UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  SCHEDULE 13D


                    Under the Securities Exchange Act of 1934
                               (Amendment No. 2)*

                       PORTFOLIO RECOVERY ASSOCIATES, INC.
                       -----------------------------------
                                (Name of Issuer)

                    Common Stock, $0.01 Par Value Per Share
                    ---------------------------------------
                         (Title of Class of Securities)

                                   73640Q105
                                   ---------
                                 (CUSIP Number)

                       David N. Roberts, Managing Director
                           Angelo, Gordon & Co., L.P.
                                 245 Park Avenue
                            New York, New York 10167
                                 (212) 692-2025
                                 --------------
                  (Name, Address and Telephone Number of Person
                Authorized to Receive Notices and Communications)

                                January 1, 2004
                                ---------------
                      (Date of Event which Requires Filing
                               of this Statement)

If the filing person has previously  filed a statement on Schedule 13G to report
the  acquisition  that is the subject of this  Schedule  13D, and is filing this
schedule because of ss.ss.240.13d-1(e),  240.13d-1(f) or 240.13d-1(g), check the
following box .

Note:  Schedules  filed in paper format shall include a signed original and five
copies of the  schedule,  including  all exhibits.  See  ss.240.13d-7  for other
parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting  person's
initial filing on this form with respect to the subject class of securities, and
for  any  subsequent   amendment   containing   information  which  would  alter
disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the  Securities  Exchange  Act of
1934 ("Act") or otherwise  subject to the liabilities of that section of the Act
but  shall be  subject  to all other  provisions  of the Act  (however,  see the
Notes).


                          Continued on following pages
                               Page 1 of 15 Pages
                             Exhibit Index: Page 14



                                  SCHEDULE 13D

CUSIP No. 73640Q105                                           Page 2 of 15 Pages

1        Names of Reporting Persons
         I.R.S. Identification Nos. of above persons (entities only).

                  ANGELO, GORDON & CO., L.P.

2        Check the Appropriate Box If a Member of a Group (See Instructions)
                                               a. [ ]
                                               b. [X]

3        SEC Use Only

4        Source of Funds (See Instructions)

                  OO

5        Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
         Items 2(d) or 2(e)
                  [ ]

6        Citizenship or Place of Organization

                  DELAWARE

                           7        Sole Voting Power
 Number of                                  0
    Shares
Beneficially               8        Shared Voting Power
 Owned By                                   3,183,035
    Each
 Reporting                 9        Sole Dispositive Power
   Person                                   0
    With
                           10       Shared Dispositive Power
                                            3,183,035

11       Aggregate Amount Beneficially Owned by Each Reporting Person

                  3,183,035

12       Check if the Aggregate Amount in Row (11) Excludes Certain Shares
         (See Instructions)
                  [X]

13       Percent of Class Represented By Amount in Row (11)

                  20.93%

14       Type of Reporting Person (See Instructions)

                  BD, IA, PN




                                  SCHEDULE 13D

CUSIP No. 73640Q105                                           Page 3 of 15 Pages

1        Names of Reporting Persons
         I.R.S. Identification Nos. of above persons (entities only).

                  AG PARTNERS, L.P.

2        Check the Appropriate Box If a Member of a Group (See Instructions)
                                               a. [ ]
                                               b. [X]

3        SEC Use Only

4        Source of Funds (See Instructions)

                  OO

6        Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
         Items 2(d) or 2(e)
                  [ ]

6        Citizenship or Place of Organization

                  DELAWARE

                           7        Sole Voting Power
 Number of                                  0
    Shares
Beneficially               8        Shared Voting Power
 Owned By                                   3,183,035
    Each
 Reporting                 9        Sole Dispositive Power
   Person                                   0
    With
                           10       Shared Dispositive Power
                                            3,183,035

11       Aggregate Amount Beneficially Owned by Each Reporting Person

                  3,183,035

12       Check if the Aggregate Amount in Row (11) Excludes Certain Shares
         (See Instructions)
                  [X]


13       Percent of Class Represented By Amount in Row (11)

                  20.93%

14       Type of Reporting Person (See Instructions)

                  PN; IA




                                  SCHEDULE 13D

CUSIP No. 73640Q105                                           Page 4 of 15 Pages

1        Names of Reporting Persons
         I.R.S. Identification Nos. of above persons (entities only).

                  AG FUNDS, L.P.

