DAVE & BUSTERS INC, 424B4, 1997-10-10

DAVE & BUSTERS INC
424B4, 1997-10-10
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<PAGE> 1

FILED PURSUANT TO RULE 424(b)(4)
REGISTRATION NO. 333-35353

2,000,000 SHARES

LOGO

COMMON STOCK

Of the 2,000,000 shares of Common Stock offered hereby, 1,800,000 shares
are being sold by Dave & Buster's, Inc. (the "Company") and 200,000 shares are
being sold by certain stockholders of the Company (the "Selling Stockholders").
The Company will not receive any of the proceeds from the sale of the shares of
Common Stock by the Selling Stockholders.

The Company's Common Stock is traded on the Nasdaq National Market under
the symbol DANB. On October 9, 1997, the last reported sale price of the Common
Stock on the Nasdaq National Market was $24.75 per share. See "Price Range of
Common Stock."

SEE "RISK FACTORS" ON PAGES 6 TO 8 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
------------------------

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.

<TABLE>
<CAPTION>
===============================================================================================================
Price to Underwriting Proceeds to Proceeds to Selling
Public Discount(1) Company(2) Stockholders(2)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share...................... $24.75 $1.33 $23.42 $23.42
- ---------------------------------------------------------------------------------------------------------------
Total(3)....................... $49,500,000 $2,660,000 $42,156,000 $4,684,000
===============================================================================================================
</TABLE>

(1) See "Underwriting" for information concerning indemnification of the
Underwriters and other matters.
(2) Before deducting expenses payable by the Company, estimated at $300,000.
(3) The Company has granted to the Underwriters a 30-day option to purchase up
to 300,000 additional shares of Common Stock solely to cover
over-allotments, if any. If the Underwriters exercise the option in full,
the Price to Public will total $56,925,000, Underwriting Discount will total
$3,059,000 and the Proceeds to Company will total $49,182,000. See
"Underwriting."

The shares of Common Stock are offered by the Underwriters named herein,
subject to receipt and acceptance by them and subject to their right to reject
any order in whole or in part. It is expected that delivery of the certificates
representing such shares will be made against payment therefor at the office of
NationsBanc Montgomery Securities, Inc. on or about October 15, 1997.
------------------------

NATIONSBANC MONTGOMERY SECURITIES, INC.
PAINEWEBBER INCORPORATED
PIPER JAFFRAY INC.

October 9, 1997
<PAGE> 2

[INSIDE COVER PAGE OF PROSPECTUS]

Gatefold as follows:

TOP PAGE:

Company's logo, trademark phrase "There's No Place Like It"(TM)
List of Locations

INSIDE:

Diagram of Complex floor plan with description of different areas

Company logo and trademark phrase

Back inside cover pictures

Gatefold as follows: Menus
Panoramic photo of outside of Complex
Logo
Description of history of Company

2
<PAGE> 3

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMPANY'S COMMON
STOCK, INCLUDING STABILIZING BIDS, SYNDICATE COVERING TRANSACTIONS AND THE
IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING."

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by reference to the more
detailed information and financial statements, including the notes thereto,
appearing elsewhere in this Prospectus. Unless otherwise indicated, (i) all
references to the Company refer to Dave & Buster's, Inc., a Missouri
corporation, and its subsidiaries, (ii) all share and per share information has
been adjusted to give effect to a three-for-two stock split (in the form of a
stock dividend) on September 15, 1997, (iii) all information assumes no exercise
of the Underwriters' over-allotment option and (iv) the 52 weeks ended January
31, 1993, January 30, 1994 and January 29, 1995, the 53 weeks ending February 4,
1996 and the 52 weeks ended February 2, 1997 and February 1, 1998 are referred
to as fiscal 1992, 1993, 1994, 1995, 1996 and 1997, respectively.

THE COMPANY

The Company operates 11 large, high volume restaurant/entertainment
complexes under the Dave & Buster's name (a "Dave & Buster's," a
"Restaurant/Entertainment Complex" or a "Complex"). Each Dave & Buster's offers
a full menu of high quality food and beverage items combined with an extensive
array of entertainment attractions such as pocket billiards, shuffleboard,
state-of-the-art interactive simulators and virtual reality systems, and
traditional carnival-style games of skill. The Company's current 50,000 to
60,000 square foot prototype facility is designed to promote easy access to, and
maximize customer cross-over between, the multiple dining and entertainment
areas within each Complex. The Company emphasizes high levels of customer
service to create casual, yet sophisticated, "ideal playing conditions" for
adults.

The Company currently operates Dave & Buster's in the following locations:
two in each of Dallas and Chicago and one each in Houston; Atlanta;
Philadelphia; Hollywood, Florida; North Bethesda, Maryland; Ontario, California;
and Cincinnati, Ohio. In addition, the Company expects to open a Complex in
Denver, Colorado in the fourth quarter of fiscal 1997. Furthermore, the Company
anticipates opening four Complexes in each of fiscal 1998 and 1999 and at least
five Complexes each fiscal year thereafter. The Company has signed leases for
sites in the Palisades Center in Rockland County, New York and the Irvine
Spectrum Center in Irvine, California, and these Complexes are expected to open
in the first and third quarters of fiscal 1998, respectively. In addition to
operations in the U.S., the Company has been actively pursuing international
growth opportunities. Pursuant to a license agreement with the Company, a
subsidiary of Bass Plc operates one Complex in Birmingham, England and has
agreed to open a total of seven Complexes in the United Kingdom by 2005. A
second licensed Complex is scheduled for opening in Bristol, England in
mid-1998.

The Company believes that the presentation of multiple attractions in one
large facility, the high quality food and service each Complex offers, and the
Company's emphasis on casual, yet sophisticated, fun for adults are key aspects
of the Dave & Buster's experience. Each Complex's dining areas, bars and
entertainment areas, including "the Grand Bar and Dining Room," "the Viewpoint
Bar" and "the Million Dollar Midway," offer a full menu of popular, moderately
priced food and beverage items. The Company's wide variety of entertainment
attractions range from traditional games such as pocket billiards, shuffleboard
and play-for-fun blackjack, to the latest in state-of-the-art video/computer
games including interactive simulators and virtual reality systems. Each Dave &
Buster's also offers group-oriented events such as "Murder Mystery Dinner
Theater," "Karaoke Sing-a-Longs," televised sporting events, private parties and
corporate events.

3
<PAGE> 4

During fiscal 1996, the Company introduced the Dave & Buster's Power Card,
which is purchased by customers to activate most of the Million Dollar Midway
games. The Power Card enables customers to activate games more easily and
encourages extended play of games. Customers have increased their initial
purchases of game credits and frequency of play, resulting in higher total
revenues and a 4% increase in the percentage of the Company's revenues derived
from amusements, which have greater operating margins than food and beverage
revenues, to 49.5% in the 26 weeks ended August 3, 1997 from 45.5% in the 26
weeks ended August 4, 1996. In addition, by replacing coin activation, the Power
Card has eliminated the technical difficulties and maintenance issues associated
with coin activated equipment. Furthermore, the Power Card feature has increased
the Company's flexibility in the pricing and promotion of games.

The Company generated total revenues of approximately $88.8 million in
fiscal 1996. For the 26 weeks ended August 3, 1997, the Company generated total
revenues of approximately $58.3 million. Approximately 50.5% of the Company's
total revenues during this period were generated by food and beverage revenues
(food and non-alcoholic beverage revenues were approximately 32.4% of total
revenues and alcoholic beverage revenues were 18.1% of total revenues). During
this 26-week period, entertainment and other revenues represented 49.5% of total
revenues.

The Company believes its Complexes have produced excellent unit economics.
For the 52 weeks ended August 3, 1997, the Company's current prototype Complexes
which had been open for at least 18 months (Houston, Atlanta, Philadelphia and
Suburban Chicago) generated average total revenues of approximately $12.7
million, average operating income of approximately $3.0 million (23.3% of
revenues) and average cash flow of approximately $3.8 million (29.9% of
revenues). Average cash flow is the unweighted average of Complex operating
income before depreciation and amortization. Although average cash flow should
not be considered an alternative to operating income as an indicator of the
Company's operating performance or an alternative to cash flows from operating
activities as a measure of liquidity, average cash flow is commonly used as an
additional measure of operating profitability in the restaurant and certain
other related industries. These Complexes required an initial investment,
including land, improvements and furniture, fixtures and equipment, but
excluding preopening expenses, averaging approximately $11.1 million. Three of
these four Complexes are owned rather than leased, while the most recently
opened and projected Complexes are and will be leased facilities. Opening a
leased facility typically reduces the Company's capital investment in a Complex
and typically decreases average operating income and average cash flow as a
result of rent expense.

The Company was founded in 1982 when David ("Dave") Corriveau and James
("Buster") Corley opened the first Dave & Buster's in Dallas. The Company's
principal executive offices are located at 2751 Electronic Lane, Dallas, Texas
75220 and its telephone number is (214) 357-9588.

THE OFFERING

Common Stock to be offered by the Company....... 1,800,000 shares

Common Stock to be offered by the Selling
Stockholders.................................... 200,000 shares

Common Stock to be outstanding after the
offering........................................ 12,717,534 shares(1)

Use of proceeds by the Company.................. To reduce outstanding
indebtedness, to fund the
development of additional
Complexes and for general
corporate purposes. See "Use
of Proceeds."

