DOLLAR GENERAL CORP, S-3/A, 1998-05-12

DOLLAR GENERAL CORP
S-3/A, 1998-05-12
VARIETY STORES

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 12, 1998

REGISTRATION NO. 333-50451
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
AMENDMENT NO. 1
TO

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------

DOLLAR GENERAL CORPORATION
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C>
KENTUCKY 61-0502302
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
</TABLE>

104 WOODMONT BOULEVARD, SUITE 500, NASHVILLE, TENNESSEE 37205
(615) 783-2000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)

---------------------

ROBERT C. LAYNE

CORPORATE SECRETARY
DOLLAR GENERAL CORPORATION
104 WOODMONT BOULEVARD, SUITE 300
NASHVILLE, TENNESSEE 37205
(615) 783-2000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

COPIES TO:

<TABLE>
<S> <C>
JAMES H. CHEEK, III NORMAN D. SLONAKER
BASS, BERRY & SIMS PLC BROWN & WOOD LLP
2700 FIRST AMERICAN CENTER ONE WORLD TRADE CENTER
NASHVILLE, TENNESSEE 37238 NEW YORK, NEW YORK 10048
(615) 742-6200 (212) 839-5300
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.

If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]

If the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] __________

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] __________

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]

---------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
================================================================================
<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED MAY 12, 1998

PROSPECTUS

7,500,000 SHARES

DOLLAR GENERAL CORPORATION LOGO

COMMON STOCK
------------------------

This Prospectus relates to 7,500,000 shares of Common Stock, par value $.50
per share (the "Common Stock"), of Dollar General Corporation, a Kentucky
corporation (the "Company"), which may be distributed to holders of the
Structured Yield Product Exchangeable for Stock(SM) (each, a "STRYPES") of and
issued by Dollar General STRYPES Trust, a Delaware business trust (the "Trust"),
upon conclusion of the term of the Trust on , 2001 (the "Exchange
Date"), upon any exercise by the Contracting Stockholder (as hereafter defined)
of its acceleration right under the Forward Purchase Contract described below,
or upon early dissolution of the Trust in certain circumstances. The Trust has
granted the Underwriters of the STRYPES a 30-day option to purchase additional
STRYPES, solely to cover over-allotments, if any. This Prospectus also relates
to up to an additional 1,125,000 shares of Common Stock which may be distributed
by the Trust to the holders of (i) STRYPES issued upon the exercise of the
over-allotment option granted by the Trust to the Underwriters of the STRYPES
and (ii) STRYPES subscribed for and purchased by an affiliate of Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch") in connection with the
formation of the Trust.

All of the shares of Common Stock covered hereby are beneficially owned by
the Turner Children Trust (the "Contracting Stockholder"), of which Cal Turner,
Jr. and James Stephen Turner are the co-trustees. The Company has been advised
that the Contracting Stockholder may deliver such Common Stock to the Trust
pursuant to a forward purchase contract (the "Forward Purchase Contract")
between the Contracting Stockholder and the Trust. In lieu of delivering shares
of Common Stock, the Contracting Stockholder has the right to satisfy its
obligations under the Forward Purchase Contract, in whole or in part, by
delivering cash with an equal value. The Company will not receive any of the
proceeds from the sale of the STRYPES or as a result of the distribution of the
Common Stock in connection therewith.

The STRYPES are offered by a separate prospectus of the Trust (the "STRYPES
Prospectus"). This Prospectus relates only to the Common Stock covered hereby
and does not relate to the STRYPES. THE COMPANY TAKES NO RESPONSIBILITY FOR ANY
INFORMATION INCLUDED IN OR OMITTED FROM THE STRYPES PROSPECTUS. THE STRYPES
PROSPECTUS DOES NOT CONSTITUTE A PART OF THIS PROSPECTUS, NOR IS IT INCORPORATED
BY REFERENCE HEREIN. Because the STRYPES are a separate security issued by the
Trust, for which the Company has no responsibility, an investment in the STRYPES
may have materially different characteristics and risks from a direct investment
in the Common Stock.

SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR A DISCUSSION OF CERTAIN FACTORS
THAT ARE RELEVANT TO AN INVESTMENT IN THE COMMON STOCK.

The Common Stock is traded on the New York Stock Exchange, Inc. ("NYSE")
under the trading symbol "DG." On May 8, 1998, the last reported sale price of
the Common Stock on the NYSE was $40 per share. See "Price Range of Common Stock
and Dividend Policy."

------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

------------------------
(SM)Service mark of Merrill Lynch & Co., Inc.

The date of this Prospectus is , 1998.
<PAGE> 3

IN CONNECTION WITH THE OFFERING OF THE STRYPES, MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED AND GOLDMAN, SACHS & CO. (THE "UNDERWRITERS OF THE
STRYPES") MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE
AFFECT THE PRICE OF THE COMMON STOCK. SUCH TRANSACTIONS MAY INCLUDE STABILIZING
AND THE PURCHASE OF STRYPES TO COVER SHORT POSITIONS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "PLAN OF DISTRIBUTION."

This Prospectus contains or incorporates by reference certain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act"), and Section 21E of the Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder
(collectively the "Exchange Act"), which are intended to be covered by the safe
harbors created thereby. When used in this Prospectus, the words "anticipate,"
"believe," "estimate," "expect" and similar expressions are intended to identify
forward-looking statements. Investors are cautioned that all forward-looking
statements involve risks and uncertainty. Although the Company believes that the
assumptions underlying the forward-looking statements contained herein are
reasonable, any of the assumptions could be inaccurate, and therefore, there can
be no assurance that the forward-looking statements included or incorporated by
reference in this Prospectus will prove to be accurate. In light of the
significant uncertainties inherent in the forward-looking statements included or
incorporated by reference herein, including those discussed in "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business," the inclusion of such information should not be
regarded as a representation by the Company or any other person that the
objectives and plans of the Company will be achieved. The Company does not
intend to update any of these forward-looking statements.

AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") in Washington, D.C., a Registration Statement on Form S-3
(including the exhibits and amendments thereto, the "Registration Statement")
pursuant to the Securities Act with respect to the shares of Common Stock
covered by this Prospectus. This Prospectus does not contain all the information
set forth in the Registration Statement, certain portions of which are omitted
as permitted by the rules and regulations of the Commission and to which
reference is hereby made. Statements contained in this Prospectus regarding the
contents of any contract, agreement or any other document referred to herein are
not necessarily complete. With respect to each such contract, agreement or other
document filed or incorporated by reference as an exhibit to the Registration
Statement or as an exhibit to documents incorporated by reference in this
Prospectus, reference is made to the copy of such contract, agreement or other
document filed as an exhibit to the Registration Statement or such other
document for a more complete description of the matter involved, and each such
statement shall be deemed qualified in all respects by such reference. Copies of
the Registration Statement, of which this Prospectus is a part, together with
such exhibits may be inspected without charge at the office of the Commission in
Washington, D.C. and copies thereof may be obtained therefrom upon payment of a
prescribed fee.

The Company is subject to the reporting requirements of the Exchange Act
and, in accordance therewith, files annual and quarterly reports, proxy
statements and other information with the Commission. Such reports, proxy
statements and other information may be inspected and copies of such materials
may be obtained from the Public Reference Section of the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N. W., Washington, D. C., 20549 and at
the following regional offices of the Commission: Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago Illinois 60661-2511; and 7 World Trade
Center, 13th Floor, New York, New York 10048, upon payment of the charges
prescribed therefor by the Commission. Additionally, the Commission maintains a
Web site on the Internet at http://www.sec.gov that contains reports, proxy
statements and other information about the Company.

The Common Stock is listed on the NYSE and the Company is required to file
reports, proxy statements and other information with the NYSE. These documents
may be inspected at the principal office of the NYSE at 20 Broad Street, New
York, New York 10005.

2
<PAGE> 4

All information contained in this Prospectus relating to the Contracting
Stockholder or to the proposed or potential methods of distribution of the
Common Stock covered hereby and all information contained herein regarding the
STRYPES, the Trust, the Forward Purchase Contract and the proposed STRYPES
offering has been supplied by the Contracting Stockholder. The Company has not
been involved in the formation of the Trust (including, without limitation,
establishing the terms of the STRYPES) and the securities issued or held by the
Trust may be subject to factors unrelated to the Company and the Common Stock.

It is contemplated that this Prospectus will be provided only to persons
who are prospective purchasers of the STRYPES, which persons shall
simultaneously receive from the Trust or the Underwriters of the STRYPES a
STRYPES Prospectus relating to the offer and sale of the STRYPES. This
Prospectus is not intended and has not been authorized to be used for any
purpose other than to provide legally required information to prospective
purchasers of the STRYPES who also have received the STRYPES Prospectus.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WITH RESPECT TO THE
COMPANY THAT ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS
(EXCLUDING EXHIBITS THERETO, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED
BY REFERENCE INTO SUCH DOCUMENTS) ARE AVAILABLE WITHOUT CHARGE TO ANY PERSON TO
WHOM THIS PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST TO MS. KILEY
FLEMING, INVESTOR RELATIONS MANAGER, DOLLAR GENERAL CORPORATION, 104 WOODMONT
BOULEVARD, SUITE 500, NASHVILLE, TENNESSEE 37205, TELEPHONE: (615) 783-2014.

The information in the following documents filed by the Company with the
Commission (File No. 0-4769) pursuant to the Exchange Act is incorporated by
reference into this Prospectus:

1. The Annual Report on Form 10-K for the fiscal year ended January
30, 1998, filed with the Commission on April 20, 1998.

2. The Company's Registration Statement on Form 8-A filed April 27,
1970, relating to the Company's Common Stock.

In addition, all documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering made hereby shall be deemed to be
incorporated by reference herein and to be a part hereof from the date any such
document is filed.

Any statement made herein or contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein, or in any other subsequently filed document that is also
incorporated or deemed to be incorporated by reference herein, modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus. The information relating to the Company contained in this Prospectus
should be read together with the information contained in the documents
incorporated by reference.

3
<PAGE> 5

PROSPECTUS SUMMARY

The following is a summary of certain information contained in or
incorporated by reference in this Prospectus. This summary is not intended to be
complete and is qualified in its entirety by reference to, and should be read in
conjunction with, the detailed information contained in and incorporated by
reference in this Prospectus. The Company's fiscal year ends on the last Friday
in January for fiscal years 1999, 1998 and 1997. Prior thereto the fiscal year
ended on January 31. The Prospectus contains references to years 1999, 1998,
1997, 1996 and 1995 which represent fiscal years ending or ended January 29,
1999, January 30, 1998 and January 31, 1997, 1996 and 1995, respectively. Unless
the context otherwise requires, references to the Company or Dollar General are
intended to include Dollar General Corporation and its consolidated
subsidiaries.

THE COMPANY

Dollar General Corporation ("Dollar General" or the "Company") is a leading
discount retailer of quality general merchandise at everyday low prices through
its conveniently located stores. The Company's stores offer a focused assortment
of consumable basic merchandise including health and beauty aids, packaged food
products, cleaning supplies, housewares, stationery, seasonal goods, non-fashion
apparel and domestics. During fiscal 1998, hardline and softline merchandise
accounted for 82% and 18% of net sales, respectively. Through convenient
neighborhood locations, Dollar General Stores primarily serve low, middle and
fixed income families. As of January 30, 1998, the Company operated 3,169 stores
located in 24 states, primarily in the midwestern and southeastern United
States.

