SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

         Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):  September 8, 2000



                               APPLE SUITES, INC.
             (Exact name of registrant as specified in its charter)


    VIRGINIA                          000-30491                  54-1933472
   (State of                         (Commission               (IRS Employer
  incorporation)                     File Number)           Identification No.)


              306 EAST MAIN STREET
              RICHMOND, VIRGINIA                             23219
              (Address of principal                       (Zip Code)
              executive offices)



               Registrant's telephone number, including area code:
                                 (804) 643-1761



<PAGE>



                               APPLE SUITES, INC.

                                    FORM 8-K

                                      Index

                                                                        Page No.

Item 2.  Acquisition or Disposition of Assets .................................3

Item 7.  Pro Forma Financial Statements and Exhibits

         a. Pro Forma Financial Statements (Unaudited)

         Apple Suites, Inc.

         Pro Forma Condensed  Consolidated  Balance Sheet as
         of June 30, 2000 ....................................................13

         Notes to Pro Forma Condensed  Consolidated  Balance
         Sheet ...............................................................14

         Pro  Forma  Condensed  Consolidated  Statements  of
         Operations for the year ended December 31, 1999 and
         the six months ended June 30, 2000 ..................................15

         Notes   to   Pro   Forma   Condensed   Consolidated
         Statements of Operations ............................................17

         Apple Suites Management, Inc.

         Pro  Forma  Condensed  Consolidated  Statements  of
         Operations for the year ended December 31, 1999 and
         the six months ended June 30, 2000 ..................................19

         Notes   to   Pro   Forma   Condensed   Consolidated
         Statements of Operations ............................................22

         b. Exhibits..........................................................23

<PAGE>


Item 2.  Acquisition or Disposition of Assets

         Apple Suites,  Inc. ("we") makes this report pursuant to Item 2 of Form
8-K to describe a financing  transaction  involving the mortgaging of certain of
its assets.  This mortgaging  constitutes a "disposition of a significant amount
of assets" within the meaning of the General  Instructions to such form. Certain
related matters are also reported herein.

REFINANCING TRANSACTION - GENERAL

     On  September 8, 2000, we refinanced much of our short-term debt with loans
from  First  Union  National  Bank in the aggregate amount of $60 million. These
loans  are  described  below in other sections. We used these loans to repay the
four promissory notes we executed in 1999 when acquiring 11 hotels.

     On  September  8,  2000,  in connection with these loans, we formed two new
wholly-owned  subsidiaries,  and  transferred  a total of eight of our hotels to
the  new  subsidiaries.  Those  eight  hotels, together with our three hotels in
Texas,  serve  as  collateral for the lender. In addition, three of our existing
subsidiaries  have  amended their organizational documents to achieve conformity
with  the  organizational  documents for our new subsidiaries. These matters are
discussed in another section below.

     Of the $60 million  total we  borrowed,  $50 million is  repayable  over 10
years.  Thus, the refinancing  constitutes a change to our borrowing  policy, as
originally described in our filings with the Securities and Exchange Commission,
because  we will  not  hold  our  properties  on an "all  cash"  basis  over the
long-term.

     When we  acquired  our first 13 hotels,  we elected to finance a portion of
the purchase price of each hotel by delivering  short-term  notes to the seller.
The use of this  short-term  debt was  consistent  with our  original  borrowing
policy,  which was to purchase  our  properties  either on an all-cash  basis or
using  interim  borrowings.  The  short-term  seller  financing was available on
attractive  terms and allowed us to purchase a greater  number of hotels at what
we believed to be more  attractive  prices than we could have purchased  without
the use of interim financing.  The intent, as expressed in previous filings with
the  Securities  and Exchange  Commission,  was to repay the  short-term  seller
financing with proceeds from the offering of common shares.

     As  indicated  in  previous   filings  with  the  Securities  and  Exchange
Commission,  when  proceeds  from our offering of common shares were raised more
slowly than was sufficient for repayment of the short-term seller financing,  we
needed to refinance the  short-term  seller debt.  Our loans through First Union
National Bank in the  aggregate  amount of $60 million are designed to refinance
the short-term seller debt that we perceived as difficult to repay when due with
proceeds from the sale of our common shares.  Since $50 million of the new debt,
as  described  in  this  Report,  has a term  of 10  years,  it is  not  interim
financing,  but is  longer-term  financing  which may stay in place for the full
10-year period. This financing is permitted by our organizational  documents and
on terms and  conditions  deemed by  management  to be favorable and in our best
interests and those of our shareholders.


                                      3
<PAGE>

     While our receipt of the loans from First Union National Bank, as described
in this Report,  represents a departure from the objective of purchasing all our
properties  on an  all-cash  basis or using  interim  borrowings,  we  intend to
pursue, on a going-forward basis, our objective of purchasing  properties either
on an all-cash basis or using interim borrowings,  but only to the extent we can
do so in  accordance  with the perceived  best  interests of our company and its
shareholders,  the rate at which attractive  acquisitions become available,  the
rate at which we receive  funds from the offering of our common shares and other
relevant factors. For the purpose of flexibility in operations, we may borrow on
such terms as we deem prudent, subject to the approval of the Board of Directors
and certain limitations imposed by our bylaws.

     Debts secured by mortgages and other  security  interests  involve  certain
risks,  including the possible  loss of equity in  properties or assets  through
foreclosure  following default on a loan.  Management believes both (1) that the
rent we are receiving as a result of the  operations of the hotels is sufficient
to make  regularly-scheduled  payments on our  existing  debt,  and (2) that our
remaining  short-term debt (including the $10 million portion of the refinancing
from First Union  National Bank and the remaining $23 million in the  short-term
seller  financing) will either be repaid from proceeds of our on-going  offering
of common shares or refinanced on terms acceptable to us. However,  there can be
no complete  assurance that either expectation will prove true. If either proves
untrue,  we  could  lose  some  or all  of  our  properties  or  assets  through
foreclosure.

     It  is our objective ultimately to own assets with a cost basis of at least
$200  million  and  with permanent debt not exceeding approximately $50 million.
Management  would  characterize  this  debt  level as "conservative," based upon
industry  standards.  There  is  no  assurance  that  we will be able to acquire
assets  at  the  indicated  level  or  will  be  able to,  or elect to, maintain
permanent  debt at the indicated level. Thus, this should be viewed merely as an
investment  objective  and not a prediction or assurance as to the future course
of events concerning our operations.


                                      4

<PAGE>


CERTAIN NEW SUBSIDIARIES

     In  connection  with the refinancing provided by First Union National Bank,
and  at  its  request,  we  formed  two  new wholly-owned subsidiaries that will
operate  as  "special  purpose  entities." These new subsidiaries were formed as
Virginia  corporations  under  the following names: Apple Suites SPE I, Inc. and
Apple Suites SPE II, Inc.

     The  new  subsidiaries  were  formed  to  receive  loans  from  First Union
National  Bank  and  to  hold certain hotels, which will serve as collateral for
the  lender.  To  qualify as special purpose entities, the new subsidiaries have
organizational  documents  that  impose certain requirements on the subsidiaries
while  the  loans are outstanding. The organizational documents for three of our
existing  subsidiaries  were  amended  to  include  the same requirements. Those
subsidiaries  are  Apple  Suites  REIT  Limited  Partnership  (which holds three
hotels  in  Texas),  Apple  Suites  General, Inc. (the sole general partner) and
Apple Suites LP, Inc. (the sole limited partner).

     In connection with these lender  requirements,  we are conducting an active
search  for   independent   directors   with  respect  to  our  four   corporate
subsidiaries.  Because these  requirements  only apply to our  subsidiaries,  no
changes  were  made  to  our  organizational   documents  as  a  result  of  the
refinancing.

     We  transferred  a  total  of  eight  of  our  hotels  to  our newly formed
subsidiaries  in connection with the refinancing. Those transfers are summarized
below:

<TABLE>
<CAPTION>
NAME OF NEW SUBSIDIARY           NAME OF HOTEL TRANSFERRED TO SUBSIDIARY
<S>                             <C>
    Apple Suites SPE I, Inc.    Atlanta - Galleria/Cumberland
                                Jackson - Ridgeland
                                Salt Lake City - Midvale
    Apple Suites SPE II, Inc.   Atlanta - Peachtree
                                Baltimore - BWI Airport
                                Clearwater
                                Detroit - Warren
                                Richmond - West End

</TABLE>


                                      5
<PAGE>


     In  connection  with  these  transfers  and at the request of the lender, a
separate  hotel  lease  agreement for each hotel was executed by the appropriate
subsidiary,  as  lessor, and Apple Suites Management, Inc., as lessee. Our chief
executive  officer,  Glade  M.  Knight,  is the sole shareholder of Apple Suites
Management,  Inc.,  as well as its president and sole director. Each hotel lease
agreement  is  substantially  similar  to  the master hotel lease agreement that
applied  to  all  eight  hotels  prior to their transfer.

     The  following  chart  summarizes the ownership of our hotels as the result
of our refinancing and the related hotel transfers:



                   [Remainder of Page is Intentionally Blank]

                                      6
<PAGE>


<TABLE>
                                       APPLE SUITES, INC.
                                              |      100% Ownership

    <S>                       <C>                   <C>                   <C>                     <C>
     _________________________________________________________________________________________________________
     Apple Suites             Apple Suites           Apple Suites          Apple Suites    |       Apple Suites
     General, Inc.               LP, Inc.             SPE I, Inc.           SPE II, Inc.   |       Pennsylvania
          |                       |                     |                       |          |      Business Trust
          |                       |                     |                       |          |            |
1% interest as               99% interest as            |                       |          |            |
general partner              limited partner            |                       |          |            |
           |                  |                         |                       |          |            |
           |                  |                         |                       |          |            |
            Apple  Suites  REIT                         |                       |          |            |
            Limited Partnership                         |                       |          |            |
                      |                                 |                       |          |            |
                      |                                 |                       |          |            |
                      |                                 |                       |          |            |
               Holds 3 Hotels                    Holds 3 Hotels                 |    Holds 1 Hotel      |
           Dallas-Addison (Texas)          Atlanta-Galleria (Georgia)           |       Boulder         |
      Dallas-Irving/Las Colinas (Texas)  Jackson-Ridgeland (Mississippi)        |      (Colorado)       |
          North Dallas-Plano (Texas)      Salt Lake City-Midvale (Utah)         |                       |
                                                                                |                       |
                                                                         Holds 5 Hotels               Holds 1 Hotel
                                                                   Atlanta-Peachtree (Georgia)        Philadelphia/Great Valley
                                                                 Baltimore-BWI Airport (Maryland)     (Pennsylvania)
                                                                      Clearwater (Florida)
                                                                    Detroit-Warren (Michigan)
                                                                  Richmond-West End (Virginia)

</TABLE>

                                       7
<PAGE>

OVERVIEW OF LOAN AMOUNTS

     The   refinancing  provided  by  First  Union  National  Bank  consists  of
long-term  loans  made  to  three of our subsidiaries and a short-term loan made
directly  to  us.  The  long-terms loans are evidenced by 11 promissory notes in
the  aggregate  principal  amount of $50 million. These notes are secured by our
hotels,  as described in another section below. The short-term loan is evidenced
by  a  single  promissory  note in the principal amount of $10 million, which is
secured by our ownership interests in all of our direct subsidiaries.

     The  following  table  provides an overview of the promissory notes for the
$60 million refinancing:

<TABLE>
<CAPTION>
                               AGGREGATE     PRINCIPAL        ANNUAL
          NAME OF              LOANS TO        AMOUNT         RATE OF                SUMMARY OF                DATE OF
          BORROWER             BORROWER       OF NOTES       INTEREST           SECURITY/COLLATERAL*          MATURITY
--------------------------- -------------- ------------- ---------------- ------------------------------- ----------------
<S>                         <C>            <C>                 <C>        <C>                             <C>
Apple Suites SPE I, Inc.     $10,500,000    $ 5,000,000        9.00%      Atlanta - Galleria/Cumberland   October 1, 2010
                                              3,000,000        9.00%      Jackson-Ridgeland               October 1, 2010
                                              2,500,000        9.00%      Salt Lake City - Midvale        October 1, 2010
Apple Suites SPE II, Inc.     25,800,000      2,800,000        9.00%      Atlanta - Peachtree             October 1, 2010
                                              9,000,000        9.00%      Baltimore - BWI Airport         October 1, 2010
                                              6,000,000        9.00%      Clearwater                      October 1, 2010
                                              2,500,000        9.00%      Detroit - Warren                October 1, 2010
                                              5,500,000        9.00%      Richmond - West End             October 1, 2010
Apple Suites REIT             13,700,000      5,500,000        9.00%      Dallas - Addison                October 1, 2010
Limited Partnership
                                              5,700,000        9.00%      Dallas - Irving/Las Colinas     October 1, 2010
                                              2,500,000        9.00%      North Dallas - Plano            October 1, 2010

Apple Suites, Inc.            10,000,000     10,000,000   Adjusted Prime  Ownership Interests             March 8, 2001
                                            -----------   or LIBOR        in All Direct Subsidiaries

                                  TOTAL     $60,000,000
                                            ===========
</TABLE>

* The face amounts of the promissory notes were based on a single hotel, but the
  notes are subject to certain cross-collateral and cross-default provisions, as
  explained in another section below.

LONG-TERM REFINANCING NOTES

     The  11  long-term  promissory  notes  for  the  $50 million portion of the
refinancing  are  substantially similar. Each of these promissory notes provides
for the following:

   o payment  of  principal  and interest on an amortized basis (calculated over
     a  25-year  period)  in equal monthly installments, with a balloon payment
     at maturity

   o acceleration,  at  the  option  of the lender, of all amounts due under the
     note  if   any  payment  of  principal or interest is not made within seven
     days of its due date or if there is any other event of default

   o a  late  charge  of  five  percent on  any  payment that is not made within
     seven days of its due date

   o an  increase  of  four   percent  in the  applicable interest rate upon any
     default

   o a  restriction  on  voluntary  prepayment,  which  is not permitted without
     penalty until the final three months of the note

   o after  two  years   we  may  cause  hotels  to be released as collateral by
     following certain procedures described below

     The  sum  of the fixed monthly installments for the 11 long-term promissory
notes  equals $419,598. At maturity on October 1, 2010, the balloon payments for
the notes will equal a total of $42,778,255.

                                      8
<PAGE>

     Revenue  from  the  hotels  will  be  used  to  make payments due under the
long-term  promissory notes. This revenue will include lease payments made to us
by   Apple   Suites  Management,  Inc.  (or  a  subsidiary)  under  hotel  lease
agreements.  There can be no assurance that hotel revenue will be sufficient for
this purpose.

     Additional   payments   will  apply  if  a  long-term  promissory  note  is
accelerated  upon  an event of default. The sum of these payments will be higher
if  the acceleration occurs in the first two years and will equal at least 5% of
the outstanding principal balance if acceleration occurs in the first year.

     Each long-term promissory note contains substantial  limitations on release
and  substitution  of  collateral.  The hotel that serves as collateral  under a
long-term  promissory  note cannot be released during the first two years of the
note.  After  that  date  a  release  of  the  collateral  can  be  obtained  by
substituting as collateral direct, non-callable obligations of the United States
that are  structured  to pay a series of  amounts  which  match,  as  closely as
possible, the remainder of the installments required under the promissory note.

     This mechanism provides us a limited  opportunity to cause properties to be
released from the liens of the mortgages. This could be helpful, for example, if
we receive an attractive offer from a prospective  purchaser of our hotels. This
requirement as to the purchase of substitute  collateral may make this mechanism
economically less attractive when compared with an unrestricted  right to prepay
the  obligation,  and its  usefulness  to us will depend  upon  future  economic
factors and opportunities.

     The  11  hotels that serve as collateral for the long-term promissory notes
are  subject  to  cross-default  and  cross-collateral  provisions under various
deeds  of trust and security instruments, which are among the material contracts
described  in  another  section  below.  These hotels have been divided into two
groups for purposes of the cross-collateral and cross-default provisions.