Nasdaq National Market Symbol................... DANB
- ---------------

(1) Excludes 741,212 shares of Common Stock reserved for issuance for options
granted under the Company's stock option plans, of which options to purchase
243,848 shares were exercisable as of November 1, 1997.
4
<PAGE> 5

SUMMARY OF SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

The following table presents selected consolidated financial data for the
Company. The following data should be read in conjunction with the Consolidated
Financial Statements of the Company and the notes thereto incorporated by
reference herein. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

<TABLE>
<CAPTION>
26 WEEKS ENDED
FISCAL YEARS ----------------------
-------------------------------- AUGUST 4, AUGUST 3,
1994 1995 1996 1996 1997
-------- -------- -------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Food and beverage revenues.......... $ 27,426 $ 28,554 $ 48,568 $ 22,549 $ 29,433
Amusement and other revenues ....... 21,997 23,990 40,207 18,813 28,870
-------- -------- -------- -------- --------
Total revenues...................... 49,423 52,544 88,775 41,362 58,303
Operating income.................... 4,038 4,908 10,721 4,803 6,692
Net income.......................... $ 2,364 $ 2,922 $ 6,340 $ 2,837 $ 3,790
======== ======== ======== ======== ========
Earnings per common share........... $ 0.30 $ 0.34 $ 0.58 $ 0.26 $ 0.35
Weighted average shares
outstanding....................... 7,796 8,681 10,902 10,901 10,905

OPERATING DATA:
Number of Company operated Complexes
open at end of period............. 5 7 9 8 10
Average weekly revenues per
Complex........................... $189,223 $187,974 $212,012 $208,448 $226,870
</TABLE>

<TABLE>
<CAPTION>
AUGUST 3, 1997
-----------------------
AS
ACTUAL ADJUSTED(1)
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA:
Working capital............................................. $ 3,819 $ 40,675
Total assets................................................ 113,486 150,342
Total long-term debt (including current portion)............ 23,500 18,500
Total stockholders' equity.................................. 79,360 121,216
</TABLE>

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

(1) As adjusted to reflect the sale of 1,800,000 shares of Common Stock by the
Company and the application of the estimated net proceeds therefrom. See
"Use of Proceeds" and "Capitalization."
5
<PAGE> 6

RISK FACTORS

This Prospectus contains certain forward-looking statements within the
meaning of the federal securities laws. Actual results and the timing of certain
events could differ materially from those projected in the forward-looking
statements due to the factors set forth below and elsewhere in this Prospectus.
See "Special Note Regarding Forward-Looking Statements." In addition to the
other information in this Prospectus, prospective investors should carefully
consider the following factors in evaluating an investment in the Common Stock
offered hereby.

EXPANSION PLANS; CAPITAL RESOURCE REQUIREMENTS

The Company presently plans to open an additional Complex during the fourth
quarter of fiscal 1997, four Complexes in each of 1998 and 1999 and at least
five Complexes each fiscal year thereafter. Accomplishing these expansion goals
will depend upon a number of factors, including the Company's ability to raise
sufficient capital, locate and obtain appropriate sites, hire and train
additional management personnel and construct or acquire, at reasonable cost,
the necessary improvements and equipment for such Restaurant/Entertainment
Complexes. In particular, the capital resources required to develop each new
Restaurant/Entertainment Complex are significant. The Company's current
prototype Complexes have required an initial investment, including land,
improvements and furniture, fixtures and equipment, but excluding pre-opening
expenses, averaging approximately $10 million per Complex.

There can be no assurance that the Company will be able to complete its
planned expansion, that the Company will continue to be successful in its
development of new Restaurant/Entertainment Complexes or that new
Restaurant/Entertainment Complexes, if completed, will perform in a manner
consistent with the Company's most recently opened Restaurant/Entertainment
Complexes or make a positive contribution to the Company's operating
performance.

SMALL NUMBER OF RESTAURANT/ENTERTAINMENT COMPLEXES

The Company operates 11 Restaurant/Entertainment Complexes. The combination
of the relatively small number of locations and the significant investment
associated with each new Restaurant/Entertainment Complex may cause the
operating results of the Company to fluctuate significantly and adversely affect
the profitability of the Company. Due to this relatively small number of
locations, poor results of operations at any one Restaurant/Entertainment
Complex could materially affect the profitability of the entire Company. New
Restaurant/Entertainment Complexes have experienced a drop in revenues after
their first year of operation, and the Company does not expect that in
subsequent years any increases in comparable Complex revenues will be
meaningful.

Future growth in revenues and profits will depend to a substantial extent
on the Company's ability to increase the number of its Restaurant/Entertainment
Complexes. Because of the substantial up-front financial requirements which are
described above, the investment risk related to any one Restaurant/Entertainment
Complex is much larger than that associated with most other companies'
restaurant or entertainment venues.

DEPENDENCE UPON SENIOR MANAGEMENT

The Company's future success will depend largely on the efforts and
abilities of its existing senior management, particularly David O. Corriveau and
James W. Corley, the Company's Co-Chief Executive Officers and the founders of
the Company's business. The loss of the services of certain of the Company's
management team could have a material adverse effect on the Company's business.
Messrs. Corriveau and Corley are employed pursuant to employment agreements
which will expire in June 2000.

EDISON BROTHERS' BANKRUPTCY

In 1989, Edison Brothers Stores, Inc. ("Edison Brothers") acquired 80% of
the Company's operating business and all of the real estate interests related to
such operating business. In June 1995, Edison Brothers distributed to its
stockholders all of the shares of the Company's Common Stock owned by Edison
Brothers

6
<PAGE> 7

(the "Spin-Off"), which represented 85% of the shares of the Company's Common
Stock then outstanding. In November 1995, Edison Brothers and its subsidiaries
filed petitions under Chapter 11 of the Federal Bankruptcy Code.

During the pendency of Edison Brothers' bankruptcy, certain of its
creditors and their representatives alleged that the Spin-Off and related
transactions could be voidable under fraudulent conveyance laws. These claims
were assigned to a limited liability corporation owned by the Edison Brothers'
creditors as part of the confirmation of a reorganization plan of Edison
Brothers in September 1997

In October 1997, the litigation limited liability corporation filed a
lawsuit against multiple parties, including former Edison Brothers shareholders,
Edison family members and the Company, seeking recovery in connection with the
Spin-Off and certain related transactions. The plaintiff's aggregate recovery in
this lawsuit would be limited to the shortfall received by the creditors in the
Edison Brothers bankruptcy, and the Company does not have access to complete
knowledge as to the number of former Edison Brothers shareholders who have
accepted a proposed settlement offer (which would lessen the amount of the
shortfall) and as to which former Edison Brothers shareholders are included in
the purported defendant class. For these reasons, the Company is unable to
quantify any potential exposure from this lawsuit. The Company believes that the
claims against the former Edison Brothers shareholders involve a substantially
greater amount than the claims against the Company.

Although no assurance can be made with respect to the results of the
litigation, the Company believes that the claims asserted against the Company
are without merit, and the Company intends to vigorously defend itself.

DEPENDENCE ON DISCRETIONARY SPENDING

The Company's profits are dependent on discretionary spending by consumers,
particularly by consumers living in the communities in which the
Restaurant/Entertainment Complexes are located. A significant weakening in the
national economy or any of the local economies in which the Company operates may
cause the Company's patrons to curtail discretionary spending which, in turn,
could materially affect the profitability of the entire Company.

INTERNATIONAL EXPANSION; LICENSE AGREEMENTS

In August 1995, the Company entered into an agreement with a subsidiary of
Bass Plc ("Bass") to license the "Dave & Buster's" name and concept in the
United Kingdom. In addition, the Company is pursuing agreements to license the
"Dave & Buster's" name and concept in other foreign countries. The Company does
not have any current plans to invest its own capital in any foreign operations.
Although Bass opened a Dave & Buster's in Birmingham, England in May 1997, the
Company's concept is largely untested outside the United States, and no
assurance can be given that international locations will be successful. In
addition, the Company's continued success is dependent to a substantial extent
on its reputation, and its reputation may be affected by the performance of
licensee-owned Restaurant/Entertainment Complexes over which the Company will
have limited control. Any international operations of the Company will also be
subject to certain external business risks such as exchange rate fluctuations,
political instability and a significant weakening of a local economy in which a
foreign Restaurant/Entertainment Complex is located. Certain provisions in a
license agreement for the benefit of the Company may be subject to restrictions
in foreign laws that limit the Company's ability to enforce such contractual
provisions. In addition, it may be more difficult to register and protect the
Company's intellectual property rights in certain foreign countries.

COMPETITION

The restaurant and entertainment industries are highly competitive. There
are a great number of food and beverage service operations and entertainment
businesses that compete directly and indirectly with the Company. Many of these
entities are larger and have significantly greater financial resources and a
greater number of units than does the Company. Although there are few other
companies presently utilizing the concept of combining entertainment and
restaurant operations to the same extent as the Company, the

7
<PAGE> 8

Company may encounter increased competition in the future, which may have an
adverse effect on the profitability of the Company. In addition, the
legalization of casino gambling in geographic areas near any
Restaurant/Entertainment Complex would create the possibility for entertainment
alternatives which could have a material adverse effect on the Company's
business.

