FORM 10-Q

Commission file number 0-17955

SEARS DC CORP.
Condensed Statements of Income
(Unaudited)

PART I. FINANCIAL INFORMATION

See accompanying notes.

1

SEARS DC CORP.
Condensed Statements of Financial Position

2

SEARS DC CORP.
Condensed Statements of Cash Flows
(Unaudited)

SEARS DC CORP.
Notes To Condensed Financial Statements
(Unaudited)

Notes to Condensed Financial Statements
(thousands)

Sears DC Corp. ("SDC" or the "Company"), a wholly-owned subsidiary of Sears, Roebuck and Co. ("Sears"), was formed to borrow in domestic and foreign debt markets and lend the proceeds of such borrowings to Sears and certain direct and indirect subsidiaries of Sears in exchange for their unsecured notes. The only outstanding debt of SDC is two series of medium-term notes. SDC does not plan to issue additional debt.

Under an agreement between SDC and Sears, the interest rate paid by Sears on its unsecured notes is designed to produce earnings sufficient to cover SDC's fixed charges at least 1.005 times. Required payments of principal and interest to SDC under the Sears borrowing agreement are intended to be sufficient to allow SDC to make timely payments of principal and interest to the holders of its securities.

Certain information and footnote disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted. The significant accounting policies used in the presentation of these financial statements are consistent with the summary of significant accounting policies set forth in SDC's Annual Report on Form 10-K for the fiscal year ended December 28, 2002, and these financial statements should be read in conjunction with the financial statements and notes found therein. The interim financial statements reflect all adjustments (consisting only of normal recurring accruals) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The results of operations for the interim periods should not be considered indicative of the results to be expected for the full year.

The medium-term notes are not redeemable by SDC except in the event of a significant decline in Discover Card receivables of Sears former subsidiary, Dean Witter, which is now a part of Morgan Stanley. SDC's borrowings include the following:

At June 28, 2003, medium-term note maturities for the next five years and thereafter are as follows:

4

SEARS DC CORP.
13 and 26 Weeks Ended June 28, 2003 And June 29, 2002

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
(amounts in millions)

SDC invests funds in promissory notes of Sears, which pay interest sufficient to cover SDC's fixed charges at least 1.005 times.

The $47.8 in outstanding medium-term notes as of June 28, 2003 are generally not redeemable prior to their stated maturity. One exception is in the event of a significant decline in Discover Card receivables of Sears former subsidiary, Dean Witter, which is now a part of Morgan Stanley.

RESULTS OF OPERATIONS

Medium-term notes outstanding were $47.8 and $52.8 as of June 28, 2003 and June 29, 2002, respectively. Revenues decreased 24.0% to $2.4 in 2003 from $3.1 in 2002. The revenue decrease is due to lower levels of interest-earning assets in 2003. The decrease in the amount of medium-term notes outstanding led to interest and related expenses decreasing 24.1% to $2.3 in 2003 from $3.1 in 2002. Earnings covered fixed charges 1.005 times for the 13 and 26 weeks ended June 28, 2003 and June 29, 2002.

Certain statements made in this Report on Form 10-Q are "forward-looking statements" that are subject to risks and uncertainties that could cause results to be materially different from any future results expressed or implied by these forward-looking statements. These statements are based on a number of assumptions about a variety of factors, including the ability of Sears to perform under the agreements described herein and general economic conditions (such as interest rates). While SDC believes that these assumptions are reasonable, SDC cautions that it is impossible to predict the impact of certain facts that could cause actual results to differ from expected results. SDC intends the forward-looking statements to speak only as of the time first made and does not undertake to update or revise them as more information becomes available.

Item 3. Quantitative and Qualitative Disclosures about Market Risk
(amounts in millions)

SDC's outstanding debt securities are subject to interest rate risk. All debt securities are considered non-trading. At June 28, 2003 and June 29, 2002, 100% of SDC's portfolio was fixed rate. For the 13 and 26 weeks ended June 28, 2003 and June 29, 2002, the carrying value of SDC's debt was $47.8 and $52.8, respectively.

For the period ended June 28, 2003, average interest rates by year of maturity were:

SEARS DC CORP.
13 and 26 Weeks Ended June 28, 2003 And June 29, 2002

The Company's management, including Larry R. Raymond, President and Chief Executive Officer (principal executive officer) and Keith E. Trost, Vice President and Treasurer (principal financial officer), have evaluated the effectiveness of the Company's "disclosure controls and procedures," as such term is defined in Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934, as amended, within 90 days of the filing date of this Quarterly Report on Form 10-Q. Based upon their evaluation, the principal executive officer and principal financial officer concluded that the Company's disclosure controls and procedures are effective. There were no significant changes in the Company's internal controls or in other factors that could significantly affect these controls, since the date the controls were evaluated.

SEARS DC CORP.
13 and 26 Weeks Ended June 28, 2003 And June 29, 2002

PART II. OTHER INFORMATION

7

SEARS DC CORP.
13 and 26 Weeks Ended June 28, 2003 And June 29, 2002

SIGNATURE

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

I, Larry R. Raymond, President and Chief Executive Officer of Sears DC Corp., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Sears DC Corp.

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

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

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

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

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

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

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

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

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

6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

I, Keith E. Trost, Vice President and Treasurer of Sears DC Corp., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Sears DC Corp.

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

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

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

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

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

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

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

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

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

6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

10

SEARS DC CORP.
13 and 26 Weeks Ended June 28, 2003 And June 29, 2002

_____________________
*     Sec File No. 0-17955
**  Filed herewith

E-1

Pursuant to 18 U.S.C. 1350 as adopted Section 906 of the Sarbanes-Oxley Act of 2002

The undersigned, Larry R. Raymond, President and Chief Executive Officer of Sears DC Corp. (the "Company"), has executed this certification in connection with the filing with the Securities and Exchange Commission of the Company's Quarterly Report on Form 10-Q for the period ended June 28, 2003 (the "Report").

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, the undersigned has executed this certification as of the 6th day of August, 2003.

A signed original of this written statement required by Section 906 has been provided to Sears DC Corp. and will be retained by Sears DC Corp. and furnished to the Securities and Exchange Commission or its staff upon request.

E-2

Pursuant to 18 U.S.C. 1350 as adopted Section 906 of the Sarbanes-Oxley Act of 2002

The undersigned, Keith E. Trost, Vice President and Treasurer of Sears DC Corp. (the "Company"), has executed this certification in connection with the filing with the Securities and Exchange Commission of the Company's Quarterly Report on Form 10-Q for the period ended June 28, 2003 (the "Report").

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, the undersigned has executed this certification as of the 6th day of August, 2003.

A signed original of this written statement required by Section 906 has been provided to Sears DC Corp. and will be retained by Sears DC Corp. and furnished to the Securities and Exchange Commission or its staff upon request.