424B1, 1999-08-30
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                                                Filed pursuant to Rule 424(b)(1)
                                                              File No. 333-85501


                            Dollar Tree Stores, Inc.

                                  Common Stock

         This  prospectus  relates  to the public  offering,  which is not being
underwritten, of 501,600 shares of our common stock which is held by some of our
current shareholders.

         The  prices at which  such  shareholders  may sell the  shares  will be
determined  by the  prevailing  market  price for the  shares  or in  negotiated
transactions.  We will  not  receive  any of the  proceeds  from the sale of the

         Our common  stock is quoted on the  Nasdaq  National  Market  under the
symbol "DLTR". On August 27, 1999, the average of the high and low price for the
common stock was $36.00.

         Investing in the common stock involves a high degree of risk. See "Risk
Factors" beginning on page 4.


         Neither the Securities and Exchange Commission nor any state securities
commission has approved or  disapproved  of these  securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.


                 The date of this prospectus is August 30, 1999.


                          CERTAIN INTRODUCTORY MATTERS

         References to "we," "our" and "the company"  generally  refer to Dollar
Tree Stores,  Inc. and its direct and indirect  subsidiaries  on a  consolidated
basis.  References to "Dollar Tree" and "98 CENTS Clearance  Centers"  generally
refer to the distinct store types.

         Dollar Tree(R), 98 CENTS Clearance  Centers(R),  Only $One(R) and their
respective  logos are  registered  trademarks of the Company.  Other  trademarks
referenced herein are trademarks of their respective legal owners.

         No person has been  authorized to give any  information  or to make any
representations other than those contained in this prospectus in connection with
the  offering  made  hereby,   and  if  given  or  made,  such   information  or
representations  must not be relied  upon as having  been  authorized  by Dollar
Tree, any selling  shareholder  or by any other person.  Neither the delivery of
this  prospectus nor any sale made  hereunder  shall,  under any  circumstances,
create  any  implication  that  information  herein  is  correct  as of any time
subsequent to the date hereof.  This  prospectus does not constitute an offer to
sell or a solicitation of an offer to buy any security other than the securities
covered by this  prospectus,  nor does it constitute an offer to or solicitation
of any person in any  jurisdiction in which such offer or  solicitation  may not
lawfully be made.




         We have made "forward-looking statements" in this document (and certain
documents  we refer to in this  document)  as that  term is used in the  Private
Securities  Litigation  Reform  Act of 1995.  Such  statements  are based on the
beliefs  and  assumptions  of  our  management,  and  on  information  currently
available to our management.  The assumptions,  beliefs and current  information
could be mistaken.

         Forward-looking  statements  include  the  information  concerning  our
operations,  economic  performance and financial  condition and also include any
statements  preceded  by,  followed  by or  including  words such as  "believe,"
"anticipate,"   "expect,"   "intend,"   "plan"  or  "estimate."  Any  statements
concerning the anticipated performance of the Company in future periods could be
inaccurate and are subject to risks relating to, among other things:

          o    possible  difficulties in meeting our expansion goals,  including
               anticipated  store  openings,  growth in  same-store  sales,  and
               development of large-format stores;

          o    dependence  on imports and  vulnerability  to import  tariffs and
               restrictions, particularly non-renewal of normal trade relations,
               the possible  imposition of punitive duties, and factors relating
               to China;

          o    adverse  economic  factors and increases in our costs,  including
               shipping rate increases,  possible increases in the minimum wage,
               and general inflation;

          o    potentially  limited   availability  of  low-cost,   high-quality

          o    the capacity and the performance of our  distribution  system and
               its  ability  to  cope  with  our  expansion  plans  as  well  as
               unforeseen difficulties;

          o    increasing competition in the discount retail market; and

          o    the  potential  failure of the computer  systems that support our
               business  (including systems supporting our vendors and suppliers
               both in the  United  States  and abroad) to  recognize  the  year

         For  additional  discussion of the factors that could affect our actual
results,  performance  or actions,  see "Risk  Factors" in this  prospectus  and
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations" and "Business" in the documents  incorporated by reference into this



                                   THE COMPANY

         Dollar  Tree's  principal  executive  offices  are located at 500 Volvo
Parkway,  Chesapeake,  Virginia 23320.  Dollar Tree's  telephone number is (757)

                                  RISK FACTORS

         An investment in our company involves a high degree of risk. You should
carefully  consider the specific risk factors  listed  below,  together with the
cautionary statements on the inside front cover of this prospectus and the other
information  included or incorporated in this prospectus  before  purchasing the
common stock.