GOVERNMENT REGULATIONS

Various federal, state and local laws and permit and license requirements
affect the Company's business. Significant numbers of hourly personnel at the
Company's Complexes are paid at rates related to the federal minimum wage and,
accordingly, legislated increases in the minimum wage will increase labor costs
at the Company's Complexes. Other governmental initiatives such as mandated
health insurance, if implemented, could adversely affect the Company as well as
the restaurant industry in general. See "Business -- Government Regulations."

STOCK PRICE VOLATILITY

The Company's Common Stock has been trading in the public market since June
1995. The price at which the Company's Common Stock trades is determined in the
marketplace and may be influenced by many factors, including the performance of
the Company, investor expectations for the Company, the trading volume in the
Company's Common Stock, general economic and market conditions and competition.

The market price of the Common Stock could fluctuate substantially due to a
variety of factors, including quarterly operating results of the Company or
other restaurant or entertainment companies, changes in general conditions in
the economy, the financial markets or the restaurant or entertainment
industries, natural disasters or other developments affecting the Company or its
competitors. In addition, in recent years the stock market has experienced
extreme price and volume fluctuations. This volatility has had a significant
effect on the market prices of securities issued by many companies for reasons
unrelated to the operating performance of these companies. See "Price Range of
Common Stock."

8
<PAGE> 9

USE OF PROCEEDS

The net proceeds to the Company from the sale of shares of Common Stock
offered by the Company are estimated to be $41.9 million ($48.9 million if the
Underwriters' over-allotment option is exercised in full). The Company will not
receive any proceeds from the sale of the 200,000 shares of Common Stock offered
hereby by the Selling Stockholders.

The Company will utilize approximately $5.0 million of the net proceeds to
reduce its bank indebtedness, which totaled $23.5 million at August 3, 1997.
This indebtedness is evidenced by a revolving credit facility bearing interest
at a floating rate based on LIBOR or, at the Company's option, the bank's prime
rate plus in each case a margin based upon financial performance (8.0% at August
3, 1997). The credit facility has a final maturity date of May 2000 and provides
for maximum borrowings in the principal amount of $50.0 million. Borrowings
thereunder have been used principally to open new Complexes. The remaining
portion of the proceeds, together with future borrowings under the revolving
credit facility, will be used to open new Complexes and for general corporate
purposes. Pending the above uses, the net proceeds will be invested in
short-term, investment grade, interest-bearing securities.

DIVIDEND POLICY

The Company has not declared or paid any dividends on its Common Stock
since 1989. The Company currently intends to retain all earnings for the
operation and expansion of its business and does not anticipate paying any cash
dividends in the foreseeable future. The Company's bank credit facility
restricts the payment of cash dividends. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources."

PRICE RANGE OF COMMON STOCK

Shares of the Company's Common Stock have been traded on the Nasdaq
National Market System under the symbol DANB since June 26, 1995. The following
table summarizes the high and low sale prices of the Common Stock for the
periods indicated, as reported by Nasdaq, and gives effect to the three-for-two
stock split (in the form of a stock dividend) completed on September 15, 1997:

<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
FISCAL 1995
Second Quarter (since June 26, 1995)........................ $14.83 $ 7.67
Third Quarter............................................... 12.67 9.50
Fourth Quarter.............................................. 10.75 7.42

FISCAL 1996
First Quarter............................................... $16.42 $ 9.33
Second Quarter.............................................. 19.25 12.67
Third Quarter............................................... 16.92 12.33
Fourth Quarter.............................................. 14.50 11.17

FISCAL 1997
First Quarter............................................... $16.92 $12.67
Second Quarter.............................................. 21.83 13.58
Third Quarter (through October 9, 1997)..................... 27.00 20.17
</TABLE>

On October 9, 1997, the last reported sales price of the Company's Common
Stock was $24.75 per share. At September 9, 1997, the Company believes there
were approximately 5,000 beneficial owners of its Common Stock represented by
3,054 holders of record.

9
<PAGE> 10

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
August 3, 1997 and as adjusted to reflect the sale by the Company of 1,800,000
shares of Common Stock offered hereby. This table should be read in conjunction
with the Consolidated Financial Statements and Notes thereto incorporated by
reference herein and "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

<TABLE>
<CAPTION>
AUGUST 3, 1997
-----------------------
ACTUAL AS ADJUSTED
-------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Long term debt (including current portion).................. $ 23,500 $ 18,500
Stockholders' equity:
Preferred Stock, 10,000,000 authorized, none issued....... -- --
Common Stock, $.01 par value, 50,000,000 authorized,
10,916,034 issued, 12,716,034 issued as adjusted....... 109 127
Paid-in capital........................................ 67,203 109,041
Retained earnings...................................... 12,048 12,048
-------- --------
Total stockholders' equity............................. 79,360 121,216
-------- --------
Total capitalization.............................. $102,860 $139,716
======== ========
</TABLE>

10
<PAGE> 11

SELECTED CONSOLIDATED FINANCIAL DATA

The following table sets forth selected consolidated financial data for the
Company. All information presented for interim periods is unaudited but, in the
opinion of management, reflects all adjustments necessary for a fair
presentation of the results for such periods. This data should be read in
conjunction with the Consolidated Financial Statements of the Company and the
Notes thereto incorporated by reference herein and "Management's Discussion and
Analysis of Financial Condition and Results of Operations." The fiscal year of
the Company ends on the Sunday after the Saturday closest to January 31.

<TABLE>
<CAPTION>
26 WEEKS ENDED
FISCAL YEARS ---------------------
---------------------------------------------------- AUGUST 4, AUGUST 3,
1992 1993 1994 1995 1996 1996 1997
-------- -------- -------- -------- -------- --------- ---------
(IN THOUSANDS EXCEPT PER SHARE AND OPERATING DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Food and beverage revenues..................... $ 14,891 $ 18,445 $ 27,426 $ 28,554 $ 48,568 $ 22,549 $ 29,433
Amusement and other revenues................... 10,603 14,453 21,997 23,990 40,207 18,813 28,870
-------- -------- -------- -------- -------- -------- --------
Total revenues......................... 25,494 32,898 49,423 52,544 88,775 41,362 58,303
-------- -------- -------- -------- -------- -------- --------
Cost of revenues............................... 5,315 6,800 10,075 10,945 18,003 8,491 11,293
Operating payroll and benefits................. 7,659 9,716 14,746 15,999 25,483 12,093 16,388
Other restaurant operating expenses............ 6,204 7,109 11,760 11,481 20,582 9,476 14,737
General and administrative expenses............ 1,854 2,271 2,724 3,905 5,734 2,672 3,833
Depreciation and amortization expense.......... 1,626 1,927 2,827 3,538 5,647 2,611 3,865
Preopening cost amortization................... 696 480 1,128 161 2,605 1,216 1,495
Earn-out and special compensation.............. 1,279 2,655 2,125 1,607 -- -- --
-------- -------- -------- -------- -------- -------- --------
Total costs and expenses............... 24,633 30,958 45,385 47,636 78,054 36,559 51,611
-------- -------- -------- -------- -------- -------- --------
Operating income............................... 861 1,940 4,038 4,908 10,721 4,803 6,692
Interest income (expense), net................. 46 36 59 101 (38) 41 (480)
-------- -------- -------- -------- -------- -------- --------
Income before provision for income taxes....... 907 1,976 4,097 5,009 10,683 4,844 6,212
Provision for income taxes..................... 336 806 1,733 2,087 4,343 2,007 2,422
-------- -------- -------- -------- -------- -------- --------
Net income............................. $ 571 $ 1,170 $ 2,364 $ 2,922 $ 6,340 $ 2,837 $ 3,790
======== ======== ======== ======== ======== ======== ========
Earnings per common share...................... $ 0.07 $ 0.15 $ 0.30 $ 0.34 $ 0.58 $ 0.26 $ 0.35
Weighted average shares outstanding............ 7,796 7,796 7,796 8,681 10,902 10,901 10,905

BALANCE SHEET DATA:
Working capital (deficit)...................... $ 639 $ (112) $ (2,637) $ 5,634 $ 1,077 $ 2,682 $ 3,819
Total assets................................... 32,140 43,403 49,030 76,201 99,436 82,468 113,486
Long-term debt (including current portion)..... 8,950 8,252 9,986 500 14,250 4,500 23,500
Stockholders' equity(1)........................ -- -- -- 69,008 75,366 71,863 79,360

OPERATING DATA:
Number of Company operated Complexes open at
end of period................................ 4 4 5 7 9 8 10
Average weekly revenues per Complex............ $149,462 $158,164 $189,223 $187,974 $212,012 $208,448 $226,870
</TABLE>

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

(1) Prior to fiscal 1995, the Company was a subsidiary of Edison Brothers.

11
<PAGE> 12

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

GENERAL

In December 1982, the Company's business was founded in Dallas, Texas, by
David Corriveau and James Corley. The Company's primary business is the
operation of Restaurant/Entertainment Complexes under the Dave & Buster's name.
The Company currently operates 11 Complexes in eight states, which include two
in Dallas, two in Chicago and one each in Houston; Atlanta; Philadelphia;
Hollywood, Florida; North Bethesda, Maryland; Ontario, California; and
Cincinnati, Ohio.