     In  general,  any  default  under  one  promissory  note  will constitute a
default  under  all other promissory notes in the same group and will enable the
lender  to  exercise  its  rights  against  all  of  the  hotels  that  serve as
collateral  for  that  group.  The  two  groups  themselves,  however,  are  not
connected  by  cross-default  or cross-collateral provisions. One group consists
of  the  six  hotels  owned  by  two  of  our  subsidiaries, and the other group
consists of five hotels owned by a single subsidiary, as indicated below:

<TABLE>
<CAPTION>
                                          GROUP I                           GROUP II
                          --------------------------------------   --------------------------
<S>                       <C>                                      <C>
SUBSIDIARIES INVOLVED     Apple Suites SPE I, Inc.                 Apple Suites SPE II, Inc.
                          Apple Suites REIT Limited Partnership

HOTELS IN GROUP           Atlanta - Galleria/Cumberland            Atlanta - Peachtree
                          Jackson-Ridgeland                        Baltimore - BWI Airport
                          Salt Lake City - Midvale                 Clearwater
                          Dallas - Addison                         Detroit - Warren
                          Dallas - Irving/Las Colinas              Richmond - West End
                          North Dallas - Plano
</TABLE>

     We  are required, as the parent company of these subsidiaries, to indemnify
the  lender  against  defaults  under  the  long-term  promissory  notes  and to
guaranty  the  collection  of  all  amounts  due  thereunder. These requirements
appear  in  an  Indemnity  and  Guaranty  Agreement, which is among the material
contracts described in another section below.

SHORT-TERM REFINANCING NOTE

     The  $10  million  portion  of the refinancing is evidenced by a short-term
promissory  note  made  payable by us to First Union National Bank. The maturity
date for this promissory note is March 8, 2001.

     Interest  will  be  based  on  the  lender's "prime rate" unless we make an
election  to convert to a LIBOR rate (which is determined by banks in the London
interbank  market).  Any  such election would remain in effect for the period we
specify in a written conversion notice, but

                                      9
<PAGE>


cannot  exceed  three  months.  We  may  continue  a LIBOR election, if made, by
delivering  a  written continuation notice to the lender at least three business
days  before  the election expires. The following table summarizes the available
interest terms:

<TABLE>
<CAPTION>
                                     NO LIBOR CONVERSION                WITH LIBOR CONVERSION
                             -----------------------------------   -------------------------------
<S>                          <C>                                   <C>
INTEREST RATE                Lender's prime rate, increased by     LIBOR rate, increased by
                             0.25% during the first 90 days        2% during the first 90 days
                             and 1% thereafter                     and 3.5% thereafter

INTEREST PAYMENTS            Monthly                               At the end of interest period
                                                                   specified in the conversion or
                                                                   continuation notice

INTEREST RATE ON             4% above the applicable interest      4% above the applicable
OVERDUE AMOUNTS              rate (see above)                      interest rate (see above)
</TABLE>

     As of the date of this Report, we have not elected a LIBOR conversion,  but
we may  consider  doing so in the future,  based on our review of  economic  and
market conditions.

     We  are required to make principal payments consisting of 75% of any equity
proceeds  we  receive  from  our ongoing "best efforts" offering. Such principal
payments  are  considered  mandatory prepayments and are due within one business
day  after  we  receive the equity proceeds. Any prepayment of principal must be
accompanied  by  payment  of  accrued  interest. Revenue from the hotels will be
used  to  pay  interest  under  the  promissory notes. This revenue will include
lease  payments  made  to  us by Apple Suites Management, Inc. (or a subsidiary)
under  hotel  lease  agreements.  There  can  be  no  assurance  that the equity
proceeds  or  the  hotel  revenues  will  be  sufficient for these purposes. Our
obligation  to  use  75%  of  our  equity proceeds from the ongoing offering for
repayment  of the $10 million loan takes precedence over our obligation to apply
our  "net  equity  proceeds" to repayment of the remaining obligations to Promus
Hotels, Inc., which are described in another section below.

     We  may  make  voluntary  prepayments of the short-term refinancing note in
whole  or in part at any time. If a LIBOR conversion is in effect, we will incur
a  prepayment  fee,  regardless  of  whether  the  prepayment  is  voluntary  or
mandatory.  The  prepayment  fee  is  based  on  a  formula  that  measures  the
difference  between  the  interest that would have accrued in the absence of the
prepayment and certain bids in the London interbank market.

     We  pledged  100%  of our ownership interests in our direct subsidiaries as
security  for  the  short-term  promissory note. These pledges consist of common
shares  in  our  four corporate subsidiaries and our sole beneficial interest in
Apple Suites Pennsylvania Business Trust.



                                      10
<PAGE>

EXISTING FINANCING FOR HOTELS

     Our  existing  financing remains in place for two hotels, which are located
in  Pennsylvania  and Colorado and which were purchased from Promus Hotels, Inc.
in  2000.  This financing is being provided by Promus Hotels, Inc., based on 75%
of  the  purchase  price  for  the  hotels,  and  is  evidenced by the following
promissory notes:

<TABLE>
<CAPTION>
                       ORIGINAL
     MONTH OF          PRINCIPAL      ANNUAL RATE        DATE OF
 PROMISSORY NOTE        AMOUNT        OF INTEREST        MATURITY
-----------------   --------------   -------------   ---------------
<S>                 <C>              <C>             <C>
  May 2000           $11,616,750           8.5%      April 28, 2001
  June 2000          $11,163,750           8.5%      April 28, 2001
                     -----------
          TOTAL      $22,780,500
                     ===========

</TABLE>

     These  promissory  notes  are  substantially similar, and each provides for
the following:

     o monthly interest payments, based on the actual number of days per month


     o our delivery of  monthly  notices to specify the net equity proceeds from
       our offering, which will be the intended source of principal payments, as
       explained below


     o our  right  to  prepay the notes, in whole or in part, without premium or
       penalty


     o a late payment premium of four percent for any payment not made within 10
       days of its due date


     Revenue  from  the hotels will be used to pay interest under the promissory
notes.  This  revenue  will  include  lease  payments made to us by Apple Suites
Management,  Inc.  (or  a  subsidiary) under the separate hotel lease agreements
for the two hotels.

     The  promissory  notes  contemplate that the "net equity proceeds" from our
offering  of common shares will be the source of our principal payments, subject
to  our obligation to First Union National Bank under the short-term refinancing
note,  as  discussed  above.  There  can  be  no  assurance  that the net equity
proceeds  will  be sufficient for this purpose. The phrase "net equity proceeds"
means  the  total  proceeds  from  our  offering of common shares, as reduced by
selling  commissions, a marketing expense allowance, closing costs, various fees
and  charges  (legal, accounting, and so forth), a working capital reserve and a
reserve for renovations, repairs and replacements of capital improvements.

                                      11

<PAGE>


SUMMARY OF MATERIAL REFINANCING CONTRACTS


Security Documents

     In  connection with the $50 million long-term refinancing provided by First
Union  National  Bank, the lender placed a mortgage and other encumbrances on 11
of  our  hotels.  The  other  encumbrances  include  a  security interest in the
personal  property  at  the  hotels  and  assignments  of hotel rents, revenues,
contracts  and  permits,  all  in  favor  of  the lender. These encumbrances are
created  by  multiple agreements and instruments, dated as of September 8, 2000,
which  will  be referred to as "security documents" for simplicity. The security
documents  are  related  to  the long-term promissory notes, which are discussed
above.


     The  security  documents  impose  a  number of requirements on three of our
subsidiaries,  as  the  owners  of the hotels, including obligations to maintain
adequate  insurance  and  the  hotel franchises. The security documents prohibit
any  further  encumbrances  or  any  further assignments of rents or leases with
respect to the hotels.


     Upon  any  default that occurs under a long-term promissory note or related
security  document, various remedies are available to the lender with respect to
the  hotels  in  the same cross-default and cross-collateral group, as discussed
above.  Those  remedies  include, for example (1) declaring the entire principal
balance  under  the promissory notes in the group, together with all accrued and
unpaid  interest,  to  be  due and payable immediately; (2) taking possession of
the  secured  property,  including  the  hotels in the group; and (3) collecting
rents  and  revenues,  or  foreclosing  on  the  hotels in the group, to satisfy
unpaid  amounts  under  the promissory notes. Our subsidiaries, as the makers of
the  long-term  promissory notes, would be required to pay any costs that may be
incurred in exercising such remedies.


     Furthermore,  upon  a  payment  default  by one of our subsidiaries under a
long-term  promissory  note,  the  lender  would  be  entitled  to  seek payment
directly  from  us  as the indemnitor under corresponding Indemnity and Guaranty
Agreements dated as of September 8, 2000.


Credit and Pledge Agreements


     In  connection  with  the  $10  million  short-term refinancing provided by
First  Union  National  Bank,  we  executed  a  credit  agreement  and  a pledge
agreement,  both  dated  as  of  September  8,  2000. The primary terms of these
documents are discussed above with respect to the short-term financing note.


Other Agreements


     With  respect to each hotel that serves as  collateral  for the $50 million
refinancing  provided by First Union National Bank, the lender received separate
and  substantially  similar  environmental  indemnity  agreements,  dated  as of
September  8,  2000  from us and the  subsidiary  that  owns the  hotel,  as the
indemnitors.  In  general,  these  agreements  provide  that the hotels  will be
operated in compliance  with all  environmental  laws,  and that the lender must
receive immediate notice of any non-compliance.  These  environmental  indemnity
agreements will survive full payment of the long-term promissory notes.


     In  addition  to  the  new  hotel  lease  agreements  for  the eight hotels
transferred  to our new subsidiaries, as discussed in another section above, the
lender  received  subordination  and attornment agreements dated as of September
8,  2000.  These  agreements provide that the lessee of the hotels, Apple Suites
Management,  Inc. or a subsidiary, will recognize the lender as the lessor under
the  hotel  lease  agreements in the event that the lender exercises its default
rights under the security documents to foreclose on the hotels.



                                      12
<PAGE>
Item 7. a.

                              APPLE SUITES, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2000 (UNAUDITED)

     The  following  unaudited Pro Forma Condensed Consolidated Balance Sheet of
Apple  Suites,  Inc.  (the  "Company")  is  presented  as  if  proceeds from the
refinancing  loans  had  been  used  as of June 30, 2000 to pay the 4 promissory
notes  executed  by  the Company in 1999. Such information is based in part upon
the  consolidated  balance  sheet  of  the Company. In management's opinion, all
adjustments  necessary  to  reflect  the  effect of these transactions have been
made.

     The  following  unaudited Pro Forma Condensed Consolidated Balance Sheet is
not  necessarily  indicative  of  what  the actual financial position would have
been  assuming  such  transactions  had  been completed as of June 30, 2000, nor
does it purport to represent the future financial position of the Company.



<TABLE>
<CAPTION>
                                                          HISTORICAL
                                                           BALANCE             PRO FORMA              TOTAL
                                                            SHEET             ADJUSTMENTS           PRO FORMA
                                                       ---------------   ---------------------   ---------------
<S>                                                    <C>               <C>                     <C>
ASSETS
Investment in hotel properties .....................    $125,100,974                              $125,100,974
Cash and cash equivalents ..........................       3,445,125        $    3,430,500 (A)
                                                                                 1,245,000 (B)
                                                                                  (355,722)(C)
                                                                                (1,327,833)(D)       6,437,070
Restricted cash ....................................         544,469                    --             544,469
Rent receivable from Apple Suites
 Management, Inc. ..................................       1,996,479                    --           1,996,479
Notes and other receivable from Apple Suites
 Management, Inc. ..................................       1,771,124                    --           1,771,124
Capital improvement reserve ........................         653,149                    --             653,149
Prepaid expenses ...................................         194,185               355,722 (C)         549,907
Other assets .......................................       1,556,769            (1,245,000)(B)       1,639,602
                                                        ------------        --------------        ------------
                                                                                 1,327,833 (D)
Total Assets .......................................    $135,262,274        $    3,430,500        $138,692,774
                                                        ============        ==============        ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Notes payable ......................................    $ 91,350,000           (56,569,500)(A)
                                                                                50,000,000 (A)
                                                                                10,000,000 (A)    $ 94,780,500
Accounts payable ...................................         355,750                    --             355,750
Accounts payable-affiliate .........................         111,639                    --             111,639
Distributions payable ..............................         576,173                    --             576,173
Accrued expenses ...................................       1,185,836                    --           1,185,836
                                                        ------------        --------------        ------------
Total Liabilities ..................................      93,579,398             3,430,500          97,009,898
Shareholders' equity
Common stock, no par value, authorized
 200,000,000 shares; issued and outstanding
 4,945,552 shares ..................................      41,885,295                    --          41,885,295
Class B convertible stock, no par value,
 authorized 240,000 shares; issued and
 outstanding 240,000 shares ........................          24,000                    --              24,000
Distributions greater than new income ..............        (226,419)                   --            (226,419)
                                                        ------------        --------------        ------------
Total Shareholders' Equity .........................      41,682,876                    --          41,682,876
                                                        ------------        --------------        ------------
Total Liabilities and Shareholders' Equity .........    $135,262,274        $    3,430,500        $138,692,774
                                                        ============        ==============        ============
</TABLE>


                                       13
<PAGE>


NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

(A) Proceeds  from  the refinancing loans in the aggregate amount of $60 million
    were  used  to  pay  4 promissory notes executed in 1999 in the total amount
    of  $56,569,500.  Of  the  total refinancing, $50 million is evidenced by 11
    promissory  notes  executed by a total of three subsidiaries of the Company.
    Each  such  note  bears  interest  at  the  annual rate of 9%, is payable in
    equal  and  consecutive  monthly  installments  and  has  a maturity date of
    October  1,  2010.  This  portion of the refinancing is secured by 11 hotels
    of  the  Company.  The  $10 million loan is evidenced by a single promissory
    note  executed  by the Company. This note bears interest at a rate described
    elsewhere  in  this  Supplement  and  has  a maturity date of March 8, 2001.
    This  portion  of  the  refinancing  is  secured  by the Company's ownership
    interests in all of its direct subsidiaries.

(B) Represents  refund  of  loan  deposit  paid  in  connection with a rate lock
    agreement with the lender.

(C) Represents  prepaid  interest  and  insurance escrow occurring in connection
with the refinancing transaction.

(D) Represents   deferred  financing  costs  incurred  in  connection  with  the
refinancing transaction.


                                       14
<PAGE>


                              APPLE SUITES, INC.
           PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR  THE  YEAR  ENDED  DECEMBER  31, 1999 AND THE SIX MONTHS ENDED JUNE 30, 2000
                                  (UNAUDITED)

     The  following  unaudited  Pro  Forma  Condensed Consolidated Statements of
Operations  of  Apple  Suites,  Inc.  (the  "Company")  are  presented as if the
acquisitions  of  the  Homewood  Suites  hotels  from Promus Hotels, Inc. or its
affiliates   ("Promus")   (now   a  wholly-owned  subsidiary  of  Hilton  Hotels
Corporation),  and the recent refinancing in the aggregate amount of $60 million
(used  to  pay  4  promissory  notes  executed  by the Company in 1999), and the
leasing  of  the  hotels  to  Apple Suites Management, Inc. or a subsidiary (the
"Lessee"),  had  occurred  at  the  beginning  of  the periods presented for the
respective  periods  prior  to  acquisition  by  the  Company.  Such  pro  forma
information  is  based in part upon the Consolidated Statements of Operations of
the  Company,  the  Pro  Forma  Statements  of  Operations of the Lessee and the
historical  Statements  of  Operations  of  the acquired hotels. In management's
opinion,  all adjustments necessary to reflect the effects of these transactions
have been made.


     The  following  unaudited  Pro  Forma  Condensed Consolidated Statements of
Operations  for  the  periods  presented  are not necessarily indicative of what
actual  results  of  operations  of  the  Company  would have been assuming such
transactions  had  been  completed as of the beginning of the periods presented,
nor  does  it purport to represent the results of operations for future periods.
The  lease  agreements between the Company and the Lessee were based on economic
conditions  at  the  time  of  acquisition.  Application  of these agreements to
periods  prior  to  the  acquisition may not be meaningful. The most significant
assumption  which  may  not  be indicative of future operations is the amount of
financial leverage employed.