We may not be able to meet our aggressive expansion goals

         Our  continued  growth  will be  jeopardized  if we cannot  continue to
aggressively  and steadily  expand the number of our stores and related  support
systems in a profitable and efficient manner. We expect to add 230 to 235 stores
during 1999,  bringing our total number of stores to 1,386 to 1,391.  Management
believes  that the  Company is well  positioned  to  operate  our new stores and
expand our support  systems  profitably  and  efficiently.  However,  we may not
achieve our  targets  for opening new stores in this or future  years and we may
not  anticipate  all the changing  demands that our  expanding  operations  will
impose on our systems and personnel.  Our failure to efficiently  and profitably
execute our expansion plans could have a material adverse effect on our business
and results of operations.

         We expect the  primary  source of our future  revenue  growth to be new
store openings.  As a fixed $1.00 price point  retailer,  we cannot increase the
sales price of our merchandise to support revenue growth.  Moreover,  we believe
that future  increases in sales at our existing  stores,  if any,  will be lower
than those  experienced  in the past,  increasing  the  importance  of new store
openings to our growth.

         Managing our future  growth has become more complex  because we are now
operating  "large  format"  stores to  supplement  our  traditional  Dollar Tree
stores.  The new format includes stores ranging from 7,000 to 14,000 square feet
in size and generally sells more consumable merchandise.  Through recent mergers
we have also added  sixty-six  "98 Cents  Clearance  Center"  stores on the West
Coast and  twenty-four  "Only $One" stores in New York --  substantially  all of
which are large format stores.

         In expanding  our store base and deploying  the larger  format,  we are
likely  to  encounter  numerous  challenges.  Some of  these  challenges  may be
difficult to manage in the context of our aggressive growth plans.  Still others
may be impossible to manage as they are entirely  controlled by outside economic
factors. Our success depends on whether we can, among other things:

          o    supply an ever  increasing  number of stores  with the proper mix
               and amount of  merchandise -- a task made even more difficult now
               that we  operate  stores  from  coast to coast  and use two store

          o    hire,  train  and  retain  an  increasing   number  of  qualified
               employees -- including associates, managers, and executives -- at
               affordable rates of compensation,



          o    obtain  an  increasing   quantity  of  high  quality,   low  cost

          o    identify,  secure leases for, build-out,  and open suitable store
               sites on a timely basis and on favorable terms,

          o    successfully locate and operate stores in new geographic markets,
               where we have no or only  limited  store  operations,  and in our
               established  geographic markets, where some of our new stores may
               compete with our existing stores for customers, and

          o    expand internal store support  systems,  such as new distribution
               centers, in an efficient, timely and economical manner.

Adverse economic conditions such as inflation could affect our business

         Our  future  success  depends  on our  ability  to manage the effect of
future changes in economic conditions both in the United States -- where we sell
merchandise  -- and in Asia -- where we buy a large portion of our  merchandise.
Inflation,  particularly in the areas of operating, labor and merchandise costs,
also  affects our  business  significantly.  For  example,  increases  in hourly
minimum  wage  rate and  trans-Pacific  shipping  rates  in  recent  years  have
increased our payroll and shipping costs.

         The  federally  mandated  minimum  wage  increased by $0.50 per hour on
October 1, 1996 and by an additional  $0.40 per hour on September 1, 1997. These
changes increased  payroll costs by approximately $5 million in 1998.  Proposals
now before the U.S.  Congress call for increasing the federal minimum wage by an
additional  $1.00 an hour over two or three  years.  We expect  that this or any
comparable  increase in the minimum wage, if eventually  passed into law,  would
significantly increase our payroll costs.

