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): June 30, 2005

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


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


              2441 Viscount Row                                  32809
               Orlando, Florida                               (Zip Code)
      (Address of principal executive offices)

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

         (Former name or former address, if changed since last report.)

      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
<PAGE>

Item 1.01 Entry into a Material Definitive Agreement.

Asset Purchase Agreement

On June 30, 2005, Galaxy Nutritional Foods, Inc. (the "Company) entered into a
definitive agreement (the "Asset Purchase Agreement") for the sale of certain of
the Company's manufacturing and production equipment to Schreiber Foods, Inc., a
Wisconsin corporation ("Schreiber"), for $8.7 million in cash.

Other key terms of the transaction are as follows:

o     Since the transaction may constitute a sale of substantially all of the
      Company's assets, the transaction will be subject to obtaining approval
      from the Company's shareholders.

o     The transaction is subject to other closing conditions, including
      obtaining approval from the Company's lenders, Textron Financial
      Corporation and Wachovia Bank (formerly SouthTrust Bank).

o     Subject to the satisfaction of the conditions described above and other
      conditions as set forth in the Asset Purchase Agreement, the anticipated
      closing date is November 1, 2005.

o     If the Company's shareholders do not approve the transaction, the Asset
      Purchase Agreement provides for an alternative transaction whereby the
      Company would sell to Schreiber a smaller portion of the assets, which
      would not constitute substantially all of the Company's assets and
      therefore would not require shareholder approval. The purchase price for
      this alternative sale would be $2,115,000. This alternative sale is
      subject to obtaining approval from the Company's lenders.

o     If the Company is unable to obtain approval from its lenders with respect
      to this alternative sale, then the Company and Schreiber will negotiate in
      good faith to make the smaller portion of the assets available for
      Schreiber's use on reasonably acceptable terms, not to exceed a term of
      180 days. This alternative arrangement is also subject to obtaining
      approval from the Company's lenders.

o     Between signing and closing of the transaction, the Company may not agree
      to sell the assets that are the subject of the Asset Purchase Agreement to
      any other person, and, except in the ordinary course of business, the
      Company may not encumber such assets.

As indicated above, there are a number of conditions that must be met prior to
the consummation of the transaction. There can be no assurance that the Company
will satisfy these conditions and, therefore, there can be no assurance that the
transaction will be consummated.

The Company plans to distribute a proxy statement describing the transaction and
the Asset Purchase Agreement after it has been filed with and reviewed by the
Securities and Exchange Commission.

The description of the proposed disposition of assets described in this report
does not purport to be complete and is qualified in its entirety by reference to
the Asset Purchase Agreement, which is filed as Exhibit 4.25 to this report and
incorporated herein by reference. The Asset Purchase Agreement has been included
to provide investors and security holders with information regarding its terms.
It is not intended to provide any other factual information about the Company.
<PAGE>

The Asset Purchase Agreement contains representations and warranties the parties
thereto made to and solely for the benefit of each other. The assertions
embodied in those representations and warranties are qualified by information in
confidential disclosure schedules that the parties have exchanged in connection
with signing the Asset Purchase Agreement. Accordingly, investors and security
holders should not rely on the representations and warranties as
characterizations of the actual state of facts, since they were only made as of
the date of the Asset Purchase Agreement and are modified in important part by
the underlying disclosure schedules. Moreover, information concerning the
subject matter of the representations and warranties may change after the date
of the Asset Purchase Agreement, which subsequent information may or may not be
fully reflected in the Company's public disclosures.

The Supply Agreement

On June 30, 2005, the Company and Schreiber entered into a Supply Agreement (the
"Supply Agreement"), whereby Galaxy will purchase all of its requirements for
products from Schreiber, and Schreiber will manufacture and distribute all of
the Company's products.