2        Check the Appropriate Box If a Member of a Group (See Instructions)
                                               a. [ ]
                                               b. [X]


3        SEC Use Only

4        Source of Funds (See Instructions)

                  OO

5        Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
         Items 2(d) or 2(e)
                  [ ]

6        Citizenship or Place of Organization

                  DELAWARE

                           7        Sole Voting Power
 Number of                                  0
    Shares
Beneficially               8        Shared Voting Power
 Owned By                                   1,756,465
    Each
 Reporting                 9        Sole Dispositive Power
   Person                                   0
    With
                           10       Shared Dispositive Power
                                            1,756,465

11       Aggregate Amount Beneficially Owned by Each Reporting Person

                  1,756,465

12       Check if the Aggregate Amount in Row (11) Excludes Certain Shares
         (See Instructions)
                  [X]

13       Percent of Class Represented By Amount in Row (11)

                  11.55%

14       Type of Reporting Person (See Instructions)

                  PN




                                  SCHEDULE 13D

CUSIP No. 73640Q105                                           Page 5 of 15 Pages

1        Names of Reporting Persons
         I.R.S. Identification Nos. of above persons (entities only).

                  JOHN M. ANGELO

2        Check the Appropriate Box If a Member of a Group (See Instructions)
                                               a. [ ]
                                               b. [X]

3        SEC Use Only

4        Source of Funds (See Instructions)

                  OO

5        Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
         Items 2(d) or 2(e)
                  [ ]

6        Citizenship or Place of Organization

                  UNITED STATES

                           7        Sole Voting Power
 Number of                                  0
    Shares
Beneficially               8        Shared Voting Power
 Owned By                                   4,939,500
    Each
 Reporting                 9        Sole Dispositive Power
   Person                                   0
    With
                           10       Shared Dispositive Power
                                            4,939,500

11       Aggregate Amount Beneficially Owned by Each Reporting Person

                  4,939,500

12       Check if the Aggregate Amount in Row (11) Excludes Certain Shares
         (See Instructions)
                  [X]

13       Percent of Class Represented By Amount in Row (11)

                  32.48%

14       Type of Reporting Person (See Instructions)

                  HC; IA



                                  SCHEDULE 13D

CUSIP No. 73640Q105                                           Page 6 of 15 Pages

1        Names of Reporting Persons
         I.R.S. Identification Nos. of above persons (entities only).

                  MICHAEL L. GORDON

2        Check the Appropriate Box If a Member of a Group (See Instructions)
                                               a. [ ]
                                               b. [X]

3        SEC Use Only

4        Source of Funds (See Instructions)

                  OO

5        Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
         Items 2(d) or 2(e)
                  [ ]

6        Citizenship or Place of Organization

                  UNITED STATES

                           7        Sole Voting Power
 Number of                                  0
    Shares
Beneficially               8        Shared Voting Power
 Owned By                                   4,942,000
    Each
 Reporting                 9        Sole Dispositive Power
   Person                                   0
    With
                           10       Shared Dispositive Power
                                            4,942,000

11       Aggregate Amount Beneficially Owned by Each Reporting Person

                  4,942,000

12       Check if the Aggregate Amount in Row (11) Excludes Certain Shares
        (See Instructions)
                  [ ]

13       Percent of Class Represented By Amount in Row (11)

                  32.49%

14       Type of Reporting Person (See Instructions)

                  HC; IA




                                  SCHEDULE 13D

CUSIP No. 73640Q105                                           Page 7 of 15 Pages

1        Names of Reporting Persons
         I.R.S. Identification Nos. of above persons (entities only).

                  PRA INVESTMENTS, L.L.C.