The Company's revenues are divided into (i) food and beverage revenues and
(ii) amusement and other revenues. For fiscal 1996, food and non-alcoholic
beverage revenues were 34.3% of total revenues, alcoholic beverage revenues were
20.4% of total revenues, and amusement and other revenues were 45.3% of total
revenues. For the 26 weeks ended August 3, 1997, food and non-alcoholic beverage
revenues were 32.4% of total revenues, alcoholic beverage revenues were 18.1% of
total revenues, and amusement and other revenues (including royalty revenues
related to the Complex operated by Bass under a license agreement) were 49.5% of
total revenues. Alcoholic beverage revenues as a percentage of total revenues
have decreased over the past five fiscal years as a result of the higher
percentage of floor space devoted to entertainment activities within the
Company's newer Restaurant/Entertainment Complexes and consistent with the
national trend towards lower alcoholic beverage consumption.

Operating payroll and benefits includes all categories of payroll, payroll
taxes and fringe benefits incurred in the operation of the
Restaurant/Entertainment Complexes. Other operating expenses are all other
direct costs (excluding depreciation) associated with Restaurant/Entertainment
Complex operation which include occupancy costs, advertising and promotional
costs, supplies, services, insurance and other lesser amounts.

The Company capitalizes Restaurant/Entertainment Complex preopening
expenses and amortizes such costs over the 12-month period following a Complex
opening. Preopening costs consist of promotion and advertising expenses, direct
costs related to hiring and training the initial workforce, and other direct
costs associated with opening a new Restaurant/Entertainment Complex, and for
its most recent five Complexes averaged approximately $1.0 million. The
amortization of deferred preopening costs will vary in amount in relation to the
timing of Restaurant/Entertainment Complex openings.

The Company heavily promotes the opening of each new
Restaurant/Entertainment Complex in order to generate substantial customer
interest. The Company believes its promotion activities in the opening period
establish the reputation of the business in the community and contribute to
long-term profitability. There is typically an initial opening period during the
first year of operation in which a new Restaurant/Entertainment Complex
experiences higher revenues than in subsequent years of operation. New
Restaurant/Entertainment Complexes have experienced a drop in revenues after the
first year, and the Company does not expect that, in subsequent years, any
increases in comparable Complex revenues will be meaningful. The Company
believes that the key factors in the growth of the Company's earnings will be
opening new Restaurant/Entertainment Complexes and increasing efficiency at
existing Complexes as opposed to increasing revenues at existing Complexes.

OPERATING RESULTS

26-WEEK PERIOD ENDED AUGUST 3, 1997 COMPARED TO 26-WEEK PERIOD ENDED AUGUST 4,
1996

Total revenues for the 26 weeks ended August 3, 1997 increased by 41.0%
over the 26 weeks ended August 4, 1996. The increase in revenues was primarily
attributable to the Hollywood, Florida location being open the full 26 weeks in
fiscal 1997 and the inclusion in the fiscal 1997 period of the North Bethesda,
Maryland and Ontario, California locations, which opened in the fourth quarter
of fiscal 1996 and first quarter of fiscal 1997, respectively. Increased
revenues at comparable Complexes and the addition of the Power Card also
contributed to the increase in total revenues. Total revenues also increased due
to the opening of the first Complex under the Bass licensing agreement. Total
revenues for the fiscal 1997 period from the Bass agreement were $145,000.

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<PAGE> 13

Cost of revenues, as a percentage of revenues, decreased to 19.4% from
20.5% in the prior comparable period. The decrease in the cost of revenues was a
result of lower costs associated with food and beverage revenues and a shift in
the revenue mix towards more amusement revenues. Operating payroll and benefits
decreased to 28.1% from 29.2% in the prior comparable period. Operating payroll
and benefits was lower due to cost reductions in variable and fixed labor and
leverage from increased revenues. Other operating expenses increased to 25.3%
compared to 22.9% in the prior comparable period. Other operating expenses were
higher due to increased occupancy costs associated with a full 26 weeks of
revenues in the fiscal 1997 period for the Hollywood, Florida location, the
addition of the North Bethesda, Maryland and Ontario, California locations and
higher fixed costs at the Complexes.

General and administrative costs increased $1.2 million over the prior
comparable period as a result of increased administrative payroll and related
costs for new personnel and additional costs associated with the Company's
future growth plans. As a percentage of revenues, general and administrative
expenses increased slightly to 6.6% compared to 6.5% for the comparable prior
period.

Depreciation and amortization expense, as a percentage of revenues,
increased to 6.6% from 6.3% for the comparable prior period. This was due to the
inclusion of the Hollywood, Florida location for the full 26 weeks in fiscal
1997 and the opening of the North Bethesda, Maryland and Ontario, California
locations subsequent to the fiscal 1996 period. As a percentage of revenues,
preopening cost amortization decreased to 2.6% compared to 2.9% in the prior
comparable period. The percentage decrease is attributable to the leverage from
increased revenues. The effective tax rate for the 26 weeks ended August 3, 1997
was 39.0% as compared to 41.4% for the comparable period of fiscal 1996 and was
the result of a lower effective state tax rate.

FISCAL 1996 COMPARED TO FISCAL 1995

Total revenues for fiscal 1996 increased by 69% over fiscal 1995. The
increase was attributable to the Chicago locations which were opened at the end
of fiscal 1995, the fiscal 1996 openings in Hollywood, Florida and North
Bethesda, Maryland and increased revenues at comparable Complexes. The mix of
revenues moved away from alcoholic beverages which captured 20.4% of the total
in fiscal 1996 compared with 21.0% in fiscal 1995.

Cost of revenues, as a percentage of revenues, decreased to 20.3% in fiscal
1996 from 20.8% in fiscal 1995 due to lower food and amusement costs. Operating
payroll and benefits, as a percentage of revenues, decreased to 28.7% in fiscal
1996 as compared to 30.5% in fiscal 1995 due primarily to lower store management
costs. Other restaurant operating expenses were 23.2% of revenues in fiscal 1996
as compared to 21.9% of revenues in fiscal 1995. This increase in other
restaurant operating expense as a percentage of revenues was attributable to
increased marketing costs, equipment rental and higher occupancy costs for the
Company.

General and administrative expenses decreased as a percentage of revenues
to 6.4% in fiscal 1996 from 7.4% in fiscal 1995 as a result of increased revenue
leverage. In total dollars, general and administrative costs increased
approximately $1.8 million due to the Company operating as an independent public
company for the entire year and the Company's continued expansion.

Preopening cost amortization increased approximately $2.4 million due to
amortization of preopening costs associated with four new Complexes in fiscal
1996. The effective tax rate decline for fiscal 1996 to 40.7% of pretax income
from 41.7% for fiscal 1995 was due to the utilization of federal tax credits.

FISCAL 1995 COMPARED TO FISCAL 1994

Total revenues for fiscal 1995 increased by 6.3% over fiscal 1994. The
increase was attributable to two new openings in Chicago in the fourth fiscal
quarter and increased revenues at comparable Complexes, offset by a normal
reduction in revenues in the Company's Philadelphia location following its first
year of operation. The mix of revenues moved away from alcoholic beverages which
captured 21.0% of the total in fiscal 1995 compared with 22.9% for fiscal 1994.

Cost of revenues, as a percentage of revenues, increased to 20.8% in fiscal
1995 as compared to 20.4% in fiscal 1994 due to a higher cost of amusement and
other revenues. The increase in operating payroll and

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benefits in fiscal 1995 to 30.5% of revenues from 29.8% in fiscal 1994 was due
primarily to increased management costs offset by modest decreases in other
payroll categories. Other restaurant operating expenses were 21.9% of revenues
in fiscal 1995 as compared to 23.8% in fiscal 1994. This decrease in other
restaurant operating expenses as a percentage of revenue was attributable to
decreased marketing costs for the Company and decreased occupancy costs related
to the Philadelphia Complex.

General and administrative expenses increased as a percentage of revenues
to 7.4% in fiscal 1995 from 5.5% in fiscal 1994 as a result of increased
administrative payroll and related costs for new personnel and additional costs
resulting from the Company operating as an independent public company.

The effective tax rate in fiscal 1995 was 41.7% of pretax income compared
to 42.3% for fiscal 1994, with the decline the result of a lower effective state
tax rate for the Company.

LIQUIDITY AND CAPITAL RESOURCES

Cash flows from operations increased from $5.0 million in fiscal 1995 to
$13.1 million in fiscal 1996. This increase was due to the Chicago locations
which were opened at the end of fiscal 1995 and the Hollywood, Florida and North
Bethesda, Maryland Complexes which were opened in fiscal 1996. Cash flows from
operations increased from $3.2 million in the first 26 weeks of fiscal 1996 to
$5.8 million in the first 26 weeks of fiscal 1997. The increase was a result of
the Hollywood, Florida location being open for the full 26 week period, the
North Bethesda, Maryland location opening in the fourth quarter of fiscal 1996
and the Ontario, California location opening in the first quarter of fiscal
1997. The increase in cash flows from operations was reduced by an increase in
inventories, prepaid costs, preopening costs and other assets related to the new
openings.

The Company has a secured revolving line of credit which permits borrowing
up to a maximum of $50.0 million. At August 3, 1997, $22.8 million was available
under this facility. Borrowings under this facility bear interest at a floating
rate based on LIBOR or, at the Company's option, the bank's prime rate plus in
each case a margin based upon financial performance. The facility, which matures
in May 2000, has certain financial covenants including minimum consolidated
tangible net worth, maximum leverage ratio, minimum fixed charge coverage and
maximum level of capital expenditures for new Complexes.