FOR THE YEAR ENDED DECEMBER 31, 1999 (UNAUDITED)

<TABLE>
<CAPTION>
                                        HISTORICAL
                                       STATEMENT OF
                                        OPERATIONS
                                      --------------
<S>                                   <C>
Revenue:
 Lease revenue ......................  $ 2,518,031
 Interest income and other
  revenue ...........................      169,086
Expenses:
 Taxes, insurance and other .........      426,592
 General and administrative .........      153,807
 Depreciation of real estate
  owned .............................      496,209
 Interest ...........................    1,245,044


 Rent expense .......................           --
                                       -----------
Total expenses ......................    2,321,652
                                       -----------
Net income ..........................  $   365,465
                                       ===========
Earnings per common share:
 Basic and Diluted ..................  $      0.14
                                       ===========
Basic weighted average common
 shares outstanding .................    2,648,196
                                       ===========
Diluted weighted common shares
 outstanding ........................    2,650,396
                                       ===========

<CAPTION>
                                                                       PRO FORMA ADJUSTMENTS
                                      ---------------------------------------------------------------------------------------
                                             HOMEWOOD              HOMEWOOD              HOMEWOOD              HOMEWOOD
                                              SUITES                SUITES                SUITES                SUITES
                                           ACQUISITION           ACQUISITION           ACQUISITION           ACQUISITION
                                              (A I)                 (A II)               (A III)                (A IV)
                                      --------------------- --------------------- --------------------- ---------------------
<S>                                   <C>                   <C>                   <C>                   <C>
Revenue:
 Lease revenue ......................     $  4,162,371 (B)      $  5,480,272 (B)      $  1,035,841 (B)      $  3,487,608 (B)
 Interest income and other
  revenue ...........................               --                    --                    --                    --
Expenses:
 Taxes, insurance and other .........          822,599 (C)           647,225 (C)            93,884 (C)           444,161 (C)
 General and administrative .........          493,985 (D)           547,542 (D)            96,388 (D)           302,981 (D)
 Depreciation of real estate
  owned .............................          656,623 (E)           821,580 (E)           140,664 (E)           688,654 (E)
 Interest ...........................               --                    --                    --             1,936,343 (F)


 Rent expense .......................               --                    --                    --               100,000 (H)
                                          ------------          ------------          ------------          ------------
Total expenses ......................        1,973,207             2,016,347               330,936             3,472,139
                                          ------------          ------------          ------------          ------------
Net income ..........................        2,189,164             3,463,925               704,905                15,469
                                          ============          ============          ============          ============
Earnings per common share:
 Basic and Diluted ..................
Basic weighted average common
 shares outstanding .................               -- (G)           937,271 (G)           331,053 (G)           916,311 (G)
Diluted weighted common shares
 outstanding ........................               -- (G)           937,271 (G)           331,053 (G)           916,311 (G)

<CAPTION>
                                      PRO FORMA ADJUSTMENTS
                                      ---------------------
                                                                  TOTAL
                                                                PRO FORMA
                                                            ----------------
<S>                                   <C>                   <C>
Revenue:
 Lease revenue ......................               --        $ 16,684,123
 Interest income and other
  revenue ...........................               --             169,086
Expenses:
 Taxes, insurance and other .........               --           2,434,461
 General and administrative .........               --           1,594,703
 Depreciation of real estate
  owned .............................               --           2,803,730
 Interest ...........................       (1,245,044)(I)       7,221,202
                                             5,069,576 (J)
                                               215,283 (K)
 Rent expense .......................               --             100,000
                                            ----------        ------------
Total expenses ......................        4,039,815          14,154,096
                                            ----------        ------------
Net income ..........................       (4,039,815)          2,699,113
                                            ==========        ============
Earnings per common share:
 Basic and Diluted ..................                         $       0.56
                                                              ============
Basic weighted average common
 shares outstanding .................                            4,832,831
                                                              ============
Diluted weighted common shares
 outstanding ........................               --           4,835,031
                                                              ============
</TABLE>


                                      15
<PAGE>

FOR THE SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)

<TABLE>
<CAPTION>
                                                                        PRO FORMA ADJUSTMENTS
                                                            ---------------------------------------------
                                                                   HOMEWOOD
                                               HISTORICAL           SUITES
                                              STATEMENT OF       ACQUISITION                                   TOTAL
                                               OPERATIONS           (A IV)                                   PRO FORMA
                                             -------------- ---------------------                         ---------------
<S>                                          <C>            <C>                   <C>                     <C>
Revenue:
 Lease revenue .............................  $ 7,242,731       $  1,648,774 (B)                 --         $ 8,891,505
 Interest income and other revenue .........      146,689                                        --             146,689
Expenses:
 Taxes, insurance and other ................    1,404,441            237,170 (C)                 --           1,641,611
 General and administrative ................      510,236             38,727 (D)                 --             548,963
 Depreciation of real estate owned .........    1,219,246            344,327 (E)                 --           1,563,573
 Interest ..................................    3,059,738            968,171 (F)         (3,059,738) (I)      3,651,851
                                                                                         2,534,788  (J)
                                                                                           148,892  (K)
 Rent expense ..............................           --             50,000 (H)                 --              50,000
                                              -----------       ------------             ----------         -----------
Total expenses .............................    6,193,661          1,638,395               (376,058)          7,455,998
Net income .................................  $ 1,195,759             10,379                376,058           1,582,196
                                              ===========       ============             ==========         ===========
Earnings per common share:
 Basic and Diluted .........................  $      0.31                                                   $      0.33
                                              ===========                                                   ===========
Basic weighted average common shares
 outstanding ...............................    3,916,520            916,311 (G)                 -- (G)       4,832,831
                                              ===========       ============                                ===========
Diluted weighted average common shares
 outstanding ...............................    3,918,720            916,311 (G)                 -- (G)       4,835,031
                                              ===========       ============                                ===========
</TABLE>



                                       16
<PAGE>

NOTES  TO  PRO  FORMA  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR APPLE
   SUITES, INC.

(A) Represents  results  of  operations  for  the hotels acquired on a pro forma
    basis  as  if  the  hotels were owned by the Company at the beginning of the
    periods  presented  for  the  respective periods prior to acquisition by the
    Company. See below.

<TABLE>
<CAPTION>
                                        DATE COMMENCED         DATE
     PROPERTY                             OPERATIONS         ACQUIRED
     --------------------------------- ---------------- ------------------
<S>  <C>                               <C>              <C>
I    Homewood Suites-Dallas, TX             1990        September 1, 1999
I    Homewood Suites-Las Colinas, TX        1990        September 1, 1999
I    Homewood Suites-Plano, TX              1997        September 1, 1999
I    Homewood Suites-Richmond. VA         May 1998      September 1, 1999
I    Homewood Suites-Atlanta, GA            1990         October 1, 1999
---------------------------------------------------------------------------

II   Homewood Suites-Clearwater, FL     February 1998   November 24, 1999
II   Homewood Suites-Salt Lake, UT          1996        November 24, 1999
II   Homewood Suites-Atlanta, GA            1990        November 24, 1999
II   Homewood Suites-Detroit, MI            1990        November 24, 1999
II   Homewood Suites-Baltimore, MD       March 1998     November 24, 1999
---------------------------------------------------------------------------

III  Homewood Suites-Jackson, MS        February 1997   December 22, 1999
---------------------------------------------------------------------------

IV   Homewood Suites-Malvern, PA        January 1998       May 8, 2000
IV   Homewood Suites-Boulder, CO        January 1991      June 30, 2000
</TABLE>

(B) Represents  lease payment from the Lessee to the Company calculated on a pro
    forma  basis  by  applying  the  rent  provisions  in the master hotel lease
    agreement  to  the historical room revenue of the hotels as if the beginning
    of  the  period  was  the beginning of the lease year. The base rent and the
    percentage  rent  will  be  calculated  and  paid  based on the terms of the
    master hotel lease agreements.

(C) Represents  historical real estate and personal property taxes and insurance
    which  will  be  paid  by  the  Company  pursuant  to the master hotel lease
    agreements.  Such  amounts are the historical amounts paid by the respective
    hotels.

(D) Represents  the  advisory  fee of 0.25% of accumulated capital contributions
    under  the  "best  efforts" offering for the period of time not owned by the
    Company  (for  the  year  ended  December  31, 1999 and the six months ended
    June  30,  2000),  plus estimated legal and accounting fees, employee costs,
    salaries  and  other  costs  to  operate  as  a public company (for the year
    ended December 31, 1999).

(E) Represents  the  depreciation  on  the hotels acquired based on the purchase
    price,  excluding  amounts  allocated  to land, of $37,450,320 for the first
    acquisition   group,   $34,954,481   for   the   second  acquisition  group,
    $5,485,886  for  the third acquisition group, and $30,500,611 for the fourth
    acquisition  group  for  the  period  of  time not owned by the Company. The
    weighted   average  life  of  the  depreciable  assets  was  39  years.  The
    estimated   useful   lives  are  based  on  management's  knowledge  of  the
    properties and the hotel industry in general.

(F) Represents  the  interest  expense for the hotel acquisitions for the period
    in  which  the  hotels  were  not  owned.  Interest  was  computed using the
    interest  rate  of  8.5%  on  mortgage  debt  of  $22,780,500 for the fourth
    acquisition that was incurred at acquisition.

(G) Represents  additional  common shares, assuming the properties were acquired
    at  the  beginning  of  the periods presented with the net proceeds from the
    ongoing  "best  efforts"  offering of $9 per share (net $8.06 per share) for
    the  first  $15,000,000  and  $10  per  share  (net $8.95 per share) for the
    remainder.

(H) Represents  rent  expense  on  the ground lease at the Malvern, Pennsylvania
    hotel. The Company accounts for the ground lease as an operating lease.

                                      17
<PAGE>


(I) Represents  the  elimination  of  the  historical interest that was replaced
    with the $60 million refinancing discussed in note J below.

(J) Represents  the  interest  expense  on  the  Company's $50 million long-term
    refinancing  at  an  interest  rate  of  9% and a portion of the $10 million
    short-term   refinancing   ($6,569,500)   at   an  interest  rate  described
    elsewhere in this Supplement for the term of the financing (6 months).

(K) Represents  amortization  of deferred financing costs incurred in connection
    with the refinancing transaction.



                                      18
<PAGE>


                         APPLE SUITES MANAGEMENT, INC.
           PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR  THE  YEAR  ENDED  DECEMBER  31, 1999 AND THE SIX MONTHS ENDED JUNE 30, 2000
                                  (UNAUDITED)

     The  following  unaudited  Pro  Forma  Condensed Consolidated Statements of
Operations  of  Apple Suites Management, Inc. (the "Lessee") are presented as if
the  hotels  purchased  or  to  be  purchased  from  Promus  Hotels, Inc. or its
affiliates  ("Promus"),  which is now a wholly-owned subsidiary of Hilton Hotels
Corporation,  had  been  leased from Apple Suites, Inc. (the "Company") pursuant
to  the  master  hotel  lease agreements from the beginning of periods presented
for  the  respective  periods  prior to acquisition by the Company. Further, the
results  of  operations  reflect  the management agreement and license agreement
entered  into  between  Promus  and  the  Lessee  or an affiliate to operate the
acquired  hotels.  The master hotel lease agreements between the Company and the
Lessee   were   based  on  economic  conditions  at  the  time  of  acquisition.
Application  of  these agreements to periods prior to the acquisition may not be
meaningful.  Such  pro  forma information is based in part upon the Consolidated
Statements  of  Operations  of the Lessee and should be read in conjunction with
such  financial  statements.  In management's opinion, all adjustments necessary
to reflect the effects of these transactions have been made.

     The  following  unaudited  Pro  Forma  Condensed Consolidated Statements of
Operations  are  not  necessarily  indicative  of  what  the  actual  results of
operations  of  the  Lessee  would have been assuming such transactions had been
completed  as  of the beginning of the periods presented, nor do they purport to
represent the results of operations for future periods.



                                      19
<PAGE>

FOR THE YEAR ENDED DECEMBER 31, 1999 (UNAUDITED)

<TABLE>
<CAPTION>
                                                                            PRO FORMA ADJUSTMENTS
                                                  --------------------------------------------------------------------------
                                                     HOMEWOOD       HOMEWOOD       HOMEWOOD      HOMEWOOD
                                     HISTORICAL       SUITES         SUITES         SUITES        SUITES
                                    STATEMENT OF   ACQUISITIONS   ACQUISITIONS   ACQUISITION   ACQUISITION
                                     OPERATIONS        (A I)         (A II)        (A III)        (A IV)
<S>                                <C>            <C>            <C>            <C>           <C>           <C>
Revenues:
 Suite revenue ...................   $5,335,925     $9,818,797    $12,082,374    $2,230,952    $7,419,101               --
 Other income ....................      335,150        560,096        709,240       168,438       398,812               --
Expenses:
 Operating expenses ..............    1,656,540      3,794,204      4,870,096       954,102     2,491,119               --
 General and administrative ......      494,377        250,317        300,399        77,381       105,719     $   (131,000)
                                                                                                                    50,000
 Advertising and promotion .......      472,787        438,985        580,564       112,902       328,070       (1,262,049)
                                                                                                                 1,262,049
 Utilities .......................      199,907        354,113        551,359        75,639       270,079               --
 Taxes and insurance .............           --        822,599        647,225        93,884       444,161       (2,007,869)
 Depreciation expense ............           --      1,783,021      2,217,128       426,986       714,411       (5,141,546)
 Franchise fees ..................      213,437        392,757        483,295        89,238       296,764       (1,262,049)
                                                                                                                 1,262,049
 Management fees .................      226,136        311,275        383,599        71,982       234,000       (1,000,856)
                                                                                                                 1,467,512
 Rent expense-Apple Suites,
  Inc. ...........................    2,518,031             --             --            --            --       14,166,093
 Other ...........................       30,964             --             --            --       100,000         (100,000)
                                     ----------     ----------    -----------    ----------    ----------     ------------
 Total expenses ..................    5,812,179      8,147,271     10,033,665     1,902,114     4,984,323        7,302,334
 Income before income tax ........     (141,104)     2,231,622      2,757,949       497,276     2,833,590       (7,302,334)
 Income tax expense ..............           --             --             --            --            --          350,800
                                     ----------     ----------    -----------    ----------    ----------     ------------
 Net income (loss) ...............   $ (141,104)    $2,231,622    $ 2,757,949    $  497,276    $2,833,590     $ (7,653,134)
                                     ==========     ==========    ===========    ==========    ==========     ============
 <CAPTION>
                                                  TOTAL
                                                PRO FORMA
<S>                                <C>       <C>
Revenues:
 Suite revenue ...................            $36,887,149
 Other income ....................              2,171,736
Expenses:
 Operating expenses ..............             13,766,061
 General and administrative ......  (B)
                                    (C)         1,147,193
 Advertising and promotion .......  (D)
                                    (E)         1,933,308
 Utilities .......................              1,451,097
 Taxes and insurance .............  (F)                --
 Depreciation expense ............  (G)                --
 Franchise fees ..................  (H)
                                    (I)         1,475,491
 Management fees .................  (J)
                                    (K)         1,693,648
 Rent expense-Apple Suites,
  Inc. ...........................  (L)        16,684,124
 Other ...........................  (M)            30,964
                                    --------  -----------
 Total expenses ..................             38,181,886
 Income before income tax ........                876,999
 Income tax expense ..............  (N)           350,800
                                    --------  -----------
 Net income (loss) ...............            $   526,199
                                              ===========

</TABLE>




                                      20
<PAGE>

FOR THE SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)