2        Check the Appropriate Box If a Member of a Group (See Instructions)
                                               a. [ ]
                                               b. [X]

3        SEC Use Only

4        Source of Funds (See Instructions)

                  OO

5        Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
         Items 2(d) or 2(e)
                  [ ]


6        Citizenship or Place of Organization

                  DELAWARE

                           7        Sole Voting Power
 Number of                                  0
    Shares
Beneficially               8        Shared Voting Power
 Owned By                                   3,183,035
    Each
 Reporting                 9        Sole Dispositive Power
   Person                                   0
    With
                           10       Shared Dispositive Power
                                            3,183,035

11       Aggregate Amount Beneficially Owned by Each Reporting Person

                  3,183,035

12       Check if the Aggregate Amount in Row (11) Excludes Certain Shares
         (See Instructions)
                  [X]

13       Percent of Class Represented By Amount in Row (11)

                  20.93%

14       Type of Reporting Person (See Instructions)

                  OO




                                                              Page 8 of 15 Pages


                  This  Amendment  No. 2 to  Schedule  13D  relates to shares of
Common Stock,  $0.01 Par Value Per Share (the "Shares"),  of Portfolio  Recovery
Associates,  Inc. (the "Issuer"). This Amendment No. 2 supplementally amends the
initial statement on Schedule 13D, dated November 15, 2002, and Amendment No. 1,
dated May 28, 2003 (together,  the "Initial Statement"),  filed by the Reporting
Persons  (as  defined  herein).  This  Amendment  No.  2 is  being  filed by the
Reporting Persons to report that, as a result of an internal reorganization,  AG
Funds (as  defined  herein),  acquired  more than five  percent  of the  Shares.
Capitalized  terms used but not defined herein shall have the meanings  ascribed
to them in the  Initial  Statement.  The  Initial  Statement  is  supplementally
amended as follows.

Item 2.           Identity and Background.

                  This  Statement  is  being  filed  on  behalf  of  each of the
following persons (collectively, the "Reporting Persons"):

                  (i) Angelo, Gordon & Co., L.P. ("Angelo, Gordon");

                  (ii) AG Partners, L.P. ("AG Partners");

                  (iii) AG Funds, L.P. ("AG Funds");

                  (iv) John M. Angelo ("Mr. Angelo");

                  (v) Michael L. Gordon ("Mr. Gordon"); and

                  (vi) PRA Investments, L.L.C. ("PRAI").

                  This  Statement  relates to Shares held for the accounts of AG
Funds and PRAI.

                  Pursuant to an internal reorganization, as of January 1, 2004,
certain  Shares  previously  held  for  the  account  of  Angelo,   Gordon  were
transferred to AG Funds in exchange for partnership  interests in AG Funds. As a
result,  as of January 1, 2004, AG Funds  acquired  1,756,465  Shares.  No other
consideration  was involved in this  transfer and there is no change in ultimate
beneficial  ownership  for Mr.  John M.  Angelo and Mr.  Michael L.  Gordon as a
result of this transaction.

                  AG Funds is a  Delaware  limited  partnership.  The  principal
business  occupation  of AG Funds is  investment  in  securities.  The principal
business  address  of AG Funds is 245 Park  Avenue,  New York,  New York  10167.
Current  information  concerning  the identity and  background  of the executive
officers  of AG Funds is set  forth in  Annex A  hereto,  which is  incorporated
herein by reference in response to this Item 2.

                  During the past five years, none of the Reporting Persons and,
to the best of the Reporting Persons'  knowledge,  no other person identified in
response  to  this  Item 2 has  been  (a)  convicted  in a  criminal  proceeding
(excluding  traffic  violations or similar  misdemeanors)  or (b) a party to any
civil proceeding of a judicial or administrative body of competent  jurisdiction
and as a result of which such person was or is subject to a judgment,  decree or
final  order  enjoining  future  violations  of,  or  prohibiting  or  mandating
activities  subject  to,  federal  or state  securities  laws,  or  finding  any
violation with respect to such laws.