The Company opened its first Dollar General Store in 1955 and during the
last five years has experienced a rapid rate of expansion. Dollar General has
grown from 1,800 stores with 10,724,000 estimated selling square feet at January
31, 1994, to 3,169 stores with 20,112,000 estimated selling square feet at
January 30, 1998. In addition to growth from new store openings, the Company
recorded same-store net sales increases in 1996, 1997 and 1998 of 5.1%, 8.2% and
8.4%, respectively. From 1994 to 1998, the Company had a compound annual growth
rate in net sales, operating income and net income of 23.4%, 30.9% and 31.4%,
respectively. Management believes that the Company has the potential to
significantly expand its existing store base within the 24 states in which it
currently operates. In 1999, the Company has plans to open approximately 500 to
525 new stores.

BUSINESS STRATEGY

The Company's mission is "SERVING OTHERS! A Better Life . . . for our
Customers. A Superior Investment . . . for our Shareholders. A Partnership in
Total Development . . . with our Employees." In order to carry out its mission,
the Company has developed a business strategy, which includes the following
principal elements:

Focus on Low, Middle and Fixed Income Customers. The Company seeks to
serve the consumable basic merchandise needs of low, middle and fixed income
customers. The Company's typical customer is a female living in a household of
three to four individuals with a household income of less than $30,000 per year.
37% of U.S. household incomes for the year 1995 were under $25,000, according to
the U.S. Bureau of the Census (median income and income level by household
type).

"Convenience Discount Store" Format. Dollar General Stores average 6,400
selling square feet and are located in close proximity to customers' homes
(usually within three to five miles). This concept appeals to the Company's
target customers, many of whom prefer the convenience of a small, neighborhood
store. This "convenience discount store" format has become even more appealing
to a wider range of consumers as many discounters have focused their efforts on
building increasingly larger stores outside of towns and consequently, have
become less accessible and convenient for the Company's target customers.

4
<PAGE> 6

housewares, stationery, seasonal goods, non-fashion apparel and domestics. In
1998, hardline merchandise represented more than 80% of net sales. Approximately
97% of net sales in 1998 consisted of first-run merchandise, with the remainder
consisting of manufacturer's overruns and closeouts. In 1998, the average
customer transaction was approximately $8. By consistently offering a focused
assortment of consumable basic merchandise, the Company encourages customers to
shop Dollar General Stores for their everyday household needs, leading to
frequent customer visits.

Everyday Low Prices. The Company's strategy is to distribute quality,
consumable basic merchandise at everyday low prices. The Company's low cost
operating structure and focused assortment allow it to offer quality merchandise
with compelling value. The Company emphasizes even-dollar price points. The
majority of products are priced at $10 or less, with nearly 50% of the products
priced at $1 or less. The most expensive items generally are priced at $35.

Low Operating Costs. The Company maintains strict overhead cost controls
and seeks to locate stores in neighborhoods where store rental and operating
costs are low. The Company also continues to utilize new technology when cost
effective in order to improve operating efficiencies. Selling, general and
administrative ("SG&A") expenses, as a percentage of net sales, declined to
19.3% in 1998 from 21.7% in 1994.

GROWTH STRATEGY

Management believes that future growth will come from a combination of
merchandising initiatives, new store growth and infrastructure leverage.

Merchandising Initiatives. The Company continually evaluates its
merchandise mix. From 1994 to 1997, net sales by product category shifted from
65% hardlines/35% softlines to 75% hardlines/25% softlines. In response to this
shift in customer preference, in 1998 the Company added 700 new, faster-turning
consumable items to the product mix and converted stores to a new prototype with
a space allocation of 65% hardlines/35% softlines, compared with a 50%/50%
allocation in 1997. These initiatives, which the Company began in March 1997,
were substantially complete by August 1997. As a result, in 1998 the Company's
product mix further shifted to hardlines from softlines (82% hardlines/18%
softlines). Management believes these initiatives have and will contribute to
same-store net sales increases.

In 1999, the Company will add a series of family-oriented basic apparel
programs to its stores. These programs include items such as jeans, khakis,
t-shirts and knit shirts for men, women and children at prices of $10 or less.
The Company expects to position this new merchandise in all of its stores by
August 1998.

New Store Growth. The Company believes its "convenience discount store"
format is portable to towns and neighborhoods throughout the country. The
Company currently serves more than 1,800 communities with populations of under
25,000, and according to the U.S. Bureau of the Census, there are approximately
18,000 such communities in the United States. The Company will continue to focus
on towns and neighborhoods within its current 24-state market area where
management believes that the Company has the potential to significantly expand
its store base. In 1999, the Company plans to open 500 to 525 new stores and
relocate an additional 150 to 200 stores. By opening new stores in its existing
24-state market area, the Company leverages brand awareness and takes advantage
of operating efficiencies. In addition, the Company expects to explore the
potential for geographic expansion as opportunities present themselves and
currently targets an annual new store growth rate of approximately 15% over the
next several years.

Leverage Infrastructure to Improve Margins. As the Company has increased
its sales and leveraged its infrastructure, SG&A expenses, as a percentage of
net sales, have declined to 19.3% in 1998, from 21.7% in 1994. The Company
continues to make significant investments in infrastructure. Management believes
that these investments will enable the Company to continue to aggressively grow
its store base while further improving its operating margins. The Company
realizes significant cost efficiencies by locating stores in close proximity to
a distribution center. Having sophisticated and well-located distribution
centers allows Dollar General to reduce distribution expenses, price its
merchandise aggressively and improve in-stock positions in its stores. During
the next 18 months, the Company plans to add three distribution centers, one of
which is scheduled to open in July 1998. In addition, the Company plans to
expand two existing distribution centers.

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<PAGE> 7

These initiatives will more than double the Company's distribution capacity. The
Company also installed point of sale scanners in all of its stores in 1998,
which the Company believes will allow the stores to decrease shrink, reduce
customer checkout time and improve inventory management.

The Company maintains its executive offices at 104 Woodmont Boulevard,
Suite 500, Nashville, Tennessee 37205. The Company's telephone number is (615)
783-2000.

RECENT RESULTS

On May 12, 1998 Dollar General reported results for the first quarter of
fiscal 1999 ended May 1, 1998. Net sales increased 35.6% to $705.3 million from
$520.0 million in the same period of the prior year. Net income increased 57.6%
to $30.4 million, or $0.18 per share, from $19.3 million, or $0.11 per share.
Same store sales increased 19.4% over the same period of the prior year. The
Company opened 166 new stores and closed 15 stores during the quarter.

Gross profit for the first quarter was $190.3 million, an increase of 34.2%
over the same period of the prior year. Gross margin decreased to 27.0% of net
sales as compared to 27.3% in the first quarter of 1998. Selling, general and
administrative expenses were $140.9 million, or 20.0% of net sales, as compared
to $110.3 million, or 21.2% in the same period of the prior year. Hardline and
softline sales accounted for 82.2% and 17.8%, respectively, of net sales, as
compared to 80.0% and 20.0% in the first quarter of 1998.

PLAN OF DISTRIBUTION

This Prospectus relates to 7,500,000 shares of Common Stock, which may be
distributed by the Trust to holders of the STRYPES upon exchange on the Exchange
Date, upon any exercise by the Contracting Stockholder of its acceleration right
under the Forward Purchase Contract, or upon early dissolution of the Trust in
certain circumstances. The Trust has granted the Underwriters of the STRYPES a
30-day option to purchase additional STRYPES, solely to cover over-allotments,
if any. This Prospectus also relates to up to an additional 1,125,000 shares of
Common Stock which may be distributed by the Trust to the holders of (i) STRYPES
issued upon the exercise of the over-allotment option granted by the Trust to
the Underwriters of the STRYPES and (ii) STRYPES subscribed for and purchased by
an affiliate of Merrill Lynch in connection with the formation of the Trust.

All of the shares of Common Stock covered hereby are beneficially owned by
the Contracting Stockholder which may deliver such Common Stock to the Trust
pursuant to the Forward Purchase Contract. The Company will not receive any of
the proceeds from the sale of the STRYPES or as a result of the distribution of
the Common Stock in connection therewith.

The STRYPES are offered only by the STRYPES Prospectus. This Prospectus of
the Company relates only to the Common Stock covered hereby and does not relate
to the STRYPES. THE COMPANY TAKES NO RESPONSIBILITY FOR ANY INFORMATION INCLUDED
IN OR OMITTED FROM THE STRYPES PROSPECTUS. THE STRYPES PROSPECTUS DOES NOT
CONSTITUTE A PART OF THIS PROSPECTUS, NOR IS IT INCORPORATED BY REFERENCE
HEREIN. Because the STRYPES are a separate security issued by the Trust, for
which the Company has no responsibility, an investment in the STRYPES may have
materially different characteristics from a direct investment in the Common
Stock.

6
<PAGE> 8

SUMMARY FINANCIAL DATA
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)

<TABLE>
<CAPTION>
FISCAL YEAR ENDED JANUARY,
--------------------------------------------------------------
1994 1995 1996 1997 1998
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS:
Net sales.......................... $1,132,995 $1,448,609 $1,764,188 $2,134,398 $2,627,325
Gross profit....................... 325,998 420,679 503,619 604,795 742,135
Operating income................... 80,196 121,087 148,907 189,676 235,543
Net income......................... 48,557 73,634 87,818 115,100 144,628
Earnings per common share(a):
Basic........................... $0.30 $0.54 $0.61 $0.80 $1.00
Diluted......................... 0.30 0.44 0.51 0.67 0.84
Cash dividends per common share.... 0.05 0.07 0.08 0.10 0.13
Weighted average shares
outstanding -- diluted(a)....... 164,260 168,479 171,288 172,213 171,490
FINANCIAL DATA:
Total assets....................... $397,237 $540,868 $679,996 $718,147 $914,838
Long-term obligations.............. 5,711 4,767 3,278 2,582 1,294
Shareholders' equity............... 240,717 323,756 420,011 485,529 583,896
Return on average assets........... 13.6% 15.7% 14.4% 16.5% 17.7%
Return on average equity........... 22.6 26.1 23.6 25.4 27.0
COMPANY OPERATING DATA (% OF NET
SALES):
Gross margin....................... 28.8% 29.0% 28.5% 28.3% 28.3%
Operating margin................... 7.1 8.3 8.4 8.9 9.0
Net income margin.................. 4.3 5.1 5.0 5.4 5.5
Hardlines sales.................... 65% 66% 70% 75% 82%
Softlines sales.................... 35 34 30 25 18
STORE OPERATING DATA:
Number of retail stores at end of
period.......................... 1,800 2,059 2,416 2,734 3,169
Estimated selling square feet at
end of period(000).............. 10,724 12,726 15,302 17,480 20,112
Average net sales per estimated
selling square foot for
same-stores..................... $114 $125 $129 $135 $141
Change in same-store net sales..... 12.7% 13.5% 5.1% 8.2% 8.4%
</TABLE>

- ---------------

(a) As adjusted to give retroactive effect to all common stock splits including
the split effective March 23, 1998.

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<PAGE> 9

RISK FACTORS

The following risk factors may affect the value of shares of Common Stock
and therefore should be considered, in conjunction with the other information
included and incorporated by reference in this Prospectus and the STRYPES
Prospectus, before making an investment decision.