         In May 1998, a  trans-Pacific  ocean-shipping  cartel imposed a freight
rate  increase on U.S.  imports  from Asia.  Effective  May 1, 1999,  the cartel
imposed a further  rate  increase.  We believe the new rates will  increase  our
shipping costs by approximately $4 million in 1999.

         As a fixed  price  point  retailer,  we  cannot  raise the price of our
merchandise  to offset  cost  increases.  Instead,  we  attempt to offset a cost
increase  in one area by finding  cost  savings  or  operating  efficiencies  in
another area.  We cannot assure you that we will be able to realize  future cost
savings or operating  efficiencies  that will offset all future cost  increases.
Our failure to realize  offsetting cost savings or operating  efficiencies could
have a material adverse effect on our business and results of operations.

We rely heavily on imported merchandise, especially from China

         Our future  success also depends on whether we can import an increasing
quantity of quality  merchandise at favorable  costs. We rely heavily on foreign
direct and  indirect  imports,  which  account for a majority of our  inventory.
China is the source of a  substantial  majority  of our direct  imports  and, we
believe,  it is also the largest  source of our indirect  imports.  We primarily
import goods from Hong Kong and Taiwan (through which our Chinese imports flow),
Thailand, Mexico, Indonesia, Italy and India.



          Imported  goods  are  less  expensive  than  domestic  goods  and have
contributed significantly to our profit margins. However, imported goods present
significant risks including:

          o    disruptions in the sourcing and supply of foreign goods,

          o    increases  in  the  cost  of  purchasing   or  shipping   foreign
               merchandise, and

          o    inconsistent  compliance by certain  foreign  manufacturers  with
               U.S.  laws  governing  the  design,  manufacture,  packaging  and
               labeling of products.

These risks may arise  because of a variety of political  and economic  factors,

          o    loss of normal trade  relations,  formerly known as "most favored
               nation" trading status,  import duties,  import quotas, and other
               trade sanctions,

          o    a lack of preparedness in China and other Asian countries for the
               Year 2000  problem,  which could result in an unstable  supply of
               electricity,  water, and other utilities and services provided by
               foreign governments,

          o    material shortages, work stoppages and strikes,

          o    economic  crises,  such as those  experienced by the countries of
               Southeast Asia beginning in 1998,

          o    international  disputes,  such as the tensions  between China and
               Taiwan and those which followed NATO's bombing of China's embassy
               in Yugoslavia, and

          o    internal political unrest.

         Chinese  goods  imported  into the United  States have been  subject to
favorable duties because China is granted normal trade  relations.  The American
government  reviews  China's trade status on an annual basis and renewed  normal
trade relations with China on July 27, 1999 for another year. However,  there is
significant political opposition to the extension of normal trade relations with
China because of a variety of issues,  including  China's trade surplus with the
United States,  its failure to open its markets  adequately to U.S.  businesses,
its human rights record,  its alleged  interference in U.S. national  elections,
and its acquisition and sale of weapons and sensitive U.S. military  technology.
U.S.  government  officials  testified  in June 1999 that  ending  normal  trade
relations with China would raise tariffs on Chinese  products from their current
trade-weighted  average of 4% to an estimated 44%, and,  depending on the extent
of the tariffs  and the nature of the goods  affected,  such an  increase  could
impose significantly higher purchasing costs on our company.

         In addition,  the United States could impose trade sanctions on Chinese
goods. In 1995, the United States threatened to impose punitive trade tariffs on
certain  categories of Chinese  goods in response to China's  failure to protect
the intellectual property of American businesses.

         In the event the potential  risks  described  above actually  arise, we
believe we could find  alternative  sources of supply to our imports that become
unavailable or too costly.  However,  the  transition to alternative  sources of
supply may not occur in time to meet our demands and products  from  alternative
sources may be



of lesser quality and more expensive than those we currently import, which could
have a material adverse effect on our business and results of operations.