<TABLE>
<CAPTION>
                                                                         PRO FORMA ADJUSTMENTS
                                                              -------------------------------------------
                                                                 HOMEWOOD
                                               HISTORICAL         SUITES
                                              STATEMENT OF     ACQUISITION                                       TOTAL
                                               OPERATIONS         (A IV)                                       PRO FORMA
                                             --------------   -------------                                 --------------
<S>                                          <C>              <C>             <C>               <C>         <C>
Revenues:
 Suite revenue ...........................    $16,162,186      $3,683,872                --                  $19,846,058
 Other income ............................        891,551         186,300                --                    1,077,851
Expenses:
 Operating expenses ......................      4,797,335       1,266,548                --                    6,063,883
 General and administrative ..............      1,409,598          66,574      $    (12,000)     (B)
                                                                                     25,000      (C)           1,489,172
 Advertising and promotion ...............      1,436,043         165,562          (147,354)     (D)
                                                                                    147,354      (E)           1,601,605
 Utilities ...............................        601,421         130,722                --                      732,143
 Taxes and insurance .....................             --         237,170          (237,170)     (F)                  --
 Franchise fees ..........................        645,065         147,354          (147,354)     (H)
                                                                                    147,354      (I)             792,419
 Management fees .........................        679,372         116,106          (116,106)     (J)
                                                                                    164,807      (K)             844,179
 Rent expense-Apple Suites, Inc. .........      7,242,731              --         1,648,774      (L)           8,891,505
 Interest expense ........................         45,587              --                --                       45,587
 Other ...................................        213,014          50,000           (50,000)     (M)             213,014
                                              -----------      ----------      ------------                  -----------
Total expenses ...........................     17,070,166       2,180,036         1,423,305                   20,673,507
Income before income tax .................        (16,429)      1,690,136        (1,423,305)                     250,402
Income tax expense .......................             --              --           100,161      (N)             100,161
                                              -----------      ----------      ------------                  -----------
Net income (loss) ........................    $   (16,429)     $1,690,136      $ (1,523,466)                 $   150,241
                                              ===========      ==========      ============                  ===========
</TABLE>



                                      21
<PAGE>

NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(A) Represents  results  of  operations  for  the  eleven  Homewood Suites hotel
    acquisitions  on  a  pro  forma  basis as if the hotels acquired were leased
    and  operated  by  the  Lessee at the beginning of the periods presented for
    the  respective  periods prior to acquisition by the Company, see below. The
    hotels acquired are as follows:

<TABLE>
<CAPTION>
                                            DATE COMMENCED       DATE
     PROPERTY                                OPERATIONS        ACQUIRED
<S>                                        <C>              <C>
--------------------------------------------------------------------------------

I    Homewood Suites-Dallas, TX               1990        September 1, 1999
I    Homewood Suites-Las Colinas, TX          1990        September 1, 1999
I    Homewood Suites-Plano, TX                1997        September 1, 1999
I    Homewood Suites-Richmond. VA           May 1998      September 1, 1999
I    Homewood Suites-Atlanta, GA              1990         October 1, 1999
--------------------------------------------------------------------------------

II   Homewood Suites-Clearwater, FL       February 1998   November 24, 1999
II   Homewood Suites-Salt Lake, UT            1996        November 24, 1999
II   Homewood Suites-Atlanta, GA              1990        November 24, 1999
II   Homewood Suites-Detroit, MI              1990        November 24, 1999
II   Homewood Suites-Baltimore, MD         March 1998     November 24, 1999
--------------------------------------------------------------------------------

III  Homewood Suites-Jackson, MS          February 1997   December 22, 1999
--------------------------------------------------------------------------------

IV   Homewood Suites-Malvern, PA        January 1998       May 8, 2000
IV   Homewood Suites-Boulder, CO        January 1991      June 30, 2000

</TABLE>

(B) Represents  the  elimination  of  the historical accounting fee allocated to
    the hotels by the prior owner.

(C) Represents  the  addition  of the anticipated legal and accounting and other
    expenses to operate as a stand alone company.

(D) Represents  the  elimination  of  the  historical  advertising, training and
    reservation fee allocated to the hotels by the prior owner.

(E) Represents  the  addition  of the marketing fee to be incurred under the new
    license  agreements.  The  marketing fee is calculated based on the terms of
    the license agreements which is 4% of suite revenue.

(F) Represents  the  elimination  of the taxes and insurance. Under the terms of
    the  master  hotel  lease  agreements these expenses will be incurred by the
    Company   and,  accordingly,  are  reflected  in  the  Company's  Pro  Forma
    Condensed Consolidated Statement of Operations.

(G) Represents  the  elimination  of the depreciation expense. This expense will
    be  reflected  in  the  Company's Pro Forma Condensed Consolidated Statement
    of Operations.

(H) Represents  the elimination of the historical franchise fee allocated to the
    hotels by the prior owner.

(I) Represents  the  addition  of  franchise  fees to  be incurred under the new
    license  agreements.  The franchise fees  are  calculated based on the terms
    of the agreement, which is 4% of suite revenue.

(J) Represents  the elimination of the historical management fees allocated to
    the hotels by the prior owner.

(K) Represents  the  addition  of  the management fees  of 4% of suite and other
    revenue  and  the  accounting  fee  of  $1,000  per  hotel  per  month to be
    incurred under the new management agreements for the period presented.

(L) Represents  lease  payments  from the Lessee to the Company  calculated on a
    pro  forma  basis by applying the rent provisions in the master  hotel lease
    agreements  to  the   historical  room  revenue  of  the  hotels  as  if the
    beginning  of the  period was the beginning of the lease year. The base rent
    and  the  percentage  rent will be calculated and paid based on the terms of
    the master hotel lease agreements.

(M) Represents  the  elimination  of rent expense for the ground lease. The rent
    expense  related  to the ground lease will be reflected on the Company's Pro
    Forma Condensed Consolidated Statement of Operations.

(N) Represents  the  combined  state and federal income tax expense estimated on
    a combined rate of 40%.

                                       22
<PAGE>

Item 7. b. Exhibits

4.1      Amended and  Restated  Hotel Lease  Agreement  dated as of November 24,
         1999  between  Apple  Suites SPE I, Inc.  as Lessor,  and Apple  Suites
         Management,  Inc.  as  Lessee,  with  respect to the hotel in Salt Lake
         City, Utah.(Incorporated by reference to Exhibit 4.52 to Post-Effective
         Amendment  No.  4  to  Form  S-11  Registration  Statement,   File  No.
         333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

4.2      Percentage Lease Subordination and Attornment Agreement dated September
         8, 2000, between and Apple Suites Management, Inc. as Lessee, and First
         Union   National  Bank  as  Lender  (with  respect  to  Exhibit  4.53).
         (Incorporated by reference to Exhibit 4.53 to Post-Effective  Amendment
         No. 4 to Form S-11 Registration Statement, File No. 333-77055, filed on
         September 20, 2000 by Apple Suites, Inc.)

4.3      Environmental  Indemnity  Agreement  dated September 8, 2000 from Apple
         Suites SPE I, Inc. and Apple Suites,  Inc. as Indemnitors,  in favor of
         First Union  National  Bank as Lender with respect to the hotel in Salt
         Lake  City,  Utah.  (Incorporated  by  reference  to  Exhibit  4.54  to
         Post-Effective  Amendment  No. 4 to Form S-11  Registration  Statement,
         File No. 333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

4.4      Schedule setting forth information on 7 substantially identical Amended
         and Restated  Hotel Lease  Agreements  (with respect to Exhibit  4.52).
         (Incorporated by reference to Exhibit 4.55 to Post-Effective  Amendment
         No. 4 to Form S-11 Registration Statement, File No. 333-77055, filed on
         September 20, 2000 by Apple Suites, Inc.)

4.5      Schedule  setting  forth  information  on  10  substantially  identical
         Percentage Lease Subordination and Attornment  Agreements (with respect
         to Exhibit  4.53) dated  September 8, 2000 with First  National Bank as
         Lender.  (Incorporated  by reference to Exhibit 4.56 to  Post-Effective
         Amendment  No.  4  to  Form  S-11  Registration  Statement,   File  No.
         333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

4.6      Schedule  setting for the  information  on 10  substantially  identical
         Environmental Indemnity Agreements (with respect to Exhibit 4.57) dated
         September  8, 2000 in favor of First  Union  National  Bank as  Lender.
         (Incorporated by reference to Exhibit 4.57 to Post-Effective  Amendment
         No. 4 to Form S-11 Registration Statement, File No. 333-77055, filed on
         September 20, 2000 by Apple Suites, Inc.)

10.1     Apple Suites SPE I, Inc.  Articles of  Incorporation.  (Incorporated by
         reference to Exhibit  10.93 to  Post-Effective  Amendment No. 4 to Form
         S-11 Registration Statement, File No. 333-77055, filed on September 20,
         2000 by Apple Suites, Inc.)

10.2     Apple Suites SPE I, Inc. Bylaws.  (Incorporated by reference to Exhibit
         10.94  to  Post-Effective  Amendment  No. 4 to Form  S-11  Registration
         Statement,  File No.  333-77055,  filed on September  20, 2000 by Apple
         Suites, Inc.)

10.3     Apple Suites SPE II, Inc. Articles of  Incorporation.  (Incorporated by
         reference to Exhibit  10.95 to  Post-Effective  Amendment No. 4 to Form
         S-11 Registration Statement, File No. 333-77055, filed on September 20,
         2000 by Apple Suites, Inc.)

10.4     Apple Suites SPE II, Inc. Bylaws. (Incorporated by reference to Exhibit
         10.96  to  Post-Effective  Amendment  No. 4 to Form  S-11  Registration
         Statement,  File No.  333-77055,  filed on September  20, 2000 by Apple
         Suites, Inc.)

10.5     Apple Suites General, Inc. Articles of Amendment and Restatement to the
         Articles of Incorporation.  (Incorporated by reference to Exhibit 10.97
         to Post-Effective  Amendment No. 4 to Form S-11 Registration Statement,
         File No. 333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.6     Apple Suites General,  Inc. Amended and Restated Bylaws.  (Incorporated
         by reference to Exhibit 10.98 to Post-Effective Amendment No. 4 to Form
         S-11 Registration Statement, File No. 333-77055, filed on September 20,
         2000 by Apple Suites, Inc.)

10.7     Apple Suites LP, Inc.  Articles of  Amendment  and  Restatement  to the
         Articles of Incorporation.  (Incorporated by reference to Exhibit 10.99
         to Post-Effective  Amendment No. 4 to Form S-11 Registration Statement,
         File No. 333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.8     Apple Suites LP, Inc.  Amended and Restated  Bylaws.  (Incorporated  by
         reference to Exhibit 10.100 to  Post-Effective  Amendment No. 4 to Form
         S-11 Registration Statement, File No. 333-77055, filed on September 20,
         2000 by Apple Suites, Inc.)

                                       23
<PAGE>

10.9     Amended and Restated Limited Partnership Agreement of Apple Suites REIT
         Limited  Partnership.  (Incorporated  by reference to Exhibit 10.101 to
         Post-Effective  Amendment  No. 4 to Form S-11  Registration  Statement,
         File No. 333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.10    Promissory  Note dated  September  8, 2000 in the  principal  amount of
         $2,500,000  made  payable by Apple  Suites SPE I, Inc.  to First  Union
         National  Bank,  with  respect  to the hotel in Salt Lake  City,  Utah.
         (Incorporated   by  reference  to  Exhibit  10.102  to   Post-Effective
         Amendment  No.  4  to  Form  S-11  Registration  Statement,   File  No.
         333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.11    Indemnity  and  Guaranty  Agreement  dated  September  8, 2000 by Apple
         Suites,  Inc.,  Indemnitor,  in favor of First Union  National  Bank as
         Lender,  with respect to a $2,500,000  loan to Apple Suites SPE I, Inc.
         as  Borrower,  with  respect  to the  hotel in Salt  Lake  City,  Utah.
         (Incorporated   by  reference  to  Exhibit  10.103  to   Post-Effective
         Amendment  No.  4  to  Form  S-11  Registration  Statement,   File  No.
         333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.12    Deed  of  Trust,  Security  Agreement  and  UCC  Fixture  Filing  dated
         September  8, 2000,  from Apple Suites SPE I, Inc.,  Grantor,  to Metro
         National  Title  Company,  as Trustee  for First Union  National  Bank,
         Beneficiary  with  respect  to the  hotel  in  Salt  Lake  City,  Utah.
         (Incorporated   by  reference  to  Exhibit  10.104  to   Post-Effective
         Amendment  No.  4  to  Form  S-11  Registration  Statement,   File  No.
         333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.13    Assignment of Contracts and Permits dated  September 8, 2000 from Apple
         Suites SPE I, Inc. as Assignor to First Union National Bank as Assignee
         with  respect to the hotel in Salt Lake City,  Utah.  (Incorporated  by
         reference to Exhibit 10.105 to  Post-Effective  Amendment No. 4 to Form
         S-11 Registration Statement, File No. 333-77055, filed on September 20,
         2000 by Apple Suites, Inc.)

10.14    Assignment  of Leases,  Rents and Profits  dated  September  8, 2000 by
         Apple  Suites SPE I, Inc. as Assignee in favor of First Union  National
         Bank as  Assignee  with  respect to the hotel in Salt Lake City,  Utah.
         (Incorporated   by  reference  to  Exhibit  10.106  to   Post-Effective
         Amendment  No.  4  to  Form  S-11  Registration  Statement,   File  No.
         333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.15    Security Agreement dated September 8, 2000 by Apple Suites SPE I, Inc.,
         Debtor, in favor of First Union National Bank, Secured Party, regarding
         a $2,500,000  loan with  respect to the hotel in Salt Lake City,  Utah.
         (Incorporated   by  reference  to  Exhibit  10.107  to   Post-Effective
         Amendment  No.  4  to  Form  S-11  Registration  Statement,   File  No.
         333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.16    Credit Agreement dated September 8, 2000 between Apple Suites, Inc. and
         First Union  National  Bank as Lender.  (Incorporated  by  reference to
         Exhibit  10.108  to  Post-Effective   Amendment  No.  4  to  Form  S-11
         Registration Statement, File No. 333-77055, filed on September 20, 2000
         by Apple Suites, Inc.)

10.17    Promissory  Note dated  September  8, 2000 in the  principal  amount of
         $10,000,000  made payable by Apple  Suites,  Inc. to the order of First
         Union  National Bank.  (Incorporated  by reference to Exhibit 10.109 to
         Post-Effective  Amendment  No. 4 to Form S-11  Registration  Statement,
         File No. 333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.18    Pledge Agreement dated September 8, 2000 between Apple Suites,  Inc. as
         Pledgor and First Union  National  Bank as  Pledgee.  (Incorporated  by
         reference to Exhibit 10.110 to  Post-Effective  Amendment No. 4 to Form
         S-11 Registration Statement, File No. 333-77055, filed on September 20,
         2000 by Apple Suites, Inc.)

10.19    Schedule  setting  forth  information  on  10  substantially  identical
         promissory  notes (with respect  to Exhibit  10.10) dated  September 8,
         2000 in various  principal  amounts  made payable to the order of First
         Union  National Bank.  (Incorporated  by reference to Exhibit 10.111 to
         Post-Effective  Amendment  No. 4 to Form S-11  Registration  Statement,
         File No. 333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.20    Schedule  setting  forth  information  on  10  substantially  identical
         Indemnity  and  Guaranty  Agreements  (with  respect to Exhibit  10.11)
         dated September 8, 2000 by Apple Suites, Inc. as Indemnitor in favor of
         First Union  National  Bank as Lender.  (Incorporated  by  reference to
         Exhibit  10.112  to  Post-Effective   Amendment  No.  4  to  Form  S-11
         Registration Statement, File No. 333-77055, filed on September 20, 2000
         by Apple Suites, Inc.)

10.21    Schedule setting forth information on 10 substantially  identical Deeds

                                       24
<PAGE>

         of Trust (with respect to Exhibit  10.12) dated September 8, 2000 with
         First Union National Bank as Beneficiary. (Incorporated by reference to
         Exhibit  10.113  to  Post-Effective   Amendment  No.  4  to  Form  S-11
         Registration Statement, File No. 333-77055, filed on September 20, 2000
         by Apple Suites, Inc.)