Continued Management of Growth. The Company has experienced substantial
growth during the past several years through internal growth from same-store
sales increases and new store growth. Same-store sales increases in 1998, 1997
and 1996 were 8.4%, 8.2% and 5.1%, respectively. In 1998, 1997 and 1996, the
Company opened 468, 360 and 397 new stores, respectively, resulting in 435, 318
and 357 net new stores for each year, respectively. In addition, the Company has
opened two new distribution centers in the last three years (and has a third
scheduled to open in July 1998 and plans for two additional centers over the
next 18 months). There can be no assurance that the Company can maintain
same-store sales increases, net new store growth or the timely opening of
distribution centers. In addition, there can be no assurance that the Company
can manage such expanded operations effectively and any failure to do so could
have a material adverse effect on the Company's business, results of operations
and financial condition.

Risk of Transportation and Distribution Delays or Interruptions. The
Company is highly dependent on ground and overseas transportation to deliver
merchandise to its distribution centers and further dependent on ground
transportation to deliver merchandise from its distribution centers to each
Dollar General Store. Failure of merchandise to reach the Dollar General Stores
on a timely basis could result in stores not being in-stock. Distribution delays
or interruptions, resulting from (among other things) third party vendor delays
in production and/or shipping; work stoppage as a result of labor unrest or
strikes; internal delays associated with the Company's inability to effectively
open a new distribution center or computer malfunctions; or employee problems at
one or more distribution centers, could have a material adverse effect on the
Company's business, results of operations and financial condition.

Inventory Risks Due to Shifts in Market Demand. As a result of operating
more than 3,100 Dollar General Stores, the Company carries extensive inventory,
particularly in the third and fourth quarters of the fiscal year. Material
shifts in market demand for consumable basic merchandise could result in the
Company carrying inventory that cannot be sold at anticipated retail prices and
could result in significant markdowns and warehouse capacity problems. Failure
to maintain proper inventory levels and purchase appropriate merchandise could
result in a material adverse effect on the Company's business, results of
operations and financial condition.

Limited Availability of Suitable Merchandise. The Company's success
depends in large part upon its ability to select and purchase quality
merchandise at attractive prices in order to maintain a balance of regularly
available core products and a changing mix of new merchandise. The Company has
no continuing contracts for the purchase of merchandise and must continually
seek out buying opportunities from both its existing suppliers and new sources,
for which it competes with other discount, convenience, variety and closeout
merchandisers. Although the Company believes that its management has
long-standing and satisfactory relationships with its suppliers, there can be no
assurance that the Company will be successful in maintaining a continuing and
increasing supply of quality merchandise at attractive prices.

Adverse Economic Factors. The Company's ability to provide quality
merchandise in the Company's target price range is subject to certain economic
factors which are beyond the Company's control, including inflation, minimum
wage levels, fluctuating operating costs, changes in consumer confidence and
general economic conditions. There can be no assurance that such factors will
remain favorable and in particular, that hourly minimum wage rates, health care
costs, distribution costs, or other costs will remain at current levels.

Impact of Competition. The retail industry is highly competitive. The
Company competes with discount stores and with many retailers including grocery,
discount drug, convenience, variety and other specialty stores. Some of the
largest retail companies in the nation have stores in some of the areas where
the Company operates. The Company expects to face increased competition in the
future which could have a material adverse effect on the Company's business,
results of operations and financial condition.

8
<PAGE> 10

Dependence upon Key Management Personnel. The success of the Company
continues to be highly dependent upon the efforts of key management personnel of
the Company, particularly its senior executive officers. The loss of the
services of any one of its senior executive officers could have a material
adverse effect on the Company.

Risks of Year 2000 Noncompliance. The Company has considered the impact of
the year 2000 on its computer systems and applications and is currently
evaluating and implementing internal and major vendor compliance. Failure of the
Company or major vendors to conform and implement the use of software with four
digit configuration could result in a material adverse effect on the Company's
business, results of operations and financial condition.

Control by Principal Shareholders. As of April 15, 1998, members of the
Turner family, including the Turner Children Trust, beneficially own 38,148,258
shares of the Common Stock (including those represented by the outstanding
Series A Convertible Junior Preferred Stock) of the Company, which represents
22.8% of the voting stock of the Company. As a result, if they determined to
vote collectively, the Turner family would significantly influence the outcome
of any issues submitted to a vote of the Company's stockholders, including
election of the Company's Board of Directors, thereby directing the policies of
the Company.

Potential Fluctuations in Quarterly Operating Results. The Company's
quarterly operating results may fluctuate significantly in the future as a
result of a variety of factors, many of which are outside the Company's control.
Factors that could affect the Company's quarterly net sales or operating results
generally include: costs relating to the expansion of the Company's business,
the seasonal nature of the Company's business, price competition or price
changes, general economic conditions and the timing of new store openings.
Quarterly sales and operating results can be difficult to forecast even in the
short term, though typically as a result of the holiday season, the Company's
net sales are highest in the fourth quarter of the fiscal year. Due to all the
foregoing factors, it is possible that the Company's net sales or operating
results in one or more future quarters will fail to meet or exceed the
expectations of securities analysts or investors. In such event, the trading
price of the Company's Common Stock would likely be materially adversely
affected.

Price Volatility. The market price of the Common Stock could be subject to
significant fluctuations in response to variations in quarterly operating
results, the Company's prospects, changes in earnings estimates by securities
analysts and by economic, financial and other factors and market conditions that
can affect the capital markets generally, the market segment of which the
Company is a part, the NYSE, including the level of, and fluctuations in, the
trading prices of stocks generally and sales of substantial amounts of Common
Stock in the market, or the perception that such sales could occur, and by other
events that are difficult to predict and beyond the Company's control. In
addition, the securities markets have experienced significant price and volume
fluctuations from time to time that have often been unrelated or
disproportionate to the operating performance of particular companies. These
broad fluctuations may adversely affect the market price of the Common Stock.

Impact of STRYPES on the Market for the Common Stock. Any market that
develops for the STRYPES is likely to influence and be influenced by the market
for the Common Stock. For example, the price of the Common Stock, and,
therefore, the value of the STRYPES, could be depressed by investors' reaction
to the potential distribution into the market of substantial amounts of the
Common Stock upon any exercise by the Contracting Stockholder of its
acceleration right under the Forward Purchase Contract and/or on the maturity
date of the STRYPES, by possible sales of the Common Stock by investors who view
the STRYPES as a more attractive means of equity participation in the Company,
and by hedging or arbitrage trading activity that may develop involving the
STRYPES and the Common Stock.

9
<PAGE> 11

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

The Company's Common Stock is listed on the NYSE under the symbol "DG."
Beginning with 1997, the Company's fiscal year ends on the last Friday in
January. The table below sets forth the high and low sale prices per share of
the Company's Common Stock on the NYSE, for the periods indicated and sets forth
the per share dividends declared with respect to the Common Stock. Per share
prices of the Common Stock and the amount of the dividend declared have been
adjusted to reflect prior stock splits.

<TABLE>
<CAPTION>
HIGH LOW DIVIDEND
------- ------- --------
<S> <C> <C> <C>
1997:
First Quarter............................................. $13 5/8 $ 9 5/8 $.03
Second Quarter............................................ 15 12 5/8 .03
Third Quarter............................................. 17 3/4 14 .03
Fourth Quarter............................................ 17 1/8 14 1/4 .03
1998:
First Quarter............................................. $22 5/8 $16 3/4 $.03
Second Quarter............................................ 29 5/8 18 1/2 .03
Third Quarter............................................. 30 3/4 23 .03
Fourth Quarter............................................ 32 24 1/2 .04
1999:
First Quarter............................................. $40 1/8 $29 1/4 $.04
Second Quarter (through May 8, 1998)...................... 40 1/2 36 13/16 N/A
</TABLE>

The last reported sale price of the Common Stock on the NYSE on May 8,
1998, was $40 per share. As of March 31, 1998, the Company estimates that it had
approximately 4,000 stockholders of record.

The Company has paid quarterly cash dividends on its Common Stock since
1975. The Board of Directors regularly reviews the Company's dividend policy to
ensure that it is consistent with the Company's earnings performance, financial
condition and need for capital and other relevant factors.

USE OF PROCEEDS

All of the shares of Common Stock covered by this Prospectus are
beneficially owned by the Contracting Stockholder, who may deliver such shares
to the Trust pursuant to the Forward Purchase Contract. See "Plan of
Distribution." The Company will not receive any of the proceeds from the sale of
any STRYPES or from any sale of such Common Stock in connection therewith.

10
<PAGE> 12

SELECTED FINANCIAL DATA

The selected consolidated financial data of the Company for the five years
ended January 31, 1994, 1995, 1996, 1997 and January 30, 1998 are derived from
the audited consolidated financial statements of the Company. The following data
should be read in conjunction with "Management's Discussion and Analysis of the
Financial Condition and Results of Operations" and the consolidated financial
statements, including the notes thereto, included or incorporated by reference
in this Prospectus.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED JANUARY,
--------------------------------------------------------------
1994 1995 1996 1997 1998
---------- ---------- ---------- ---------- ----------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)
<S> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS:
Net sales............................... $1,132,995 $1,448,609 $1,764,188 $2,134,398 $2,627,325
Gross profit............................ 325,998 420,679 503,619 604,795 742,135
Operating income........................ 80,196 121,087 148,907 189,676 235,543
Net income.............................. 48,557 73,634 87,818 115,100 144,628
Earnings per common share(a):
Basic................................ $0.30 $0.54 $0.61 $0.80 $1.00
Diluted.............................. 0.30 0.44 0.51 0.67 0.84
Cash dividends per common share......... 0.05 0.07 0.08 0.10 0.13
Weighted average shares outstanding --
diluted(a)........................... 164,260 168,479 171,288 172,213 171,490
FINANCIAL DATA:
Total assets............................ $397,237 $540,868 $679,996 $718,147 $914,838
Long-term obligations................... 5,711 4,767 3,278 2,582 1,294
Shareholders' equity.................... 240,717 323,756 420,011 485,529 583,896
Return on average assets................ 13.6% 15.7% 14.4% 16.5% 17.7%
Return on average equity................ 22.6 26.1 23.6 25.4 27.0
COMPANY OPERATING DATA (% OF NET SALES):
Gross margin............................ 28.8% 29.0% 28.5% 28.3% 28.3%
Operating margin........................ 7.1 8.3 8.4 8.9 9.0
Net income margin....................... 4.3 5.1 5.0 5.4 5.5
Hardlines sales......................... 65% 66% 70% 75% 82%
Softlines sales......................... 35 34 30 25 18
STORE OPERATING DATA:
Number of retail stores at end of
period............................... 1,800 2,059 2,416 2,734 3,169
Estimated selling square feet at end of
period(000).......................... 10,724 12,726 15,302 17,480 20,112
Average net sales per estimated selling
square foot for same-stores.......... $114 $125 $129 $135 $141
Change in same-store net sales.......... 12.7% 13.5% 5.1% 8.2% 8.4%
</TABLE>

- ---------------

(a) As adjusted to give retroactive effect to all common stock splits including
the split distributed March 23, 1998.

11
<PAGE> 13

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

This discussion and analysis contains both historical and forward-looking
information. The forward-looking statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Although the
Company believes that the assumptions underlying the forward-looking statements
contained herein are reasonable, any of the assumptions could be inaccurate, and
therefore, there can be no assurance that the forward-looking statements
included herein will prove to be accurate. Forward-looking statements may be
significantly impacted by certain risks and uncertainties, including, but not
limited to: general transportation and distribution delays or interruptions;
inventory risks due to shifts in market demand; changes in product mix;
interruptions in suppliers' operations; costs and delays associated with
building, opening and operating new distribution centers; and the other risk
factors set forth in this Prospectus. The Company undertakes no obligation to
publicly release any revisions to any forward-looking statements contained
herein to reflect events or circumstances occurring after the date hereof or to
reflect the occurrence of unanticipated events.

