UNITED STATES

SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Item 3.

Source and Amount of Funds or Other Consideration

Item 3 of the Schedule 13D is hereby amended and supplemented by the following:

Pursuant to the terms of the Exchange Agreement (as defined in Item 4), POI Acquisition, L.L.C. (“POI Acquisition”) and Quadrangle Master Funding Ltd (“QMFL”), as lenders under the Credit Facility, discharged an aggregate of $120,000,000 principal amount of indebtedness under the Credit Facility in consideration for the issuance by Protection One, Inc. of an aggregate of 16,000,000 shares of Common Stock. 

Item 4.

Purpose of Transaction

Item 4 of the Schedule 13D is hereby amended and supplemented by the following:

Exchange Agreement; Restructuring

Pursuant to the terms of an Exchange Agreement dated as of November 12, 2004 (the “Exchange Agreement”) by and among Protection One, Inc. (“POI”), Protection One Alarm Monitoring, Inc., POI Acquisition, POI Acquisition I, Inc. (“PAII”) and QMFL, the principal balance outstanding under the Credit Facility was reduced by $120,000,000 as of February 8, 2005, and in consideration for such reduction, POI issued and delivered 10,666,667 shares to POI Acquisition and 5,333,333 shares to QMFL for an aggregate of 16,000,000 shares of Common Stock (such shares, the “New Shares”, such transaction, the “Exchange” and together with all other transactions contemplated under the Exchange Agreement, the “Restructuring”).

In addition, in connection with the Restructuring, POI amended and restated its certificate of incorporation to effectuate a one-for-fifty share reverse stock split of its shares of Common Stock outstanding immediately prior to the closing of the Exchange (the “Reverse Stock Split”).  The Reverse Stock Split did not apply to the New Shares. Accordingly, based on the 18,198,571 shares of Common Stock outstanding as of February 8, 2005 following the completion of the Restructuring, the aggregate number of New Shares issued pursuant to the Exchange represents 87.9% of all shares of Common Stock outstanding immediately following the Restructuring, and the shares of Common Stock outstanding immediately prior to the Restructuring represent approximately 10.8% of all shares of Common Stock outstanding immediately following the Restructuring.

Stockholders Agreement

In connection with the Restructuring, and pursuant to the terms of a Stockholders Agreement dated as of February 8, 2005 (the “Stockholders Agreement”) by and among POI, POI Acquisition and QMFL, the parties to such Stockholders Agreement agreed as to certain arrangements governing the administration and corporate governance of POI.  In particular, the parties are generally required to use their reasonable best efforts to cause POI’s board of directors to consist of five members, including two members designated by POI Acquisition, one member designated by QMFL, POI’s president and chief executive officer, Richard Ginsburg, and one independent director selected by a majority of the other directors.  It is anticipated that the board of directors will select an independent director at the next meeting of the board of directors.  In addition, POI is obligated to amend its bylaws at the first meeting of the board of directors following the Restructuring to require QMFL’s consent to POI’s taking any of the following actions: (i) voluntarily filing for bankruptcy, (ii) merging or consolidating with another entity for a period of two years after the Restructuring or (iii) selling all or substantially all of POI’s assets.

The Stockholders Agreement also includes certain restrictions on the transfer of POI’s Common Stock as well as “drag-along” rights in favor of POI Acquisition with respect to shares of Common Stock owned by QMFL and “tag along” rights in favor of QMFL with respect to sales of Common Stock by POI Acquisition.  Furthermore, the Stockholders Agreement gives POI Acquisition and QMFL the right to participate on a proportional basis in any future equity issuance by POI, except for issuances pursuant to registered public offerings, business combination transactions or certain issuances to officers, employees, directors or consultants of POI.

Item 5.

Interest in Securities of the Issuer

Item 5 of the Schedule 13D is hereby amended and supplemented by the following:

The information contained on the cover pages of this Schedule 13D and in Item 4 is incorporated herein by reference.

(c)  None of the Reporting Persons or, to the best knowledge of the Reporting Persons, none of the persons named in Item 2 or on Schedules 1, 2, 3 and 4 has engaged in any transaction during the past 60 days in, any Shares, except as described in this Schedule 13D.

Item 6.

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

Item 6 of the Schedule 13D is hereby amended and supplemented by the information contained in Item 4 of this Amendment, which is herein incorporated by reference.