The Company's plan is to open one additional Complex in the remaining
portion of fiscal 1997 and four new Complexes in fiscal 1998. The Company
estimates that its capital expenditures will be approximately $41 million and
$42 million for fiscal 1997 and 1998, respectively. These amounts are inclusive
of approximately $250,000 to $375,000 of capitalized maintenance and
improvements for each existing Complex in each year and costs associated with
the construction of the Company's new corporate headquarters. The Company
intends to finance its capital expenditures with proceeds from this offering,
income from operations, the revolving credit facility described above and
equipment leases.

SUBSEQUENT EVENT

In October 1997, an entity owned by the creditors of Edison Brothers filed
a lawsuit against multiple parties, including the Company, seeking recovery in
connection with the Spin-Off and certain related transactions. See "Risk
Factors -- Edison Brothers' Bankruptcy."

QUARTERLY FLUCTUATIONS, SEASONALITY AND INFLATION

As a result of the substantial revenues associated with each new
Restaurant/Entertainment Complex, the timing of new Restaurant/Entertainment
Complex openings will result in significant fluctuations in quarterly results.
The Company expects seasonality to be a factor in the operation or results of
its business in the future due to expected lower third quarter revenues due to
the summer season, and expects higher fourth quarter revenues associated with
the year-end holidays. The effects of supplier price increases have not been
material. The Company believes low inflation rates in its market areas have
contributed to stable food and labor costs in recent years. However, the second
increment of the Federal minimum wage increase will cause future labor costs to
increase and there is no assurance that low inflation rates will continue.

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BUSINESS

GENERAL

The Company operates 11 large, high-volume Restaurant/Entertainment
Complexes under the Dave & Buster's name. Each Dave & Buster's offers a full
menu of high quality food and beverage items combined with an extensive array of
entertainment attractions such as pocket billiards, shuffleboard,
state-of-the-art interactive simulators and virtual reality systems, and
traditional carnival-style games of skill. The Company's current 50,000 to
60,000 square foot prototype facility is designed to promote easy access to, and
maximize customer cross-over between, the multiple dining and entertainment
areas within each Complex. The Company emphasizes high levels of customer
service to create casual, yet sophisticated, "ideal playing conditions" for
adults.

The Company currently operates Dave & Buster's in the following locations:
two in each of Dallas and Chicago and one each in Houston; Atlanta;
Philadelphia; Hollywood, Florida; North Bethesda, Maryland; Ontario, California;
and Cincinnati, Ohio. In addition, the Company expects to open a Complex in
Denver, Colorado in the fourth quarter of fiscal 1997. Furthermore, the Company
anticipates opening four Complexes in each of fiscal 1998 and 1999 and at least
five Complexes each fiscal year thereafter. The Company has signed leases for
sites in the Palisades Center in Rockland County, New York and the Irvine
Spectrum Center in Irvine, California, and these Complexes are expected to open
in the first and third quarters of fiscal 1998, respectively. In addition to
operations in the U.S., the Company has been actively pursuing international
growth opportunities. Pursuant to a license agreement with the Company, Bass
operates one Complex in Birmingham, England and has agreed to open a total of
seven Complexes in the United Kingdom by 2005. A second licensed Complex is
scheduled for opening in Bristol, England in mid-1998.

THE DAVE & BUSTER'S CONCEPT

The Company seeks to differentiate itself by providing high quality dining,
bar service and entertainment attractions in a comfortable, adult atmosphere.
The key factors of the Company's market positioning and operating strategy are:

Distinctive Concept. Each Dave & Buster's offers a distinctive combination
of dining, bar service and entertainment. A full menu and complete bar service
are available from early lunch until late at night in each restaurant and
throughout almost all of the entertainment areas. The broad array of
attractions, ranging from table and carnival games to state-of-the-art virtual
reality games, is continuously reviewed and updated to maintain a fresh
entertainment environment. The Company has actively sought to enhance the
popularity of its traditional games, such as play-for-fun casino style
blackjack, pocket billiards and shuffleboard, by providing high quality tables,
a clean and comfortable environment and a high standard of service.

A Large, Multiple Attraction Destination. The Complexes range in
approximate total area from 30,000 square feet to 70,000 square feet, with a
current prototype of approximately 50,000 to 60,000 square feet. The large scale
of each operation, together with the numerous food, beverage and entertainment
options offered, is designed to attract a diverse customer base and consolidate
multiple-destination customer spending into one location. Each Dave & Buster's
attracts local customers from a wide geographical area (estimated to be a twenty
mile radius) along with tourists, conventioneers and business travelers.

Commitment to Quality. The Company strives to provide its customers with
good food and an inviting atmosphere. Accordingly, each Dave & Buster's offers
an extensive menu which features popular, moderately priced food and beverage
items that are individually prepared with a commitment to value and quality. The
Company makes a significant investment in each Complex, and the Company's
facilities are designed with an attention to detail. In addition, the
customer-participation entertainment attractions are tastefully presented in an
atmosphere that the Company defines as "ideal playing conditions."

High Standard of Customer Service. Through intensive training, constant
monitoring and stringent operational controls, the Company strives to maintain a
consistently high standard of food, beverage and amusement service throughout
each Dave & Buster's. The Company's commitment to customer service is

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evidenced by the availability of full food and beverage service in entertainment
areas as well as the restaurant and bar areas. With respect to entertainment,
the Company's commitment to customer service is demonstrated by service staff in
each of the entertainment areas who offer assistance in playing and enjoying the
games. The Company believes its customer service is enhanced by a strong
commitment to employee motivation and appreciation programs. The Company also
believes that high service standards are critical to promoting customer loyalty
and to generating frequent-visiting patterns and referrals by customers.

Comfortable Adult Atmosphere. Each Dave & Buster's is primarily adult
oriented and, while children are welcome, strict guidelines are enforced.
Customers under 21 years of age must be accompanied by a responsible adult at
all times during their visit and are not allowed in a Dave & Buster's after
10:00 p.m. (11:00 p.m. in the summer months). The Company believes that these
policies help maintain the type of pleasant, relaxed atmosphere that appeals to
adult customers. The Company also believes that this atmosphere allows it to
attract groups of customers such as private parties and business organizations.

Integrated Systems. The Company utilizes centralized information and
accounting systems that are designed to allow its management to efficiently
monitor labor, food and other direct operating expenses and provide timely
access to financial and operating data. Management believes that its integrated
computer systems permit it, on both an overall and per Complex basis, to
efficiently operate the Restaurant/ Entertainment Complexes.

MENU AND ENTERTAINMENT OFFERINGS

Dave & Buster's offers a full menu of high quality food and beverage items
combined with an extensive array of entertainment attractions such as pocket
billiards, shuffleboard, state-of-the-art interactive simulators and virtual
reality systems, and traditional carnival-style games of skill. The Company's
facilities are designed to promote easy access to, and maximize customer
cross-over between, the multiple dining and entertainment areas within each
Complex. The Company emphasizes high levels of customer service to create
casual, yet sophisticated, "ideal playing conditions" for adults.

The Dave & Buster's menu is offered from early lunch until late night and
features moderately priced food designed to appeal to a wide variety of
customers. This well-rounded fare includes gourmet pastas, individual sized
pizzas, burgers, steaks, seafood and chicken. Specialties of the house include
babyback ribs, blackened chicken pasta, mesquite-peppered rib eye steak and a
Philadelphia cheese steak sandwich. A wide variety of other appetizers, soups,
salads and sandwiches is also available. Entree prices range from $6.50 to
$18.95, with many entrees in the $7.50 to $10.95 range. In order to promote
customer flow and complement the entertainment areas, full, sit down food
service is offered not only in the restaurant areas but throughout Dave &
Buster's, with the exception of the "Play-for-Fun" Casino. In addition,
throughout the restaurant and entertainment areas including the "Play-for-Fun"
Casino, each Dave & Buster's offers full bar service including over 50 different
beers, an extensive wine selection and a variety of non-alcoholic beverages such
as its own private label, "D&B Old Fashioned Philly Root Beer."

The entertainment attractions in each Dave & Buster's are geared toward
customer participation and offer both traditional entertainment and "Million
Dollar Midway" entertainment.

Traditional Entertainment. Each Dave & Buster's offers a number of
traditional entertainment options. These traditional offerings include "world
class" pocket billiards, "championship-style" shuffleboard tables,
"play-for-fun" casino featuring blackjack played on authentic tables, the Show
Room which is designed for hosting private social parties and business
gatherings as well as Company sponsored events, and D&B Lanes which is bowling,
Dave & Buster's style. Other than the "play for fun" casino, traditional
entertainment games are rented by the hour.

Million Dollar Midway Games. The largest area in each Dave & Buster's is
the Million Dollar Midway, which is designed to provide high-energy, fantasy
entertainment through a broad selection of electronic, skill and sports-oriented
games. The Power Card activates all the midway games (with the exception of the
coin action games) and can be recharged again and again for more play. The Power
Card enables customers to activate games more easily and encourages extended
play of games. Customers have increased their initial

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purchases of game credits and frequency of play, resulting in an increase in the
Company's total revenues and a 4% increase in the percentage of the Company's
revenues derived from amusements, which have greater operating margins than food
and beverage revenues, to 49.5% in the 26 weeks ended August 3, 1997 from 45.5%
in the 26 weeks ended August 4, 1996. In addition, by replacing coin activation,
the Power Card has eliminated the technical difficulties and maintenance issues
associated with coin activated equipment. Furthermore, the Power Card feature
has increased the Company's flexibility in the pricing and promotion of games.