The following text contains references to years 1999, 1998, 1997 and 1996
which represent fiscal years ending January 29, 1999, January 30, 1998 and
January 31, 1997 and 1996, respectively. This discussion and analysis should be
read in conjunction with, and is qualified in its entirety by, the consolidated
financial statements, including the notes thereto.

GENERAL

During 1998, Dollar General achieved record sales and earnings and
continued its rapid pace of new store openings. In addition, the Company
continued to lower its SG&A expense, as a percentage of net sales.

For the tenth consecutive year, the Company increased its total number of
store units. By adding a net 435 units, the Company ended the year with 3,169
stores. This increase in store units represents the largest number of annual new
store openings in the Company's history. Despite the start-up costs associated
with opening these stores, the minimum wage increase and the store remodeling
costs associated with the Company's addition of 700 new consumable basic items,
the Company increased earnings per diluted share by more than 15% for the
eleventh consecutive year. From 1994 through 1998, the Company had a compound
annual growth rate in net sales and net income of 23.4% and 31.4%, respectively.

The Company opened 468 new stores in 1998, compared with 360 in 1997 and
397 in 1996. The 1998 new stores, net of 33 closed stores, added approximately
2,632,000 selling square feet to the Company's total sales space, providing the
Company with an aggregate of approximately 20,112,000 selling square feet at the
end of the year. The average store measured 6,400 selling square feet in 1998
and 1997 and 6,300 selling square feet in 1996. The four states in which the
greatest number of new stores were opened during 1998 were Texas (76), Alabama
(36), Georgia (29) and Illinois (29). In 1998, the approximate size of the
average new store was 6,200 selling square feet, the same as the 1997 average.
In 1999, the Company anticipates opening approximately 500 to 525 new stores
within its current 24-state market with a focus on store openings within 250
miles of a distribution center. In 1998, the Company remodeled or relocated 195
stores, compared with 168 in 1997 and 311 in 1996. During the last three years,
the Company opened, remodeled, or relocated 1,899 stores, accounting for
approximately 60% of the total stores at January 30, 1998.

Customer demand continues to dictate an intensified focus on everyday low
prices and consumable basic merchandise, which resulted in the Company's sales
mix further shifting to hardlines from softlines during the year (82%
hardlines/18% softlines in 1998; 75% hardlines/25% softlines in 1997; 70%
hardlines/30% softlines in 1996). In 1998, the Company increased its focus on
consumable basic merchandise by adding 700 new, faster-turning consumable items
to its merchandise mix and refurbishing more than 2,400 stores to a new
prototype. The new store prototype and related product mix reflects a 65%
hardlines/35% softlines space allocation versus the 50%/50% allocation in 1997.
Management believes that during 1999 the softlines sales mix will increase
slightly as a percentage of net sales. To support the mix change, the Company
will increase the selection of quality basic apparel without increasing the
current square footage allocation to softline merchandise. The Company will add
five new programs of basic apparel in a full range of sizes for the entire
family.

12
<PAGE> 14

In June 1997, the Company opened its fourth distribution center, a 718,000
square foot center located in South Boston, Virginia, with minimal disruption to
its flow of merchandise to the stores. In addition, the Company completed the
expansion of its Scottsville, Kentucky Distribution Center by 217,000 square
feet in September 1997. The Company plans to open a fifth distribution center
(800,000 square feet) in Indianola, Mississippi in July 1998. To better support
its rapidly growing store base and improve distribution efficiency, the Company
expects to open two new distribution centers (each measuring approximately
1,000,000 square feet) which are anticipated to be operational within 18 months.
The Company will also expand its South Boston, Virginia Distribution Center by
484,000 square feet and its Homerville, Georgia Distribution Center by 190,000
square feet. Additionally, the Company is planning to lease a separate facility
dedicated to serving the initial stocking needs of new stores. Management
believes this additional distribution capacity will eliminate the need for
outside warehouses during peak, seasonal shipping periods and accommodate
planned store growth.

In 1999, the Company will continue to work on the implementation of several
technology projects that began in 1997, including a new merchandising system and
a new general ledger system. In 1998, the Company installed point of sale (POS)
scanners in all store locations. In 1999, the Company will implement electronic
data interchange purchase ordering with approximately 1,000 core vendors. The
Company will also partner with 50 of its top vendors and work directly with the
logistics personnel of these vendors to improve the supply chain. Management
expects this program to lower costs for both parties, balance store inventories,
increase inventory turns and improve in-stock levels.

In 1998, the Company entered into a transportation agreement with Werner
Enterprises to provide dedicated trucking, logistics and trailer maintenance
services. Management expects this relationship to lower costs and improve
service during peak, seasonal shipping periods.

During 1998, inventory shrinkage continued to improve significantly,
declining to 2.2% of net sales, from 2.7% in 1997. Management attributes much of
this improvement to a reduction in employee turnover and the implementation of
cycle inventories which permitted the booking of actual inventory shrinkage
throughout the year instead of only at year-end. This process allows for the
early identification of adverse trends that can be addressed immediately.

In 1997, the federal minimum wage law was changed to increase minimum wage
from $4.75 per hour to $5.15 per hour effective September 1, 1997. The Company
believes the financial impact of the minimum wage increase to SG&A expense for
1998 was offset by increases in sales and employee productivity.

RESULTS OF OPERATIONS

Net Sales. Net sales totaled $2.63 billion for 1998, $2.13 billion for
1997 and $1.76 billion for 1996. These totals represent annual increases of
23.1% in 1998, 21.0% in 1997 and 21.8% in 1996. These increases resulted from
435 net new stores and a same-store net sales increase of 8.4% for the 52 week
period ending January 30, 1998, 318 net new stores and a same-store net sales
increase of 8.2% in 1997, and 357 net new stores and a same-store net sales
increase of 5.1% in 1996. The Company defines same-stores as those which were
opened before the beginning of the prior fiscal year and have remained open
throughout both the prior and current fiscal years.

Gross Profit. Gross profit for 1998 was $742.1 million, compared with
$604.8 million in 1997 and $503.6 million in 1996. Gross profit, as a percentage
of net sales, was 28.3% for 1998 and 1997, and 28.5% for 1996. The 1998 result
reflects the further shift in sales mix to hardlines and higher freight costs
associated with the distribution of 700 new faster-turning items, which were
partially offset by significantly lower store inventory shrinkage and markdowns.
Management believes that gross margin may continue to decline slightly, as a
percentage of net sales, in 1999.

Selling, General and Administrative Expense. The Company lowered its SG&A
expense, as a percentage of net sales, to 19.3% in 1998 from 19.4% in 1997. SG&A
expense for 1998 was $506.6 million, compared with $415.1 million in 1997 and
$354.7 million in 1996. Total SG&A expense increased 22.0% in 1998, compared
with 1997, primarily from opening and operating 435 net new stores. The lower
SG&A expense, as a percentage of net sales, achieved in 1998 primarily resulted
from (i) improved labor productivity and individual store level controls, (ii)
lower advertising costs through the elimination of the Spring direct-

13
<PAGE> 15

mail circular, and (iii) lower self-insurance expense which was primarily the
result of improved claims prevention and management. All other expense
categories remained relatively flat, as a percentage of net sales.

Total SG&A expense increased 17.3% in 1997, compared with 1996, primarily
from opening and operating 318 net new stores. The SG&A expense, as a percentage
of net sales, of 19.4% in 1997, compared with 20.1% in 1996, was the result of
improved store labor productivity, lower advertising costs and lower self-
insurance expense.

Interest Expense. In 1998, interest expense decreased 19.2% to $3.8
million, compared with $4.7 million in 1997 and $7.4 million in 1996. This
decrease was primarily the result of improved accounts payable management and
better payment terms. Daily average total debt outstanding equaled $74.8 million
during 1998, compared with $88.0 million in 1997 and $104.3 million in 1996.

Provision for Taxes on Income. The effective income tax rates for 1998,
1997 and 1996 were 37.6%, 37.8% and 38.0%, respectively. The Company anticipates
its 1999 tax rate will decrease slightly as a result of state tax planning
initiatives.

Return on Equity and Assets. The ratio of net income to average
shareholders' equity was 27.0% in 1998, compared with 25.4% in 1997 and 23.6% in
1996. Return on average assets was 17.7% in 1998, compared with 16.5% in 1997
and 14.4% in 1996.

LIQUIDITY AND CAPITAL RESOURCES

Working Capital. Working capital increased to $359.0 million in 1998,
compared with $280.1 million in 1997 and $262.5 million in 1996, or an increase
of 28.2% in 1998, 6.7% in 1997 and 30.5% in 1996. The year-end current ratio was
2.2 in 1998 and 1997 and 2.0 in 1996.

Cash Flows from Operating Activities. Net cash provided by operating
activities was $139.1 million in 1998, compared with $170.1 million in 1997 and
compared with net cash used by operations of $17.8 million in 1996. The cash
generated from net income before depreciation and deferred taxes was offset
partially by increased inventory levels. The higher level of inventory was the
result of the additional inventory required to stock the Virginia Distribution
Center and 435 net new stores.

The favorable 1997 year-end net cash provided was driven by cash generated
from net income before depreciation and deferred taxes coupled with the lower
amount of cash used to purchase merchandise. The lower inventory level was the
result of reduced softline merchandise purchases.

Cash Flows from Investing Activities. Capital expenditures in 1998 totaled
$107.7 million, compared with $84.4 million in 1997 and $60.5 million in 1996.
The Company opened 468 new stores and relocated or remodeled 195 stores at a
cost of $39.4 million in 1998. The Company also refurbished more than 2,400
stores to support the new merchandise mix at a cost of $11.9 million and
installed POS scanners in all stores at a cost of $11.4 million. Capital
expenditures during 1997 and 1996 for new, relocated and remodeled stores
totaled $27.0 million and $33.3 million, respectively.

Cash flows from investing activities increased as a result of the cash
provided from the $33.8 million sale/ leaseback of the Virginia Distribution
Center.

Distribution-related capital expenditures totaled $26.2 million in 1998
resulting primarily from the costs associated with the expansion of the Kentucky
Distribution Center and the purchase of new trailers. In 1997, the Company spent
$38.6 million primarily for costs associated with the construction of the
Virginia Distribution Center. In 1996, the Company spent $16.8 million for
expansion of existing distribution centers and the purchase of new distribution
trailers.

Capital expenditures during 1999 are projected to be $100 to $125 million.
This includes approximately $59 million for new stores, remodels and
relocations; $28 million for upgrades of the current distribution centers; and
$11 million for transportation equipment and logistics technology. The Company
believes that its capital expenditure requirements in 1999 will be met through
internally generated funds.

Cash Flows from Financing Activities. Total debt at year-end (including
current maturities and short-term borrowings) was $24.7 million in 1998, $43.1
million in 1997 and $77.0 million in 1996. Long-term debt

14
<PAGE> 16

at January 30, 1998, was $1.3 million, a decrease of $1.3 million from 1997 and
$2.0 million from 1996. The ratio of total debt (including current maturities
and short-term borrowings) to equity decreased to 4.2% in 1998 from 8.9% in
1997, primarily as a result of lower average borrowing levels and interest
rates. Also the average daily use of short-term debt decreased $13.2 million in
1997 to $74.8 million in 1998.