10.22    Schedule  setting  forth  information  on  10  substantially  identical
         Assignments  of Contracts and Permits (with  respect to Exhibit  10.13)
         dated  September  8, 2000 to First  Union  National  Bank as  Assignee.
         (Incorporated   by  reference  to  Exhibit  10.114  to   Post-Effective
         Amendment  No.  4  to  Form  S-11  Registration  Statement,   File  No.
         333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.23    Schedule  setting  forth  information  on  10  substantially  identical
         Assignments  of  Leases,  Rents and  Profits  (with  respect to Exhibit
         10.14)  dated  September  8,  2000  to  First  Union  National  Bank as
         Assignee.   (Incorporated   by   reference   to   Exhibit   10.115   to
         Post-Effective  Amendment  No. 4 to Form S-11  Registration  Statement,
         File No. 333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.24    Schedule  setting  forth  information  on  10  substantially  identical
         Security Agreements (with respect  to Exhibit 10.15) dated September 8,
         2000 in favor of First Union National Bank.  (Incorporated by reference
         to  Exhibit  10.116  to  Post-Effective  Amendment  No. 4 to Form  S-11
         Registration Statement, File No. 333-77055, filed on September 20, 2000
         by Apple Suites, Inc.)


                                       25
<PAGE>


                                   SIGNATURES
                                   ----------

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

                                                     Apple Suites, Inc.


Date: September 25, 2000                     By: /s/ Glade M. Knight
                                               ------------------------------
                                                Glade M. Knight,
                                                Chief Executive Officer of
                                                Apple Suites, Inc.
[{"type": "8-K", "sequence": "1", "filename": "0001.txt", "description": "FORM 8-K", "secsgml_size_bytes": 85337}]
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SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

         Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):  September 8, 2000

                               APPLE SUITES, INC.
             (Exact name of registrant as specified in its charter)

    VIRGINIA                          000-30491                  54-1933472
   (State of                         (Commission               (IRS Employer
  incorporation)                     File Number)           Identification No.)

              306 EAST MAIN STREET
              RICHMOND, VIRGINIA                             23219
              (Address of principal                       (Zip Code)
              executive offices)

               Registrant's telephone number, including area code:
                                 (804) 643-1761
APPLE SUITES, INC.

                                    FORM 8-K

                                      Index

                                                                        Page No.

Item 2.  Acquisition or Disposition of Assets .................................3

Item 7.  Pro Forma Financial Statements and Exhibits

         a. Pro Forma Financial Statements (Unaudited)

         Apple Suites, Inc.

         Pro Forma Condensed  Consolidated  Balance Sheet as
         of June 30, 2000 ....................................................13

         Notes to Pro Forma Condensed  Consolidated  Balance
         Sheet ...............................................................14

         Pro  Forma  Condensed  Consolidated  Statements  of
         Operations for the year ended December 31, 1999 and
         the six months ended June 30, 2000 ..................................15

         Notes   to   Pro   Forma   Condensed   Consolidated
         Statements of Operations ............................................17

         Apple Suites Management, Inc.

         Pro  Forma  Condensed  Consolidated  Statements  of
         Operations for the year ended December 31, 1999 and
         the six months ended June 30, 2000 ..................................19

         Notes   to   Pro   Forma   Condensed   Consolidated
         Statements of Operations ............................................22

         b. Exhibits..........................................................23
Item 2.  Acquisition or Disposition of Assets

         Apple Suites,  Inc. ("we") makes this report pursuant to Item 2 of Form
8-K to describe a financing  transaction  involving the mortgaging of certain of
its assets.  This mortgaging  constitutes a "disposition of a significant amount
of assets" within the meaning of the General  Instructions to such form. Certain
related matters are also reported herein.

REFINANCING TRANSACTION - GENERAL

     On  September 8, 2000, we refinanced much of our short-term debt with loans
from  First  Union  National  Bank in the aggregate amount of $60 million. These
loans  are  described  below in other sections. We used these loans to repay the
four promissory notes we executed in 1999 when acquiring 11 hotels.

     On  September  8,  2000,  in connection with these loans, we formed two new
wholly-owned  subsidiaries,  and  transferred  a total of eight of our hotels to
the  new  subsidiaries.  Those  eight  hotels, together with our three hotels in
Texas,  serve  as  collateral for the lender. In addition, three of our existing
subsidiaries  have  amended their organizational documents to achieve conformity
with  the  organizational  documents for our new subsidiaries. These matters are
discussed in another section below.

     Of the $60 million  total we  borrowed,  $50 million is  repayable  over 10
years.  Thus, the refinancing  constitutes a change to our borrowing  policy, as
originally described in our filings with the Securities and Exchange Commission,
because  we will  not  hold  our  properties  on an "all  cash"  basis  over the
long-term.

     When we  acquired  our first 13 hotels,  we elected to finance a portion of
the purchase price of each hotel by delivering  short-term  notes to the seller.
The use of this  short-term  debt was  consistent  with our  original  borrowing
policy,  which was to purchase  our  properties  either on an all-cash  basis or
using  interim  borrowings.  The  short-term  seller  financing was available on
attractive  terms and allowed us to purchase a greater  number of hotels at what
we believed to be more  attractive  prices than we could have purchased  without
the use of interim financing.  The intent, as expressed in previous filings with
the  Securities  and Exchange  Commission,  was to repay the  short-term  seller
financing with proceeds from the offering of common shares.

     As  indicated  in  previous   filings  with  the  Securities  and  Exchange
Commission,  when  proceeds  from our offering of common shares were raised more
slowly than was sufficient for repayment of the short-term seller financing,  we
needed to refinance the  short-term  seller debt.  Our loans through First Union
National Bank in the  aggregate  amount of $60 million are designed to refinance
the short-term seller debt that we perceived as difficult to repay when due with
proceeds from the sale of our common shares.  Since $50 million of the new debt,
as  described  in  this  Report,  has a term  of 10  years,  it is  not  interim
financing,  but is  longer-term  financing  which may stay in place for the full
10-year period. This financing is permitted by our organizational  documents and
on terms and  conditions  deemed by  management  to be favorable and in our best
interests and those of our shareholders.

                                      3
While our receipt of the loans from First Union National Bank, as described
in this Report,  represents a departure from the objective of purchasing all our
properties  on an  all-cash  basis or using  interim  borrowings,  we  intend to
pursue, on a going-forward basis, our objective of purchasing  properties either
on an all-cash basis or using interim borrowings,  but only to the extent we can
do so in  accordance  with the perceived  best  interests of our company and its
shareholders,  the rate at which attractive  acquisitions become available,  the
rate at which we receive  funds from the offering of our common shares and other
relevant factors. For the purpose of flexibility in operations, we may borrow on
such terms as we deem prudent, subject to the approval of the Board of Directors
and certain limitations imposed by our bylaws.

     Debts secured by mortgages and other  security  interests  involve  certain
risks,  including the possible  loss of equity in  properties or assets  through
foreclosure  following default on a loan.  Management believes both (1) that the
rent we are receiving as a result of the  operations of the hotels is sufficient
to make  regularly-scheduled  payments on our  existing  debt,  and (2) that our
remaining  short-term debt (including the $10 million portion of the refinancing
from First Union  National Bank and the remaining $23 million in the  short-term
seller  financing) will either be repaid from proceeds of our on-going  offering
of common shares or refinanced on terms acceptable to us. However,  there can be
no complete  assurance that either expectation will prove true. If either proves
untrue,  we  could  lose  some  or all  of  our  properties  or  assets  through
foreclosure.

     It  is our objective ultimately to own assets with a cost basis of at least
$200  million  and  with permanent debt not exceeding approximately $50 million.
Management  would  characterize  this  debt  level as "conservative," based upon
industry  standards.  There  is  no  assurance  that  we will be able to acquire
assets  at  the  indicated  level  or  will  be  able to,  or elect to, maintain
permanent  debt at the indicated level. Thus, this should be viewed merely as an
investment  objective  and not a prediction or assurance as to the future course
of events concerning our operations.

                                      4
CERTAIN NEW SUBSIDIARIES

     In  connection  with the refinancing provided by First Union National Bank,
and  at  its  request,  we  formed  two  new wholly-owned subsidiaries that will
operate  as  "special  purpose  entities." These new subsidiaries were formed as
Virginia  corporations  under  the following names: Apple Suites SPE I, Inc. and
Apple Suites SPE II, Inc.

     The  new  subsidiaries  were  formed  to  receive  loans  from  First Union
National  Bank  and  to  hold certain hotels, which will serve as collateral for
the  lender.  To  qualify as special purpose entities, the new subsidiaries have
organizational  documents  that  impose certain requirements on the subsidiaries
while  the  loans are outstanding. The organizational documents for three of our
existing  subsidiaries  were  amended  to  include  the same requirements. Those
subsidiaries  are  Apple  Suites  REIT  Limited  Partnership  (which holds three
hotels  in  Texas),  Apple  Suites  General, Inc. (the sole general partner) and
Apple Suites LP, Inc. (the sole limited partner).

     In connection with these lender  requirements,  we are conducting an active
search  for   independent   directors   with  respect  to  our  four   corporate
subsidiaries.  Because these  requirements  only apply to our  subsidiaries,  no
changes  were  made  to  our  organizational   documents  as  a  result  of  the
refinancing.

     We  transferred  a  total  of  eight  of  our  hotels  to  our newly formed
subsidiaries  in connection with the refinancing. Those transfers are summarized
below:
NAME OF NEW SUBSIDIARY           NAME OF HOTEL TRANSFERRED TO SUBSIDIARY
Apple Suites SPE I, Inc.    Atlanta - Galleria/Cumberland
                                Jackson - Ridgeland
                                Salt Lake City - Midvale
    Apple Suites SPE II, Inc.   Atlanta - Peachtree
                                Baltimore - BWI Airport
                                Clearwater
                                Detroit - Warren
                                Richmond - West End
5
In  connection  with  these  transfers  and at the request of the lender, a
separate  hotel  lease  agreement for each hotel was executed by the appropriate
subsidiary,  as  lessor, and Apple Suites Management, Inc., as lessee. Our chief
executive  officer,  Glade  M.  Knight,  is the sole shareholder of Apple Suites
Management,  Inc.,  as well as its president and sole director. Each hotel lease
agreement  is  substantially  similar  to  the master hotel lease agreement that
applied  to  all  eight  hotels  prior to their transfer.

     The  following  chart  summarizes the ownership of our hotels as the result
of our refinancing and the related hotel transfers:

                   [Remainder of Page is Intentionally Blank]

                                      6
APPLE SUITES, INC.
                                              |      100% Ownership
_________________________________________________________________________________________________________
     Apple Suites             Apple Suites           Apple Suites          Apple Suites    |       Apple Suites
     General, Inc.               LP, Inc.             SPE I, Inc.           SPE II, Inc.   |       Pennsylvania
          |                       |                     |                       |          |      Business Trust
          |                       |                     |                       |          |            |
1% interest as               99% interest as            |                       |          |            |
general partner              limited partner            |                       |          |            |
           |                  |                         |                       |          |            |
           |                  |                         |                       |          |            |
            Apple  Suites  REIT                         |                       |          |            |
            Limited Partnership                         |                       |          |            |
                      |                                 |                       |          |            |
                      |                                 |                       |          |            |
                      |                                 |                       |          |            |
               Holds 3 Hotels                    Holds 3 Hotels                 |    Holds 1 Hotel      |
           Dallas-Addison (Texas)          Atlanta-Galleria (Georgia)           |       Boulder         |
      Dallas-Irving/Las Colinas (Texas)  Jackson-Ridgeland (Mississippi)        |      (Colorado)       |
          North Dallas-Plano (Texas)      Salt Lake City-Midvale (Utah)         |                       |
                                                                                |                       |
                                                                         Holds 5 Hotels               Holds 1 Hotel
                                                                   Atlanta-Peachtree (Georgia)        Philadelphia/Great Valley
                                                                 Baltimore-BWI Airport (Maryland)     (Pennsylvania)
                                                                      Clearwater (Florida)
                                                                    Detroit-Warren (Michigan)
                                                                  Richmond-West End (Virginia)
7
OVERVIEW OF LOAN AMOUNTS

     The   refinancing  provided  by  First  Union  National  Bank  consists  of
long-term  loans  made  to  three of our subsidiaries and a short-term loan made
directly  to  us.  The  long-terms loans are evidenced by 11 promissory notes in
the  aggregate  principal  amount of $50 million. These notes are secured by our
hotels,  as described in another section below. The short-term loan is evidenced
by  a  single  promissory  note in the principal amount of $10 million, which is
secured by our ownership interests in all of our direct subsidiaries.

     The  following  table  provides an overview of the promissory notes for the
$60 million refinancing:
AGGREGATE     PRINCIPAL        ANNUAL
          NAME OF              LOANS TO        AMOUNT         RATE OF                SUMMARY OF                DATE OF
          BORROWER             BORROWER       OF NOTES       INTEREST           SECURITY/COLLATERAL*          MATURITY
--------------------------- -------------- ------------- ---------------- ------------------------------- ----------------
Apple Suites SPE I, Inc.     $10,500,000    $ 5,000,000        9.00%      Atlanta - Galleria/Cumberland   October 1, 2010
                                              3,000,000        9.00%      Jackson-Ridgeland               October 1, 2010
                                              2,500,000        9.00%      Salt Lake City - Midvale        October 1, 2010
Apple Suites SPE II, Inc.     25,800,000      2,800,000        9.00%      Atlanta - Peachtree             October 1, 2010
                                              9,000,000        9.00%      Baltimore - BWI Airport         October 1, 2010
                                              6,000,000        9.00%      Clearwater                      October 1, 2010
                                              2,500,000        9.00%      Detroit - Warren                October 1, 2010
                                              5,500,000        9.00%      Richmond - West End             October 1, 2010
Apple Suites REIT             13,700,000      5,500,000        9.00%      Dallas - Addison                October 1, 2010
Limited Partnership
                                              5,700,000        9.00%      Dallas - Irving/Las Colinas     October 1, 2010
                                              2,500,000        9.00%      North Dallas - Plano            October 1, 2010

Apple Suites, Inc.            10,000,000     10,000,000   Adjusted Prime  Ownership Interests             March 8, 2001
                                            -----------   or LIBOR        in All Direct Subsidiaries

                                  TOTAL     $60,000,000
                                            ===========
* The face amounts of the promissory notes were based on a single hotel, but the
  notes are subject to certain cross-collateral and cross-default provisions, as
  explained in another section below.

LONG-TERM REFINANCING NOTES

     The  11  long-term  promissory  notes  for  the  $50 million portion of the
refinancing  are  substantially similar. Each of these promissory notes provides
for the following:

   o payment  of  principal  and interest on an amortized basis (calculated over
     a  25-year  period)  in equal monthly installments, with a balloon payment
     at maturity

   o acceleration,  at  the  option  of the lender, of all amounts due under the
     note  if   any  payment  of  principal or interest is not made within seven
     days of its due date or if there is any other event of default

   o a  late  charge  of  five  percent on  any  payment that is not made within
     seven days of its due date

   o an  increase  of  four   percent  in the  applicable interest rate upon any
     default

   o a  restriction  on  voluntary  prepayment,  which  is not permitted without
     penalty until the final three months of the note

   o after  two  years   we  may  cause  hotels  to be released as collateral by
     following certain procedures described below

     The  sum  of the fixed monthly installments for the 11 long-term promissory
notes  equals $419,598. At maturity on October 1, 2010, the balloon payments for
the notes will equal a total of $42,778,255.

                                      8
Revenue  from  the  hotels  will  be  used  to  make payments due under the
long-term  promissory notes. This revenue will include lease payments made to us
by   Apple   Suites  Management,  Inc.  (or  a  subsidiary)  under  hotel  lease
agreements.  There can be no assurance that hotel revenue will be sufficient for
this purpose.

     Additional   payments   will  apply  if  a  long-term  promissory  note  is
accelerated  upon  an event of default. The sum of these payments will be higher
if  the acceleration occurs in the first two years and will equal at least 5% of
the outstanding principal balance if acceleration occurs in the first year.

     Each long-term promissory note contains substantial  limitations on release
and  substitution  of  collateral.  The hotel that serves as collateral  under a
long-term  promissory  note cannot be released during the first two years of the
note.  After  that  date  a  release  of  the  collateral  can  be  obtained  by
substituting as collateral direct, non-callable obligations of the United States
that are  structured  to pay a series of  amounts  which  match,  as  closely as
possible, the remainder of the installments required under the promissory note.

     This mechanism provides us a limited  opportunity to cause properties to be
released from the liens of the mortgages. This could be helpful, for example, if
we receive an attractive offer from a prospective  purchaser of our hotels. This
requirement as to the purchase of substitute  collateral may make this mechanism
economically less attractive when compared with an unrestricted  right to prepay
the  obligation,  and its  usefulness  to us will depend  upon  future  economic
factors and opportunities.

