8-K

                       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: February 9, 2004


                                 PIZZA INN, INC.

             (Exact name of registrant as specified in its charter)



          MISSOURI                    0-12919               47-0654575
(State  or  other  jurisdiction   (Commission        (I.R.S.  Employer
of  incorporation  or  organization) File  Number) Identification  Number)


                    3551 PLANO PARKWAY, THE COLONY, TX 75056

               (Address of principal executive offices)(zip code)



      Telephone number of registrant, including area code:  (469) 384-5000






ITEM  5.

See  attached  Exhibit  1.

                                   SIGNATURES


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




                              PIZZA  INN,  INC.


                              By:  /s/ Shawn M. Preator
          Shawn  M.  Preator,  Chief  Financial  Officer

Date:     February  9,  2004

EX-1

                                        February  9,  2004







Dear  Pizza  Inn  Shareholder,

I  want to take this opportunity to update you on your company's performance and
efforts  since  this  management  team  began in late August, 2002, particularly
looking  at this past quarter as well as our fiscal year ended on June 29, 2003.
We  have  implemented  many  new  initiatives since the fall of 2002 in order to
increase  shareholder value. I will summarize the major ones and their impact to
date  in  this letter. These initiatives have one common foundation, and that is
to  improve  company  performance and shareholder value by helping our Pizza Inn
franchisees,  both  existing  and  new,  become  more  successful.  As  will  be
specifically  noted  below,  these  programs  address  the  areas  of both sales
building  and  expense  reductions,  while  staying  focused  on  our number one
restaurant  level  goal of attracting and satisfying customers. By reaching more
of  these  goals  faster,  all  shareholders will benefit directly through Pizza
Inn's  financial  success and stock price growth, which we have continued to see
in  recent  months.

The  following  list  outlines  the  key  initiatives:

   (1)  Marketing  and  Sales  Building  Improvements

As  I  discussed  at  our  last shareholder meeting about a year ago, one of our
first     acts  was  to  change  the  leadership  and direction of our marketing
efforts. First we conducted extensive research in many of our strategic markets,
talking directly with consumers about the strengths and weaknesses of our brand.
Our  management  team  then worked with the franchisee advertising board and our
new  advertising agency, Launch, to develop new brand positioning and supporting
advertising  materials  for  2003. These programs, which included new television
and  radio  commercials  as  well  as  direct  marketing  materials,  were first
presented  to  franchisees  at  our May, 2003 Franchisee Owners' Conference. The
subsequent  use of these materials and strategies began in July, and we are very
pleased  with  their  impact  on  sales  as  demonstrated  by the enclosed graph
entitled  "Comparable  Sales  Growth."  Subsequent  expansion  of these creative
materials  will  continue  to  focus  on  Pizza  Inn's strong foundation of both
quality  pizza  and  menu  variety  as  well  as  our  appeal  to  families.





   (2)  Franchisee  Communications  and  Teamwork

Quality franchisee relations are the bedrock of success for Pizza Inn and one of
the  keys  to  optimizing shareholder value. Without a high level of cooperation
and  trust,  Pizza  Inn's new marketing and operational initiatives could not be
fully  implemented  in  the field.  As a result, the Company's performance would
suffer.

I  am  happy  to  report  that  recent  success  in  the  areas of marketing and
comparable  sales  is due in large part to inspired teamwork. The efforts of the
franchisee  advertising  board, in addition to the support of other franchisees,
are  helping  to  make  Pizza  Inn  better  every  day.

The  previously  mentioned  May, 2003 Franchisee Owners' Conference proved to be
one  of  our  best-attended  and  most  productive  events  in  many  years. The
enthusiasm  and  teamwork created continues with many of the programs rolled out
last  May, and we are already receiving indications of strong attendance support
and  program participation from our franchisees for our June, 2004 conference in
Biloxi,  MS.

   (3)  Operation  and  Training  Programs

Another  key  step began in late 2002, when we increased the service and support
levels  for  newly opened Pizza Inn restaurants, especially for operators new to
the  Pizza  Inn system. We believe this increased commitment to start-up support
is  improving  sales  levels  and  franchisee profitability in our new units. As
mentioned  above,  our  operations and training team also continues to work with
our  franchisees  on  new  product  testing. For example, we are currently field
testing  "Take  and Bake" pizza and Pizza Inn's "4 -Pack Sampler" as new ways to
address  consumers'  changing  needs  and  preferences.

This  same  team  remains  focused  on assistance to all existing franchisees as
well.  Their  highest priorities remain cooperative efforts with our franchisees
regarding  quality  training  and  compliance  with our standards, each of which
contributes  to our high quality of products, excellent service and cleanliness.

   (4)  Franchise  Development,  Including  Net  Unit  Growth

In  fiscal 2004, we have opened 20 new units, of which three had been previously
closed.  During  this  time,  we have closed 15 units of which four were express
operations.  We  have  placed  significant  emphasis  on minimizing closings, as
evidenced  by the fact that year-to-date closings on an annualized basis are the
fewest  in  more  than  ten  years. We feel our ongoing commitment to increasing
franchisee  profitability  will  continue  to  improve  our  closing  results.