Attractions within the Million Dollar Midway include fantasy/high
technology and classic midway entertainment. Fantasy/high technology offerings
include simulator games which include formula race cars, off-road vehicles,
fighter jets and motorcycles, Galaxian Theater(R) which is a multi-participant,
enclosed simulation theater where up to six players take part in mock battles
with alien invaders, Virtuality(R) which is an interactive, electronic game
designed to simulate an actual battlefield environment, Virtual World(R)which is
a fantasy environment attraction, Iwerks Turbo Ride Theatre(R) which is a 16 to
18 seat motion simulation theater, large-screen interactive electronic games,
and "The 19th Hole"(R) which is a large, enclosed, state-of-the-art golf
simulator.

Classic midway entertainment includes sports-oriented games of skill,
carnival-style games, which are intended to replicate the atmosphere found in
many local county fairs, and D&B Downs, which is one of several multiple-player
race games offered in each Dave & Buster's. At the Winner's Circle, players take
the coupons they have won from selected games of skill to be redeemed for a wide
variety of prizes, many of which display the Dave & Buster's logo. The prizes
include stuffed animals, ballcaps, T-shirts, boxer shorts and small electronic
items.

UNIT ECONOMICS

For the 52 weeks ended August 3, 1997, the Company's current prototype
Complexes which had been open for at least 18 months (Houston, Atlanta,
Philadelphia and Suburban Chicago) generated average net revenues of
approximately $12.7 million, average operating income of approximately $3.0
million, or 23.3% of revenues, and average cash flow of approximately $3.8
million, or 29.9% of revenues. Average cash flow is the unweighted average of
Complex operating income before depreciation and amortization. Although average
cash flow should not be considered an alternative to operating income as an
indicator of the Company's operating performance or an alternative to cash flows
from operating activities as a measure of liquidity, average cash flow is
commonly used as an additional measure of operating profitability in the
restaurant and certain other related industries. These Restaurant/Entertainment
Complexes required an initial investment, including land, improvements and
furniture, fixtures and equipment, but excluding preopening expenses, averaging
approximately $11.1 million. Three of these four Complexes are owned rather than
leased, while the most recently opened and projected Complexes are and will be
leased facilities. Opening a leased facility typically reduces the Company's
capital investment in a Complex and typically decreases average operating income
and average cash flow as a result of rent expense.

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LOCATIONS

The following table provides information with respect to those Complexes
which are open and those under development:

<TABLE>
<CAPTION>
APPROXIMATE
LOCATION TYPE OPENING DATE SQUARE FOOTAGE
-------- ------ ------------ --------------------
<S> <C> <C> <C>
Original Prototype:
Dallas/Stemmons............................... Owned December 1982 40,000
Dallas/Central................................ Leased January 1988 31,000
Current Prototype:
Houston....................................... Owned October 1991 53,000
Atlanta....................................... Owned October 1992 53,000
Philadelphia.................................. Leased February 1994 70,000
Suburban Chicago (Addison).................... Owned November 1995 50,000
Chicago (Gold Coast).......................... Leased January 1996 58,000
Hollywood, Florida............................ Leased(1) April 1996 50,000
North Bethesda, Maryland...................... Leased November 1996 60,000
Ontario, California........................... Leased March 1997 58,000
Cincinnati.................................... Leased September 1997 63,000
Future Sites:
Denver, Colorado.............................. Leased Fiscal 1997(2) 48,000
Rockland County, New York..................... Leased Fiscal 1998(2) 50,000
Irvine, California............................ Leased Fiscal 1998(2) 55,000
International Licensed Locations:
Birmingham, England........................... -- May 1997 40,000
Bristol, England.............................. -- Fiscal 1998(2) --
</TABLE>

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

(1) The Company leases the land, but owns the building.

(2) Projected.

EXPANSION AND SITE SELECTION

The Company continually seeks to identify and evaluate new locations for
expansion. The Company expects to open a Complex in Denver, Colorado in the
fourth quarter of fiscal 1997, four Complexes in each of fiscal 1998 and 1999
and at least five more each fiscal year thereafter. The Company has signed
leases for sites in the Palisades Center in Rockland County, New York and the
Irvine Spectrum Center in Irvine, California, and these Complexes are expected
to open in the first and third quarters of fiscal 1998, respectively. Potential
locations for additional openings in fiscal 1998 have been tentatively
identified and site negotiations are currently in progress.

The Company believes that the location of its Complexes is critical to the
Company's long-term success and devotes significant time and resources to
analyzing each prospective site. In general, the Company targets high-profile
sites within a metropolitan area of at least one million people. In addition to
carefully analyzing demographic information (such as average income levels) for
each prospective site, the Company considers factors such as visibility,
accessibility to regional highway systems, zoning, regulatory restrictions and
proximity to shopping areas, office complexes, tourist attractions and
residential areas. The Company also carefully studies the restaurant and
entertainment competition in prospective areas. In addition, the Company must
select a site of sufficient size to accommodate its prototype facility with
ample, convenient customer parking.

The typical cost of opening a Dave & Buster's ranges from approximately
$7.0 million to $12.0 million (excluding preopening expenses and developer
allowances), depending upon the location and condition of the premises. The
Company bases its decision of owning or leasing a site on the projected unit
economics. The Company's more recently opened and its projected Complexes have
been leased facilities. Opening a leased

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facility reduces the Company's capital investment in a Complex, because the
Company does not incur land and site improvement costs and might also receive a
construction allowance from the landlord for improvements. The decor and
interior design of a Dave & Buster's are flexible and can be readily adapted to
different types of buildings. The Company has opened Complexes in both new
structures and within existing buildings, and Complexes are located in both
urban and suburban areas.

INTERNATIONAL

In August 1995, the Company entered into a license agreement with Bass to
license the "Dave & Buster's" name and concept in the United Kingdom. Under this
Agreement, Bass opened one Complex in Birmingham, England in May 1997 and has
agreed to open a total of seven Complexes in the United Kingdom by 2005. Bass
has scheduled a second Complex to open in Bristol, England in mid-1998. Under
the license agreement, Bass is required to pay the Company a royalty based upon
gross revenues, net of value added taxes. The royalty rate paid by Bass is a
sliding scale which averages 5% of gross revenues. The license agreement
contains strict operating covenants to ensure consistency of the menu and
entertainment offerings with those in the Company operated Complexes.

The Company is considering entering into agreements to license the "Dave &
Buster's" name and concept in additional foreign countries. The Company does not
have any current plans to invest its own capital in any foreign operations. In
August 1997, the Company entered into two different letters of intent to license
the "Dave & Buster's" name and concept in the Pacific Rim and Europe. TaiMall
Development Co. proposes to develop seven locations in Taiwan, Hong Kong, the
People's Republic of China and Singapore. The first location is expected to open
in December 1998 in a suburban Taipei mall. S.T.A. Salmann Trust proposes to
develop seven locations in Germany, Switzerland and Austria, with the first
location targeted to open in a mall currently under development in Berlin. There
is no assurance that these letters of intent will result in definitive
agreements.

OPERATIONS AND MANAGEMENT

The Company's ability to manage a complex operation including both high
volume restaurants and bars and diverse entertainment attractions has been
critical to its overall success. The Company strives to maintain quality and
consistency in each of its Restaurant/Entertainment Complexes through the
careful training and supervision of personnel and the establishment of, and
adherence to, high standards relating to personnel performance, food and
beverage preparation, entertainment productions and equipment, and maintenance
of facilities. The Company believes that it has been able to attract high
quality, experienced restaurant and entertainment management and personnel with
its competitive compensation and bonus programs and policy of promoting from
within the Company. Staffing levels vary according to the size of the location,
but a prototype Dave & Buster's is managed by one general manager, two assistant
general managers, six line managers and one business manager.

In general, each prototype Dave & Buster's also employs one purchasing
manager, one amusement manager, one assistant amusement manager, one Midway
auditor, one kitchen manager, two assistant kitchen managers and two special
events sales managers.

The Company has experienced relatively little turnover of managerial
employees. On average, the Company's current general managers possess
approximately four and a half years of experience with the Company. The general
manager of each Dave & Buster's reports to a Regional Manager who reports to the
Vice President, Director of Operations.

All managers, many of whom are promoted from within, must complete an
eleven-week training program during which they are instructed in areas such as
food quality and preparation, customer service, alcoholic beverage service,
entertainment management and employee relations. The Company has also prepared
operations manuals relating to food and beverage quality and service standards
and proper operation and playing conditions of the Company's entertainment
attractions. New sales staff and entertainment personnel participate in
approximately three weeks of training under the close supervision of Company
management. Management strives to instill enthusiasm and dedication in its
employees, regularly solicits employee

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suggestions concerning Company operations and endeavors to be responsive to
employees' concerns. In addition, the Company has extensive and varied programs
designed to recognize and reward employees for superior performance.

Efficient, attentive and friendly service is integral to the Company's
overall concept. In addition to customer evaluations, the Company uses a "secret
shopper" quality control program to independently monitor customer satisfaction.
"Secret shoppers" are independent persons who test the Company's food, beverage
and service as customers without the knowledge of restaurant management or
personnel on a periodic basis and report their findings to corporate management.

