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

                                 FORM 10-Q


[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934

             For the Quarterly Period Ended September 30, 1997

                                    or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934

For the transition period from                    to                   


                         Commission File #0-17593


                   Inland Monthly Income Fund II, L.P. 
          (Exact name of registrant as specified in its charter)



         Delaware                                     #36-3587209
  (State or other jurisdiction      (I.R.S. Employer Identification Number) 
of incorporation or organization)



       2901 Butterfield Road, Oak Brook, Illinois         60523
        (Address of principal executive office)         (Zip Code)


    Registrant's telephone number, including area code:  630-218-8000


                                 N/A                        
              (Former name, former address and former fiscal
                    year, if changed since last report)


Indicate by check mark  whether  the  registrant  (1) has filed all reports
required to be filed by Section 13  or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such  reports), and (2) has been subject to
such filing requirements for the past 90 days.  Yes X  No   




                                    -1-



                    INLAND MONTHLY INCOME FUND II, L.P.
                          (a limited partnership)

                              Balance Sheets

                 September 30, 1997 and December 31, 1996
                                (unaudited)


                                  Assets
                                  ------
 
                                                       1997          1996
                                                       ----          ----
Current assets:
  Cash and cash equivalents (Note 1).............. $   919,486     1,043,462
  Accounts and rents receivable...................     188,645       139,447
  Current portion of deferred rent receivable
    (Note 2)......................................       1,329         1,366
  Other assets....................................       3,261           493
                                                   ------------  ------------
    Total current assets..........................   1,112,721     1,184,768
                                                   ------------  ------------
Investment properties (including acquisition fees
  paid to Affiliates of $1,430,682)(Note 1):
    Land..........................................   3,998,149     3,998,149 
    Buildings and improvements....................  13,814,185    13,814,185
                                                   ------------  ------------
                                                    17,812,334    17,812,334
      Less accumulated depreciation...............   3,509,969     3,186,278
                                                   ------------  ------------
    Net investment properties.....................  14,302,365    14,626,056
                                                   ------------  ------------
Other assets:
  Deferred leasing fees to Affiliates (net of
    accumulated amortization of $120,390 and
    $106,820 at September 30, 1997 and December 31,
    1996, respectively) (Note 1)..................     107,342       120,912
  Deferred rent receivable, less current portion
    (Note 2)......................................     357,926       381,268
                                                   ------------  ------------
    Total other assets............................     465,268       502,180
                                                   ------------  ------------
Total assets...................................... $15,880,354    16,313,004 
                                                   ============  ============










                See accompanying notes to financial statements.


                                    -2-



                      INLAND MONTHLY INCOME FUND II, L.P.
                            (a limited partnership)

                                Balance Sheets
                                  (continued)

                   September 30, 1997 and December 31, 1996
                                  (unaudited)


                       Liabilities and Partners' Capital
                       ---------------------------------

                                                       1997          1996
                                                       ----          ----
Current liabilities:
  Accounts payable................................ $     6,169        14,122
  Accrued real estate taxes.......................     141,547       183,965
  Distributions payable (Note 4)..................     135,900       140,045
  Due to Affiliates (Note 3)......................      10,802         2,925
  Deposits held for others........................     266,377       340,767
  Other current liabilities.......................      26,925        26,925
                                                   ------------  ------------
    Total current liabilities.....................     587,720       708,749

Commission payable to Affiliates (Note 3).........     132,000       132,000
                                                   ------------  ------------
Total liabilities.................................     719,720       840,749
                                                   ------------  ------------
Partners' capital (Notes 1 and 4):
  General Partner:
    Capital contribution..........................         500           500
    Cumulative net income.........................      65,353        68,590
                                                   ------------  ------------
                                                        65,853        69,090
  Limited Partners:                                ------------  ------------
    Units of $500. Authorized 80,000 Units,
      50,095.50 Units outstanding (net of
      offering costs of $3,148,734, of which
      $653,165 was paid to Affiliates)............  21,916,510    21,916,510
    Cumulative net income.........................  12,397,833    11,469,545
    Cumulative distributions...................... (19,219,562)  (17,982,890)
                                                   ------------  ------------
                                                    15,094,781    15,403,165
                                                   ------------  ------------
      Total Partners' capital.....................  15,160,634    15,472,255
                                                   ------------  ------------
Total liabilities and Partners' capital........... $15,880,354    16,313,004
                                                   ============  ============






                See accompanying notes to financial statements.