     The  11  hotels that serve as collateral for the long-term promissory notes
are  subject  to  cross-default  and  cross-collateral  provisions under various
deeds  of trust and security instruments, which are among the material contracts
described  in  another  section  below.  These hotels have been divided into two
groups for purposes of the cross-collateral and cross-default provisions.

     In  general,  any  default  under  one  promissory  note  will constitute a
default  under  all other promissory notes in the same group and will enable the
lender  to  exercise  its  rights  against  all  of  the  hotels  that  serve as
collateral  for  that  group.  The  two  groups  themselves,  however,  are  not
connected  by  cross-default  or cross-collateral provisions. One group consists
of  the  six  hotels  owned  by  two  of  our  subsidiaries, and the other group
consists of five hotels owned by a single subsidiary, as indicated below:
GROUP I                           GROUP II
                          --------------------------------------   --------------------------
SUBSIDIARIES INVOLVED     Apple Suites SPE I, Inc.                 Apple Suites SPE II, Inc.
                          Apple Suites REIT Limited Partnership

HOTELS IN GROUP           Atlanta - Galleria/Cumberland            Atlanta - Peachtree
                          Jackson-Ridgeland                        Baltimore - BWI Airport
                          Salt Lake City - Midvale                 Clearwater
                          Dallas - Addison                         Detroit - Warren
                          Dallas - Irving/Las Colinas              Richmond - West End
                          North Dallas - Plano
We  are required, as the parent company of these subsidiaries, to indemnify
the  lender  against  defaults  under  the  long-term  promissory  notes  and to
guaranty  the  collection  of  all  amounts  due  thereunder. These requirements
appear  in  an  Indemnity  and  Guaranty  Agreement, which is among the material
contracts described in another section below.

SHORT-TERM REFINANCING NOTE

     The  $10  million  portion  of the refinancing is evidenced by a short-term
promissory  note  made  payable by us to First Union National Bank. The maturity
date for this promissory note is March 8, 2001.

     Interest  will  be  based  on  the  lender's "prime rate" unless we make an
election  to convert to a LIBOR rate (which is determined by banks in the London
interbank  market).  Any  such election would remain in effect for the period we
specify in a written conversion notice, but

                                      9
cannot  exceed  three  months.  We  may  continue  a LIBOR election, if made, by
delivering  a  written continuation notice to the lender at least three business
days  before  the election expires. The following table summarizes the available
interest terms:
NO LIBOR CONVERSION                WITH LIBOR CONVERSION
                             -----------------------------------   -------------------------------
INTEREST RATE                Lender's prime rate, increased by     LIBOR rate, increased by
                             0.25% during the first 90 days        2% during the first 90 days
                             and 1% thereafter                     and 3.5% thereafter

INTEREST PAYMENTS            Monthly                               At the end of interest period
                                                                   specified in the conversion or
                                                                   continuation notice

INTEREST RATE ON             4% above the applicable interest      4% above the applicable
OVERDUE AMOUNTS              rate (see above)                      interest rate (see above)
As of the date of this Report, we have not elected a LIBOR conversion,  but
we may  consider  doing so in the future,  based on our review of  economic  and
market conditions.

     We  are required to make principal payments consisting of 75% of any equity
proceeds  we  receive  from  our ongoing "best efforts" offering. Such principal
payments  are  considered  mandatory prepayments and are due within one business
day  after  we  receive the equity proceeds. Any prepayment of principal must be
accompanied  by  payment  of  accrued  interest. Revenue from the hotels will be
used  to  pay  interest  under  the  promissory notes. This revenue will include
lease  payments  made  to  us by Apple Suites Management, Inc. (or a subsidiary)
under  hotel  lease  agreements.  There  can  be  no  assurance  that the equity
proceeds  or  the  hotel  revenues  will  be  sufficient for these purposes. Our
obligation  to  use  75%  of  our  equity proceeds from the ongoing offering for
repayment  of the $10 million loan takes precedence over our obligation to apply
our  "net  equity  proceeds" to repayment of the remaining obligations to Promus
Hotels, Inc., which are described in another section below.

     We  may  make  voluntary  prepayments of the short-term refinancing note in
whole  or in part at any time. If a LIBOR conversion is in effect, we will incur
a  prepayment  fee,  regardless  of  whether  the  prepayment  is  voluntary  or
mandatory.  The  prepayment  fee  is  based  on  a  formula  that  measures  the
difference  between  the  interest that would have accrued in the absence of the
prepayment and certain bids in the London interbank market.

     We  pledged  100%  of our ownership interests in our direct subsidiaries as
security  for  the  short-term  promissory note. These pledges consist of common
shares  in  our  four corporate subsidiaries and our sole beneficial interest in
Apple Suites Pennsylvania Business Trust.

                                      10
EXISTING FINANCING FOR HOTELS

     Our  existing  financing remains in place for two hotels, which are located
in  Pennsylvania  and Colorado and which were purchased from Promus Hotels, Inc.
in  2000.  This financing is being provided by Promus Hotels, Inc., based on 75%
of  the  purchase  price  for  the  hotels,  and  is  evidenced by the following
promissory notes:
ORIGINAL
     MONTH OF          PRINCIPAL      ANNUAL RATE        DATE OF
 PROMISSORY NOTE        AMOUNT        OF INTEREST        MATURITY
-----------------   --------------   -------------   ---------------
May 2000           $11,616,750           8.5%      April 28, 2001
  June 2000          $11,163,750           8.5%      April 28, 2001
                     -----------
          TOTAL      $22,780,500
                     ===========
These  promissory  notes  are  substantially similar, and each provides for
the following:

     o monthly interest payments, based on the actual number of days per month

     o our delivery of  monthly  notices to specify the net equity proceeds from
       our offering, which will be the intended source of principal payments, as
       explained below

     o our  right  to  prepay the notes, in whole or in part, without premium or
       penalty

     o a late payment premium of four percent for any payment not made within 10
       days of its due date

     Revenue  from  the hotels will be used to pay interest under the promissory
notes.  This  revenue  will  include  lease  payments made to us by Apple Suites
Management,  Inc.  (or  a  subsidiary) under the separate hotel lease agreements
for the two hotels.

     The  promissory  notes  contemplate that the "net equity proceeds" from our
offering  of common shares will be the source of our principal payments, subject
to  our obligation to First Union National Bank under the short-term refinancing
note,  as  discussed  above.  There  can  be  no  assurance  that the net equity
proceeds  will  be sufficient for this purpose. The phrase "net equity proceeds"
means  the  total  proceeds  from  our  offering of common shares, as reduced by
selling  commissions, a marketing expense allowance, closing costs, various fees
and  charges  (legal, accounting, and so forth), a working capital reserve and a
reserve for renovations, repairs and replacements of capital improvements.

                                      11
SUMMARY OF MATERIAL REFINANCING CONTRACTS

Security Documents

     In  connection with the $50 million long-term refinancing provided by First
Union  National  Bank, the lender placed a mortgage and other encumbrances on 11
of  our  hotels.  The  other  encumbrances  include  a  security interest in the
personal  property  at  the  hotels  and  assignments  of hotel rents, revenues,
contracts  and  permits,  all  in  favor  of  the lender. These encumbrances are
created  by  multiple agreements and instruments, dated as of September 8, 2000,
which  will  be referred to as "security documents" for simplicity. The security
documents  are  related  to  the long-term promissory notes, which are discussed
above.

     The  security  documents  impose  a  number of requirements on three of our
subsidiaries,  as  the  owners  of the hotels, including obligations to maintain
adequate  insurance  and  the  hotel franchises. The security documents prohibit
any  further  encumbrances  or  any  further assignments of rents or leases with
respect to the hotels.

     Upon  any  default that occurs under a long-term promissory note or related
security  document, various remedies are available to the lender with respect to
the  hotels  in  the same cross-default and cross-collateral group, as discussed
above.  Those  remedies  include, for example (1) declaring the entire principal
balance  under  the promissory notes in the group, together with all accrued and
unpaid  interest,  to  be  due and payable immediately; (2) taking possession of
the  secured  property,  including  the  hotels in the group; and (3) collecting
rents  and  revenues,  or  foreclosing  on  the  hotels in the group, to satisfy
unpaid  amounts  under  the promissory notes. Our subsidiaries, as the makers of
the  long-term  promissory notes, would be required to pay any costs that may be
incurred in exercising such remedies.

     Furthermore,  upon  a  payment  default  by one of our subsidiaries under a
long-term  promissory  note,  the  lender  would  be  entitled  to  seek payment
directly  from  us  as the indemnitor under corresponding Indemnity and Guaranty
Agreements dated as of September 8, 2000.

Credit and Pledge Agreements

     In  connection  with  the  $10  million  short-term refinancing provided by
First  Union  National  Bank,  we  executed  a  credit  agreement  and  a pledge
agreement,  both  dated  as  of  September  8,  2000. The primary terms of these
documents are discussed above with respect to the short-term financing note.

Other Agreements

     With  respect to each hotel that serves as  collateral  for the $50 million
refinancing  provided by First Union National Bank, the lender received separate
and  substantially  similar  environmental  indemnity  agreements,  dated  as of
September  8,  2000  from us and the  subsidiary  that  owns the  hotel,  as the
indemnitors.  In  general,  these  agreements  provide  that the hotels  will be
operated in compliance  with all  environmental  laws,  and that the lender must
receive immediate notice of any non-compliance.  These  environmental  indemnity
agreements will survive full payment of the long-term promissory notes.

     In  addition  to  the  new  hotel  lease  agreements  for  the eight hotels
transferred  to our new subsidiaries, as discussed in another section above, the
lender  received  subordination  and attornment agreements dated as of September
8,  2000.  These  agreements provide that the lessee of the hotels, Apple Suites
Management,  Inc. or a subsidiary, will recognize the lender as the lessor under
the  hotel  lease  agreements in the event that the lender exercises its default
rights under the security documents to foreclose on the hotels.

                                      12
Item 7. a.

                              APPLE SUITES, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2000 (UNAUDITED)

     The  following  unaudited Pro Forma Condensed Consolidated Balance Sheet of
Apple  Suites,  Inc.  (the  "Company")  is  presented  as  if  proceeds from the
refinancing  loans  had  been  used  as of June 30, 2000 to pay the 4 promissory
notes  executed  by  the Company in 1999. Such information is based in part upon
the  consolidated  balance  sheet  of  the Company. In management's opinion, all
adjustments  necessary  to  reflect  the  effect of these transactions have been
made.

     The  following  unaudited Pro Forma Condensed Consolidated Balance Sheet is
not  necessarily  indicative  of  what  the actual financial position would have
been  assuming  such  transactions  had  been completed as of June 30, 2000, nor
does it purport to represent the future financial position of the Company.
HISTORICAL
                                                           BALANCE             PRO FORMA              TOTAL
                                                            SHEET             ADJUSTMENTS           PRO FORMA
                                                       ---------------   ---------------------   ---------------
ASSETS
Investment in hotel properties .....................    $125,100,974                              $125,100,974
Cash and cash equivalents ..........................       3,445,125        $    3,430,500 (A)
                                                                                 1,245,000 (B)
                                                                                  (355,722)(C)
                                                                                (1,327,833)(D)       6,437,070
Restricted cash ....................................         544,469                    --             544,469
Rent receivable from Apple Suites
 Management, Inc. ..................................       1,996,479                    --           1,996,479
Notes and other receivable from Apple Suites
 Management, Inc. ..................................       1,771,124                    --           1,771,124
Capital improvement reserve ........................         653,149                    --             653,149
Prepaid expenses ...................................         194,185               355,722 (C)         549,907
Other assets .......................................       1,556,769            (1,245,000)(B)       1,639,602
                                                        ------------        --------------        ------------
                                                                                 1,327,833 (D)
Total Assets .......................................    $135,262,274        $    3,430,500        $138,692,774
                                                        ============        ==============        ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Notes payable ......................................    $ 91,350,000           (56,569,500)(A)
                                                                                50,000,000 (A)
                                                                                10,000,000 (A)    $ 94,780,500
Accounts payable ...................................         355,750                    --             355,750
Accounts payable-affiliate .........................         111,639                    --             111,639
Distributions payable ..............................         576,173                    --             576,173
Accrued expenses ...................................       1,185,836                    --           1,185,836
                                                        ------------        --------------        ------------
Total Liabilities ..................................      93,579,398             3,430,500          97,009,898
Shareholders' equity
Common stock, no par value, authorized
 200,000,000 shares; issued and outstanding
 4,945,552 shares ..................................      41,885,295                    --          41,885,295
Class B convertible stock, no par value,
 authorized 240,000 shares; issued and
 outstanding 240,000 shares ........................          24,000                    --              24,000
Distributions greater than new income ..............        (226,419)                   --            (226,419)
                                                        ------------        --------------        ------------
Total Shareholders' Equity .........................      41,682,876                    --          41,682,876
                                                        ------------        --------------        ------------
Total Liabilities and Shareholders' Equity .........    $135,262,274        $    3,430,500        $138,692,774
                                                        ============        ==============        ============
13
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

(A) Proceeds  from  the refinancing loans in the aggregate amount of $60 million
    were  used  to  pay  4 promissory notes executed in 1999 in the total amount
    of  $56,569,500.  Of  the  total refinancing, $50 million is evidenced by 11
    promissory  notes  executed by a total of three subsidiaries of the Company.
    Each  such  note  bears  interest  at  the  annual rate of 9%, is payable in
    equal  and  consecutive  monthly  installments  and  has  a maturity date of
    October  1,  2010.  This  portion of the refinancing is secured by 11 hotels
    of  the  Company.  The  $10 million loan is evidenced by a single promissory
    note  executed  by the Company. This note bears interest at a rate described
    elsewhere  in  this  Supplement  and  has  a maturity date of March 8, 2001.
    This  portion  of  the  refinancing  is  secured  by the Company's ownership
    interests in all of its direct subsidiaries.

(B) Represents  refund  of  loan  deposit  paid  in  connection with a rate lock
    agreement with the lender.

(C) Represents  prepaid  interest  and  insurance escrow occurring in connection
with the refinancing transaction.

(D) Represents   deferred  financing  costs  incurred  in  connection  with  the
refinancing transaction.

                                       14
APPLE SUITES, INC.
           PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR  THE  YEAR  ENDED  DECEMBER  31, 1999 AND THE SIX MONTHS ENDED JUNE 30, 2000
                                  (UNAUDITED)

     The  following  unaudited  Pro  Forma  Condensed Consolidated Statements of
Operations  of  Apple  Suites,  Inc.  (the  "Company")  are  presented as if the
acquisitions  of  the  Homewood  Suites  hotels  from Promus Hotels, Inc. or its
affiliates   ("Promus")   (now   a  wholly-owned  subsidiary  of  Hilton  Hotels
Corporation),  and the recent refinancing in the aggregate amount of $60 million
(used  to  pay  4  promissory  notes  executed  by the Company in 1999), and the
leasing  of  the  hotels  to  Apple Suites Management, Inc. or a subsidiary (the
"Lessee"),  had  occurred  at  the  beginning  of  the periods presented for the
respective  periods  prior  to  acquisition  by  the  Company.  Such  pro  forma
information  is  based in part upon the Consolidated Statements of Operations of
the  Company,  the  Pro  Forma  Statements  of  Operations of the Lessee and the
historical  Statements  of  Operations  of  the acquired hotels. In management's
opinion,  all adjustments necessary to reflect the effects of these transactions
have been made.

     The  following  unaudited  Pro  Forma  Condensed Consolidated Statements of
Operations  for  the  periods  presented  are not necessarily indicative of what
actual  results  of  operations  of  the  Company  would have been assuming such
transactions  had  been  completed as of the beginning of the periods presented,
nor  does  it purport to represent the results of operations for future periods.
The  lease  agreements between the Company and the Lessee were based on economic
conditions  at  the  time  of  acquisition.  Application  of these agreements to
periods  prior  to  the  acquisition may not be meaningful. The most significant
assumption  which  may  not  be indicative of future operations is the amount of
financial leverage employed.