We may have difficulty obtaining enough quality, low-cost merchandise

         Our future  success  depends  upon our  ability to select and  purchase
quality  merchandise  at  attractive  prices to maintain a balance of  regularly
available  core  products and a changing mix of fresh  merchandise  at the $1.00
price  point.  We have  historically  been able to locate and  purchase  quality
merchandise,  but such merchandise may not be available in the future, or it may
not be available in  quantities  necessary to  accommodate  the expansion of our
company. We do not have continuing contracts for the purchase of merchandise and
must continuously seek out buying opportunities from both our existing suppliers
and new sources,  for which we compete with wholesalers,  discount chains,  mass
merchandisers,  food  markets,  drug chains,  club stores,  other  retailers and
various  small  privately-held  companies and  individuals.  Although we are not
dependent on any single supplier or group of suppliers, our business and results
of operations could be adversely affected by a disruption in the availability of
sufficient quantities of high quality, affordable merchandise.

We could encounter unforeseen disruptions or costs in receiving and distribution

         Our future  success  also depends on whether we obtain  inventory  from
suppliers  and ship them to our  stores in a timely and cost  efficient  manner.
Substantially  all of our  inventory  is  shipped  or  picked-up  directly  from
suppliers and delivered to our  distribution  centers in  Chesapeake,  Virginia,
Olive Branch,  Mississippi,  North Highlands,  California and Chicago, Illinois.
The  inventory is then  processed  and  distributed  to our stores.  The orderly
operation  of our  receiving  and  distribution  process  depends  on  effective
management  of  our  distribution  centers  and  strict  adherence  to  shipping
schedules (especially those from Asia).

         Our rapid growth places  significant  pressure on our  distribution and
receiving systems.  Some of the factors that could have an adverse effect on our
distribution and receiving systems are:

          o    Expansion,  replacement and addition of distribution centers. The
               distribution  center in North Highlands,  California is currently
               near its maximum  capacity.  During the first quarter of 2000, we
               expect to  replace  the North  Highlands  facility  with a leased
               distribution   center  now  under   construction   in   Stockton,
               California.   Management   expects  the  Stockton  facility  will
               eventually  service  300 to 400 large  format  stores  when it is
               fully automated.  In the foreseeable  future, we will be required
               to expand,  replace  and build  other  distribution  centers on a
               tight and  demanding  time schedule in order to  accommodate  our
               aggressive growth plans.

          o    Costs associated with replaced distribution center sites. We will
               remain  liable for rent and  pass-through  costs  under the North
               Highlands  lease  until June 2008,  at a current  annual  cost of
               approximately   $641,000.  We  may  not  be  able  to  secure  an
               acceptable  sublease  for this site or other  leased sites we may
               replace in the future.

          o    Shipping  disruptions.  The  economic  crisis in  Southeast  Asia
               resulted in a shipping container shortage in 1998. We can give no
               assurance that shipping disruptions will



               not occur in the future. We may be forced to alter  our  shipping
               schedules  in the  future to react to  shipping  disruptions.  In
               turn,  this could create  bottlenecks  in the receipt of goods by
               the  distribution  centers and  adversely  affect the orderly and
               timely distribution of goods to our stores.

          o    Unionization   of  our  work  force.   From  time  to  time,  the
               International  Brotherhood of Teamsters has actively attempted to
               organize our employees at our Chesapeake and Chicago distribution
               centers.  Unionization  of a portion of our  distribution  center
               workforce could result in labor  disagreements that could cause a
               disruption in the receipt or distribution of merchandise.

          o    Natural or  man-made  disasters.  A fire,  explosion,  hurricane,
               tornado,  flood, earthquake or other disaster at our distribution
               facilities  could  result  in a  significant  disruption  in  the
               receipt and  distribution of goods.  The facilities in California
               and Mississippi are susceptible to earthquakes and the facilities
               in  Mississippi  and  Virginia  are  susceptible  to  hurricanes.
               Although we  maintain  business  interruption  and  property  and
               casualty insurance,  a disaster could  significantly  disrupt the
               distribution  of goods to our  stores for an  extended  period of

Although  management  believes that our receiving  and  distribution  process is
efficient and  well-positioned  to support our expansion plans,  there is little
excess  capacity in our current  systems.  We may not be able to  anticipate  or
respond to all the changing  demands of our  expanding  operations  or to events
beyond our control.  Any of the  foregoing  risks could have a material  adverse
effect on our business and results of operations.