                                    -3-



                      INLAND MONTHLY INCOME FUND II, L.P.
                            (a limited partnership)

                           Statements of Operations

        For the three and nine months ended September 30, 1997 and 1996
                                  (unaudited)

                                         Three months           Nine months
                                            ended                 ended
                                         September 30,         September 30,
                                         -------------         -------------
                                       1997       1996       1997       1996
                                       ----       ----       ----       ----
Income:
  Rental income (Notes 1 and 2).... $ 480,653    475,680  1,437,430  1,427,514 
  Additional rental income.........    41,731     37,057    125,279    116,464
  Interest income..................     9,170      8,397     26,826     24,078
  Other income.....................      -          -        17,489       -
                                    ---------- ---------- ---------- ----------
                                      531,554    521,134  1,607,024  1,568,056
Expenses:                           ---------- ---------- ---------- ----------
  Professional services to
    Affiliates.....................     3,300      3,076      9,230      9,551
  Professional services to
    non-affiliates.................      -          -        27,230     23,665
  General and administrative
    expenses to Affiliates.........     6,870      8,436     20,368     24,499
  General and administrative
    expenses to non-affiliates.....     1,567      2,223     14,397     13,299
  Property operating expenses to
    Affiliates.....................     7,392      8,494     23,703     24,162
  Property operating expenses to
    non-affiliates.................    90,379     68,324    249,784    212,137 
  Depreciation.....................   107,897    107,896    323,691    323,690
  Amortization.....................     4,524      4,523     13,570     13,569
                                    ---------- ---------- ---------- ----------
                                      221,929    202,972    681,973    644,572
                                    ---------- ---------- ---------- ----------
Net income......................... $ 309,625    318,162    925,051    923,484
                                    ========== ========== ========== ==========

Net income (loss) allocated to:
  General Partner..................    (1,079)    (1,079)    (3,237)    (3,237)
  Limited Partners.................   310,704    319,241    928,288    926,721
                                    ---------- ---------- ---------- ----------
Net income......................... $ 309,625    318,162    925,051    923,484
                                    ========== ========== ========== ==========

Net loss allocated to the one
  General Partner Unit............. $  (1,079)    (1,079)    (3,237)    (3,237)
                                    ========== ========== ========== ==========
Net income allocated to Limited 
  Partners per weighted average
  Limited Partnership Units of  
  50,095.50........................ $    6.20       6.37      18.53      18.50
                                    ========== ========== ========== ==========

                See accompanying notes to financial statements.


                                    -4-



                      INLAND MONTHLY INCOME FUND II, L.P.
                            (a limited partnership)

                           Statements of Cash Flows

               For nine months ended September 30, 1997 and 1996
                                  (unaudited)



                                                       1997          1996
                                                       ----          ----
Cash flows from operating activities:
  Net income...................................... $   925,051       923,484
  Adjustments to reconcile net income to
      net cash provided by operating activities:
    Depreciation..................................     323,691       323,690
    Amortization..................................      13,570        13,569
    Deferred rent receivable......................      23,379         4,673
    Changes in assets and liabilities:
      Accounts and rents receivable...............     (49,198)       38,503
      Other assets................................      (2,768)         (579)
      Accounts payable............................      (7,953)        8,931
      Accrued real estate taxes...................     (42,418)      (42,051)
      Due to Affiliates...........................       7,877        (6,996)
                                                   ------------  ------------
Net cash provided by operating activities.........   1,191,231     1,263,224
                                                   ------------  ------------
Cash flows from financing activities:
  Deposits held for others........................     (74,390)      (84,321)
  Cash distributions..............................  (1,240,817)   (1,292,705)
                                                   ------------  ------------
Net cash used in financing activities.............  (1,315,207)   (1,377,026)
                                                   ------------  ------------
Net decrease in cash and cash equivalents.........    (123,976)     (113,802)
Cash and cash equivalents at beginning of period..   1,043,462       981,562
                                                   ------------  ------------
Cash and cash equivalents at end of period........ $   919,486       867,760
                                                   ============  ============
















                See accompanying notes to financial statements.


                                    -5-



                      INLAND MONTHLY INCOME FUND II, L.P.
                            (a limited partnership)

                         Notes to Financial Statements

                              September 30, 1997
                                  (unaudited)


Readers of this  Quarterly  Report  should  refer  to the Partnership's audited
financial statements for the  fiscal  year  ended  December 31, 1996, which are
included  in  the  Partnership's  1996   Annual  Report,  as  certain  footnote
disclosures which would substantially duplicate those contained in such audited
financial statements have been omitted from this Report.