Other key terms of the transaction are as follows:

o     The initial term of the Supply Agreement is for five years from the
      effective date of September 1, 2005, and is renewable at the Company's
      option for up to two additional five-year periods.

o     After November 1, 2005 and throughout the remainder of the Supply
      Agreement's term, Schreiber will be the sole source of supply of the
      Company's products.

o     If the Company does not exercise its option to renew the Supply Agreement
      at the end of the initial five-year period, there is a cancellation charge
      of $1.5 million. If the Company does not exercise its option to renew the
      Supply Agreement at the end of the second five-year period, there is a
      cancellation charge of $750,000. If the sale of the assets to Schreiber
      for $8,700,000 as contemplated by the Asset Purchase Agreement described
      above is not consummated, then the Company will not be required to pay any
      cancellation charge.

o     On or before November 1, 2005, Schreiber will purchase the Company's
      remaining raw materials, ingredients and packaging and operating supplies
      at the Company's cost.

o     The Supply Agreement provides for a contingent short-fall payment
      obligation by the Company if a specified production level is not met
      during the second year after the effective date. If a contingent
      short-fall payment is accrued after the second year, it may be reduced at
      the end of the third year if the production level during the third year
      exceeds the specified level of production. If the sale of the assets to
      Schreiber for $8,700,000 as contemplated by the Asset Purchase Agreement
      is not consummated, then the Company will not be required to pay any such
      short-fall payment.

o     Schreiber is required to deliver products to the Company or its customers
      that are in compliance with the Company's standards and specifications and
      all applicable laws. Schreiber has guaranteed that the products will not
      be adulterated or misbranded within the meaning of the Federal Food, Drug
      and Cosmetic Act as of the time of delivery.

o     Schreiber will deliver all products within 10 business days of the
      effective date of such order, which is one business day after receipt of
      the order.

o     The Company may not manufacture any products governed by the Supply
      Agreement during the term of the Supply Agreement.
<PAGE>

o     Schreiber may not manufacture the Company's products or use any of the
      Company's intellectual property other than pursuant to the terms of the
      Supply Agreement.

o     The Company may terminate the Supply Agreement if the Company's
      shareholders do not approve the transaction contemplated by the Asset
      Purchase Agreement (described above), by providing notice to Schreiber
      within 30 days of the date that the Company's stockholders vote on, but do
      not approve, the transactions contemplated by the Asset Purchase
      Agreement. The effectiveness of such termination may not be more than 180
      days after the date of such notice.

o     If the Company's shareholders do not approve the transaction contemplated
      by the Asset Purchase Agreement, and the Company and Schreiber are unable
      to consummate an alternative transaction (as described above) prior to
      January 1, 2006, then Schreiber may terminate the agreement by providing
      written notice to the Company prior to February 1, 2006. The effectiveness
      of such termination may not be less than 180 days after the date of such
      notice, unless agreed to by the Company.

o     Performance under the Supply Agreement (other than payment obligations)
      will be excused if either party is prevented from complying with any terms
      or provisions of the Supply Agreement by reason of certain events that are
      demonstrably beyond such party's control.

The description of the Supply Agreement described in this report does not
purport to be complete and is qualified in its entirety by reference to the
Supply Agreement, which is filed as Exhibit 10.19 to this report and
incorporated herein by reference.

Assuming that the above agreements are consummated, the Company anticipates that
the pricing terms received from Schreiber will be at terms favorable to the
Company's current production and distribution costs. The Company believes it
will benefit from a reduction in annual cash outlay in excess of $2.5 million in
the first full year due to lower costs on production and distribution of its
products, as well as the elimination of ongoing debt service to Wachovia Bank,
N.A. (as described below).

Section 2 - Financial Information

Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet Arrangement.

