limit surprisingly the use of dimethyl acetoacetamide has been found effective in reducing or eliminating free formaldehyde while not imparting undesirable characteristics such as yellowing to the treated fabric in preparing the composition by mixing the dimethyl acetoacetamide with the dmdheu or alkylated dmdheu sufficient time is provided for the free formaldehyde to be reacted this results in a composition with extremely low levels of residual formaldehyde which benefits the manufacturing environment when the composition is being applied to the fabric also the treated fabric has extremely low or even essentially no residual formaldehyde as measured by the aatcc test method 118 the admixture of polyols to either dmdheu or to the finishing bath gives little or no reduction in free formaldehyde in the resin but will reduce the residual formaldehyde on the treated fabric similarly as taught in u s pat no 4 396 391 which is hereby incorporated herein by reference the reaction of polyols with dmdheu or alkylated dmdheu gives even lower residual formaldehyde on the fabric although the use of dimethyl acetoacetamide gives reductions in formaldehyde levels with dmdheu alone or with dmdheu mixed with polyols it is beneficial to use dmdheu reacted with polyols which provides the lowest overall levels of residual formaldehyde the by weight ratio of amount of dmdheu polyol is generally in a ratio of from 1 0 2 1 6 preferably 1 05 1 3 0 the preferred polyols are ethylene glycol diethylene glycol propylene glycols butylene glycols and their mixtures the reaction of polyol with dmdheu or alkylated dmdheu may be carried out in aqueous solution within the temperature range of about 10 u00b0 to 100 u00b0 c and preferably within the range of about 50.