Each Complex uses a variety of integrated management information systems.
These systems include a computerized point-of-sale system which facilitates the
movement of customer food and beverage orders between the customer areas and
kitchen operations, controls cash, handles credit card authorizations, keeps
track of revenues on a per employee basis for incentive awards purposes and
provides management with revenue and inventory data.

MARKETING, ADVERTISING AND PROMOTION

The Company operates its marketing, advertising and promotional programs
through an in-house corporate marketing department which employs a full-time
corporate Marketing Director. The Company focuses on three primary marketing
target audiences in its advertising and promotional programs: local market-area
customers; out-of-town visitors; and corporate and group customers.

Local Market-Area Customers. Management believes that its strongest
marketing tool is customer referrals. In addition, the Company continually
updates its local (10 to 20 mile radius) customer database which is utilized for
specifically targeted marketing and advertising programs. Through a mix of
marketing techniques such as direct mailings, point-of-sale materials, outdoor
advertising and local-market print and broadcast media, the Company promotes
seasonal events, in-house promotions, special offers and new entertainment
attractions.

Out-of-Town Visitors. The Company markets aggressively to attract tourists
and business travelers by placing advertisements in local tourist and special
event guides and by otherwise promoting each Dave & Buster's as a local "must
see" attraction. The Company monitors local tourist and visitors bureaus for
convention schedulings, festivals and special sporting events. Additionally,
through the use of local trade arrangements such as "concierge referral
programs," the Company extends its marketing presence into local high-traffic
tourist and business traveler areas.

Corporate and Group Marketing. The Complex-based special events sales
managers book group events such as business seminars, receptions and private
parties. The Company develops and maintains a database for corporate and group
bookings. Each Dave & Buster's has hosted events for many large multinational,
national and regional businesses. Many of the Company's corporate and group
customers have hosted repeat events. In addition to the rapport developed with
these clients, the Company stages and promotes its own local group marketing
opportunities such as "Karaoke Sing-a-Longs," "Murder Mystery Dinner Theater,"
televised sporting events and charity benefits. The corporate marketing
department is also responsible for budgeting and controlling media and
production costs. During fiscal 1996, the Company's expenditures for advertising
and promotions were approximately 2.6% of its revenues.

COMPETITION

20
<PAGE> 21

Restaurant/Entertainment Complex would create the possibility for entertainment
alternatives which could have a material adverse effect on the Company's
business.

EMPLOYEES

At August 3, 1997, the Company employed approximately 3,200 persons, 72 of
whom served in administrative or executive capacities, 270 of whom served as
restaurant and entertainment management personnel, and the remainder of whom
were hourly restaurant and entertainment personnel.

None of the Company's employees are covered by collective bargaining
agreements, and the Company has never experienced an organized work stoppage,
strike or labor dispute. The Company believes its working conditions and
compensation packages are competitive with those offered by its competitors and
considers relations with its employees to be very good.

INTELLECTUAL PROPERTY

The Company has registered the servicemark "Dave & Buster's" with the
United States Patent and Trademark Office and in various foreign countries. The
Company has registered certain additional servicemarks with the United States
Patent and Trademark Office and the United Kingdom.

GOVERNMENT REGULATIONS

The Company is subject to various federal, state and local laws affecting
its business. Each Dave & Buster's is subject to licensing and regulation by a
number of governmental authorities, which may include alcoholic beverage
control, amusement, health and safety and fire agencies in the state or
municipality in which the Restaurant/Entertainment Complex is located. Each Dave
& Buster's is required to obtain a license to sell alcoholic beverages on the
premises from a state authority and, in certain locations, county and municipal
authorities. Typically, licenses must be renewed annually and may be revoked or
suspended for cause at any time. Alcoholic beverage control regulations relate
to numerous aspects of the daily operations of each Dave & Buster's, including
minimum age of patrons and employees, hours of operation, advertising, wholesale
purchasing, inventory control and handling, and storage and dispensing of
alcoholic beverages. The Company has not encountered any material problems
relating to alcoholic beverage licenses to date. The failure to receive or
retain a liquor license in a particular location could adversely affect the
Company's ability to obtain such a license elsewhere.

The Company is subject to "dram-shop" statutes in the states in which
Complexes are located. These statutes generally provide a person injured by an
intoxicated person the right to recover damages from an establishment which
wrongfully served alcoholic beverages to the intoxicated individual. The Company
carries liquor liability coverage as part of its existing comprehensive general
liability insurance which it believes is consistent with coverage carried by
other entities in the restaurant and entertainment industries. Although the
Company is covered by insurance, a judgment against the Company under a
dram-shop statute in excess of the Company's liability coverage could have a
material adverse effect on the Company.

As a result of operating certain entertainment games and attractions
including operations which offer redemption prizes, the Company is subject to
amusement licensing and regulation by the states and municipalities in which it
has opened Complexes. Certain entertainment attractions are heavily regulated
and such regulations vary significantly between communities. From time to time,
existing Complexes may be required to modify certain games, alter the mix of
games or terminate the use of specific games as a result of the interpretation
of regulations by state or local officials. The Company has, in the past, had to
seek changes in state or local regulations to enable it to open in a given
location. To date, the Company has been successful in seeking all such
regulatory changes.

The Company's operations are also subject to federal and state laws
governing such matters as wages, working conditions, citizenship requirements
and overtime. Some states have set minimum wage requirements higher than the
federal level, and the federal government recently increased the federal minimum
wage. In September 1997, the second phase of an increase in the minimum wage
will be implemented in accordance

21
<PAGE> 22

with the Federal Fair Labor Standards Act of 1996. Significant numbers of hourly
personnel at the Company's Complexes are paid at rates related to the federal
minimum wage and, accordingly, increases in the minimum wage will increase labor
costs at the Company's Complexes. Other governmental initiatives such as
mandated health insurance, if implemented, could adversely affect the Company as
well as the restaurant industry in general. The Company is also subject to the
Americans With Disabilities Act of 1990, which, among other things, may require
certain minor renovations to its Complexes to meet federally mandated
requirements. The cost of these renovations is not expected to be material to
the Company.

LEGAL PROCEEDINGS

In October 1997, an entity owned by the creditors of Edison Brothers filed
a lawsuit against multiple parties, including former Edison Brothers
shareholders, Edison family members and the Company, seeking recovery in
connection with the Spin-Off and certain related transactions. Although no
assurance can be made with respect to the results of the litigation, the Company
believes that the claims asserted against the Company are without merit, and the
Company intends to vigorously defend itself. See "Risk Factors -- Edison
Brothers' Bankruptcy."

In addition, from time to time, the Company is a defendant in litigation
arising in the ordinary course of its business, including claims resulting from
"slip and fall" accidents, claims under federal and state laws governing access
to public accommodations and employment-related claims. To date, none of such
litigation, some of which is covered by insurance, has had a material effect on
the Company.

22
<PAGE> 23

MANAGEMENT

The executive officers and directors of the Company are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
James W. ("Buster") Corley........... 46 Founder, Co-Chairman and Chief Executive Officer, Chief
Operating Officer and Director
David O. Corriveau................... 46 Founder, Co-Chairman and Chief Executive Officer,
President and Director
Barry N. Carter...................... 49 Vice President, Director of Store Support
Gary W. Duffey....................... 43 Vice President of Amusements
Cory J. Haynes....................... 37 Vice President, Assistant Director of Operations
Charles M. Krauthamer, Jr............ 44 Vice President of Training and Opening Team Director
Kimberly M. Martinez................. 35 Vice President of Purchasing
Charles Michel....................... 44 Vice President, Chief Financial Officer and Treasurer
Alan L. Murray....................... 52 Vice President, Director of Legal and Administration and
Secretary
Dennis C. Paine...................... 49 Vice President, Director of Communications
J. Michael Plunkett.................. 46 Vice President, Director of Information Systems
Mary E. Reynolds..................... 33 Vice President of Human Resources
Sterling R. Smith.................... 45 Vice President, Director of Operations
Bryan L. Spain....................... 49 Vice President, Director of Real Estate Development
Allen J. Bernstein................... 51 Director
Peter A. Edison...................... 42 Director
Walter S. Henrion.................... 58 Director
Mark A. Levy......................... 51 Director
Christopher C. Maguire............... 36 Director
Andrew E. Newman..................... 53 Director
Mark B. Vittert...................... 49 Director
</TABLE>

SELLING STOCKHOLDERS

The table below sets forth the beneficial ownership of the Company's Common
Stock by the Selling Stockholders. Each of the Selling Stockholders is a
director and executive officer of the Company and has sole voting and investment
power with respect to the shares of Common Stock beneficially owned by him.

<TABLE>
<CAPTION>
SHARES OWNED
BEFORE SHARES OWNED AFTER
THE OFFERING(1) THE OFFERING(1)
----------------- SHARES BEING -------------------
NAME NUMBER PERCENT OFFERED NUMBER PERCENT
---- ------- ------- ------------ -------- --------
<S> <C> <C> <C> <C> <C>
James W. ("Buster") Corley................... 523,473 4.8% 100,000 423,473 3.3%
David O. Corriveau........................... 523,473 4.8% 100,000 423,473 3.3%
</TABLE>

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

(1) Includes shares issuable upon exercise of stock options which are vested or
will be vested within 60 days.