On June 30, 2005, the Company entered into a Loan Modification Agreement with
Wachovia Bank, N.A. (formerly SouthTrust Bank) regarding its loan to the
Company. The agreement modified the following terms of the loan:

      o     the loan will mature and be payable in full on July 31, 2006 instead
            of June 1, 2009;

      o     the principal payments will remain at $110,000 per month until the
            scheduled maturity of the loan on July 31, 2006 instead of
            increasing to $166,250 on July 1, 2005 as provided by the terms of
            the promissory note evidencing the loan; and

      o     Wachovia Bank has waived through July 31, 2006, the Company's
            compliance with the covenants set forth in the loan agreement
            related to the Company's tangible net worth requirement and the
            Company's total liabilities to tangible net worth and maximum funded
            debt to EBITDA ratios.

In connection with the agreement, the Company agreed to pay Wachovia $60,000, of
which $30,000 was paid upon execution of the agreement and $30,000 is due on
August 1, 2005. As required by the terms of the Loan Modification Agreement, as
well as other loan documents applicable to the loan, if the Company sells its
equipment as described above, the loan will be due and payable in full at the
time of sale.
<PAGE>

The description of the Loan Modification Agreement described in this report does
not purport to be complete and is qualified in its entirety by reference to the
Loan Modification Agreement, which is filed as Exhibit 10.20 to this report and
incorporated herein by reference.

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits

      4.25  Asset Purchase Agreement dated June 30, 2005 between Galaxy
            Nutritional Foods, Inc. and Schreiber Foods, Inc. (Filed herewith).

      10.19 Supply Agreement dated June 30, 2005 between Galaxy Nutritional
            Foods, Inc. and Schreiber Foods, Inc. (Filed herewith).

      10.20 Loan Modification Agreement June 30, 2005 between Galaxy Nutritional
            Foods, Inc. and Wachovia Bank N.A (formerly SouthTrust Bank) (Filed
            herewith).

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 thereunto duly authorized.

                                           GALAXY NUTRITIONAL FOODS, INC.


July 6, 2005                               By:    /s/ Michael E. Broll
                                                --------------------------------

                                           Name:  Michael E. Broll
                                                --------------------------------

                                           Title: Chief Executive Officer
                                                 -------------------------------
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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): June 30, 2005

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

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

              2441 Viscount Row                                  32809
               Orlando, Florida                               (Zip Code)
      (Address of principal executive offices)

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

         (Former name or former address, if changed since last report.)

      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 1.01 Entry into a Material Definitive Agreement.

Asset Purchase Agreement

On June 30, 2005, Galaxy Nutritional Foods, Inc. (the "Company) entered into a
definitive agreement (the "Asset Purchase Agreement") for the sale of certain of
the Company's manufacturing and production equipment to Schreiber Foods, Inc., a
Wisconsin corporation ("Schreiber"), for $8.7 million in cash.

Other key terms of the transaction are as follows:

o     Since the transaction may constitute a sale of substantially all of the
      Company's assets, the transaction will be subject to obtaining approval
      from the Company's shareholders.

o     The transaction is subject to other closing conditions, including
      obtaining approval from the Company's lenders, Textron Financial
      Corporation and Wachovia Bank (formerly SouthTrust Bank).

o     Subject to the satisfaction of the conditions described above and other
      conditions as set forth in the Asset Purchase Agreement, the anticipated
      closing date is November 1, 2005.

o     If the Company's shareholders do not approve the transaction, the Asset
      Purchase Agreement provides for an alternative transaction whereby the
      Company would sell to Schreiber a smaller portion of the assets, which
      would not constitute substantially all of the Company's assets and
      therefore would not require shareholder approval. The purchase price for
      this alternative sale would be $2,115,000. This alternative sale is
      subject to obtaining approval from the Company's lenders.

o     If the Company is unable to obtain approval from its lenders with respect
      to this alternative sale, then the Company and Schreiber will negotiate in
      good faith to make the smaller portion of the assets available for
      Schreiber's use on reasonably acceptable terms, not to exceed a term of
      180 days. This alternative arrangement is also subject to obtaining
      approval from the Company's lenders.

o     Between signing and closing of the transaction, the Company may not agree
      to sell the assets that are the subject of the Asset Purchase Agreement to
      any other person, and, except in the ordinary course of business, the
      Company may not encumber such assets.