We expect to encounter increasing competition

         The retail industry is highly competitive. Our competitors include mass
merchandisers  (such as  Wal-Mart),  discount  stores (such as Dollar  General),
closeout  stores (such as Odd Lots and Big Lots) and other  variety  stores.  In
past years,  our  principal  competitors  have not been other single price point
retailers.  However,  we expect that the  expansion  plans of other single price
point retailers will bring us increasingly  into direct  competition.  Increased
competition  could have a material adverse effect on our business and results of

We may  experience  disruptions  caused by the failure of computers to recognize
the year 2000

         Our company and our  suppliers  use  computer  software  programs for a
variety of essential tasks, such as purchasing,  distribution, store management,
financial systems and various administrative functions. Software applications in
these  computers may be unable to interpret the upcoming  calendar year 2000 and
beyond properly.  We are in the process of evaluating and adjusting or replacing
all of our known date-sensitive systems for year 2000 compliance. We believe the
total costs of modifying our current  systems will not exceed  $275,000 and that
we will not have to defer any  information  technology  projects  to address the
year 2000 issue.  However,  we cannot  guarantee that unknown  problems will not
arise,  resulting in remediation costs or disruptions of our business that could
have a material adverse effect on our business and results of operations.

         Additionally,  we are continuing to communicate with service  providers
and domestic suppliers of



merchandise  to assess their Year 2000  readiness and the extent to which we may
be  vulnerable  to any third  parties'  failure to  correct  their own Year 2000
issues.  Many of these  parties have stated that their ability to supply us will
not be  affected  by the Year 2000  issue.  However,  we cannot be sure of their
timely  compliance  and our  operations  could  suffer  due to the  failure of a
significant third part to become Year 2000 compliant.

         We feel we are unable to adequately assess the potential effect of Year
2000 problems on our  international  suppliers,  particularly in China.  Several
recent studies suggest that the  preparedness of China and other Asian countries
is considerably less than that of the United States and Europe,  particularly in
the fields of  manufacturing  and  utilities.  We cannot predict the duration or
severity of any  disruptions  which may occur in China or the home  countries of
our other overseas suppliers. In addition, we have evaluated the preparedness of
third parties who handle our  international  merchandise  shipping for China. We
believe these third parties are substantially Year 2000 compliant.

         Although we anticipate that minimal business disruption will occur as a
result of Year 2000 issues,  possible  consequences include, but are not limited
to, loss of communications  links with store locations,  customs delays, loss of
electric power,  and the inability to process  transactions or engage in similar
normal  business  activities.  In  addition,  the United  States and other world
economies  could witness  unusual  purchasing  patterns or other  disruptions if
large numbers of consumers believe interruptions in power, communications, water
or  food  supplies  are  likely,  regardless  of  the  actual  risks.  Any  such
disruptions  could  affect  our  business   operations.   With  the  substantial
completion of the assessment,  implementation and testing phases of our plan, we
are now in the process of analyzing  reasonably likely  worst-case  scenarios in
order to establish  appropriate  contingency  plans.  We expect to establish any
needed contingency plans by early in the fourth quarter of 1999.

         The Year 2000 problem, particularly a failure in our normal merchandise
supply  chain  from  China or other  overseas  suppliers,  could have a material
adverse effect on our business and results of operations.

         Note: This section is a Year 2000 readiness disclosure as defined under
the Year 2000 Information and Readiness Disclosure Act of 1998.

                                 USE OF PROCEEDS

         We will not receive any of the  proceeds  from the sale of common stock
in this offering.

