FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person * DILLARD WILLIAM T II   2. Issuer Name and Ticker or Trading Symbol DILLARDS INC [DDS] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) __X__ Director _____ 10% Owner __X__ Officer (give title below) _____ Other (specify below) CEO, Chairman of Board (Last) (First) (Middle) 1600 CANTRELL ROAD 3. Date of Earliest Transaction (Month/Day/Year) 01/20/2006 (Street) LITTLE ROCK, AR 72201 4. If Amendment, Date Original Filed(Month/Day/Year) 6. Individual or Joint/Group Filing(Check Applicable Line) _X_ Form filed by One Reporting Person ___ Form filed by More than One Reporting Person (City) (State) (Zip) Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned

1.Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Class A 12/13/2005   G   900 D (2) 656,085 D   Common Class A 01/20/2006   M   150,000 A $ 25.125 816,422 (1) D   Common Class A 01/20/2006   F   146,826 D $ 25.95 669,596 D   Common Class A 01/20/2006   M   300,000 A $ 24.01 969,596 D   Common Class A 01/20/2006   F   285,197 D $ 25.95 684,399 (1) D   Dillard's Capital Trust 1 7.5% Capital Securities               64,250 D   Common Class A - Retirement Plan               79,710 D   Common Class A               41,496 D   Common Class B               3,985,776 D

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security (Instr. 3)

2. Conversion or Exercise Price of Derivative Security

3. Transaction Date (Month/Day/Year)

3A. Deemed Execution Date, if any (Month/Day/Year)

4. Transaction Code (Instr. 8)

5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5)

6. Date Exercisable and Expiration Date (Month/Day/Year)

7. Title and Amount of Underlying Securities (Instr. 3 and 4)

8. Price of Derivative Security (Instr. 5)

9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)

10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4)

11. Nature of Indirect Beneficial Ownership (Instr. 4)

Code

V

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

Employee Stock Option

$ 25.125

01/20/2006

M

150,000

02/05/1999

02/05/2006

Common Class A

150,000

$ 25.125

816,422

D

Employee Stock Option

$ 25.95

01/20/2006

F

146,826

01/20/2006

02/06/2006

Common Class A

146,826

$ 25.95

669,596

D

Employee Stock Option

$ 24.01

01/20/2006

A

300,000

05/14/2002

05/14/2009

Common Class A

300,000

$ 24.01

969,596

D

Employee Stock Option

$ 25.125

01/20/2006

F

285,197

02/05/1999

02/05/2006

Common Class A

285,197

$ 25.95

684,399

D

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
DILLARD WILLIAM T II 1600 CANTRELL ROAD LITTLE ROCK, AR 72201	X		CEO, Chairman of Board

Signatures

William Dillard II		01/23/2006
**Signature of Reporting Person		Date

Explanation of Responses:

*	If the form is filed by more than one reporting person, see Instruction 4(b)(v).
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1)	Col 5 includes 10,337 shares of Class A acquired under Rule 16(b)-3(c).
(2)	Gift
Remarks: Common Class A 79,710 Shares in Dillard's 401K Plan                                                                                                                                                                                              Common Class A    41,496 Shares   By W.D Company.   Reporting person owns 27.4%  interest in W.D. Co..   This is W.D. Co.'s entire interest.                                   Common Class B   3,985,776 Shares By W.D. Company.  Reporting person owns 27.4%   interest  in W.D. Co..   This is W.D. Co.'s entire interest.                                                                                                                                                                                                                             Co-Beneficiary in WDT Exemption Trust - 4,719 shares Class A Common.

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