Because of the significant impact of seasonal buying (e.g., Spring and
December-holiday purchases), the Company's working capital requirements vary
significantly during the year. These working capital requirements were financed
by short-term borrowings under the Company's $175 million revolving credit/term
loan agreement and short-term bank lines of credit totaling $175 million at
January 30, 1998. The Company's maximum outstanding short-term indebtedness in
1998 was $196 million in November 1997. Short-term bank lines of credit will be
up for renewal at various dates throughout 1999, and the Company currently
anticipates all of these agreements will be renewed.

During 1998, the Company renegotiated its revolving credit/term loan
facility and negotiated a $100 million leveraged lease facility. The revolving
credit/term loan facility, along with short term bank lines of credit, will be
used to fund working capital needs, open market stock repurchases and general
corporate needs. The leveraged lease facility will be used to meet capital
requirements related to construction of new stores, the new Mississippi
Distribution Center and the new corporate headquarters complex in
Goodlettsville, Tennessee. In March 1998, the Company renegotiated its revolving
credit/term loan facility and negotiated an additional $125 million under its
leveraged lease facility. This provides available credit of $175 million under
the revolving credit loan facility and $225 million under the leveraged lease
facility. The increase in the leveraged lease facility provides capital for the
planned two additional distribution centers and the opening of new stores. These
two credit facilities will expire September 2, 2002, and they contain financial
covenants similar to the Company's existing credit facilities.

EFFECTS OF INFLATION AND CHANGING PRICES

The Company believes that inflation and/or deflation had a minimal impact
on its overall operations during 1998, 1997 and 1996. In particular, the effect
of deflation on cost of goods sold has been minimal as reflected by the small
decline in LIFO reserves in 1998, 1997 and 1996.

ACCOUNTING PRONOUNCEMENTS

The Company will adopt Statement of Financial Accounting Standards (SFAS)
No. 131 "Disclosures about Segments of an Enterprise and Related Information"
for the year ended January 29, 1999. Management does not believe adoption of
this standard will have a significant impact on the Company's financial
reporting.

YEAR 2000

The Company has considered the impact of the year 2000 on its computer
systems and applications. An action plan has been developed which includes
establishing a task force to evaluate the Company's major vendors' year 2000
Compliance. The Company is in the process of installing a new, previously
planned general ledger system that will be year 2000 compliant. Previously
planned software and equipment upgrades and revisions are expected to remedy
year 2000 compliance issues. The Company believes the impact of the year 2000
and related costs of compliance will not have any material impact on its
operations or liquidity.

15
<PAGE> 17

BUSINESS
GENERAL

Dollar General Corporation is a leading discount retailer of quality
general merchandise at everyday low prices through its conveniently located
stores. The Company's stores offer a focused assortment of consumable basic
merchandise including health and beauty aids, packaged food products, cleaning
supplies, housewares, stationery, seasonal goods, non-fashion apparel and
domestics. During fiscal 1998, hardline and softline merchandise accounted for
82% and 18% of net sales, respectively. Through convenient neighborhood
locations, Dollar General Stores primarily serve low, middle and fixed income
families. As of January 30, 1998, the Company operated 3,169 stores located in
24 states, primarily in the midwestern and southeastern United States.

The Company opened its first Dollar General Store in 1955 and during the
last five years has experienced a rapid rate of expansion. Dollar General has
grown from 1,800 stores with 10,724,000 estimated selling square feet at January
31, 1994, to 3,169 stores with 20,112,000 estimated selling square feet at
January 30, 1998. In addition to growth from new store openings, the Company
recorded same-store sales increases in 1996, 1997 and 1998 of 5.1%, 8.2% and
8.4%, respectively. From 1994 to 1998, the Company had a compound annual growth
rate in net sales, operating income and net income of 23.4%, 30.9% and 31.4%,
respectively. Management believes that the Company has the potential to
significantly expand its existing store base within the 24 states in which it
currently operates. In 1999, the Company has plans to open approximately 500 to
525 new stores.

BUSINESS STRATEGY

Focused Assortment of Consumable Basic Merchandise. The Company is
committed to offering a focused assortment of quality, consumable basic
merchandise in a number of core categories. The Company offers such basic
merchandise as health and beauty aids, packaged food products, cleaning
supplies, housewares, stationery, seasonal goods, non-fashion apparel and
domestics. In 1998, hardline merchandise represented more than 80% of net sales.
Approximately 97% of net sales in 1998 consisted of first-run merchandise, with
the remainder consisting of manufacturer's overruns and closeouts. In 1998, the
average customer transaction was approximately $8. By consistently offering a
focused assortment of consumable basic merchandise, the Company encourages
customers to shop Dollar General Stores for their everyday household needs,
leading to frequent customer visits.

16
<PAGE> 18

of products are priced at $10 or less, with nearly 50% of the products priced at
$1 or less. The most expensive items generally are priced at $35.

Low Operating Costs. The Company maintains strict overhead cost controls
and seeks to locate stores in neighborhoods where store rental and operating
costs are low. The Company also continues to utilize new technology when cost
effective in order to improve operating efficiencies. SG&A expenses, as a
percentage of net sales, declined to 19.3% in 1998 from 21.7% in 1994.

GROWTH STRATEGY

Management believes that future growth will come from a combination of
merchandising initiatives, new store growth and infrastructure leverage.

17
<PAGE> 19

MERCHANDISE

Dollar General Stores offer a focused assortment of quality, consumable
basic merchandise in a number of core categories. The Company buys first-run
merchandise. In 1998, national branded merchandise represented more than 35% of
net sales and manufacturers' overruns and closeouts represented less than 3% of
net sales. The merchandise sales mix of the Company has shifted incrementally by
12% to hardlines sales over the past three-year period and 7% during the past
year. The increase in sales of hardline merchandise occurred in part because of
a determined commitment to keep hardlines in stock, an increased emphasis on
private label products and food items, an expanded selection of brand-name
merchandise and a continued lowering of prices.

The Company believes that its merchandising strategy generates frequent
repeat customer traffic. The Company is able to offer everyday low prices to its
customers in large part because its buying staff negotiates low purchase prices.
The Company purchases its merchandise from a wide variety of suppliers, with no
supplier accounting for more than 6% of the Company's purchases during 1998.

In order to fulfill the Company's commitment to maintain high in-stock
levels of core merchandise, the Company limits its stock keeping units (SKUs)
per store to approximately 3,000 items. The majority of items are priced at $1
and in increments of $1, with the most expensive item generally priced at $35.
The Company believes even-dollar pricing more easily demonstrates value to the
customer and disciplines its merchants to continually negotiate purchase prices
that conform to a limited number of retail price points. The Company believes
the risk of inventory obsolescence is low because it offers quality, consumable
basic merchandise. The Company regularly reviews its inventory to identify aged
merchandise and sells it at reduced prices to remove it from inventory.

Dollar General Stores receive merchandise shipments weekly from Company
distribution centers. See "-- Properties."

THE DOLLAR GENERAL STORE

The typical Dollar General Store has approximately 6,400 square feet of
selling space and is operated by a manager, an assistant manager and two or more
sales clerks. Approximately 75% of the Dollar General Stores are in communities
with populations under 25,000. As of January 30, 1998, 67% of stores were
located in strip shopping centers, 15% were in downtown store buildings and 18%
were freestanding buildings. The Company has not had difficulty locating
suitable store sites in the past, and the Company does not anticipate
experiencing difficulty in finding suitable locations in the future.

The Company's recent store growth is summarized in the following table:

<TABLE>
<CAPTION>
BEGINNING STORES STORES NET STORES STORES AT
YEAR OF YEAR OPENED CLOSED OPENED YEARS END
- ---- --------- ------ ------ ---------- ---------
<S> <C> <C> <C> <C> <C>
1998........................................ 2,734 468 33 435 3,169
1997........................................ 2,416 360 42 318 2,734
1996........................................ 2,059 397 40 357 2,416
</TABLE>

18
<PAGE> 20

PROPERTIES

As of January 30, 1998, the Company operated 3,169 retail stores located in
24 states. The following table sets forth the number of stores located in each
state:

<TABLE>
<CAPTION>
NUMBER NUMBER
STATE OF STORES STATE OF STORES
- ----- --------- ----- ---------
<S> <C> <C> <C>
Alabama...................... 137 Mississippi.................. 91
Arkansas..................... 109 Missouri..................... 169
Delaware..................... 10 Nebraska..................... 15
Florida...................... 185 North Carolina............... 135
Georgia...................... 148 Ohio......................... 159
Illinois..................... 155 Oklahoma..................... 138
Indiana...................... 166 Pennsylvania................. 115
Iowa......................... 63 South Carolina............... 91
Kansas....................... 73 Tennessee.................... 214
Kentucky..................... 173 Texas........................ 432
Louisiana.................... 112 Virginia..................... 168
Maryland..................... 32 West Virginia................ 79
</TABLE>

Substantially all of the Company's stores are located in leased premises.
Individual store leases vary as to their respective terms, rental provisions and
expiration dates. In 1998, the Company's aggregate store rental expense was
approximately $81.4 million, or an average of $4.04 per square foot of selling
space. The Company's policy is to negotiate low-cost, short-term leases, usually
three to five years, with multiple renewal options when available.

The Company's distribution centers service Dollar General Stores as
described in the following table:

<TABLE>
<CAPTION>
SQUARE STORES
LOCATION FOOTAGE SERVED
- -------- --------- ------
<S> <C> <C>
Scottsville, Kentucky....................................... 782,000 786
Homerville, Georgia(a)...................................... 510,000 719
Ardmore, Oklahoma........................................... 750,000 953
South Boston, Virginia(b)................................... 718,000 711
Indianola, Mississippi(c)................................... 800,000 n/a
</TABLE>

----------------
(a) Does not include the planned expansion of 190,000 square feet.
(b) Does not include the planned expansion of 484,000 square feet.
(c) Under construction; scheduled to begin shipping merchandise in July
1998.

The Company also plans to add two new distribution centers (of
approximately 1,000,000 square feet each) during the next 18 months. After the
completion of such facilities and the expansion noted above, the Company's
distribution center space will be 6,234,000 square feet.

The Company's executive offices are located in approximately 30,000 square
feet of leased space in Nashville, Tennessee and 10,000 square feet of leased
space in Goodlettsville, Tennessee. The Company's lease on the Nashville office
space expires in 2001. During October 1997, construction began on the Company's
new administrative office complex located in Goodlettsville, Tennessee. The
Company intends to consolidate administrative operations currently located in
its Scottsville, Kentucky and Nashville, Tennessee offices into the new
facility. The Goodlettsville office complex, which is scheduled to be complete
in July 1999, will be approximately 20 miles from the Nashville office and
approximately 50 miles from the Scottsville office.

EMPLOYEES

At March 31, 1998, the Company and its subsidiaries employed approximately
27,400 full and part-time employees, including regional managers, district
managers, store managers, and distribution center and

19
<PAGE> 21

administrative personnel, compared with approximately 25,400 at March 31, 1997.
None of the Company's employees are represented by a labor union.

COMPETITION

The business in which the Company is engaged is highly competitive. The
Company competes with discount stores and with many retailers including grocery,
discount drug, convenience, variety and other specialty stores. Some of the
largest retail companies in the nation have stores in some of the areas where
the Company operates. Management believes that it competes primarily by offering
quality, consumable basic merchandise at an everyday low price in convenient
locations.