Management Stockholder’s Agreement

Pursuant to the terms of a Management Stockholder’s Agreement dated as of February 8, 2005 (the “Management Stockholder’s Agreement”) by and among POI, POI Acquisition, QMFL and the named executive officers and certain other officers of POI, such officers invested an aggregate of $1.75 million in POI and received approximately 233,334 shares of Common Stock.  Under the Management Stockholder’s Agreement, the shares of Common Stock held by the executives are subject to transfer restrictions.  In addition, POI Acquisition has the right to include or “drag-along” the shares of Common Stock held by the

executives as part of any bona fide sale involving 100% of the shares of Common Stock held by POI Acquisition and, pursuant to the “tag-along” rights included in the Management Stockholder’s Agreement, the executives have the right to include their shares pro rata in any third-party sale by POI Acquisition of shares of Common Stock representing at least 25% of the shares of Common Stock then outstanding.  Prior to the occurrence of a significant public sale of shares of Common Stock by POI, POI Acquisition and QMFL will generally be entitled to a right of first refusal on third-party sales of shares of Common Stock by such officers of POI who are parties to the Management Stockholder’s Agreement.

Registration Rights Agreement

In connection with the Restructuring POI Acquisition, QMFL and POI entered into a Registration Rights Agreement dated as of February 8, 2005 (the “Registration Agreement”), pursuant to which POI Acquisition and QMFL have the right (exercisable four times by POI Acquisition and twice by QMFL) to request that POI register any or all of their shares of Common Stock.  POI Acquisition and QMFL also received piggyback registration rights whereby they shall have the opportunity to register their shares of Common Stock pursuant to any registration statement POI may file in the future, subject to certain conditions.

Item 7.

Material to Be Filed as Exhibits

Item 7 of the Schedule 13D is hereby supplemented by adding the following:

Exhibit 4                 Exchange Agreement, dated as of November 12, 2004, by and among Protection One, Inc., Protection One Alarm Monitoring, Inc., POI Acquisition, L.L.C., POI Acquisition I, Inc. and Quadrangle Master Funding Ltd.  (incorporated by reference to Exhibit 10.5 to POI’s Form 10-Q filed November 15, 2004)

Exhibit 6                 Stockholders Agreement, dated as of February 8, 2005, by and among Protection One, Inc., POI Acquisition, L.L.C. and Quadrangle Master Funding Ltd. (incorporated by reference to Exhibit 10.1 to POI’s Current Report on Form 8-K filed February 14, 2005)

Exhibit 7                 Form of Management Stockholder’s Agreement, dated as of February 8, 2005, by and among Protection One, Inc., POI Acquisition, L.L.C. and Quadrangle Master Funding Ltd. (incorporated by reference to Exhibit 10.8 to POI’s Current Report on Form 8-K filed February 14, 2005)

Exhibit 8                 Registration Rights Agreement, dated as of February 8, 2005, by and among Protection One, Inc., POI Acquisition, L.L.C. and Quadrangle Master Funding Ltd. (incorporated by reference to Exhibit 10.2 to POI’s Current Report on Form 8-K filed February 14, 2005)

Dated: February 18, 2005

POI ACQUISITION I, INC.

By:

/s/ David A. Tanner

Name:  David A. Tanner

Title:  President

POI ACQUISITION, L.L.C.

By:

/s/ David A. Tanner

Name:  David A. Tanner

Title:  Manager

QUADRANGLE CAPITAL PARTNERS LP

By:

Quadrangle GP Investors LP,
its General Partner

By:

Quadrangle GP Investors LLC,
its General Partner

By:

/s/ David A. Tanner

Name: David A. Tanner

Title: Managing Member

QUADRANGLE SELECT PARTNERS LP

By:

Quadrangle GP Investors LP,
its General Partner

By:

Quadrangle GP Investors LLC,
its General Partner

By:

/s/ David A. Tanner

Name: David A. Tanner

Title: Managing Member

QUADRANGLE CAPITAL PARTNERS-A LP

By:

Quadrangle GP Investors LP,
its General Partner

By:

Quadrangle GP Investors LLC,
its General Partner

By:

/s/ David A. Tanner

Name: David A. Tanner

Title: Managing Member

QUADRANGLE GP INVESTORS LP

By:

Quadrangle GP Investors LLC,

its General Partner

By:

/s/ David A. Tanner

Name:  David A. Tanner

Title:  Managing Member

QUADRANGLE GP INVESTORS LLC

By:

/s/ David A. Tanner

Name:  David A. Tanner

Title:  Managing Member

QUADRANGLE MASTER FUNDING LTD

By:

/s/ Michael Weinstock

Name:  Michael Weinstock

Title:  Director

QUADRANGLE DEBT RECOVERY ADVISORS LLC

By:

/s/ Michael Weinstock

Name:  Michael Weinstock

Title:  Managing Member