As indicated above, there are a number of conditions that must be met prior to
the consummation of the transaction. There can be no assurance that the Company
will satisfy these conditions and, therefore, there can be no assurance that the
transaction will be consummated.

The Company plans to distribute a proxy statement describing the transaction and
the Asset Purchase Agreement after it has been filed with and reviewed by the
Securities and Exchange Commission.

The description of the proposed disposition of assets described in this report
does not purport to be complete and is qualified in its entirety by reference to
the Asset Purchase Agreement, which is filed as Exhibit 4.25 to this report and
incorporated herein by reference. The Asset Purchase Agreement has been included
to provide investors and security holders with information regarding its terms.
It is not intended to provide any other factual information about the Company.
The Asset Purchase Agreement contains representations and warranties the parties
thereto made to and solely for the benefit of each other. The assertions
embodied in those representations and warranties are qualified by information in
confidential disclosure schedules that the parties have exchanged in connection
with signing the Asset Purchase Agreement. Accordingly, investors and security
holders should not rely on the representations and warranties as
characterizations of the actual state of facts, since they were only made as of
the date of the Asset Purchase Agreement and are modified in important part by
the underlying disclosure schedules. Moreover, information concerning the
subject matter of the representations and warranties may change after the date
of the Asset Purchase Agreement, which subsequent information may or may not be
fully reflected in the Company's public disclosures.

The Supply Agreement

On June 30, 2005, the Company and Schreiber entered into a Supply Agreement (the
"Supply Agreement"), whereby Galaxy will purchase all of its requirements for
products from Schreiber, and Schreiber will manufacture and distribute all of
the Company's products.

Other key terms of the transaction are as follows:

o     The initial term of the Supply Agreement is for five years from the
      effective date of September 1, 2005, and is renewable at the Company's
      option for up to two additional five-year periods.

o     After November 1, 2005 and throughout the remainder of the Supply
      Agreement's term, Schreiber will be the sole source of supply of the
      Company's products.

o     If the Company does not exercise its option to renew the Supply Agreement
      at the end of the initial five-year period, there is a cancellation charge
      of $1.5 million. If the Company does not exercise its option to renew the
      Supply Agreement at the end of the second five-year period, there is a
      cancellation charge of $750,000. If the sale of the assets to Schreiber
      for $8,700,000 as contemplated by the Asset Purchase Agreement described
      above is not consummated, then the Company will not be required to pay any
      cancellation charge.

o     On or before November 1, 2005, Schreiber will purchase the Company's
      remaining raw materials, ingredients and packaging and operating supplies
      at the Company's cost.

o     The Supply Agreement provides for a contingent short-fall payment
      obligation by the Company if a specified production level is not met
      during the second year after the effective date. If a contingent
      short-fall payment is accrued after the second year, it may be reduced at
      the end of the third year if the production level during the third year
      exceeds the specified level of production. If the sale of the assets to
      Schreiber for $8,700,000 as contemplated by the Asset Purchase Agreement
      is not consummated, then the Company will not be required to pay any such
      short-fall payment.

o     Schreiber is required to deliver products to the Company or its customers
      that are in compliance with the Company's standards and specifications and
      all applicable laws. Schreiber has guaranteed that the products will not
      be adulterated or misbranded within the meaning of the Federal Food, Drug
      and Cosmetic Act as of the time of delivery.

o     Schreiber will deliver all products within 10 business days of the
      effective date of such order, which is one business day after receipt of
      the order.

o     The Company may not manufacture any products governed by the Supply
      Agreement during the term of the Supply Agreement.
o     Schreiber may not manufacture the Company's products or use any of the
      Company's intellectual property other than pursuant to the terms of the
      Supply Agreement.