(1) Organization and Basis of Accounting

The Registrant, Inland Monthly  Income  Fund  II, L.P. (the "Partnership"), was
formed on June  20,  1988  pursuant  to  the  Delaware  Revised Uniform Limited
Partnership Act, to  invest  in  improved  residential,  retail, industrial and
other income producing properties. On August 4, 1988, the Partnership commenced
an Offering of 50,000 (subject to increase to 80,000) Limited Partnership Units
pursuant to a  Registration  under  the  Securities  Act  of 1933. The Offering
terminated on August 4, 1990, with  total  sales of 50,647.14 Units at $500 per
Unit, resulting in gross  offering  proceeds  of $25,323,569, not including the
General Partner's contribution for $500. All of the holders of these Units have
been admitted to the Partnership.  Inland Real Estate Investment Corporation is
the General Partner.  The  Limited  Partners  of  the  Partnership share in the
benefits  of  ownership  of  the  Partnership's  real  property  investments in
proportion to the  number  of  Units  held.  The Partnership repurchased 551.64
Units for $260,285 from  various  Limited  Partners through the Unit Repurchase
Program. There are no funds remaining  for the repurchase of Units through this
program.

The preparation of financial  statements  in conformity with generally accepted
accounting principles requires  management  to  make  estimates and assumptions
that affect the reported amounts  of  assets  and liabilities and disclosure of
contingent assets and liabilities at  the  date of the financial statements and
the reported amounts of  revenues  and  expenses  during the reporting periods.
Actual results could differ from those estimates.

Offering costs have been offset against the Limited Partners' capital accounts.

Statement of Financial Accounting Standards  No.  121 ("SFAS 121") requires the
Partnership to record  an  impairment  loss  on  its  property  to  be held for
investment whenever  its  carrying  value  cannot  be  fully  recovered through
estimated undiscounted future cash flows  from  their operations and sale.  The
amount of the impairment loss to  be recognized would be the difference between
the property's carrying value and the  property's  estimated fair value.  As of
September 30, 1997, the Partnership has not recognized any such impairment.







                                    -6-



                      INLAND MONTHLY INCOME FUND II, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)

                              September 30, 1997
                                  (unaudited)


Depreciation expense is computed using the straight-line method.  Buildings and
improvements are based upon estimated  useful  lives  of  30 to 40 years, while
furniture and fixtures are based upon estimated  useful lives of 5 to 12 years.
Maintenance  and  repair  expenses  are  charged  to  operations  as  incurred.
Significant improvements are capitalized  and  depreciated over their estimated
useful lives.

Deferred leasing fees are amortized on  a  straight-line basis over the term of
the related lease.

Rental income is recognized  on  a  straight-line  basis  over the term of each
lease.  The difference between rental  income earned on the straight-line basis
and the cash rent due under the  provisions of the lease agreements is recorded
as deferred rent receivable.

The Partnership  considers  all  highly  liquid  investments  purchased  with a
maturity of three months or  less  to  be  cash  equivalents and are carried at
cost, which approximates market.  For  the periods ended September 30, 1997 and
December 31, 1996,  included  in  cash  and  cash  equivalents is approximately
$253,500 and $327,800, respectively, held in an unrestricted escrow account for
the payment of real estate taxes for Colonial Manor Living Center.

No provision for Federal income taxes  has  been made as the liability for such
taxes is that of the Partners rather than the Partnership.

In  the  opinion  of  management,  the  financial  statements  contain  all the
adjustments necessary, which  are  of  a  normal  recurring  nature, to present
fairly the  financial  position  and  results  of  operations  for  the periods
presented herein.  Results of interim periods are not necessarily indicative of
the results to be expected for the year.

















                                    -7-



                      INLAND MONTHLY INCOME FUND II, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)

                              September 30, 1997
                                  (unaudited)


(2) Deferred Rent Receivable

Certain tenant leases contain provisions  providing for stepped rent increases.
Generally accepted accounting principles require that rental income be recorded
for the period of occupancy  using  the  straight-line basis.  The accompanying
financial statements include  decreases  of  $23,379  and  $4,673  for the nine
months ended September 30, 1997  and  1996,  respectively, of rental income for
the period of occupancy for which stepped rent increases apply and $359,255 and
$382,634 in related  deferred  rent  receivable  as  of  September 30, 1997 and
December 31, 1996, respectively.    These  amounts  will  be collected over the
terms of the related leases as scheduled rent payments are made.


(3) Transactions with Affiliates

The General  Partner  and  its  Affiliates  are  entitled  to reimbursement for
salaries and expenses of employees  of  the  General Partner and its Affiliates
relating to the administration of the  Partnership.  Such costs are included in
professional services and general and administrative expenses to Affiliates, of
which $10,802 and $2,925 was unpaid  as  of September 30, 1997 and December 31,
1996, respectively.