                              PLAN OF DISTRIBUTION

         Dollar  Tree is  registering  all  501,600  shares on behalf of certain
selling shareholders. All of the shares were issued by us in connection with our
acquisition of Tehan's  Merchandising,  Inc. Our wholly-owned  subsidiary merged
with Tehan's Merchandising,  which as the surviving corporation changed its name
to Dollar Tree New York,  Inc. and became our  wholly-owned  subsidiary.  Dollar
Tree will receive no proceeds from this offering. The Selling Shareholders named
in   the   table   below   or   pledgees,    donees,    transferees   or   other
successors-in-interest  selling  shares  received from a named selling  security
holder as a gift, partnership  distribution or other  non-sale-related  transfer
after the date of this prospectus (collectively, the "Selling Shareholders") may
sell  the  shares  from  time  to  time.  The  Selling   Shareholders  will  act
independently  of the company in making  decisions  with  respect to the timing,
manner and size of each sale.



The sales may be made on one or more exchanges or in the over-the-counter market
or otherwise, at prices and at terms then prevailing or at prices related to the
then  current  market  price,  or  in  negotiated   transactions.   The  Selling
Shareholders  may effect such  transactions  by selling the shares to or through
broker-dealers.  The shares may be sold by one or more of, or a combination  of,
the following:

          o    a block trade in which the  broker-dealer so engaged will attempt
               to sell the shares as agent but may position and resell a portion
               of the block as principal to facilitate the transaction,

          o    purchases  by a  broker-dealer  as  principal  and resale by such
               broker-dealer for its account pursuant to this prospectus,

          o    an exchange  distribution  in  accordance  with the rules of such

          o    ordinary  brokerage  transactions  and  transactions in which the
               broker solicits purchasers, and

          o    in privately negotiated  transactions,  including but not limited
               to exchange trusts or similar exchange vehicles.

         To the extent required,  this prospectus may be amended or supplemented
from time to time to  describe a specific  plan of  distribution.  In  effecting
sales,  broker-dealers engaged by the Selling Shareholders may arrange for other
broker-dealers to participate in the resales.

         The  Selling  Shareholders  may enter into  hedging  transactions  with
broker-dealers in connection with  distributions of the shares or otherwise.  In
such transactions, broker-dealers may engage in short sales of the shares in the
course of hedging  the  positions  they assume with  Selling  Shareholders.  The
Selling  Shareholders  also may sell shares  short and  redeliver  the shares to
close out such short positions.  The Selling  Shareholders may enter into option
or other  transactions  with  broker-dealers  which  require the delivery to the
broker-dealer  of the shares.  The  broker-dealer  may then resell or  otherwise
transfer such shares pursuant to this prospectus.  The Selling Shareholders also
may loan or pledge the shares to a broker-dealer. The broker-dealer may sell the
shares so  loaned,  or upon a default  the  broker-dealer  may sell the  pledged
shares pursuant to this prospectus.

         Broker-dealers  or  agents  may  receive  compensation  in the  form of
commissions, discounts or concessions from Selling Shareholders.  Broker-dealers
or agents may also receive  compensation  from the  purchasers of the shares for
whom  they  act  as  agents  or to  whom  they  sell  as  principals,  or  both.
Compensation  as to a particular  broker-dealer  might be in excess of customary
commissions and will be in amounts to be negotiated in connection with the sale.
Broker-dealers  or agents  and any  other  participating  broker-dealers  or the
Selling  Shareholders may be deemed to be  "underwriters"  within the meaning of
Section  2(11) of the  Securities  Act in  connection  with sales of the shares.
Accordingly,  any such commission,  discount or concession  received by them and
any  profit on the resale of the  shares  purchased  by them may be deemed to be
underwriting  discounts or commissions under the Securities Act. Because Selling
Shareholders  may be deemed to be  "underwriters"  within the meaning of Section
2(11) of the  Securities  Act, the Selling  Shareholders  will be subject to the
prospectus  delivery  requirements  of the  Securities  Act.  In  addition,  any
securities  covered by this  prospectus  which qualify for sale pursuant to Rule
144 promulgated  under the Securities Act may be sold under Rule 144 rather than
pursuant to this



prospectus. The Selling Shareholders have advised the company that they have not
entered  into  any  agreements,   understandings   or   arrangements   with  any
underwriters or broker-dealers regarding the sale of their securities.  There is
no underwriter  or  coordinating  broker acting in connection  with the proposed
sale of shares by Selling Shareholders.