o     The Company may terminate the Supply Agreement if the Company's
      shareholders do not approve the transaction contemplated by the Asset
      Purchase Agreement (described above), by providing notice to Schreiber
      within 30 days of the date that the Company's stockholders vote on, but do
      not approve, the transactions contemplated by the Asset Purchase
      Agreement. The effectiveness of such termination may not be more than 180
      days after the date of such notice.

o     If the Company's shareholders do not approve the transaction contemplated
      by the Asset Purchase Agreement, and the Company and Schreiber are unable
      to consummate an alternative transaction (as described above) prior to
      January 1, 2006, then Schreiber may terminate the agreement by providing
      written notice to the Company prior to February 1, 2006. The effectiveness
      of such termination may not be less than 180 days after the date of such
      notice, unless agreed to by the Company.

o     Performance under the Supply Agreement (other than payment obligations)
      will be excused if either party is prevented from complying with any terms
      or provisions of the Supply Agreement by reason of certain events that are
      demonstrably beyond such party's control.

The description of the Supply Agreement described in this report does not
purport to be complete and is qualified in its entirety by reference to the
Supply Agreement, which is filed as Exhibit 10.19 to this report and
incorporated herein by reference.

Assuming that the above agreements are consummated, the Company anticipates that
the pricing terms received from Schreiber will be at terms favorable to the
Company's current production and distribution costs. The Company believes it
will benefit from a reduction in annual cash outlay in excess of $2.5 million in
the first full year due to lower costs on production and distribution of its
products, as well as the elimination of ongoing debt service to Wachovia Bank,
N.A. (as described below).

Section 2 - Financial Information

Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet Arrangement.

On June 30, 2005, the Company entered into a Loan Modification Agreement with
Wachovia Bank, N.A. (formerly SouthTrust Bank) regarding its loan to the
Company. The agreement modified the following terms of the loan:

      o     the loan will mature and be payable in full on July 31, 2006 instead
            of June 1, 2009;

      o     the principal payments will remain at $110,000 per month until the
            scheduled maturity of the loan on July 31, 2006 instead of
            increasing to $166,250 on July 1, 2005 as provided by the terms of
            the promissory note evidencing the loan; and

      o     Wachovia Bank has waived through July 31, 2006, the Company's
            compliance with the covenants set forth in the loan agreement
            related to the Company's tangible net worth requirement and the
            Company's total liabilities to tangible net worth and maximum funded
            debt to EBITDA ratios.

In connection with the agreement, the Company agreed to pay Wachovia $60,000, of
which $30,000 was paid upon execution of the agreement and $30,000 is due on
August 1, 2005. As required by the terms of the Loan Modification Agreement, as
well as other loan documents applicable to the loan, if the Company sells its
equipment as described above, the loan will be due and payable in full at the
time of sale.
The description of the Loan Modification Agreement described in this report does
not purport to be complete and is qualified in its entirety by reference to the
Loan Modification Agreement, which is filed as Exhibit 10.20 to this report and
incorporated herein by reference.

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits

      4.25  Asset Purchase Agreement dated June 30, 2005 between Galaxy
            Nutritional Foods, Inc. and Schreiber Foods, Inc. (Filed herewith).

      10.19 Supply Agreement dated June 30, 2005 between Galaxy Nutritional
            Foods, Inc. and Schreiber Foods, Inc. (Filed herewith).

      10.20 Loan Modification Agreement June 30, 2005 between Galaxy Nutritional
            Foods, Inc. and Wachovia Bank N.A (formerly SouthTrust Bank) (Filed
            herewith).

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 thereunto duly authorized.

                                           GALAXY NUTRITIONAL FOODS, INC.

July 6, 2005                               By:    /s/ Michael E. Broll
                                                --------------------------------

                                           Name:  Michael E. Broll
                                                --------------------------------

                                           Title: Chief Executive Officer
                                                 -------------------------------