LEGAL PROCEEDINGS

There are no material pending legal proceedings to which the Company or any
of its subsidiaries is a party, or to which any of its property is subject.

20
<PAGE> 22

PRINCIPAL STOCKHOLDERS

The following table sets forth information known to the Company regarding
beneficial ownership of the Company's Common Stock and Series A Convertible
Junior Preferred Stock (the "Series A Preferred Stock") as of January 31, 1998
(including stock options exercisable for shares of Common Stock within sixty
days of such date), held by (i) each person or group of persons known by the
Company to own beneficially more than five percent (5%) of the outstanding
Common Stock, (ii) each director of the Company, and (iii) the executive
officers and directors of the Company as a group. All information is taken from
or based upon ownership filings made by such persons with the Commission or upon
information provided by such persons to the Company. Unless otherwise indicated,
the stockholders listed below have sole voting and investment power with respect
to the shares reported as owned.

<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL PERCENT OF CLASS --
OWNERSHIP -- COMMON STOCK/ COMMON STOCK/
NAME AND ADDRESS OF BENEFICIAL OWNER SERIES A PREFERRED STOCK(1) SERIES A PREFERRED STOCK
- ------------------------------------ ------------------------------- ------------------------
<S> <C> <C>
Cal Turner, Jr................................ 29,128,650/1,715,742 (2) 17.4%/100.0%
104 Woodmont Blvd., Suite 500
Nashville, TN 37205
James Stephen Turner.......................... 25,499,093/1,643,037 (3) 15.3/95.8
138 Second Ave.
Nashville, TN 37201
Turner Children Trust......................... 24,623,749/1,613,742 (4) 14.7/94.1
104 Woodmont Blvd., Suite 500
Nashville, TN 37205
Provident Investment Council(5)............... 12,810,686/0 7.4/*
300 North Lake Ave.
Pasadena, CA 91101
W. P. Stewart and Company(6).................. 12,318,725/0 7.4/*
527 Madison Ave.
New York, NY 10022
Cal Turner(7)................................. 3,401,322/0 2.0/*
John B. Holland(8)............................ 295,968/0 */*
James L. Clayton(9)........................... 235,500/0 */*
David M. Wilds(10)............................ 134,502/0 */*
Wallace N. Rasmussen(11)...................... 37,538/0 */*
William S. Wire, II(12)....................... 35,732/0 */*
Reginald D. Dickson(13)....................... 27,582/0 */*
Barbara M. Knuckles(14)....................... 5,562/0 */*
All directors and executive officers as a
group (19 persons)(15)...................... 36,349,307/1,715,742 21.5%/100.0%
</TABLE>

- ---------------

* Denotes less than 1% of class.
(1) The Series A Preferred Stock (i) is convertible into Common Stock (the
conversion ratio will reach 15.26 shares of Common Stock for each share of
Series A Preferred Stock in August 1999) and (ii) votes with the Common
Stock on all matters presented to the holders of Common Stock.
(2) Includes 24,623,749 shares of Common Stock represented by the Series A
Preferred Stock held and voted by the Turner Children Trust (for which Mr.
Turner serves as Co-Trustee with Mr. James Stephen Turner); 1,109,390
shares of Common Stock issuable upon conversion of the Series A Preferred
Stock held by the Cal Turner Family Foundation (for which Mr. Turner serves
as Trustee); 447,006 shares of Common Stock issuable upon conversion of the
Series A Preferred Stock held by the Turner Foundation for Lindsey Wilson
College, Inc. (for which Mr. Turner serves as Co-Trustee with Mr. James
Stephen Turner), 522,498 shares of Common Stock held by various trusts and
foundations for which Mr. Turner has sole voting and investment power;
372,525 shares of Common Stock held by Mr. Turner's wife; 5,580 shares of
Common Stock held in the Employee Stock Ownership Plan; and 287,726 shares
of Common Stock which may be acquired upon the exercise of options which
are currently

21
<PAGE> 23

exercisable or exercisable within 60 days of the date hereof. Mr. Turner
disclaims ownership of the shares of Common Stock and/or Series A Preferred
Stock held by the various trusts and foundations, except to the extent of
his pecuniary interests.
(3) Includes 24,623,749 shares of Common Stock represented by the Series A
Preferred Stock held and voted by the Turner Children Trust (for which
James Stephen Turner serves as Co-Trustee), 447,006 shares of Common Stock
issuable upon conversion of the Series A Preferred Stock held by the Turner
Foundation for Lindsey Wilson College, Inc. (for which James Stephen Turner
serves as a Co-Trustee), 264,123 shares of Common Stock held by various
trusts and foundations for which James Stephen Turner has sole voting and
investment power; and 28,900 shares of Common Stock held by James Stephen
Turner's wife. James Stephen Turner disclaims ownership of the shares of
Common Stock and/or Series A Preferred Stock held by the various trusts and
foundations, except to the extent of his pecuniary interests.
(4) The shares of Common Stock represented are the number of shares represented
by the Series A Preferred Stock held and voted by the Turner Children
Trust. See notes (2) and (3) above.
(5) Pursuant to the Schedule 13G filed on February 14, 1998 Shares have been
adjusted to reflect the March 23, 1998 five-for-four common stock split.
Provident Investment Council claims sole voting powers on 8,845,742 shares
and sole dispositive power on 11,801,308 shares.
(6) Pursuant to the Schedule 13G filed on February 14, 1998 Shares have been
adjusted to reflect the March 23, 1998 five-for-four common stock split.
(7) Includes 3,401,210 shares beneficially owned by trusts established for the
benefit of Mr. Turner's children for which Mr. Turner serves as Trustee.
Mr. Turner is the father of Cal Turner, Jr.
(8) Includes 146,769 shares of Common Stock issuable upon the exercise of
outstanding options currently exercisable or exercisable within 60 days and
49,169 shares of Common Stock held by Mr. Holland's wife.
(9) Includes 146,769 shares of Common Stock issuable upon the exercise of
outstanding options currently exercisable or exercisable within 60 days.
(10) Includes 97,598 shares of Common Stock issuable upon the exercise of
outstanding options currently exercisable or exercisable within 60 days and
1,125 shares owned by Mr. Wild's daughter.
(11) Includes 10,007 shares of Common Stock issuable upon the exercise of
outstanding options currently exercisable or exercisable within 60 days.
(12) Includes 27,548 shares of Common Stock issuable upon the exercise of
outstanding options currently exercisable or exercisable within 60 days.
(13) Includes 17,817 shares of Common Stock issuable upon the exercise of
outstanding options currently exercisable or exercisable within 60 days.
(14) Includes 2,862 shares of Common Stock issuable upon the exercise of
outstanding options currently exercisable or exercisable within 60 days.
(15) Includes 2,251,054 shares of Common Stock issuable upon the exercise of
outstanding options currently exercisable or exercisable within 60 days.

22
<PAGE> 24

STOCK OWNERSHIP BY TURNER CHILDREN TRUST

At May 1, 1998, the Turner Children Trust (the "Trust") beneficially owned
an aggregate of 1,613,742 shares of Series A Preferred Stock, which are
presently convertible into 22,769,899 shares of Common Stock and allow the Trust
to vote 24,623,749 shares of Common Stock, representing approximately 14.7% of
the Company's outstanding Common Stock.

Pursuant to the Forward Purchase Contract, the Contracting Stockholder is
obligated to deliver up to 7,500,000 shares (8,625,000 shares if the
over-allotment option granted to the Underwriters of the STRYPES is exercised in
full) of Common Stock (or Series A Preferred Stock presently convertible into
such shares) to the Trust, subject to the Contracting Stockholder's right to
satisfy such obligation by delivering an amount in cash with an equal value.
Until such shares are delivered, the Contracting Stockholder will retain the
right to vote such shares and receive dividends thereon. See "Price Range of
Common Stock and Dividend Policy."

PLAN OF DISTRIBUTION

The Company is advised that it is the investment objective of the Trust to
exchange each of the STRYPES on the Exchange Date for a specified number of
shares of Common Stock. The Company is advised that, pursuant to the terms of
the Forward Purchase Contract, assuming the Trust continues to the Exchange
Date, the Contracting Stockholder is obligated to deliver to the Trust
immediately prior to the Exchange Date a number of shares of Common Stock
covered by this Prospectus equal to the number required by the Trust in order to
exchange all of the STRYPES (including STRYPES issued pursuant to the
over-allotment option granted to the Underwriters of the STRYPES and STRYPES
subscribed for and purchased by an affiliate of Merrill Lynch in connection with
the formation of the Trust) on the Exchange Date in accordance with its
investment objective, subject to the Contracting Stockholder's option to settle
its obligation under the Forward Purchase Contract, in whole or in part, by
delivering cash with an equal value. The Contracting Stockholder may, at its
option, accelerate its obligation under the Forward Purchase Contract. The
Company is not a party to the Forward Purchase Contract and has no obligation
thereunder or with respect to the STRYPES, which are securities of the Trust and
are not securities of the Company.

The Company and the Contracting Stockholder have agreed, subject to certain
exceptions, not to offer, sell, contract to sell or otherwise dispose of,
directly or indirectly, any shares of Common Stock or securities directly or
indirectly convertible into, or exercisable or exchangeable for, Common Stock
for a period of 90 days after the date of this Prospectus without the prior
written consent of Merrill Lynch.

The Company and the Contracting Stockholder have agreed to indemnify the
Trust and the Underwriters of the STRYPES against certain liabilities, including
liabilities under the Securities Act, with respect to the information contained
in this Prospectus (including the documents incorporated by reference herein),
other than information furnished to the Company in writing by the Trust or the
Underwriters of the STRYPES through Merrill Lynch expressly for use herein.

Until the distribution of the STRYPES is completed, rules of the Commission
may limit the ability of the Underwriters of the STRYPES to bid for and purchase
the STRYPES or the shares of Common Stock. As an exception to these rules, the
Underwriters of the STRYPES are permitted to engage in certain transactions that
stabilize the price of the STRYPES or the Common Stock. Such transactions
consist of bids or purchases for the purpose of pegging, fixing or maintaining
the price of the STRYPES or the Common Stock.

If the Underwriters of the STRYPES create a short position in the STRYPES
in connection with the STRYPES offering, i.e., if they sell more STRYPES than
are set forth on the cover page of the STRYPES Prospectus, the Underwriters of
the STRYPES may reduce that short position by purchasing STRYPES in the open
market. The Underwriters of the STRYPES may also elect to reduce any short
position by exercising all or part of the over-allotment option granted to them.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases.

Neither the Trust nor any of the Underwriters of the STRYPES makes any
representation or prediction as to the direction or magnitude of any effect that
the transactions described above may have on the price of

23
<PAGE> 25

the STRYPES or the Common Stock. In addition, neither the Trust nor any of the
Underwriters of the STRYPES makes any representation that the Underwriters of
the STRYPES will engage in such transactions or that such transactions, once
commenced, will not be discontinued without notice.

The Underwriters of the STRYPES render investment banking and other
financial services to the Company from time to time.

EXPERTS

The financial statements incorporated by referenced in this Prospectus from
the Company's Annual Report on Form 10-K for the fiscal year ended January 30,
1998 have been audited by Deloitte & Touche LLP, independent auditors, as stated
in their report, which is incorporated herein by reference, and have so been
incorporated in reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.

The financial statements of the Company as of January 31, 1997 and for the
years ended January 31, 1997 and 1996 incorporated by reference in this
Prospectus have been audited by Coopers & Lybrand L.L.P., independent
accountants, as stated in their report thereon appearing in the Form 10-K
incorporated by reference herein and have been so incorporated in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.