Item 3.           Source and Amount of Funds or Other Consideration

                  As noted  above,  as of  January 1,  2004,  AG Funds  acquired
1,756,465 Shares from Angelo, Gordon in return for certain partnership interests

                                                              Page 9 of 15 Pages

in AG Funds pursuant to an internal  reorganization.  No other consideration was
involved  in this  transfer  and  there  is no  change  in  ultimate  beneficial
ownership  for Mr. John M. Angelo and Mr.  Michael L. Gordon as a result of this
transaction.

                  The  securities  held for the  account of AG Funds may be held
through margin accounts  maintained with brokers,  which extend margin credit as
and when required to open or carry positions in their margin  accounts,  subject
to applicable federal margin  regulations,  stock exchange rules and such firms'
credit  policies.  The  positions  which  may be  held in the  margin  accounts,
including the Shares,  are pledged as  collateral  security for the repayment of
debit balances in the respective accounts.

Item 4.           Purpose of Transaction.

                  Mr. David N. Roberts ("Mr.  Roberts"),  a Managing Director of
Angelo, Gordon, serves on the Board of Directors of the Issuer. As a Director of
the Issuer, Mr. Roberts may have influence over the corporate  activities of the
Issuer,   including   activities   which  may  relate  to  items   described  in
subparagraphs (a) through (j) of Item 4 of Schedule 13D.

                  All of the Shares reported herein were acquired for investment
purposes.  Except as set  forth in this  Schedule  13D,  neither  the  Reporting
Persons nor, to the best of their knowledge, any of the other persons identified
in response to Item 2, has any plans or proposals that relate to or would result
in any of the transactions  described in subparagraphs (a) through (j) of Item 4
of Schedule 13D.

                  The Reporting  Persons reserve the right to acquire,  or cause
to be acquired,  additional securities of the Issuer, to dispose of, or cause to
be disposed,  such securities at any time or to formulate other purposes,  plans
or proposals regarding the Issuer or any of its securities, to the extent deemed
advisable in light of general  investment and trading  policies of the Reporting
Persons, market conditions or other factors.

Item 5.           Interest in Securities of the Issuer

                  Based  upon  information  provided  by the  Issuer in its most
recently-filed  quarterly  report  on Form  10-Q,  the  total  number  of Shares
outstanding was 15,208,761 as of October 27, 2003.

                  (a) (i)    Each of Angelo,  Gordon,  AG Partners  and PRAI may
be deemed the beneficial owner of 3,183,035 Shares (approximately  20.93% of the
total number of Shares  outstanding).  This number consists of 3,183,035  Shares
held for the account of PRAI.

                      (ii)   AG Funds  may  be  deemed  the  beneficial owner of
1,756,465  Shares   (approximately  11.55%  of  the   total   number  of  Shares
outstanding) held for its account.

                      (iii)  Mr. Angelo may be deemed the  beneficial  owner  of
4,939,500   Shares  (approximately  32.48%   of   the   total  number  of Shares
outstanding). This number consists of A) 1,756,465 Shares held for account of AG
Funds, and B) 3,183,035 Shares held for the account of PRAI.

                      (iv)   Mr. Gordon  may be deemed the  beneficial  owner of
4,942,000  Shares  (approximately   32.49%   of   the  total  number  of  Shares
outstanding). This number consists of A) 1,756,465 Shares held for account of AG
Funds,  B)  3,183,035 Shares  held  for the account of PRAI, and C) 2,500 Shares
held for Mr. Gordon's personal account.

