inc., Holding Sub Inc. and the Proxy Statement
Company dated January 6, 1986............ (File No. 1-2385)

3(a) Regulations and By-Laws of the Company... Exhibit 2(e) to
Registration
Statement No. 2-68136
to Form S-16

3(b) Copy of Amended Articles of Incorporation Exhibit 3(b) to Report on
of the Company dated January 3, 1991..... Form 10-K for the year
ended December 31,
1991 (File No. 1-2385)

4(a) Copy of Composite Indenture dated as of Exhibit 4(a) to Report on
October 1,1935, between the Company and Form 10-K for the year
The Bank of New York, Trustee with all ended December 31,
amendments through the Twenty-Ninth 1985(File No. 1-2385)
Supplemental Indenture...................

4(b) Copy of the Thirtieth Supplemental Exhibit 4(h) to
Indenture dated as of March 1, 1982, Registration Statement
between the Company and The Bank of No. 33-53906
New York, Trustee........................

4(c) Copy of the Thirty-First Supplemental Exhibit 4(h) to
Indenture dated as of November 1, 1982, Registration Statement
betweeen the Company and The Bank of No. 33-56162
New York, Trustee........................

4(d) Copy of the Thirty-Second Supplemental Exhibit 4(i) to
Indenture dated as of November 1, 1982, Registration Statement
between the Company and The Bank of New No. 33-56162
York, Trustee............................

4(e) Copy of the Thirty-Third Supplemental Exhibit 4(e) to Report on
dated as of December 1, 1985, between Form 10-K for the year
the Company and The Bank of New York, ended December 31,
Trustee.................................. 1985 (File No. 1-2385)

4(f) Copy of the Thirty-Fourth Supplemental Exhibit 4 to Report on
Indenture dated as of April 1, 1986, Form 10-Q for quarter
between the Company and The Bank of New ended June 30, 1986
York, Trustee............................ (File No. 1-2385)

IV-2

4(g) Copy of the Thirty-Fifth Supplemental Exhibit 4(h) to Report on
Indenture dated as of December 1, 1986, Form 10-K for the year
between the Company and The Bank of New ended December 31,
York, Trustee............................ 1986 (File No. 1-9052)

4(h) Copy of the Thirty-Sixth Supplemental Exhibit 4(i) to
Indenture dated as of August 15, 1992, Registration Statement
between the Company and The Bank of New No. 33-53906
York, Trustee............................

4(i) Copy of the Thirty-Seventh Supplemental Exhibit 4(j) to
dated as of November 15, 1992, between Registration Statement
the Company and The Bank of New York, No. 33-56162
Trustee..................................

4(j) Copy of the Thirty-Eighth Supplemental Exhibit 4(k) to
Indenture dated as of November 15, 1992, Registration Statement
between the Company and The Bank of New No. 33-56162
York, Trustee............................

4(k) Copy of the Thirty-Ninth Supplemental Exhibit 4(k) to
Indenture dated as of January 15, 1993, Registration Statement
between the Company and The Bank of New No. 33-57928
York, Trustee............................

4(l) Copy of the Fortieth Supplemental Exhibit 4(m) to Report on
Indenture dated as of February 15, 1993, Form 10-K for the year
between the Company and The Bank of New ended December 31,
York, Trustee............................ 1992 (File No. 1-2385)

10(a) Description of Management Incentive Exhibit 10(d) to Report on
Compensation Program for Certain Form 10-K for the year
Executive Officers...................... ended December 31,
1986 (File No. 1-9052)

10(b) Copy of Severance Pay Agreement with Exhibit 10(g) to Report on
Certain Executive Officers.............. Form 10-K for the year
ended December 31,
1987 (File No. 1-2385)

10(c) Copy of Supplemental Executive Exhibit 10(f) to Report on
Retirement Plan amended August 6, 1991.. Form 10-K for the year
ended December 31,
1991 (File No. 1-2385)

10(d) Amended description of Directors' Exhibit 10(d) to Report on
Deferred Stock Compensation Plan Form 10-K for the year
effective January 1, 1993............... ended December 31,
1993 (File No. 1-2385)

IV-3

10(e) Amended description of Deferred Exhibit 10(e) to Report on
Compensation Plan for Non-Employee Form 10-K for the year
Directors effective January 1, 1993..... ended December 31,
1993 (File No. 1-2385)

10(f) Copy of Management Stock Incentive Plan Exhibit 10(f) to Report on
amended January 1, 1993................. Form 10-K for the year
ended December 31,
1993 (File No. 1-2385)

18 Copy of preferability letter relating to Exhibit 18 to Report on
change in accounting for unbilled Form 10-K for the year
revenues from Price Waterhouse LLP....... ended December 31,
1988 (File No. 1-2385)

The following exhibits are filed herewith:

Page No.
--------

21 Copy of List of Subsidiaries of the Company

(b) Reports on Form 8-K
-------------------

None.

IV-4

SIGNATURES

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

THE DAYTON POWER AND LIGHT COMPANY

Registrant

March 21, 1996 Peter H. Forster
----------------------------------
Peter H. Forster
Chairman

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

Paul R. Anderson Controller (principal March 21, 1996
- -------------------- accounting officer)
(P. R. Anderson)

Thomas J. Danis Director March 26, 1996
- --------------------
(T. J. Danis)

Director March , 1996
- --------------------
(J. F. Dicke, II)

Peter H. Forster Director and Chairman March 21, 1996
- -------------------- (principal executive
(P.H. Forster) officer)

Ernie Green Director March 22, 1996
- --------------------
(E. Green)

Director March , 1996
- --------------------
(J. G. Haley)

IV-5

Allen M. Hill Director, President and March 21, 1996
- -------------------- Chief Executive Officer
(A. M. Hill) Executive Officer

Director March , 1996
- --------------------
(W A. Hillenbrand)

Director March , 1996
- --------------------
(D. R. Holmes)

Thomas M. Jenkins Group Vice President March 21, 1996
- -------------------- (principal financial
(T. M. Jenkins) officer)

Burnell R. Roberts Director March 25, 1996
- --------------------
(B. R. Roberts)

IV-6

Schedule II

THE DAYTON POWER AND LIGHT COMPANY
VALUATION AND QUALIFYING ACCOUNTS

For the years ended December 31, 1995, 1994 and 1993

- ----------------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- ----------------------------------------------------------------------------------------
Additions
--------------
Balance at Charged Balance
Beginning to Deductions at End
Description of Period Income Other (1) of Period
- ----------------------------------------------------------------------------------------
-------------------thousands--------------------

1995:
Deducted from accounts receivable--

Provision for uncollectible accounts $ 7,801 $ 1,096 $ - $ 2,416 $ 6,481

1994:
Deducted from accounts receivable--

Provision for uncollectible accounts $ 9,122 $ 1,553 $ - $ 2,874 $ 7,801

1993:
Deducted from accounts receivable--

Provision for uncollectible accounts $10,461 $ 1,353 $ - $ 2,692 $ 9,122

(1) Amounts written off, net of recoveries of accounts
previously written off.

IV-7