LEGAL MATTERS

The validity of the issuance of Common Stock offered hereby will be passed
upon for the Company by Bass, Berry & Sims PLC, Nashville, Tennessee.

24
<PAGE> 26

======================================================

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING OF
COMMON STOCK DESCRIBED HEREIN. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, THE CONTRACTING STOCKHOLDER OR THE UNDERWRITERS OF THE STRYPES. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO
MAKE AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAN THERE HAS
NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 2
Incorporation of Certain Information
by Reference........................ 3
Prospectus Summary.................... 4
Risk Factors.......................... 8
Price Range of Common Stock and
Dividend Policy..................... 10
Use of Proceeds....................... 10
Selected Financial Data............... 11
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 12
Business.............................. 16
Principal Stockholders................ 21
Stock Ownership by Turner Children
Trust............................... 23
Plan of Distribution.................. 23
Experts............................... 24
Legal Matters......................... 24
</TABLE>

======================================================
======================================================

7,500,000 SHARES

(DOLLAR GENERAL CORPORATION LOGO)

COMMON STOCK

---------------------------
PROSPECTUS
---------------------------

, 1998
======================================================
<PAGE> 27

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

<TABLE>
<S> <C>
SEC registration fee................................................................................... $ 95,822
Accounting fees and expense............................................................................ 70,000
Legal fees and expenses................................................................................ 200,000
NASD fee............................................................................................... 30,500
Printing expenses...................................................................................... 120,000
Miscellaneous expenses................................................................................. 8,678
----------
Total........................................................................................ $ 525,000
==========
</TABLE>

All of the above expenses except the SEC registration fee and the NASD fee are
estimated. All of the above expenses will be paid by the Underwriters of the
STRYPES.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Under Section 271 B.8-510 of the Kentucky Business Corporation Act of 1988,
as amended (the "Act"), a corporation may indemnify a director against liability
incurred in a proceeding if (a) the director conducted himself in good faith,
and (b) the director believed, in the case of conduct in his official capacity
as a director of the corporation, his conduct was in the corporation's best
interest or, in all other cases, his conduct was at least not opposed to the
corporation's best interests; and (c) in the case of any criminal proceeding,
the director had no reasonable cause to believe his conduct was unlawful.

A corporation may not indemnify a director under the above-referenced
section in connection with (i) a proceeding by or in the right of the
corporation in which the director is adjudged liable to the corporation or (ii)
any other proceeding charging improper personal benefit to the director, whether
or not involving action in his official capacity, in which the director is
adjudged liable on the basis that personal benefit was improperly received by
him. Indemnification permitted under Section 271B.8-510 in connection with a
proceeding by or in the right of the corporation shall be limited to reasonable
expenses incurred in connection with the proceeding. Section 271B.8-560 of the
Act provides that a Kentucky corporation may indemnify its officers, employees
and agents to the same extent as directors.

Unless limited by a corporation's articles of incorporation, the Act
further provides mandatory indemnification against reasonable expenses incurred
in connection with a proceeding for each director and officer who is wholly
successful, on the merits or otherwise, in the defense of any proceeding to
which such director or officer was made a party because of their official
capacity with the corporation. Additionally, the Act provides that a corporation
may purchase and maintain insurance on behalf of directors, officers, employees
or agents of the corporation against liability asserted against or incurred by
such party in their respective capacity with the corporation.

Article VIII of the Company's bylaws states that the Company shall
indemnify to the full extent permitted by law its directors, officers, employees
and agents. The Company has entered into indemnification agreements with all of
its directors providing that the Company will indemnify the directors to the
fullest extent permitted by law against claims arising out of their actions as
directors of the Company and will advance expenses of defending against such
claims.

The Company has purchased a directors and officers liability insurance
policy as permitted by Kentucky law which, subject to certain limits and
retentions set forth in the policy, covers (i) losses that may be incurred by
directors and officers of the Company and its subsidiaries as a result of
wrongful acts (as defined in the policy) while acting in their capacities as
officers and directors and (ii) payment on behalf of the Company of amounts
which the Company may be required or permitted to pay as indemnification to
directors and officers of the Company.

II-1
<PAGE> 28

ITEM 16. EXHIBITS.

The following exhibits are filed as part of the Registration Statement:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <C> <S>
1.1 -- Form of Registration Agreement among the Company, Dollar
General STRYPES Trust and the Underwriters of the STRYPES.*
4.1 -- Form of Common Stock certificate.
4.2 -- Articles of Incorporation, as amended, of Dollar General
Corporation (incorporated herein by reference to the
Company's reports on Form 10-K filed for the years ended
December 31, 1983 and 1986 and the Articles of Amendment
dated August 22, 1994 filed in the Company's report on Form
8-K dated August 22, 1994).
4.3 -- Registration Rights Agreement dated August 22, 1994 by and
among Dollar General Corporation, Turner Children Trust
dated January 21, 1980, Cal Turner, Jr., James Stephen
Turner, Laura Jo Dugas and Elizabeth Turner Campbell
(incorporated by reference to the Company's report on Form
8-K dated August 22, 1994 filed with the Commission).
4.4 -- Form of Registration Rights Agreement by and between Turner
Children Trust and Dollar General Corporation.
5.1 -- Opinion of Bass, Berry & Sims PLC.
23.1 -- Consent of Deloitte & Touche LLP.
23.2 -- Consent of Coopers & Lybrand L.L.P.
23.4 -- Consent of Counsel (included in opinion filed as Exhibit
5.1).
24.1 -- Power of Attorney (included on page II-4).
</TABLE>

- ---------------

* To be filed by Amendment.

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made
of the securities offered hereby, a post-effective amendment to this
registration statement:

(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) to reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this registration statement;

(iii) to include any material information with respect to the plan
of distribution not previously disclosed in this registration statement
or any material change to such information in this registration
statement;

provided, however, that the undertakings in paragraph (i) and (ii) above
do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement;

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof; and

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered hereby which remain unsold at the
termination of the offering.

II-2
<PAGE> 29

The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and where applicable, each filing of any
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 14 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered hereunder, the registrant will,
unless in the opinion of its counsel the question has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

II-3
<PAGE> 30

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this amendment to the registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Nashville, State of Tennessee, on May 12, 1998.

DOLLAR GENERAL CORPORATION

By: /s/ CAL TURNER, JR.
------------------------------------
Cal Turner, Jr.
Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Cal Turner, Jr. and Phil Richards, and
each of them, with full power to act without the other, as his attorney-in-fact,
each with the power of substitution and resubstitution, for him in any and all
capacities, to sign any and all amendments to this registration statement
(including post-effective amendments and amendments thereto) and to any
registration statement relating to the same offering as this registration
statement that is to be effective upon filing pursuant to Rule 462(b) under the
Securities Act of 1933, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>

/s/ CAL TURNER, JR. Chairman of the Board and Chief May 12, 1998
- ----------------------------------------------------- Executive Officer and Director
Cal Turner, Jr.

/s/ PHILIP RICHARDS Vice President & Chief Financial May 12, 1998
- ----------------------------------------------------- Officer (Principal Financial
Philip Richards Officer and Principal
Accounting Officer)

Director May , 1998
- -----------------------------------------------------
Dennis C. Bottorff

/s/ JAMES L. CLAYTON Director May 12, 1998
- -----------------------------------------------------
James L. Clayton

/s/ REGINALD D. DICKSON Director May 12, 1998
- -----------------------------------------------------
Reginald D. Dickson

* Director May 12, 1998
- -----------------------------------------------------
John B. Holland

* Director May 12, 1998
- -----------------------------------------------------
Barbara M. Knuckles
</TABLE>

II-4
<PAGE> 31

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>

* Director May 12, 1998
- -----------------------------------------------------
Wallace N. Rasmussen

* Director May 12, 1998
- -----------------------------------------------------
Cal Turner

* Director May 12, 1998
- -----------------------------------------------------
David M. Wilds

* Director May 12, 1998
- -----------------------------------------------------
William S. Wire, II

*By: /s/ CAL TURNER, JR.
-----------------------------------------------
Cal Turner, Jr.
As Attorney-in-Fact
</TABLE>

II-5
<PAGE> 32

EXHIBIT INDEX

- ---------------

* To be filed by Amendment.

<PAGE> 1

EXHIBIT 4.1

[NUMBER] DOLLAR GENERAL CORPORATION [SHARES]
COMMON STOCK

THIS CERTIFICATE IS TRANSFERABLE COMMON STOCK
IN THE CITY OF NEW YORK OR INCORPORATED UNDER THE
IN THE STATE OF NEW JERSEY FOUNDER OUR MISSION: LAWS OF KENTUCKY
CAL TURNER SERVING OTHERS

SEE REVERSE FOR CERTAIN DEFINITIONS

CUSIP 256669 10 2

THIS CERTIFIES THAT

Is the owner of

FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK OF THE PAR VALUE OF $.50 EACH OF

CERTIFICATE OF STOCK

Dollar General Corporation transferable on the books of the corporation in person or by attorney duly authorized in writing upon
surrender of this certificate properly endorsed. This certificate and the shares represented hereby are issued and shall be held
subject to all the provisions of the corporation's Articles of Incorporation and By-Laws and any amendments thereof, copies of
which are on file with the Transfer Agent, to all the provisions of which the holder hereof by acceptance of this certificate
assents. This certificate is not valid until countersigned by the Transfer Agent and registered by the Registrar.

Witness the facsimile seal of the corporation and the facsimile signatures of its duly authorized officers.

Dated:

SECRETARY CHAIRMAN

[CORPORATE SEAL]

COUNTERSIGNED AND REGISTERED:
REGISTRAR AND TRANSFER COMPANY
TRANSFER AGENT
AND REGISTRAR.

AUTHORIZED OFFICER.

The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S> <C>
TEN COM -- as tenants in common UNIF GIFT MIN ACT -- _____________ Custodian ___________
TEN ENT -- as tenants by the entireties (Cust) (Minor)
JT TEN -- as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act __________________
in common (State)
</TABLE>

Additional abbreviations may also be used though not in the above list.

For value received, __________________ hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
[ ]

_______________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE

_______________________________________________________________________________

________________________________________________________________________ Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint ___________________________________________,
_______________________________________________________________________________
Attorney to transfer the said stock on the books of the within named
Corporation with full power of substitution in the premises.

Dated, ______________

AFFIX MEDALLION SIGNATURE X_______________________________________
GUARANTEE IMPRINT BELOW (SIGNATURE)

X_______________________________________
(SIGNATURE)

_________________________________________
ABOVE SIGNATURE(S) TO THIS ASSIGNMENT
MUST CORRESPOND WITH THE NAME AS WRITTEN
UPON THE FACE OF THE CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT, OR ANY CHANGE WHATEVER.

THE SIGNATURE(S) MUST BE GUARANTEED BY AN
ELIGIBLE GUARANTOR INSTITUTION SUCH AS A
SECURITIES BROKER/DEALER, COMMERCIAL BANK
& TRUST COMPANY, SAVINGS AND LOAN
ASSOCIATION OR A CREDIT UNION
PARTICIPATING IN A MEDALLION PROGRAM
APPROVED BY THE SECURITIES TRANSFER
ASSOCIATION, INC.