FOR THE YEAR ENDED DECEMBER 31, 1999 (UNAUDITED)
HISTORICAL
                                       STATEMENT OF
                                        OPERATIONS
                                      --------------
Revenue:
 Lease revenue ......................  $ 2,518,031
 Interest income and other
  revenue ...........................      169,086
Expenses:
 Taxes, insurance and other .........      426,592
 General and administrative .........      153,807
 Depreciation of real estate
  owned .............................      496,209
 Interest ...........................    1,245,044

 Rent expense .......................           --
                                       -----------
Total expenses ......................    2,321,652
                                       -----------
Net income ..........................  $   365,465
                                       ===========
Earnings per common share:
 Basic and Diluted ..................  $      0.14
                                       ===========
Basic weighted average common
 shares outstanding .................    2,648,196
                                       ===========
Diluted weighted common shares
 outstanding ........................    2,650,396
                                       ===========
PRO FORMA ADJUSTMENTS
                                      ---------------------------------------------------------------------------------------
                                             HOMEWOOD              HOMEWOOD              HOMEWOOD              HOMEWOOD
                                              SUITES                SUITES                SUITES                SUITES
                                           ACQUISITION           ACQUISITION           ACQUISITION           ACQUISITION
                                              (A I)                 (A II)               (A III)                (A IV)
                                      --------------------- --------------------- --------------------- ---------------------
Revenue:
 Lease revenue ......................     $  4,162,371 (B)      $  5,480,272 (B)      $  1,035,841 (B)      $  3,487,608 (B)
 Interest income and other
  revenue ...........................               --                    --                    --                    --
Expenses:
 Taxes, insurance and other .........          822,599 (C)           647,225 (C)            93,884 (C)           444,161 (C)
 General and administrative .........          493,985 (D)           547,542 (D)            96,388 (D)           302,981 (D)
 Depreciation of real estate
  owned .............................          656,623 (E)           821,580 (E)           140,664 (E)           688,654 (E)
 Interest ...........................               --                    --                    --             1,936,343 (F)

 Rent expense .......................               --                    --                    --               100,000 (H)
                                          ------------          ------------          ------------          ------------
Total expenses ......................        1,973,207             2,016,347               330,936             3,472,139
                                          ------------          ------------          ------------          ------------
Net income ..........................        2,189,164             3,463,925               704,905                15,469
                                          ============          ============          ============          ============
Earnings per common share:
 Basic and Diluted ..................
Basic weighted average common
 shares outstanding .................               -- (G)           937,271 (G)           331,053 (G)           916,311 (G)
Diluted weighted common shares
 outstanding ........................               -- (G)           937,271 (G)           331,053 (G)           916,311 (G)
PRO FORMA ADJUSTMENTS
                                      ---------------------
                                                                  TOTAL
                                                                PRO FORMA
                                                            ----------------
Revenue:
 Lease revenue ......................               --        $ 16,684,123
 Interest income and other
  revenue ...........................               --             169,086
Expenses:
 Taxes, insurance and other .........               --           2,434,461
 General and administrative .........               --           1,594,703
 Depreciation of real estate
  owned .............................               --           2,803,730
 Interest ...........................       (1,245,044)(I)       7,221,202
                                             5,069,576 (J)
                                               215,283 (K)
 Rent expense .......................               --             100,000
                                            ----------        ------------
Total expenses ......................        4,039,815          14,154,096
                                            ----------        ------------
Net income ..........................       (4,039,815)          2,699,113
                                            ==========        ============
Earnings per common share:
 Basic and Diluted ..................                         $       0.56
                                                              ============
Basic weighted average common
 shares outstanding .................                            4,832,831
                                                              ============
Diluted weighted common shares
 outstanding ........................               --           4,835,031
                                                              ============
15
FOR THE SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)
PRO FORMA ADJUSTMENTS
                                                            ---------------------------------------------
                                                                   HOMEWOOD
                                               HISTORICAL           SUITES
                                              STATEMENT OF       ACQUISITION                                   TOTAL
                                               OPERATIONS           (A IV)                                   PRO FORMA
                                             -------------- ---------------------                         ---------------
Revenue:
 Lease revenue .............................  $ 7,242,731       $  1,648,774 (B)                 --         $ 8,891,505
 Interest income and other revenue .........      146,689                                        --             146,689
Expenses:
 Taxes, insurance and other ................    1,404,441            237,170 (C)                 --           1,641,611
 General and administrative ................      510,236             38,727 (D)                 --             548,963
 Depreciation of real estate owned .........    1,219,246            344,327 (E)                 --           1,563,573
 Interest ..................................    3,059,738            968,171 (F)         (3,059,738) (I)      3,651,851
                                                                                         2,534,788  (J)
                                                                                           148,892  (K)
 Rent expense ..............................           --             50,000 (H)                 --              50,000
                                              -----------       ------------             ----------         -----------
Total expenses .............................    6,193,661          1,638,395               (376,058)          7,455,998
Net income .................................  $ 1,195,759             10,379                376,058           1,582,196
                                              ===========       ============             ==========         ===========
Earnings per common share:
 Basic and Diluted .........................  $      0.31                                                   $      0.33
                                              ===========                                                   ===========
Basic weighted average common shares
 outstanding ...............................    3,916,520            916,311 (G)                 -- (G)       4,832,831
                                              ===========       ============                                ===========
Diluted weighted average common shares
 outstanding ...............................    3,918,720            916,311 (G)                 -- (G)       4,835,031
                                              ===========       ============                                ===========
16
NOTES  TO  PRO  FORMA  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR APPLE
   SUITES, INC.

(A) Represents  results  of  operations  for  the hotels acquired on a pro forma
    basis  as  if  the  hotels were owned by the Company at the beginning of the
    periods  presented  for  the  respective periods prior to acquisition by the
    Company. See below.
DATE COMMENCED         DATE
     PROPERTY                             OPERATIONS         ACQUIRED
     --------------------------------- ---------------- ------------------
I    Homewood Suites-Dallas, TX             1990        September 1, 1999
I    Homewood Suites-Las Colinas, TX        1990        September 1, 1999
I    Homewood Suites-Plano, TX              1997        September 1, 1999
I    Homewood Suites-Richmond. VA         May 1998      September 1, 1999
I    Homewood Suites-Atlanta, GA            1990         October 1, 1999
---------------------------------------------------------------------------

II   Homewood Suites-Clearwater, FL     February 1998   November 24, 1999
II   Homewood Suites-Salt Lake, UT          1996        November 24, 1999
II   Homewood Suites-Atlanta, GA            1990        November 24, 1999
II   Homewood Suites-Detroit, MI            1990        November 24, 1999
II   Homewood Suites-Baltimore, MD       March 1998     November 24, 1999
---------------------------------------------------------------------------

III  Homewood Suites-Jackson, MS        February 1997   December 22, 1999
---------------------------------------------------------------------------

IV   Homewood Suites-Malvern, PA        January 1998       May 8, 2000
IV   Homewood Suites-Boulder, CO        January 1991      June 30, 2000
(B) Represents  lease payment from the Lessee to the Company calculated on a pro
    forma  basis  by  applying  the  rent  provisions  in the master hotel lease
    agreement  to  the historical room revenue of the hotels as if the beginning
    of  the  period  was  the beginning of the lease year. The base rent and the
    percentage  rent  will  be  calculated  and  paid  based on the terms of the
    master hotel lease agreements.

(C) Represents  historical real estate and personal property taxes and insurance
    which  will  be  paid  by  the  Company  pursuant  to the master hotel lease
    agreements.  Such  amounts are the historical amounts paid by the respective
    hotels.

(D) Represents  the  advisory  fee of 0.25% of accumulated capital contributions
    under  the  "best  efforts" offering for the period of time not owned by the
    Company  (for  the  year  ended  December  31, 1999 and the six months ended
    June  30,  2000),  plus estimated legal and accounting fees, employee costs,
    salaries  and  other  costs  to  operate  as  a public company (for the year
    ended December 31, 1999).

(E) Represents  the  depreciation  on  the hotels acquired based on the purchase
    price,  excluding  amounts  allocated  to land, of $37,450,320 for the first
    acquisition   group,   $34,954,481   for   the   second  acquisition  group,
    $5,485,886  for  the third acquisition group, and $30,500,611 for the fourth
    acquisition  group  for  the  period  of  time not owned by the Company. The
    weighted   average  life  of  the  depreciable  assets  was  39  years.  The
    estimated   useful   lives  are  based  on  management's  knowledge  of  the
    properties and the hotel industry in general.

(F) Represents  the  interest  expense for the hotel acquisitions for the period
    in  which  the  hotels  were  not  owned.  Interest  was  computed using the
    interest  rate  of  8.5%  on  mortgage  debt  of  $22,780,500 for the fourth
    acquisition that was incurred at acquisition.

(G) Represents  additional  common shares, assuming the properties were acquired
    at  the  beginning  of  the periods presented with the net proceeds from the
    ongoing  "best  efforts"  offering of $9 per share (net $8.06 per share) for
    the  first  $15,000,000  and  $10  per  share  (net $8.95 per share) for the
    remainder.

(H) Represents  rent  expense  on  the ground lease at the Malvern, Pennsylvania
    hotel. The Company accounts for the ground lease as an operating lease.

                                      17
(I) Represents  the  elimination  of  the  historical interest that was replaced
    with the $60 million refinancing discussed in note J below.

(J) Represents  the  interest  expense  on  the  Company's $50 million long-term
    refinancing  at  an  interest  rate  of  9% and a portion of the $10 million
    short-term   refinancing   ($6,569,500)   at   an  interest  rate  described
    elsewhere in this Supplement for the term of the financing (6 months).

(K) Represents  amortization  of deferred financing costs incurred in connection
    with the refinancing transaction.

                                      18
APPLE SUITES MANAGEMENT, INC.
           PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR  THE  YEAR  ENDED  DECEMBER  31, 1999 AND THE SIX MONTHS ENDED JUNE 30, 2000
                                  (UNAUDITED)

     The  following  unaudited  Pro  Forma  Condensed Consolidated Statements of
Operations  of  Apple Suites Management, Inc. (the "Lessee") are presented as if
the  hotels  purchased  or  to  be  purchased  from  Promus  Hotels, Inc. or its
affiliates  ("Promus"),  which is now a wholly-owned subsidiary of Hilton Hotels
Corporation,  had  been  leased from Apple Suites, Inc. (the "Company") pursuant
to  the  master  hotel  lease agreements from the beginning of periods presented
for  the  respective  periods  prior to acquisition by the Company. Further, the
results  of  operations  reflect  the management agreement and license agreement
entered  into  between  Promus  and  the  Lessee  or an affiliate to operate the
acquired  hotels.  The master hotel lease agreements between the Company and the
Lessee   were   based  on  economic  conditions  at  the  time  of  acquisition.
Application  of  these agreements to periods prior to the acquisition may not be
meaningful.  Such  pro  forma information is based in part upon the Consolidated
Statements  of  Operations  of the Lessee and should be read in conjunction with
such  financial  statements.  In management's opinion, all adjustments necessary
to reflect the effects of these transactions have been made.

     The  following  unaudited  Pro  Forma  Condensed Consolidated Statements of
Operations  are  not  necessarily  indicative  of  what  the  actual  results of
operations  of  the  Lessee  would have been assuming such transactions had been
completed  as  of the beginning of the periods presented, nor do they purport to
represent the results of operations for future periods.

                                      19
FOR THE YEAR ENDED DECEMBER 31, 1999 (UNAUDITED)
PRO FORMA ADJUSTMENTS
                                                  --------------------------------------------------------------------------
                                                     HOMEWOOD       HOMEWOOD       HOMEWOOD      HOMEWOOD
                                     HISTORICAL       SUITES         SUITES         SUITES        SUITES
                                    STATEMENT OF   ACQUISITIONS   ACQUISITIONS   ACQUISITION   ACQUISITION
                                     OPERATIONS        (A I)         (A II)        (A III)        (A IV)
Revenues:
 Suite revenue ...................   $5,335,925     $9,818,797    $12,082,374    $2,230,952    $7,419,101               --
 Other income ....................      335,150        560,096        709,240       168,438       398,812               --
Expenses:
 Operating expenses ..............    1,656,540      3,794,204      4,870,096       954,102     2,491,119               --
 General and administrative ......      494,377        250,317        300,399        77,381       105,719     $   (131,000)
                                                                                                                    50,000
 Advertising and promotion .......      472,787        438,985        580,564       112,902       328,070       (1,262,049)
                                                                                                                 1,262,049
 Utilities .......................      199,907        354,113        551,359        75,639       270,079               --
 Taxes and insurance .............           --        822,599        647,225        93,884       444,161       (2,007,869)
 Depreciation expense ............           --      1,783,021      2,217,128       426,986       714,411       (5,141,546)
 Franchise fees ..................      213,437        392,757        483,295        89,238       296,764       (1,262,049)
                                                                                                                 1,262,049
 Management fees .................      226,136        311,275        383,599        71,982       234,000       (1,000,856)
                                                                                                                 1,467,512
 Rent expense-Apple Suites,
  Inc. ...........................    2,518,031             --             --            --            --       14,166,093
 Other ...........................       30,964             --             --            --       100,000         (100,000)
                                     ----------     ----------    -----------    ----------    ----------     ------------
 Total expenses ..................    5,812,179      8,147,271     10,033,665     1,902,114     4,984,323        7,302,334
 Income before income tax ........     (141,104)     2,231,622      2,757,949       497,276     2,833,590       (7,302,334)
 Income tax expense ..............           --             --             --            --            --          350,800
                                     ----------     ----------    -----------    ----------    ----------     ------------
 Net income (loss) ...............   $ (141,104)    $2,231,622    $ 2,757,949    $  497,276    $2,833,590     $ (7,653,134)
                                     ==========     ==========    ===========    ==========    ==========     ============
TOTAL
                                                PRO FORMA
Revenues:
 Suite revenue ...................            $36,887,149
 Other income ....................              2,171,736
Expenses:
 Operating expenses ..............             13,766,061
 General and administrative ......  (B)
                                    (C)         1,147,193
 Advertising and promotion .......  (D)
                                    (E)         1,933,308
 Utilities .......................              1,451,097
 Taxes and insurance .............  (F)                --
 Depreciation expense ............  (G)                --
 Franchise fees ..................  (H)
                                    (I)         1,475,491
 Management fees .................  (J)
                                    (K)         1,693,648
 Rent expense-Apple Suites,
  Inc. ...........................  (L)        16,684,124
 Other ...........................  (M)            30,964
                                    --------  -----------
 Total expenses ..................             38,181,886
 Income before income tax ........                876,999
 Income tax expense ..............  (N)           350,800
                                    --------  -----------
 Net income (loss) ...............            $   526,199
                                              ===========
20
FOR THE SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)
PRO FORMA ADJUSTMENTS
                                                              -------------------------------------------
                                                                 HOMEWOOD
                                               HISTORICAL         SUITES
                                              STATEMENT OF     ACQUISITION                                       TOTAL
                                               OPERATIONS         (A IV)                                       PRO FORMA
                                             --------------   -------------                                 --------------
Revenues:
 Suite revenue ...........................    $16,162,186      $3,683,872                --                  $19,846,058
 Other income ............................        891,551         186,300                --                    1,077,851
Expenses:
 Operating expenses ......................      4,797,335       1,266,548                --                    6,063,883
 General and administrative ..............      1,409,598          66,574      $    (12,000)     (B)
                                                                                     25,000      (C)           1,489,172
 Advertising and promotion ...............      1,436,043         165,562          (147,354)     (D)
                                                                                    147,354      (E)           1,601,605
 Utilities ...............................        601,421         130,722                --                      732,143
 Taxes and insurance .....................             --         237,170          (237,170)     (F)                  --
 Franchise fees ..........................        645,065         147,354          (147,354)     (H)
                                                                                    147,354      (I)             792,419
 Management fees .........................        679,372         116,106          (116,106)     (J)
                                                                                    164,807      (K)             844,179
 Rent expense-Apple Suites, Inc. .........      7,242,731              --         1,648,774      (L)           8,891,505
 Interest expense ........................         45,587              --                --                       45,587
 Other ...................................        213,014          50,000           (50,000)     (M)             213,014
                                              -----------      ----------      ------------                  -----------
Total expenses ...........................     17,070,166       2,180,036         1,423,305                   20,673,507
Income before income tax .................        (16,429)      1,690,136        (1,423,305)                     250,402
Income tax expense .......................             --              --           100,161      (N)             100,161
                                              -----------      ----------      ------------                  -----------
Net income (loss) ........................    $   (16,429)     $1,690,136      $ (1,523,466)                 $   150,241
                                              ===========      ==========      ============                  ===========
21
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(A) Represents  results  of  operations  for  the  eleven  Homewood Suites hotel
    acquisitions  on  a  pro  forma  basis as if the hotels acquired were leased
    and  operated  by  the  Lessee at the beginning of the periods presented for
    the  respective  periods prior to acquisition by the Company, see below. The
    hotels acquired are as follows:
DATE COMMENCED       DATE
     PROPERTY                                OPERATIONS        ACQUIRED
--------------------------------------------------------------------------------

I    Homewood Suites-Dallas, TX               1990        September 1, 1999
I    Homewood Suites-Las Colinas, TX          1990        September 1, 1999
I    Homewood Suites-Plano, TX                1997        September 1, 1999
I    Homewood Suites-Richmond. VA           May 1998      September 1, 1999
I    Homewood Suites-Atlanta, GA              1990         October 1, 1999
--------------------------------------------------------------------------------

II   Homewood Suites-Clearwater, FL       February 1998   November 24, 1999
II   Homewood Suites-Salt Lake, UT            1996        November 24, 1999
II   Homewood Suites-Atlanta, GA              1990        November 24, 1999
II   Homewood Suites-Detroit, MI              1990        November 24, 1999
II   Homewood Suites-Baltimore, MD         March 1998     November 24, 1999
--------------------------------------------------------------------------------

III  Homewood Suites-Jackson, MS          February 1997   December 22, 1999
--------------------------------------------------------------------------------

IV   Homewood Suites-Malvern, PA        January 1998       May 8, 2000
IV   Homewood Suites-Boulder, CO        January 1991      June 30, 2000
(B) Represents  the  elimination  of  the historical accounting fee allocated to
    the hotels by the prior owner.