         The shares will be sold only through  registered or licensed brokers or
dealers if required under  applicable  state  securities  laws. In addition,  in
certain  states the shares may not be sold unless they have been  registered  or
qualified for sale in the applicable state or an exemption from the registration
or qualification requirement is available and is complied with.

         Under  applicable  rules and  regulations  under the Exchange  Act, any
person engaged in the distribution of the shares may not  simultaneously  engage
in market making activities with respect to our common stock for a period of two
business days prior to the commencement of such distribution.  In addition, each
Selling Shareholder will be subject to applicable provisions of the Exchange Act
and the  associated  rules and  regulations  under the Exchange  Act,  including
Regulation  M, which  provisions  may limit the timing of purchases and sales of
shares of our common  stock by the Selling  Shareholders.  The company will make
copies of this prospectus available to the Selling Shareholders and has informed
them of the need for delivery of copies of this  prospectus  to purchasers at or
prior to the time of any sale of the shares.

         The company will file a  supplement  to this  prospectus,  if required,
pursuant  to Rule  424(b)  under the  Securities  Act upon being  notified  by a
Selling  Shareholder that any material  arrangement has been entered into with a
broker-dealer  for the sale of shares through a block trade,  special  offering,
exchange  distribution  or secondary  distribution  or a purchase by a broker or
dealer. Such supplement will disclose:

          o    the  name  of  each   such   Selling   Shareholder   and  of  the
               participating broker-dealer(s),

          o    the number of shares involved,

          o    the price at which such shares were sold,

          o    the commissions paid or discounts or concessions  allowed to such
               broker-dealer(s), where applicable,

          o    that such  broker-dealer(s)  did not conduct any investigation to
               verify the  information  set out or  incorporated by reference in
               this prospectus, and

          o    other facts material to the transaction.

         In addition,  upon being notified by a Selling Shareholder that a donee
or  pledgee  intends  to sell  more than 500  shares,  the  company  will file a
supplement to this prospectus.

         The company will bear all costs,  expenses and fees in connection  with
the  registration  of  the  shares.  The  Selling  Shareholders  will  bear  all
commissions and discounts,  if any, attributable to the sales of the shares. The
Selling  Shareholders  may agree to indemnify  any  broker-dealer  or agent that
participates  in  transactions  involving  sales of the shares  against  certain
liabilities, including liabilities arising under the Securities Act. The Selling
Shareholders have agreed to indemnify certain persons,  including broker-dealers
and agents,  against certain  liabilities in connection with the offering of the
shares, including liabilities arising



under the Securities Act.

                              SELLING SHAREHOLDERS

         The  following  table sets forth the number of shares  owned by each of
the Selling  Shareholders.  None of the Selling  Shareholders has had a material
relationship with Dollar Tree within the past three years other than as a result
of the  ownership of the shares or other  securities of Dollar Tree. No estimate
can be  given  as to the  amount  of  shares  that  will be held by the  Selling
Shareholders after completion of this offering because the Selling  Shareholders
may  offer  all or  some  of the  shares  and  because  there  currently  are no
agreements,  arrangements or  understandings  with respect to the sale of any of
the shares.  The shares  offered by this  prospectus may be offered from time to
time by the Selling Shareholders named below.


                              Number of Shares  Percent of     Number of Shares
                              Beneficially      Outstanding    Registered for
Name of Selling Shareholder   Owned             Shares         Sale Hereby(1)
- ---------------------------   ----------------  -----------    ----------------

<S>                           <C>               <C>            <C>
Basil Tehan (2)               100,320           *              100,320
Fred Tehan (2)                100,320           *              100,320
Richard Tehan (2)             100,320           *              100,320
Robert Tehan (2)              100,320           *              100,320
Steven Tehan (2)              100,320           *              100,320
                              =======           ======         =======
         Total                501,600           *              501,600

*        Represents beneficial ownership of less than 1%.