                                                             Page 10 of 15 Pages

                  (b) (i)    Each of Angelo,  Gordon,  AG Partners  and PRAI may
be  deemed  to have  shared  power to  direct  the  voting  and  disposition  of
the 3,183,035 Shares held for the account of PRAI.

                      (ii)   AG  Funds  may  be  deemed  to have shared power to
direct the voting and  disposition of the 1,756,465 Shares held for its account.

                      (iii)  Mr. Angelo  may  be  deemed to have shared power to
direct the voting and disposition of the  4,939,500 Shares held for the accounts
of AG Funds and PRAI.

                      (iv)   Mr. Gordon  may  be  deemed to have shared power to
direct the voting and disposition of the  4,942,000 Shares held for the accounts
of AG Funds, PRAI and Mr. Gordon.

                  (c) Other than as set forth herein in Item 2 and Item 3, there
have been no transactions with respect to the Shares since November 10, 2003 (60
days prior to the date hereof) by any of the Reporting Persons.

                  (d) (i)    The  partners  of  Angelo,  Gordon  have the  right
to  participate in the receipt of dividends  from, or proceeds from the sale of,
the  Shares  held  for  the  account  of  Angelo,  Gordon  in  accordance  with
their partnership interests in Angelo, Gordon.

                      (ii)   The partners of PRAI have  the right to participate
in  the receipt of dividends from, or proceeds from the sale of, the Shares held
for the account of PRAI in accordance with their partnership interests in PRAI.

                      (iii)  The  partners  of  AG  Funds  have  the  right  to
participate  in the receipt of dividends from, or proceeds from the sale of, the
Shares held  for  the  account  of AG Funds in accordance with their partnership
interests in AG Funds.

                  (e) Not Applicable.

Item 6.           Contracts, Arrangements, Understandings  or Relationships with
                  Respect to Securities of the Issuer

                  From  time to time,  each of the  Reporting  Persons  may lend
portfolio securities to brokers,  banks or other financial  institutions.  These
loans  typically  obligate  the borrower to return the  securities,  or an equal
amount of securities of the same class, to the lender and typically  provide the
borrower is entitled to exercise  voting rights and to retain  dividends  during
the term of the loan.  From time to time, to the extent  permitted by applicable
law, each of the Reporting Persons may borrow securities,  including the Shares,
for the purpose of effecting,  and may effect, short sale transactions,  and may
purchase  securities for the purpose of closing out short sale positions in such
securities.

                  Except as set forth herein, and in the Initial Statement,  the
Reporting  Persons do not have any contracts,  arrangements,  understandings  or
relationships with respect to any securities of the Issuer.



                                                             Page 11 of 15 Pages

Item 7.           Materials to be Filed as Exhibits.

                  The Exhibit Index is incorporated herein by reference.



                                                             Page 12 of 15 Pages

                                   SIGNATURES

         After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this Statement is
true, complete and correct.

Date:    January 9, 2004               ANGELO, GORDON & CO., L.P.

                                       By: AG Partners, L.P.,
                                           Its General Partner

                                       By: /s/ Michael L. Gordon
                                          ----------------------------------
                                          Name:  Michael L. Gordon
                                          Title: General Partner

Date:    January 9, 2004               AG PARTNERS, L.P.


                                       By: /s/ Michael L. Gordon
                                          -----------------------------------
                                          Name:  Michael L. Gordon
                                          Title: General Partner

Date:    January 9, 2004               AG FUNDS, L.P.

                                       By: AG Funds GP, L.P.,
                                           Its General Partner

                                       By: JM Funds LLC,
                                           Its General Partner

                                       By: /s/ Michael L. Gordon
                                          -----------------------------------
                                          Name:  Michael L. Gordon
                                          Title: Managing Member

Date:    January 9, 2004               JOHN M. ANGELO

                                       /s/ John M. Angelo
                                       --------------------------------------

Date:    January 9, 2004               MICHAEL L. GORDON

                                       /s/ Michael L. Gordon
                                       --------------------------------------

Date:    January 9, 2004               PRA INVESTMENTS, L.L.C.