(C) Represents  the  addition  of the anticipated legal and accounting and other
    expenses to operate as a stand alone company.

(D) Represents  the  elimination  of  the  historical  advertising, training and
    reservation fee allocated to the hotels by the prior owner.

(E) Represents  the  addition  of the marketing fee to be incurred under the new
    license  agreements.  The  marketing fee is calculated based on the terms of
    the license agreements which is 4% of suite revenue.

(F) Represents  the  elimination  of the taxes and insurance. Under the terms of
    the  master  hotel  lease  agreements these expenses will be incurred by the
    Company   and,  accordingly,  are  reflected  in  the  Company's  Pro  Forma
    Condensed Consolidated Statement of Operations.

(G) Represents  the  elimination  of the depreciation expense. This expense will
    be  reflected  in  the  Company's Pro Forma Condensed Consolidated Statement
    of Operations.

(H) Represents  the elimination of the historical franchise fee allocated to the
    hotels by the prior owner.

(I) Represents  the  addition  of  franchise  fees to  be incurred under the new
    license  agreements.  The franchise fees  are  calculated based on the terms
    of the agreement, which is 4% of suite revenue.

(J) Represents  the elimination of the historical management fees allocated to
    the hotels by the prior owner.

(K) Represents  the  addition  of  the management fees  of 4% of suite and other
    revenue  and  the  accounting  fee  of  $1,000  per  hotel  per  month to be
    incurred under the new management agreements for the period presented.

(L) Represents  lease  payments  from the Lessee to the Company  calculated on a
    pro  forma  basis by applying the rent provisions in the master  hotel lease
    agreements  to  the   historical  room  revenue  of  the  hotels  as  if the
    beginning  of the  period was the beginning of the lease year. The base rent
    and  the  percentage  rent will be calculated and paid based on the terms of
    the master hotel lease agreements.

(M) Represents  the  elimination  of rent expense for the ground lease. The rent
    expense  related  to the ground lease will be reflected on the Company's Pro
    Forma Condensed Consolidated Statement of Operations.

(N) Represents  the  combined  state and federal income tax expense estimated on
    a combined rate of 40%.

                                       22
Item 7. b. Exhibits

4.1      Amended and  Restated  Hotel Lease  Agreement  dated as of November 24,
         1999  between  Apple  Suites SPE I, Inc.  as Lessor,  and Apple  Suites
         Management,  Inc.  as  Lessee,  with  respect to the hotel in Salt Lake
         City, Utah.(Incorporated by reference to Exhibit 4.52 to Post-Effective
         Amendment  No.  4  to  Form  S-11  Registration  Statement,   File  No.
         333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

4.2      Percentage Lease Subordination and Attornment Agreement dated September
         8, 2000, between and Apple Suites Management, Inc. as Lessee, and First
         Union   National  Bank  as  Lender  (with  respect  to  Exhibit  4.53).
         (Incorporated by reference to Exhibit 4.53 to Post-Effective  Amendment
         No. 4 to Form S-11 Registration Statement, File No. 333-77055, filed on
         September 20, 2000 by Apple Suites, Inc.)

4.3      Environmental  Indemnity  Agreement  dated September 8, 2000 from Apple
         Suites SPE I, Inc. and Apple Suites,  Inc. as Indemnitors,  in favor of
         First Union  National  Bank as Lender with respect to the hotel in Salt
         Lake  City,  Utah.  (Incorporated  by  reference  to  Exhibit  4.54  to
         Post-Effective  Amendment  No. 4 to Form S-11  Registration  Statement,
         File No. 333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

4.4      Schedule setting forth information on 7 substantially identical Amended
         and Restated  Hotel Lease  Agreements  (with respect to Exhibit  4.52).
         (Incorporated by reference to Exhibit 4.55 to Post-Effective  Amendment
         No. 4 to Form S-11 Registration Statement, File No. 333-77055, filed on
         September 20, 2000 by Apple Suites, Inc.)

4.5      Schedule  setting  forth  information  on  10  substantially  identical
         Percentage Lease Subordination and Attornment  Agreements (with respect
         to Exhibit  4.53) dated  September 8, 2000 with First  National Bank as
         Lender.  (Incorporated  by reference to Exhibit 4.56 to  Post-Effective
         Amendment  No.  4  to  Form  S-11  Registration  Statement,   File  No.
         333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

4.6      Schedule  setting for the  information  on 10  substantially  identical
         Environmental Indemnity Agreements (with respect to Exhibit 4.57) dated
         September  8, 2000 in favor of First  Union  National  Bank as  Lender.
         (Incorporated by reference to Exhibit 4.57 to Post-Effective  Amendment
         No. 4 to Form S-11 Registration Statement, File No. 333-77055, filed on
         September 20, 2000 by Apple Suites, Inc.)

10.1     Apple Suites SPE I, Inc.  Articles of  Incorporation.  (Incorporated by
         reference to Exhibit  10.93 to  Post-Effective  Amendment No. 4 to Form
         S-11 Registration Statement, File No. 333-77055, filed on September 20,
         2000 by Apple Suites, Inc.)

10.2     Apple Suites SPE I, Inc. Bylaws.  (Incorporated by reference to Exhibit
         10.94  to  Post-Effective  Amendment  No. 4 to Form  S-11  Registration
         Statement,  File No.  333-77055,  filed on September  20, 2000 by Apple
         Suites, Inc.)

10.3     Apple Suites SPE II, Inc. Articles of  Incorporation.  (Incorporated by
         reference to Exhibit  10.95 to  Post-Effective  Amendment No. 4 to Form
         S-11 Registration Statement, File No. 333-77055, filed on September 20,
         2000 by Apple Suites, Inc.)

10.4     Apple Suites SPE II, Inc. Bylaws. (Incorporated by reference to Exhibit
         10.96  to  Post-Effective  Amendment  No. 4 to Form  S-11  Registration
         Statement,  File No.  333-77055,  filed on September  20, 2000 by Apple
         Suites, Inc.)

10.5     Apple Suites General, Inc. Articles of Amendment and Restatement to the
         Articles of Incorporation.  (Incorporated by reference to Exhibit 10.97
         to Post-Effective  Amendment No. 4 to Form S-11 Registration Statement,
         File No. 333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.6     Apple Suites General,  Inc. Amended and Restated Bylaws.  (Incorporated
         by reference to Exhibit 10.98 to Post-Effective Amendment No. 4 to Form
         S-11 Registration Statement, File No. 333-77055, filed on September 20,
         2000 by Apple Suites, Inc.)

10.7     Apple Suites LP, Inc.  Articles of  Amendment  and  Restatement  to the
         Articles of Incorporation.  (Incorporated by reference to Exhibit 10.99
         to Post-Effective  Amendment No. 4 to Form S-11 Registration Statement,
         File No. 333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.8     Apple Suites LP, Inc.  Amended and Restated  Bylaws.  (Incorporated  by
         reference to Exhibit 10.100 to  Post-Effective  Amendment No. 4 to Form
         S-11 Registration Statement, File No. 333-77055, filed on September 20,
         2000 by Apple Suites, Inc.)

                                       23
10.9     Amended and Restated Limited Partnership Agreement of Apple Suites REIT
         Limited  Partnership.  (Incorporated  by reference to Exhibit 10.101 to
         Post-Effective  Amendment  No. 4 to Form S-11  Registration  Statement,
         File No. 333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.10    Promissory  Note dated  September  8, 2000 in the  principal  amount of
         $2,500,000  made  payable by Apple  Suites SPE I, Inc.  to First  Union
         National  Bank,  with  respect  to the hotel in Salt Lake  City,  Utah.
         (Incorporated   by  reference  to  Exhibit  10.102  to   Post-Effective
         Amendment  No.  4  to  Form  S-11  Registration  Statement,   File  No.
         333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.11    Indemnity  and  Guaranty  Agreement  dated  September  8, 2000 by Apple
         Suites,  Inc.,  Indemnitor,  in favor of First Union  National  Bank as
         Lender,  with respect to a $2,500,000  loan to Apple Suites SPE I, Inc.
         as  Borrower,  with  respect  to the  hotel in Salt  Lake  City,  Utah.
         (Incorporated   by  reference  to  Exhibit  10.103  to   Post-Effective
         Amendment  No.  4  to  Form  S-11  Registration  Statement,   File  No.
         333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.12    Deed  of  Trust,  Security  Agreement  and  UCC  Fixture  Filing  dated
         September  8, 2000,  from Apple Suites SPE I, Inc.,  Grantor,  to Metro
         National  Title  Company,  as Trustee  for First Union  National  Bank,
         Beneficiary  with  respect  to the  hotel  in  Salt  Lake  City,  Utah.
         (Incorporated   by  reference  to  Exhibit  10.104  to   Post-Effective
         Amendment  No.  4  to  Form  S-11  Registration  Statement,   File  No.
         333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.13    Assignment of Contracts and Permits dated  September 8, 2000 from Apple
         Suites SPE I, Inc. as Assignor to First Union National Bank as Assignee
         with  respect to the hotel in Salt Lake City,  Utah.  (Incorporated  by
         reference to Exhibit 10.105 to  Post-Effective  Amendment No. 4 to Form
         S-11 Registration Statement, File No. 333-77055, filed on September 20,
         2000 by Apple Suites, Inc.)

10.14    Assignment  of Leases,  Rents and Profits  dated  September  8, 2000 by
         Apple  Suites SPE I, Inc. as Assignee in favor of First Union  National
         Bank as  Assignee  with  respect to the hotel in Salt Lake City,  Utah.
         (Incorporated   by  reference  to  Exhibit  10.106  to   Post-Effective
         Amendment  No.  4  to  Form  S-11  Registration  Statement,   File  No.
         333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.15    Security Agreement dated September 8, 2000 by Apple Suites SPE I, Inc.,
         Debtor, in favor of First Union National Bank, Secured Party, regarding
         a $2,500,000  loan with  respect to the hotel in Salt Lake City,  Utah.
         (Incorporated   by  reference  to  Exhibit  10.107  to   Post-Effective
         Amendment  No.  4  to  Form  S-11  Registration  Statement,   File  No.
         333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.16    Credit Agreement dated September 8, 2000 between Apple Suites, Inc. and
         First Union  National  Bank as Lender.  (Incorporated  by  reference to
         Exhibit  10.108  to  Post-Effective   Amendment  No.  4  to  Form  S-11
         Registration Statement, File No. 333-77055, filed on September 20, 2000
         by Apple Suites, Inc.)

10.17    Promissory  Note dated  September  8, 2000 in the  principal  amount of
         $10,000,000  made payable by Apple  Suites,  Inc. to the order of First
         Union  National Bank.  (Incorporated  by reference to Exhibit 10.109 to
         Post-Effective  Amendment  No. 4 to Form S-11  Registration  Statement,
         File No. 333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.18    Pledge Agreement dated September 8, 2000 between Apple Suites,  Inc. as
         Pledgor and First Union  National  Bank as  Pledgee.  (Incorporated  by
         reference to Exhibit 10.110 to  Post-Effective  Amendment No. 4 to Form
         S-11 Registration Statement, File No. 333-77055, filed on September 20,
         2000 by Apple Suites, Inc.)

10.19    Schedule  setting  forth  information  on  10  substantially  identical
         promissory  notes (with respect  to Exhibit  10.10) dated  September 8,
         2000 in various  principal  amounts  made payable to the order of First
         Union  National Bank.  (Incorporated  by reference to Exhibit 10.111 to
         Post-Effective  Amendment  No. 4 to Form S-11  Registration  Statement,
         File No. 333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.20    Schedule  setting  forth  information  on  10  substantially  identical
         Indemnity  and  Guaranty  Agreements  (with  respect to Exhibit  10.11)
         dated September 8, 2000 by Apple Suites, Inc. as Indemnitor in favor of
         First Union  National  Bank as Lender.  (Incorporated  by  reference to
         Exhibit  10.112  to  Post-Effective   Amendment  No.  4  to  Form  S-11
         Registration Statement, File No. 333-77055, filed on September 20, 2000
         by Apple Suites, Inc.)

10.21    Schedule setting forth information on 10 substantially  identical Deeds

                                       24
of Trust (with respect to Exhibit  10.12) dated September 8, 2000 with
         First Union National Bank as Beneficiary. (Incorporated by reference to
         Exhibit  10.113  to  Post-Effective   Amendment  No.  4  to  Form  S-11
         Registration Statement, File No. 333-77055, filed on September 20, 2000
         by Apple Suites, Inc.)

10.22    Schedule  setting  forth  information  on  10  substantially  identical
         Assignments  of Contracts and Permits (with  respect to Exhibit  10.13)
         dated  September  8, 2000 to First  Union  National  Bank as  Assignee.
         (Incorporated   by  reference  to  Exhibit  10.114  to   Post-Effective
         Amendment  No.  4  to  Form  S-11  Registration  Statement,   File  No.
         333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.23    Schedule  setting  forth  information  on  10  substantially  identical
         Assignments  of  Leases,  Rents and  Profits  (with  respect to Exhibit
         10.14)  dated  September  8,  2000  to  First  Union  National  Bank as
         Assignee.   (Incorporated   by   reference   to   Exhibit   10.115   to
         Post-Effective  Amendment  No. 4 to Form S-11  Registration  Statement,
         File No. 333-77055, filed on September 20, 2000 by Apple Suites, Inc.)

10.24    Schedule  setting  forth  information  on  10  substantially  identical
         Security Agreements (with respect  to Exhibit 10.15) dated September 8,
         2000 in favor of First Union National Bank.  (Incorporated by reference
         to  Exhibit  10.116  to  Post-Effective  Amendment  No. 4 to Form  S-11
         Registration Statement, File No. 333-77055, filed on September 20, 2000
         by Apple Suites, Inc.)

                                       25
SIGNATURES
                                   ----------

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

                                                     Apple Suites, Inc.

Date: September 25, 2000                     By: /s/ Glade M. Knight
                                               ------------------------------
                                                Glade M. Knight,
                                                Chief Executive Officer of
                                                Apple Suites, Inc.