Regarding our 20 year-to-date openings, eight are buffet restaurants and another
eight  are  delivery/carry  out (DELCO) restaurants, including a recently opened
DELCO  company  restaurant  in  Little Elm, TX, near our offices. We are pleased
with the sales levels of these new units, with opening sales higher overall than
in  past  years.

To  improve  upon  this  success,  we  will  continue  to  focus on lowering the
investment  costs  of  new  restaurants  as well as remodeling costs of existing
units.  Our modular construction option is one of these lower cost alternatives.
In  fact,  our  recently  opened company-owned DELCO is modular in construction.

Overall,  we  expect  to open about 35 new Pizza Inn's for fiscal 2004, and have
received  a  high  level  of  interest  for  fiscal  2005  also.

   (5)  Key  Financial  Trends

         Revenue  Growth,  Including  Norco  Sales

The  major  components  of our revenue growth plans for fiscal 2004 are net unit
growth, increased comparable restaurant sales, and additional Norco sales market
share.  Our net unit growth is now positive for the first time in five years and
average  retail sales for new buffet units are 19.3% higher than last year's and
6.0%  higher  for  DELCO units. Comparable sales, which decreased 5.5% in fiscal
2003,  have  shown steady improvement since July, 2003, as shown on the enclosed
graph  entitled  "Comparable  Sales  Growth."  Average  weekly  comparable sales
decreased 2.4% over the last seven months, but have been positive beginning with
the  last  week  in  December.  In  addition,  our  comparable  Norco  sales  to
franchisees  have  increased  by  2.1%  year  to  date.

        General  and  Administrative  Expenses

We  have  decreased  our general and administrative expenses, excluding bad debt
expenses,  $458,000,  or  9.7%,  for fiscal 2003 and $247,000, or 11.0%, for the
first  six months of fiscal 2004, compared to the same respective periods in the
prior  years.

Total compensation for the Company's top five employees in fiscal 2003 decreased
$1,072,000  or  37.6%  from  fiscal 2002 and the Company has realized additional
savings at the top five level for the first six months of fiscal 2004 of $55,000
or  5.5%.




Cash  Flow,  Uses  of  Cash,  and  Debt  Balances

Pizza  Inn  generated  approximately  $4.0  million  in cash flow from operating
activities  in  fiscal  2003  and $2.6 million in the first six months of fiscal
year  2004.  This  cash was primarily used to reduce our debt load, to reacquire
certain  area  development  rights, and to fund the construction of our recently
opened Company-owned store. As of today, current debt balances are the lowest in
many  years:  $1.4  million on our line of credit, $209,000 on our term loan and
$7.3  million  on  our  corporate  facilities  mortgage.

     Pizza  Inn  Stock  Price

As  shown on the enclosed graph, Pizza Inn's stock price has grown from $1.04 on
August  22,  2002  to  $2.94  as  of  Friday,  February  6,  2004.


In closing, we believe that an objective evaluation of the Company's performance
over the last 17 months will show that we have been highly focused on increasing
both  shareholder  value  and  franchisee  profitability, two goals we pledge to
remain  our  top  priorities  in  the  months  and  years  to  come.


Sincerely,


/s/ Ronald W. Parker


Ronald  W.  Parker
President  and  Chief  Executive  Officer


Attachments  (2)


Comparable Sales Growth






Month/Year   Comp Sales          Comment
                          
- ------  -----------      ----------------
  Aug .2002     -5.0%
  Sept.2002 .   -4.8%
  Oct .2002 .   -5.7%
  Nov .2002 .   -6.5%
  Dec .2002 .   -5.7%    December 2002 New positioning research begins
  Jan .2003 .   -6.6%
  Feb .2003 .   -5.2%
  Mar  2003 .   -6.7%
  Apr  2003 .   -7.7%
  May  2003     -5.6%   May 2003 Research findings, positioning recommendations,communication
                        strategy and creative materials  presented chainwide
  Jun  2003 .   -6.4%  June 2003 Co-Ops begin implementation of new ad campaigns
  July.2003 .   -6.9%  July 2003 TV and FSI creative with new positioning begins chainwide
  Aug .2003 .   -3.6%
  Sept.2003 .   -4.5%
  Oct .2003 .   -2.3%  October 2003 "Family Savings Blitz" FSI distributed chainwide
  Nov .2003 .   -1.5%
  Dec .2003 .   -1.4%
  Jan .2004 .    1.2%  January 2004 "Free Medium Pizza" FSI introduced chainwide




Pizza Inn Stock Price







               Monthly Average
                ---------------
    Date              Close
                       
  Aug 2002             1.24
  Sep 2002             1.64
  Oct 2002             1.67
  Nov 2002             1.68
  Dec 2002             2.25
  Jan 2003             2.40
  Feb 2003             1.85
  Mar 2003             1.71
  Apr 2003             1.64
  May 2003             1.77
  Jun 2003             1.96
  Jul 2003             2.18
  Aug 2003             2.27
  Sep 2003             2.60
  Oct 2003             2.71
  Nov 2003             2.85
  Dec 2003             2.94
  Jan 2004             2.95
  Feb 2004             2.90