An Affiliate of the General Partner  earned Property Management Fees of $23,703
and  $24,162  for  the  nine   months   ended  September  30,  1997  and  1996,
respectively, in connection with  managing  the Partnership's properties.  Such
fees are included in property  operating  expenses  to Affiliates, all of which
have been paid.

In connection with the  sale  of  The  Wholesale  Club  on January 8, 1991, the
Partnership recorded $132,000 of  sales  commission  payable to an Affiliate of
the General Partner.    Such  commission  has  been  deferred until the Limited
Partners receive their  Original  Capital  plus  a  return  as specified in the
Partnership Agreement.


(4)  Subsequent Events

During October 1997, the  Partnership  paid  a  distribution of $135,900 to the
Limited Partners.








                                    -8-



Item 2.  Management's  Discussion  and  Analysis  of  Financial  Condition  and
         Results of Operations


Certain statements in this  "Management's  Discussion and Analysis of Financial
Condition and Results of Operations" and  elsewhere in this quarterly report on
Form 10-Q constitute of "forward-looking  statements" within the meaning of the
Federal Private Securities  Litigation  Reform  Act  of  1995.   These forward-
looking statements involve  known  and  unknown  risks, uncertainties and other
factors which  may  cause  the  Partnership's  actual  results,  performance or
achievements to be materially different from any future results, performance or
achievements expressed or implied  by  these forward-looking statements.  These
factors include,  among  other  things,  federal,  state  or local regulations;
adverse changes in general economic  or local conditions; inability of borrower
to meet financial  obligations;  uninsured  losses;  and potential conflicts of
interest between the  Partnership  and  its  Affiliates,  including the General
Partner.

Liquidity and Capital Resources

On August 4, 1988, the Partnership  commenced an Offering of 50,000 (subject to
increase to  80,000)  Limited  Partnership  Units  pursuant  to  a Registration
Statement  on  Form  S-11  under  the  Securities  Act  of  1933.  The Offering
terminated on August 4, 1990, with  total  sales of 50,647.14 Units at $500 per
Unit, resulting in gross  offering  proceeds  of $25,323,569, not including the
General Partner's contribution of $500. All  of the holders of these Units have
been admitted to the Partnership.  The Partnership has acquired five properties
utilizing $21,224,542 of capital  proceeds  collected.  On January 8, 1991, the
Partnership sold one of its  properties,  The  Wholesale Club.  As of September
30, 1997, cumulative distributions to  Limited Partners totaled $19,219,562, of
which $4,395,565 represents proceeds from  the  sale  of The Wholesale Club and
$14,823,997  represents  distributable  cash  flow  from  the  properties.  The
Partnership repurchased 551.64 Units for $260,285 from various Limited Partners
through the Unit  Repurchase  Program.  There  are  no  funds remaining for the
repurchase of Units through this program.

As of September 30,  1997,  the  Partnership  had  cash and cash equivalents of
$919,486 which includes approximately  $253,500  held in an unrestricted escrow
account for the payment of real  estate taxes for Colonial Manor Living Center.
The Partnership intends to use  such  remaining funds for distributions and for
working capital requirements.

The properties owned by the Partnership  are  generating cash flow in excess of
the 8% annualized  distributions  to  the  Limited  Partners (paid monthly), in
addition to covering all  the  operating  expenses  of  the Partnership.  As of
September 30,  1997,  the  Partnership  has  made  cumulative  distributions of
$253,868 in addition to the 8%  annualized  return to the Limited Partners from
excess cash flow. To  the  extent  that  the  cash  flow from the properties is
insufficient to meet  the  Partnership's  needs,  the  Partnership  may rely on
advances from Affiliates of the General Partner, other short-term financing, or
may sell one or more of the properties.






                                    -9-



During May 1996, Euro-Fresh  Market  ("Euro-Fresh")  began its occupancy of the
anchor store of Water Tower Market Plaza in Palatine, Illinois and the shopping
center has been renamed Euro-Fresh Market  Plaza.  Eagle Foods had assigned the
lease on February 4, 1994 to  Certified Grocers Midwest, Inc. ("Certified") who
vacated in August 1995.  Under the original lease, as well as the assignment of
the lease, Eagle Foods  has  guaranteed  payments  until  November 1998.  As of
September 30, 1997, there was one  vacant  space at Euro-Fresh Market Plaza for
1,246 square feet.

