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

                                  UNITED STATES
                       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): July 31, 2006

                         GALAXY NUTRITIONAL FOODS, INC.
             (Exact Name of Registrant as Specified in its Charter)

            Delaware                      1-15345                 25-1391475
--------------------------------  ------------------------   -------------------
        (State or other           (Commission File Number)      (IRS Employer
juristidiction of incorporation)                             Identification No.)

                                2441 Viscount Row
                             Orlando, Florida 32809
               ---------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

                                 (407) 855-5500
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

|_|   Written  communications  pursuant to Rule 425 under the Securities Act (17
      CFR 230.425)

|_|   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)

|_|   Pre-commencement  communications  pursuant  to  Rule  14d-2(b)  under  the
      Exchange Act (17 CFR 240.14d-2(b))

|_|   Pre-commencement  communications  pursuant  to  Rule  13e-4(c)  under  the
      Exchange Act (17 CFR 240.13e-4(c))

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

<PAGE>

Section 1. Registrant's Business and Operations

Item 1.02 Termination of a Material Definitive Agreement.

After  Galaxy   Nutritional   Foods,   Inc.  (the   "Company")   outsourced  its
manufacturing and distribution functions in December 2005, the Company sought to
sublease or terminate its operating lease on its unused distribution  facilities
in Orlando,  Florida.  Effective July 31, 2006, the Company entered into a lease
termination agreement with its landlord,  CLP Industrial  Properties,  regarding
its unused leased distribution  facilities whereby the landlord will release the
Company  from  $1,068,869  in future  payment  obligations  from  August 1, 2006
through  July 31,  2009  under  the terms of its  current  operating  lease,  in
exchange for a termination fee of $228,859 payable as follows: $128,859 upon the
effective  date,  followed  by  payments  of  $75,000  and  $25,000  thirty  and
forty-five days thereafter, respectively.

Item 9.01   Financial Statements and Exhibits

10.32       Termination Agreement dated July 31, 2006 between Galaxy Nutritional
            Foods, Inc. and CLP Industrial Properties (filed herewith).

99.1        Press  Release  regarding the  termination  issued by the Company on
            August 3, 2006 (filed herewith).


                                       1
<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.

Dated: August 3, 2006                       Galaxy Nutritional Foods, Inc.


                                        By: /s/ Salvatore J. Furnari
                                            ------------------------------------
                                            Salvatore J. Furnari
                                            Chief Financial Officer


                                       2
{"company-data": {"conformed-name": "GALAXY NUTRITIONAL FOODS INC", "cik": "0000819527", "assigned-sic": "2020", "irs-number": "251391475", "state-of-incorporation": "DE", "fiscal-year-end": "0331"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-15345", "film-number": "061001209"}, "business-address": {"street1": "2441 VISCOUNT ROW", "city": "ORLANDO", "state": "FL", "zip": "32809", "phone": "4078555500"}, "mail-address": {"street1": "2441 VISCOUNT ROW", "city": "ORLANDO", "state": "FL", "zip": "32809"}, "former-company": [{"former-conformed-name": "GALAXY FOODS CO", "date-changed": "19920703"}, {"former-conformed-name": "GALAXY CHEESE CO", "date-changed": "19920302"}]}
--------------------------------------------------------------------------------

                                  UNITED STATES
                       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): July 31, 2006

                         GALAXY NUTRITIONAL FOODS, INC.
             (Exact Name of Registrant as Specified in its Charter)

            Delaware                      1-15345                 25-1391475
--------------------------------  ------------------------   -------------------
        (State or other           (Commission File Number)      (IRS Employer
juristidiction of incorporation)                             Identification No.)

                                2441 Viscount Row
                             Orlando, Florida 32809
               ---------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

                                 (407) 855-5500
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

|_|   Written  communications  pursuant to Rule 425 under the Securities Act (17
      CFR 230.425)

|_|   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)

|_|   Pre-commencement  communications  pursuant  to  Rule  14d-2(b)  under  the
      Exchange Act (17 CFR 240.14d-2(b))

|_|   Pre-commencement  communications  pursuant  to  Rule  13e-4(c)  under  the
      Exchange Act (17 CFR 240.13e-4(c))

--------------------------------------------------------------------------------
Section 1. Registrant's Business and Operations

Item 1.02 Termination of a Material Definitive Agreement.

After  Galaxy   Nutritional   Foods,   Inc.  (the   "Company")   outsourced  its
manufacturing and distribution functions in December 2005, the Company sought to
sublease or terminate its operating lease on its unused distribution  facilities
in Orlando,  Florida.  Effective July 31, 2006, the Company entered into a lease
termination agreement with its landlord,  CLP Industrial  Properties,  regarding
its unused leased distribution  facilities whereby the landlord will release the
Company  from  $1,068,869  in future  payment  obligations  from  August 1, 2006
through  July 31,  2009  under  the terms of its  current  operating  lease,  in
exchange for a termination fee of $228,859 payable as follows: $128,859 upon the
effective  date,  followed  by  payments  of  $75,000  and  $25,000  thirty  and
forty-five days thereafter, respectively.

Item 9.01   Financial Statements and Exhibits

10.32       Termination Agreement dated July 31, 2006 between Galaxy Nutritional
            Foods, Inc. and CLP Industrial Properties (filed herewith).

99.1        Press  Release  regarding the  termination  issued by the Company on
            August 3, 2006 (filed herewith).

                                       1
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.

Dated: August 3, 2006                       Galaxy Nutritional Foods, Inc.

                                        By: /s/ Salvatore J. Furnari
                                            ------------------------------------
                                            Salvatore J. Furnari
                                            Chief Financial Officer

                                       2