FORM 8-K


                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549




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


                          Date of Report: December 23, 1998

                 Date of Earliest Event Reported: December 10, 1998


                            DOLLAR TREE STORES, INC.
             (Exact name of registrant as specified in its charter)

                         COMMISSION FILE NUMBER: 0-25464

                  VIRGINIA                            54-1387365
      (State or other jurisdiction of              (I.R.S. Employer
       incorporation or organization)             Identification No.)

                                500 Volvo Parkway
                              Chesapeake, VA 23320
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (757) 321-5000




ITEM 2. ACQUISITION OF ASSETS

(a) On December 10, 1998,  pursuant to a Merger  Agreement  dated as of July 22,
1998,  as amended by the Amendment to Merger  Agreement  dated as of October 20,
1998 (collectively,  the "Merger  Agreement"),  by and among Dollar Tree Stores,
Inc.  ("Dollar Tree"),  Dollar Tree West,  Inc., a California  corporation and a
wholly  owned   subsidiary  of  Dollar  Tree  ("Merger  Sub"),  and  Step  Ahead
Investments,  Inc., a privately-held  California company ("Step Ahead"),  Merger
Sub  merged  with and into Step  Ahead  (the  "Merger")  with Step  Ahead as the
surviving  corporation  (the  "Surviving  Corporation")  and thereby  becoming a
wholly owned subsidiary of Dollar Tree.

     Upon  consummation of the Merger,  (i) each share of outstanding Step Ahead
stock,  common or  preferred,  was  converted  into the right to receive  1.1212
shares of Dollar Tree common  stock,  (ii) Dollar Tree assumed each  outstanding
option  ("Stock  Option") to purchase  shares of Step Ahead common stock granted
pursuant to Step Ahead  Investments,  Inc. Long Term Incentive Plan, as amended,
which Stock Options now constitute  options to acquire the number (rounded up to
the nearest whole number) of shares of Dollar Tree common stock as the holder of
such Stock Option would have been entitled to receive pursuant to the Merger had
such  holder  exercised  such  Stock  Option  in full  immediately  prior to the
effective  time of the Merger and (iii) Dollar Tree granted  options to purchase
165,000  shares of Dollar  Tree common  stock  ("Special  Options")  to five key
employees  of  Step  Ahead  who had  executed  non-competition  agreements  or a
non-competition and consulting  agreement.  Dollar Tree expects to issue a total
of  2,151,000  shares of its common  stock in the Merger,  including  1,663,000
shares in exchange for the outstanding shares of Step Ahead common and preferred
stock,  323,000  shares  issuable upon exercise of the Stock Options and 165,000
shares  issuable  upon  exercise of the Special  Options.  Shares of Dollar Tree
common stock to be issued in the Merger were registered with the U.S. Securities
Exchange  Commission  on a  Registration  Statement  on Form  S-4  which  became
effective on November 10, 1998. No cash  consideration  is payable to Step Ahead
shareholders  in  connection  with  the  Merger,  other  than  cash  in  lieu of
fractional shares.

         Under the terms of the Merger  Agreement,  an  aggregate  of 10% of the
shares of Dollar  Tree common  stock  issued to Step Ahead  shareholders  in the
Merger  will be held in escrow to satisfy  any claims  Dollar Tree may have with
respect to breaches of  representations,  warranties and covenants in the Merger
Agreement and may also be claimed by Dollar Tree to the extent that Step Ahead's
adjusted net worth prior to closing is less than $8.2 million as of November 29,
1998.

         At the time of the Merger,  there was no material  relationship between
Dollar Tree (including its subsidiaries,  officers,  directors and shareholders)
and Step Ahead.

         BankBoston,  N.A. has been retained to serve as Exchange Agent. Letters
of  Transmittal  and  accompanying  materials  have  been  sent  to  Step  Ahead
shareholders instructing them on the exchange of their Step Ahead shares.






(b) At the time of the merger,  Step Ahead  operated a chain of 66 retail stores
under the name of  "98(cent)  Clearance  Centers"  in  northern  California  and
Nevada.  Dollar  Tree  intends to  continue  to engage in the same  business  in
substantially the same manner.

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS

(a) No financial  statements  are required to be filed on this Current Report on
Form 8-K in connection with the reported merger.

(b) No proforma  financial  information  is required to be filed on this Current
Report on Form 8-K in connection with the reported merger.

(c) Exhibits required by Item 601 of Regulation S-K:

   The following document,  filed as Exhibit 2.1 to the Company's Current Report
   on Form 8-K on July 31, 1998, is incorporated herein by this reference:

         2.1      Merger  Agreement dated July 22, 1998 by and among Dollar Tree
                  Stores,   Inc.,   Dollar  Tree  West,  Inc.,  and  Step  Ahead
                  Investments, Inc.

         The following  document,  filed as Exhibit 2.1 to the Company's Current
         Report on Form 8-K on October 29, 1998, is incorporated  herein by this
         reference:

         2.2      Amendment to the Merger  Agreement  dated  October 20, 1998 by
                  and among Dollar Tree Stores,  Inc.,  Dollar Tree West,  Inc.,
                  and Step Ahead Investments, Inc.



                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) 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.


                                         DOLLAR TREE STORES, INC.
                                                   (Registrant)


Date:         December 23, 1998          By:   /s/ Frederick C. Coble     
                                             -----------------------------
                                                    Frederick C. Coble
                                                    Senior Vice President,
                                                    Chief Financial Officer