(1)      This registration statement also  shall  cover any additional shares of
         which become issuable in connection with the shares registered for sale
         hereby by reason of any stock dividend, stock  split,  recapitalization
         or  other   similar   transaction   effected  without  the  receipt  of
         consideration  which  results  in  an  increase in the number of Dollar
         Tree's outstanding shares of common stock.
(2)      The figure for each Selling  Shareholder  includes 5,016 shares held of
         record by Steates,  Remmell, Steates & Dziekan, a New York partnership,
         as escrow agent under an Escrow  Agreement  dated June 30,  1999.  Such
         shares held by the escrow agent may be sold under this  prospectus  for
         the benefit of the  shareholder,  provided the proceeds  from such sale
         will  be held  until  at  least  June  30,  2000  as  security  for the
         shareholder's  indemnification  obligations  under the Escrow Agreement
         and the Merger  Agreement  dated June 15, 1999,  as amended on June 22,
         1999, with Dollar Tree.

                                  LEGAL MATTERS

          The validity of the securities  offered hereby will be passed upon for
Dollar Tree by Hofheimer Nusbaum, P.C., Norfolk, Virginia.


         The consolidated  financial  statements of Dollar Tree Stores, Inc. and
subsidiaries  as of December  31, 1997 and 1998 and for each of the years in the
three-year  period ended December 31, 1998 have been  incorporated  by reference
herein and in the  registration  statement  in reliance  upon the report of KPMG
LLP, independent certified public accountants,  incorporated by reference herein
and upon the authority of said firm as experts in accounting and auditing.




         We file annual,  quarterly and special  reports,  proxy  statements and
other  information  with the SEC.  You may read and copy any document we file at
the SEC's public  reference  rooms in  Washington,  D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public  reference rooms. Our SEC filings are also available to the public
from  our web  site at  or at the  SEC's  web site at

         The SEC allows us to "incorporate by reference" the information we file
with them,  which means that we can  disclose  important  information  to you by
referring you to those documents.  The information  incorporated by reference is
considered to be part of this prospectus,  and later  information filed with the
SEC will update and supersede this information.  We incorporate by reference the
documents  listed below and any future  filings made with the SEC under  Section
13(a),  13(c),  14, or 15(d) of the  Securities  Exchange  Act of 1934 until our
offering is completed.

          1.   Annual Report on Form 10-K for the year ended  December 31, 1998,
               filed March 25, 1999,  including  certain  information  in Dollar
               Tree's  Definitive  Proxy  Statement  in  connection  with Dollar
               Tree's  1999   Annual   Meeting  of   Shareholders   and  certain
               information  in Dollar Tree's Annual Report to  Shareholders  for
               the fiscal year ended December 31, 1998;

          2.   Dollar  Tree's  Quarterly  Reports  on Form 10-Q for the  quarter
               ended  March 31,  1999,  filed May 13,  1999 and for the  quarter
               ended June 30, 1999, filed August 10, 1999;

          3.   Dollar Tree's  Current  Reports on Form 8-K filed April 27, 1999,
               June 10, 1999, July 22, 1999 and August 18, 1999; and

          4.   The  description  of Dollar Tree common  stock  contained  in its
               registration  statement  on Form 8-A  filed  February  28,  1995,
               including  any  amendments  or reports  filed for the  purpose of
               updating such descriptions.

         You may  request a copy of these  filings,  at no cost,  by  writing or
telephoning us at the following address:

                              Dollar Tree Stores, Inc.
                              Shareholder Services
                              500 Volvo Parkway
                              Chesapeake, Virginia  23320
                              (757) 321-5000

         You should rely only on the  information  incorporated  by reference or
provided in this prospectus or the prospectus supplement.  We have authorized no
one to provide you with different  information.  You also should not assume that
the information in this  prospectus or the prospectus  supplement is accurate as
of any date other than the date on the front of the document.


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


                                                Dollar Tree Stores, Inc.

 -------------------------------                       Common Stock

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

Certain Introductory Matters          2
A Warning about Forward-Looking
Statements                            3

The Company                           4              August  30, 1999

Risk Factors                          4

Use of Proceeds                       9

Plan of Distribution                  9

Selling Shareholders                 12

Legal Matters                        12

Experts                              12

Where You Can Find More Information  13

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

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