Getting only top 2 rows of information for each item in a table in MSSQL 2005

I am trying to get top 2 rows of information from each item in a table. The table have many items and locations, the unqiue row is item + loc. I have tried TOP n, set rowcount but not the result I am looking looking for. The idea is getting the top 2 loc with the minimum qty for each item.
item loc Qty
ITEMA LOCA 2
ITEMA LOCB 4
ITEMA LOCC 10
ITEMB LOCD 20
ITEMB LOCE 14
ITEMB LOCF 10
ITEMC LOCG 4
ITEMC LOCH 16
ITEMC LOCI 12
Expected result
item loc Qty
ITEMA LOCA 2
ITEMA LOCB 4
ITEMB LOCF 10
ITEMB LOCE 14
ITEMC LOCG 4
ITEMC LOCI 12
Is there a way to write this in a select statement without going through store procedure

hi, use cursor and fetch the item one by one and get top 2 and store it in temp table

Use a correlated subquery.
You need the top 2 locations per item code, ordering on the qty (ascending):
SELECT * FROM dbo.tblItem i
WHERE i.loc IN
(SELECT TOP 2 x.loc FROM dbo.tblItem x
WHERE x.item = i.item
ORDER BY x.Qty ASC)

Hi Frank
SELECT item, loc, qty , RANK() OVER (PARTITION BY item ORDER BY qty) AS rn
FROM tablename
i tryed using this query sql server 2000 , i am getting error in rank() and over
can you explain waht all this

Frank's version will work only in SQL 2005 and SQL 2008. For 2000 or earlier, use my syntax.