23
<PAGE> 24

UNDERWRITING

The Underwriters named below (the "Underwriters") have severally agreed,
subject to the terms and conditions contained in the underwriting agreement (the
"Underwriting Agreement") by and among the Company, the Selling Stockholders and
the Underwriters, to purchase from the Company and the Selling Stockholders the
number of shares of Common Stock indicated below opposite their respective names
at the initial public offering price less the underwriting discount set forth on
the cover page of this Prospectus. The Underwriting Agreement provides that the
obligations of the Underwriters are subject to certain conditions precedent and
that the Underwriters are committed to purchase all of the shares to if they
purchase any.

<TABLE>
<CAPTION>
NUMBER
UNDERWRITER OF SHARES
----------- ---------
<S> <C>
NationsBanc Montgomery Securities, Inc. .................... 666,668
PaineWebber Incorporated.................................... 666,666
Piper Jaffray Inc. ......................................... 666,666
---------
Total............................................. 2,000,000
=========
</TABLE>

The Underwriters have advised the Company and the Selling Stockholders that
the Underwriters propose initially to offer the Common Stock to the public on
the terms set forth on the cover page of this Prospectus. The Underwriters may
allow, and such dealers may reallow, to selected dealers a concession of not
more than $.73 per share, and the Underwriters may allow a concession of not
more than $.10 per share to certain other dealers. After the offering, the
public offering price and other selling terms may be changed by the
Underwriters. The Common Stock is offered subject to receipt and acceptance by
the Underwriters and to certain other conditions, including the right to reject
orders in whole or in part.

The Company has granted an option to the Underwriters, exercisable during
the 30-day period after the date of this Prospectus, to purchase up to an
aggregate maximum of 300,000 additional shares of Common Stock, to cover
over-allotments, if any, at the same price per share as the initial shares to be
purchased by the Underwriters. To the extent the Underwriters exercise this
option, the Underwriters will be committed, subject to certain conditions, to
purchase such additional shares in approximately the same proportion as set
forth in the above table. The Underwriters may purchase such shares only to
cover over-allotments made in connection with this offering.

The Underwriting Agreement provides that the Company and the Selling
Stockholders will indemnify the Underwriters and their controlling persons
against certain liabilities, including civil liabilities under the Securities
Act of 1933, as amended, or will contribute to payments the Underwriters may be
required to make in respect thereof.

All of the Company's executive officers and directors and certain of its
stockholders have agreed that, for a period of 90 days after the date of this
Prospectus, they will not, without the prior written consent of Montgomery
Securities, directly or indirectly sell, offer, contract or grant any option to
sell, pledge, transfer, or otherwise dispose of any shares of Common Stock,
options or warrants to acquire shares of Common Stock, or securities
exchangeable or exercisable for or convertible into shares of Common Stock,
other than for the shares of Common Stock offered by the Selling Stockholders
hereby. In addition, the Company has agreed that, for a period of 90 days after
the date of this Prospectus, it will not, without the prior written consent of
Montgomery Securities, directly or indirectly issue, sell, offer, contract or
grant any option to sell, pledge, transfer, or otherwise dispose of any shares
of Common Stock, options or warrants to acquire shares of Common Stock, or
securities exchangeable or exercisable for or convertible into shares of Common
Stock, other than (i) the shares of Common Stock offered by the Company hereby
or (ii) shares of Common Stock issued pursuant to the exercise of certain
outstanding options or (iii) options granted after the date of this Prospectus
under the Company's existing plans.

Certain persons participating in this offering may over-allot or effect
transactions which stabilize, maintain or otherwise affect the market price of
the Common Stock at levels above those which might otherwise prevail in the open
market. Such transactions may include stabilizing bids, effecting syndicate
covering transactions or imposing penalty bids. A stabilizing bid means the
placing of any bid or effecting any purchase for the purpose of pegging, fixing
or maintaining the price of the Common Stock. A syndicate

24
<PAGE> 25

covering transaction means the placing of any bid on behalf of the underwriting
syndicate or the effecting of any purchase to reduce a short position created in
connection with the offering. The Underwriters may also elect to reduce any
short position by exercising all or part of the over-allotment options described
above. A penalty bid means an arrangement that permits the Underwriters to
reclaim a selling concession from a syndicate member in connection with the
offering when shares of Common Stock sold by the syndicate member are purchased
in syndicate covering transactions. Such transactions may be effected on the
Nasdaq National Market, in the over-the-counter market, or otherwise.

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

LEGAL MATTERS

The validity of the Common Stock offered hereby will be passed upon for the
Company by Crouch & Hallett, L.L.P., Dallas, Texas. Certain legal matters will
be passed on for the Underwriters by Fried, Frank, Harris, Shriver & Jacobson, a
partnership including professional corporations, Los Angeles, California.

EXPERTS

The consolidated financial statements of the Company and subsidiaries as of
February 4, 1996 and February 2, 1997, and for each of the fiscal years in the
three-year period ended February 2, 1997, incorporated by reference herein, have
been audited by Ernst & Young LLP, independent auditors, as indicated in their
report with respect thereto, and is incorporated elsewhere herein in reliance
upon such reports given upon the authority of such firm as experts in accounting
and auditing.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information filed by the
Company at the Commission can be inspected and copied, at prescribed rates, at
the public reference facilities of the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices
at 7 World Trade Center, Suite 1300, New York, New York 10048, and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Certain reports,
proxy statements and other information filed by the Company may also be obtained
at the Commission's World Wide Web site, located at http://www.sec.gov. In
addition, such material can be inspected at the offices of the Nasdaq Stock
Market, Inc., 1735 K Street, N.W., Washington, D.C. 20006.

The Company has filed with the Commission a Registration Statement on Form
S-3 (together with all amendments, exhibits, schedules and supplements thereto,
the "Registration Statement") under the Securities Act of 1933, as amended, with
respect to the Common Stock offered hereby. This Prospectus, which is a part of
the Registration Statement, does not contain all of the information set forth in
the Registration Statement, certain portions of which have been omitted as
permitted by the rules and regulations of the Commission. The Registration
Statement may be inspected, and copied at prescribed rates, at the Commission's
public reference facilities at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549. Statements made in this Prospectus as to the
contents of any contract, agreement or other document referred to are not
necessarily complete. With respect to each contract, agreement or other
document,

25
<PAGE> 26

reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.

DOCUMENTS INCORPORATED BY REFERENCE

The following documents filed by the Company with the Commission are hereby
incorporated by reference into this Prospectus:

(1) Annual Report on Form 10-K for the fiscal year ended February 2,
1997;

(2) Quarterly reports on Form 10-Q for the first two fiscal quarters
of the fiscal year ending February 1, 1998; and

(3) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A, including any amendment filed
for the purpose of updating such information.

All documents filed by the Company pursuant to Sections 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 in this Prospectus and to be a part hereof from the respective
dates of the filing of such documents. Any statement or information contained in
a document incorporated or deemed to be incorporated herein by reference shall
be deemed modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed document
which also is or is 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 Company will provide without charge to each person, including any
beneficial owner, to whom a Prospectus is delivered, upon written or oral
request of such person, a copy of the documents incorporated by reference
herein, other than exhibits to such documents not specifically incorporated by
reference. Such requests should be directed to Dave & Buster's, Inc., 2751
Electronic Lane, Dallas, Texas 75220, Attention: Secretary (telephone (214)
357-9588).

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Prospectus constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties, and other factors which may cause the actual results,
performance, or achievements of the Company to be materially different from any
future results, performance, or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, the following:
general economic and business conditions; competition; development and operating
costs; adverse publicity; consumer trial and frequency; availability, locations
and terms of sites for complex development; quality of management; business
abilities and judgment of personnel; availability of qualified personnel; food,
labor and employee benefit costs; changes in, or the failure to comply with,
government regulations; and the Risk Factors elsewhere described in this
Prospectus.

26
<PAGE> 27

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

No dealer, sales representative or any other person has been authorized to
give any information or to make any representations in connection with this
Offering other than those contained in this Prospectus, and, if given or made,
such information or representations must not be relied upon as having been
authorized by the Company, the Selling Stockholders or any of the Underwriters.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any securities other than the shares of Common Stock to which it
relates or an offer to, or a solicitation of, any person in any jurisdiction in
which such an offer or solicitation would be unlawful. Neither the delivery of
this Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that there has been no change in the affairs of the
Company since the date hereof or that the information contained herein is
correct as of any time subsequent to the date hereof.

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

TABLE OF CONTENTS

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

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 6
Use of Proceeds....................... 9
Dividend Policy....................... 9
Price Range of Common Stock........... 9
Capitalization........................ 10
Selected Consolidated Financial
Data................................ 11
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 12
Business.............................. 15
Management............................ 23
Selling Stockholders.................. 23
Underwriting.......................... 24
Legal Matters......................... 25
Experts............................... 25
Available Information................. 25
Documents Incorporated by Reference... 26
Special Note Regarding Forward-Looking
Statements.......................... 26
</TABLE>

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

2,000,000 SHARES

LOGO

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

PROSPECTUS

------------------------
NATIONSBANC MONTGOMERY
SECURITIES, INC,

PAINEWEBBER INCORPORATED

PIPER JAFFRAY INC.

October 9, 1997

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