                                       By: Angelo, Gordon & Co., L.P.,
                                           Its Manager

                                       By: AG Partners, L.P.,
                                           Its General Partner

                                       By: /s/ Michael L. Gordon
                                          ----------------------------------
                                          Name:  Michael L. Gordon
                                          Title: General Partner




                                                             Page 13 of 15 Pages

                                     ANNEX A

                      Executive Officers of AG Funds, L.P.

Name/Citizenship         Principal Occupation                 Business Address
----------------         --------------------                 ----------------
John M. Angelo           Chief Executive Officer              245 Park Avenue
(United States)                                               New York, NY 10167

Michael L. Gordon        Chief Operating Officer              245 Park Avenue
(United States)                                               New York, NY 10167

Fred Berger              Chief Administrative Officer         245 Park Avenue
(United States)                                               New York, NY 10167

Joseph R. Wekselblatt    Chief Financial Officer              245 Park Avenue
(United States)                                               New York, NY 10167



         Other than as set forth herein, to the best of the Reporting Persons'
knowledge:

         (a)   None of the above persons hold any Shares. /1/

         (b)   None of the above persons has any contracts, arrangements,
               understandings or relationships with respect to the Shares. /1/







------------------------------------------------------------
/1/ Mr. Gordon holds 2,500 Shares for his personal  account and may be deemed to
beneficially own the securities held for the accounts of AG Funds, L.P. and PRA
Investments, L.L.C. as set forth herein.



                                                             Page 14 of 15 Pages

                                  EXHIBIT INDEX
                                                                        Page No.
                                                                        --------
D.        Joint Filing Agreement, dated as of January 9, 2004,
          by and among Angelo, Gordon & Co., L.P., AG Partners,
          L.P., AG Funds, L.P., John M. Angelo, and Michael L. Gordon...      15




                                                             Page 15 of 15 Pages

                                    EXHIBIT D

                             JOINT FILING AGREEMENT

                  The  undersigned  hereby agree that the  statement on Schedule
13D with respect to the Shares of Portfolio Recovery Associates,  Inc., dated as
of January 9, 2004,  is, and any  amendments  thereto  (including  amendments on
Schedule  13G) signed by each of the  undersigned  shall be,  filed on behalf of
each of us pursuant to and in  accordance  with the  provisions of Rule 13d-1(k)
under the Securities Exchange Act of 1934.

Date:    January 9, 2004               ANGELO, GORDON & CO., L.P.

                                       By: AG Partners, L.P.,
                                           Its General Partner

                                       By: /s/ Michael L. Gordon
                                          ----------------------------------
                                          Name:  Michael L. Gordon
                                          Title: General Partner

Date:    January 9, 2004               AG PARTNERS, L.P.


                                       By: /s/ Michael L. Gordon
                                          -----------------------------------
                                          Name:  Michael L. Gordon
                                          Title: General Partner

Date:    January 9, 2004               AG FUNDS, L.P.

                                       By: AG Funds GP, L.P.,
                                           Its General Partner

                                       By: JM Funds LLC,
                                           Its General Partner

                                       By: /s/ Michael L. Gordon
                                          -----------------------------------
                                          Name:  Michael L. Gordon
                                          Title: Managing Member

Date:    January 9, 2004               JOHN M. ANGELO

                                       /s/ John M. Angelo
                                       --------------------------------------

Date:    January 9, 2004               MICHAEL L. GORDON

                                       /s/ Michael L. Gordon
                                       --------------------------------------

Date:    January 9, 2004               PRA INVESTMENTS, L.L.C.

                                       By: Angelo, Gordon & Co., L.P.,
                                           Its Manager

                                       By: AG Partners, L.P.,
                                           Its General Partner

                                       By: /s/ Michael L. Gordon
                                          ----------------------------------
                                          Name:  Michael L. Gordon
                                          Title: General Partner