Results of Operations

At September 30, 1997, the Partnership  owns four operating properties.  Two of
the  Partnership's  four  operating  properties,  Scandinavian  Health  Spa and
Colonial Manor Living Center, are  leased  on  a "triple-net" basis which means
that all expenses of the property are passed through to the tenant.  The leases
of the other two properties  owned  by  the  Partnership, K mart and Euro-Fresh
Market Plaza, provide that  the  Partnership  be responsible for maintenance of
the structure and the parking lot and the tenants are required to reimburse the
Partnership for  portions  of  insurance,  real  estate  taxes  and common area
maintenance.  The Partnership sold  one  of its properties, The Wholesale Club,
on January 8, 1991.

Rental and additional income  increased  for  the  three  and nine months ended
September 30, 1997, as compared  to  the  three and nine months ended September
30, 1996, due to an increase  in  occupancy  at Euro-Fresh Market Plaza.  As of
September 30, 1997, there was one  vacant  space at Euro-Fresh Market Plaza for
1,246 square feet.

Interest income increased for  the  three  and  nine months ended September 30,
1997, as compared to the three and nine months ended September 30, 1996, due to
an increase in interest rates for the comparable periods.

Other income  increased  for  the  nine  months  ended  September  30, 1997, as
compared to the nine months  ended  September  30, 1996, due to the Partnership
receiving real estate tax refunds for Colonial Manor Living Center.

Professional services to  non-affiliates  increased  for  the nine months ended
September 30, 1997, as compared  to  the  nine months ended September 30, 1996,
due  to  an  increase  in  legal   and  accounting  services  required  by  the
Partnership.

General and administrative expenses to  Affiliates  decreased for the three and
nine months ended September 30, 1997, as  compared to the three and nine months
ended September 30, 1996,  due  to  a  decrease  in  investor services and data
processing expenses.   General  and  administrative  expenses to non-affiliates
increased for the nine months ended September 30, 1997, as compared to the nine
months ended  September  30,  1996,  due  to  increases  in supplies, printing,
postage and state taxes.

Property operating expenses to non-affiliates  increased for the three and nine
months ended September 30, 1997, as compared to the three and nine months ended
September 30, 1996,  due  to  increases  in  repair  and maintenance, supplies,
insurance and real estate taxes at  Euro-Fresh Market Plaza.  This increase was
partially offset by decreases in common area maintenance and marketing expenses
at the property.


                                   -10-



The following is a list  of  approximate occupancy levels for the Partnership's
investment properties as of the end of each quarter during 1996 and 1997:


                                    1996                        1997
                          ------------------------    ------------------------
                            at    at    at    at        at    at    at    at
        Properties         03/31 06/30 09/30 12/31     03/31 06/30 09/30 12/31
        ----------         ----- ----- ----- -----     ----- ----- ----- -----
Scandinavian Health Spa    100%  100%  100%  100%      100%  100%  100%
  Broadview Heights, Ohio

Colonial Manor             100%  100%  100%  100%      100%  100%  100%
  LaGrange, Illinois

K mart                     100%  100%  100%  100%      100%  100%  100%
  Chandler, Arizona

Euro-Fresh Market Plaza     91%*  89%   93%   95%       93%   98%   98%
  Palatine, Illinois

*  Certified Grocers Midwest,  Inc.  vacated  Euro-Fresh  Market Plaza in August
   1995.  Certified occupied 29,317  square  feet,  or approximately 56%, of the
   shopping center.  This  occupancy  reflects  the payment of guaranteed rental
   income received under the original lease to Eagle Foods.



                          PART II - Other Information

Items 1 through 5 are omitted because  of the absence of conditions under which
they are required.

Item 6.  Exhibits and Reports on Form 8-K

     (a) Exhibits:

         (27) Financial Data Schedule

     (b) Reports on Form 8-K:

         None















                                   -11-



                                  SIGNATURES



Pursuant to the  requirements  of  the  Securities  Exchange  Act  of 1934, the
Registrant has duly caused  this  report  to  be  signed  on  its behalf by the
undersigned, thereunto duly authorized.



                            INLAND MONTHLY INCOME FUND II, L.P.
 
                            By:   Inland Real Estate Investment Corporation
                                  General Partner


                                  /S/ ROBERT D. PARKS

                            By:   Robert D. Parks
                                  Chairman
                            Date: November 12, 1997


                                  /S/ PATRICIA A. CHALLENGER

                            By:   Patricia A. Challenger
                                  Senior Vice President
                            Date: November 12, 1997


                                  /S/ KELLY TUCEK

                            By:   Kelly Tucek
                                  Principal Financial Officer and
                                  Principal Accounting Officer
                            Date: November 12, 1997





















                                   -12-