<PAGE> 1
Exhibit 4.4

REGISTRATION RIGHTS AGREEMENT

May ___, 1998

Turner Children Trust
c/o Cal Turner, Jr. and James Stephen Turner
104 Woodmont Boulevard, Suite 300
Nashville, TN 37205

Gentlemen:

This will confirm that in connection with your plans to enter into a
forward purchase contract with the Dollar General STRYPES Trust (the "Trust
Contract") pursuant to which you may deliver to certain public investors certain
shares of common stock of Dollar General Corporation (the "Company") whereupon
such shares would be distributed in an orderly manner and in recognition of the
intent of and the rights previously granted to you in a Registration Rights
Agreement dated August 22, 1994 between the Company, you and your immediate
beneficiaries (the "1994 Registration Rights Agreement"), the Company hereby
covenants and agrees with you as follows:

1. Certain Definitions. As used herein, the following terms shall have the
following respective meanings:

"Commission" means the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.

"Common Stock" means the common stock, par value $.50 per share, of
the Company, as constituted as of the date of this Agreement.

"Exchange Act" means the Securities Exchange Act of 1934 or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.

"Registration Expenses" means the expenses so described in Section 4
hereof.

"Securities Act" means the Securities Act of 1933 or any similar
federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.

"Trust" means the Turner Children Trust, of which Cal Turner, Jr. and
James Stephen Turner are the co-trustees.

<PAGE> 2

"Trust Shares" means the 22,769,899 shares of Common Stock, subject to
further adjustment pursuant to the Articles of Incorporation, as amended,
into which the 1,613,742 shares of Series A Convertible Junior Preferred
Stock of the Company held by the Trust are convertible.

2. Registration on Form S-3. At your request, the Board of Directors of the
Company has approved the preparation and filing of one registration statement on
Form S-3 under the Securities Act covering the number of Trust Shares which are
the subject of your obligations under the Trust Contract. The Company agrees to
use its best efforts to cause such registration statement to become effective in
accordance with the registration procedures set forth in Section 3 hereof. You
shall advise the Company of the number of Trust Shares to be registered and
shall describe the plan of distribution of the Trust Shares. In the event the
proposed offering contemplated by the Trust Contract is not consummated within
90 days of this Agreement, this Agreement and the obligations of the Company
under this Agreement shall terminate and be of no force and effect thereafter.

3. Registration Procedures. In connection with the Company's obligation to
use its best efforts to effect the registration of any of the Trust Shares under
the Securities Act, the Company will, as expeditiously as possible:

(a) prepare (and afford counsel for the Trust reasonable opportunity
to review and comment thereon) and file with the Commission a registration
statement on Form S-3 with respect to such securities and use its best
efforts to cause such registration statement to become and remain effective
for the period of distribution contemplated thereby (determined as
hereinafter provided);

(b) prepare (and afford counsel for the Trust reasonable opportunity
to review and comment thereon) and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for the period specified in paragraph (a) above and as
comply with all material provisions of the Securities Act with respect to
the distribution of all Trust Shares covered by such registration statement
in accordance with the Trust's intended method of distribution set forth in
such registration statement for such period;

(c) furnish such number of copies of the registration statement and
the prospectus included therein (including each preliminary prospectus) as
may reasonably be required to facilitate the plan of distribution of the
Trust Shares covered by such registration statement;

<PAGE> 3

(d) use its best efforts to list, register or qualify the Trust Shares
covered by such registration statement with the New York Stock Exchange and
under the securities or blue sky laws of such jurisdictions as may
reasonably be required to effect the plan of distribution set forth in the
registration statement (provided that the Company will not be required to
(i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to so qualify but for this paragraph (d), (ii)
subject itself to taxation in any such jurisdiction or (iii) consent to
general service of process in any jurisdiction); and

(e) immediately notify the Trust at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of
the happening of any event as a result of which the prospectus contained in
such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing.

For purposes of paragraphs (a) and (b) above, the period of distribution of
Trust Shares shall be deemed to extend until the plan of distribution set forth
in the registration statement is completed but no longer than three years after
the effective date thereof.

In connection with the registration hereunder, the Trust will furnish to
the Company in writing such information with respect to itself and the proposed
plan of distribution as shall be reasonably necessary in order to assure
compliance with federal and applicable state securities laws.

4. Expenses. All expenses incurred by the Company in complying with
Sections 2 and 3 hereof, including without limitation all registration and
filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees of the National Association
of Securities Dealers, Inc., transfer taxes, fees of transfer agents and
registrars and fees and expenses of one counsel for the Trust are herein called
"Registration Expenses". The Trust will pay all Registration Expenses in
connection with the registration statement filed and maintained pursuant to
Sections 2 and 3 hereof.

5. Indemnification. The Company will indemnify and hold harmless the Trust
and each person, if any, who controls the Trust within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such Trust or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any registration statement (including documents incorporated by reference
therein) under which the Trust Shares were registered under the Securities Act
pursuant to Section 2 hereof, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the

<PAGE> 4

Trust and each such controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case if and to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made in
conformity with information furnished by the Trust or such controlling person in
writing specifically for use in such registration statement or prospectus.

The Trust will indemnify and hold harmless the Company and each person, if
any, who controls the Company within the meaning of the Securities Act, each
officer of the Company who signs the registration statement, and each director
of the Company against all losses, claims, damages or liabilities, joint or
several, to which the Company or such controlling person, officer or director
may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement under which Trust Shares
were registered under the Securities Act pursuant to Section 2 hereof, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company and each such controlling person, officer and director for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Trust will be liable hereunder in any such case if and only to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with information pertaining to
the Trust and its plan of distribution, as such, furnished in writing to the
Company by the Trust specifically for use in such registration statement or
prospectus.

Promptly after receipt by an indemnified party hereunder of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party hereunder, notify the
indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party other than under this Section 5. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel satisfactory to such indemnified
party, and, after notice from the indemnifying party to such indemnified party
of its election so to assume and undertake the defense thereof, the indemnifying
party shall not be liable to such indemnified party under this Section 5 for
any legal expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation and of
liaison with counsel so selected; provided, however, that, if the defendants in
any such action

<PAGE> 5

include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be reasonable
defenses available to it which are different from or additional to those
available to the indemnifying party, or if the interests of the indemnified
party reasonably may be deemed to conflict with the interests of the
indemnifying party, the indemnified party shall have the right to select a
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed by the
indemnifying party as incurred.

Notwithstanding the foregoing, any indemnified party shall have the right
to retain its own counsel in any such action, but the fees and disbursements of
such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party shall have failed to retain counsel for the indemnified
person as aforesaid or (ii) the indemnifying party and such indemnified party
shall have mutually agreed to the retention of such counsel. It is understood
that the indemnifying party shall not, in connection with any action or related
actions in the same jurisdiction, be liable for the fees and disbursements of
more than one separate firm qualified in such jurisdiction to act as counsel for
the indemnified party. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.

6. Miscellaneous.

(a) All covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto whether so
expressed or not.

(b) All notices, requests, consents and other communications hereunder
shall be in writing and shall be mailed by first class registered mail,
postage prepaid, addressed as follows:

if to the Company, to it at:

Dollar General Corporation
104 Woodmont Boulevard, Suite 300
Nashville, Tennessee 37205
Attention: Corporate Secretary

if to the Trust, to it at:

Turner Children Trust
c/o Cal Turner, Jr. and James Stephen Turner
104 Woodmont Boulevard, Suite 300
Nashville, Tennessee 37205

<PAGE> 6

or, in any case, at such other address or addresses as shall have been
furnished in writing to the Company (in the case of the Trust) or to the
Trust (in the case of the Company).

(d) Except as set forth herein, this Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof. This
Agreement may not be modified or amended except in writing signed by the
Company and the Trust. This Agreement shall have no effect on the rights
and obligations of the Company and the Trust set forth in the 1994
Registration Rights Agreement which shall remain in full force and effect.

Please indicate your acceptance of the foregoing by signing and returning
the enclosed counterpart of this letter, whereupon this letter (herein sometimes
called "this Agreement") shall be a binding agreement between the Company and
you.

Very truly yours,

DOLLAR GENERAL CORPORATION

By: ________________________________
Title: ________________________________

AGREED TO AND ACCEPTED
as of the date first
above written.

TURNER CHILDREN TRUST

By: _____________________________
Title: _____________________________

<PAGE> 1
EXHIBIT 5.1

BASS, BERRY & SIMS PLC
A PROFESSIONAL LIMITED LIABILITY COMPANY
ATTORNEYS AT LAW

2700 FIRST AMERICAN CENTER 1700 RIVERVIEW TOWER
NASHVILLE, TENNESSEE 37238-2700 POST OFFICE BOX 1509
TELEPHONE (615)742-6200 KNOXVILLE, TENNESSEE 37901-1509
TELECOPIER (615) 742-6293 TELEPHONE (423) 521-6200
TELECOPIER (423) 521-6234

May 11, 1998

Dollar General Corporation
104 Woodmont Boulevard, Suite 500
Nashville, Tennessee 37205

RE: REGISTRATION STATEMENT ON FORM S-3
COMMISSION FILE NO. 333-50451

Gentlemen:

We have acted as your counsel in connection with preparation of a
registration statement on Form S-3 (the "Registration Statement") filed by you
with the Securities and Exchange Commission on April 20, 1998, as subsequently
amended, covering 8,625,000 shares of $.50 par value common stock (the "Common
Stock") of Dollar General Corporation (the "Company") which may be sold by the
Dollar General STRYPES Trust, a Delaware business trust (the "Trust"), to the
underwriters represented by Merrill Lynch, Pierce, Fenner & Smith Incorporated
and Goldman, Sachs & Co. (the "Underwriters") pursuant to the Purchase
Agreement among the Trust, the Turner Children Trust dated January 21, 1980 and
the Underwriters filed as an exhibit to the registration statement on Form N-2
(file no. 333-50783 and 811-08755).

In connection with this opinion, we have examined and relied upon such
records, documents and other instruments as in our judgment are necessary or
appropriate in order to express the opinions hereinafter set forth and have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, and the conformity to original documents of all
documents submitted to us as certified or photostatic copies.

Based on the foregoing and such other matters as we have deemed relevant,
we are of the opinion that the shares of Common Stock which may be sold by the
Trust, when issued and delivered in the manner and on the terms described in
the Registration Statement (after the same is declared effective), will be
validly issued, fully paid and nonassessable.

We hereby consent to the reference to our law firm in the Registration
Statement under the caption "Legal Matters" and to the use of this opinion as
an exhibit to the Registration Statement.

Very truly yours,

/s/ Bass Berry & Sims PLC

<PAGE> 1

EXHIBIT 23.1

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Amendment No. 1 to Registration Statement No.
333-50451 of Dollar General Corporation of our report dated February 24, 1998,
appearing in the Annual Report on Form 10-K of Dollar General Corporation for
the year ended January 30, 1998 and to the reference to us under the caption
"Experts" in the Prospectus, which is part of this Registration Statement.

/s/ DELOITTE & TOUCHE LLP

Nashville, Tennessee
May 11, 1998

<PAGE> 1

EXHIBIT 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in this Amendment No. 1 to the
registration statement (No. 333-50451) of Dollar General Corporation of our
report dated March 5, 1997 on our audits of the consolidated financial
statements of Dollar General Corporation and Subsidiaries as of January 31, 1997
and for the years ended January 31, 1997 and 1996, which report is included in
the Annual Report on Form 10-K. We also consent to the reference to our firm
under the caption "Expert."

/s/ Coopers & Lybrand L.L.P.

Louisville, Kentucky
May 11, 1998