UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549FORM 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, 2001or

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

For the transition period from __________ to __________
Commission File #0-17593Inland 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





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INLAND MONTHLY INCOME FUND II, L.P.
(a limited partnership)
Balance Sheets
September 30, 2001 and December 31, 2000
(unaudited)Assets

|                                                                                                                                                                 |   | 2001       | 2000      
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ---------- | ----------
|                                                                                                                                                                 |   |            |           
|Current assets:                                                                                                                                                  |   |            |           
|Cash and cash equivalents                                                                                                                                        | $ | 1,502,554  | 1,413,462 
|Accounts and rents receivable                                                                                                                                    |   | 1,938      | 4,094     
|Other assets                                                                                                                                                     |   | -          | 167       
|                                                                                                                                                                 |   |            |           
|Total current assets                                                                                                                                             |   | 1,504,492  | 1,417,723 
|                                                                                                                                                                 |   |            |           
|Investment properties (including acquisition fees paid to   Affiliates of $1,430,682):                                                                           |   |            |           
|Land                                                                                                                                                             |   | 3,187,438  | 3,187,438 
|Buildings and improvements                                                                                                                                       |   | 12,423,443 | 12,423,443
|                                                                                                                                                                 |   |            |           
|                                                                                                                                                                 |   | 15,610,881 | 15,610,881
|Less accumulated depreciation                                                                                                                                    |   | 4,702,528  | 4,428,736 
|                                                                                                                                                                 |   |            |           
|Net investment properties                                                                                                                                        |   | 10,908,353 | 11,182,145
|                                                                                                                                                                 |   |            |           
|Other assets:                                                                                                                                                    |   |            |           
|Deferred leasing fees to Affiliates (net of accumulated     amortization of $183,351 and $178,812 at September 30,     2001 and December 31, 2000, respectively) |   | 44,381     | 48,920    
|Deferred rent receivable (Note 2)                                                                                                                                |   | 222,325    | 137,812   
|                                                                                                                                                                 |   |            |           
|Total other assets                                                                                                                                               |   | 266,706    | 186,732   
|                                                                                                                                                                 |   |            |           
|Total assets                                                                                                                                                     | $ | 12,679,551 | 12,786,600
|                                                                                                                                                                 |   |            |           



See accompanying notes to financial statements.

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INLAND MONTHLY INCOME FUND II, L.P.
(a limited partnership)
Balance Sheets
(continued)
September 30, 2001 and December 31, 2000
(unaudited)

Liabilities and Partners' Capital

|                                                                                                                                                                |   | 2001         | 2000        
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------ | ------------
|                                                                                                                                                                |   |              |             
|Current liabilities:                                                                                                                                            |   |              |             
|Accounts payable                                                                                                                                                | $ | 2,000        | 39,045      
|Distributions payable (Note 4)                                                                                                                                  |   | 120,162      | 123,832     
|Due to Affiliates (Note 3)                                                                                                                                      |   | 4,875        | 6,839       
|Deposits held for others                                                                                                                                        |   | 474,000      | 406,637     
|                                                                                                                                                                |   |              |             
|Total current liabilities                                                                                                                                       |   | 601,037      | 576,353     
|                                                                                                                                                                |   |              |             
|Commission payable to Affiliates (Note 3)                                                                                                                       |   | 132,000      | 132,000     
|                                                                                                                                                                |   |              |             
|Total liabilities                                                                                                                                               |   | 733,037      | 708,353     
|                                                                                                                                                                |   |              |             
|Partners' capital:                                                                                                                                              |   |              |             
|General Partner:                                                                                                                                                |   |              |             
|Capital contribution                                                                                                                                            |   | 500          | 500         
|Cumulative net income                                                                                                                                           |   | 53,428       | 56,166      
|                                                                                                                                                                |   |              |             
|                                                                                                                                                                |   | 53,928       | 56,666      
|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                                                                                                                                           |   | 17,883,761   | 16,919,461  
|Cumulative distributions                                                                                                                                        |   | (27,907,685) | (26,814,390)
|                                                                                                                                                                |   |              |             
|                                                                                                                                                                |   | 11,892,586   | 12,021,581  
|                                                                                                                                                                |   |              |             
|Total Partners' capital                                                                                                                                         |   | 11,946,514   | 12,078,247  
|                                                                                                                                                                |   |              |             
|Total liabilities and Partners' capital                                                                                                                         | $ | 12,679,551   | 12,786,600  
|                                                                                                                                                                |   |              |             



See accompanying notes to financial statements.

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INLAND MONTHLY INCOME FUND II, L.P.
(a limited partnership)
Statements of Operations
For the three and nine months ended September 30, 2001 and 2000
(unaudited)

|                                                                                                                                          |   | Three months       | Three months       | Nine months        | Nine months       
|----------------------------------------------------------------------------------------------------------------------------------------- | - | ------------------ | ------------------ | ------------------ | ------------------
|                                                                                                                                          |   | ended              | ended              | Ended              | ended             
|                                                                                                                                          |   | September 30, 2001 | September 30, 2000 | September 30, 2001 | September 30, 2000
|Income:                                                                                                                                   |   |                    |                    |                    |                   
|Rental income (Notes 1 and 2)                                                                                                             | $ | 418,317            | 430,503            | 1,307,953          | 1,267,419         
|Additional rental income                                                                                                                  |   | 2,261              | 2,260              | 6,780              | 3,424             
|Interest income                                                                                                                           |   | 3,207              | 11,904             | 24,324             | 48,050            
|Other income                                                                                                                              |   | 3,646              | 13,310             | 3,755              | 13,310            
|                                                                                                                                          |   | 427,431            | 457,977            | 1,342,812          | 1,332,203         
|Expenses:                                                                                                                                 |   |                    |                    |                    |                   
|Professional services to Affiliates                                                                                                       |   | 7,524              | 7,660              | 18,863             | 18,420            
|Professional services to non-    affiliates                                                                                               |   | 2,000              | 2,780              | 26,710             | 29,968            
|General and administrative     expenses to Affiliates                                                                                     |   | 8,222              | 9,370              | 22,008             | 26,993            
|General and administrative     expenses to non-affiliates                                                                                 |   | 5,401              | 3,989              | 16,624             | 30,572            
|Property operating expenses to     Affiliates                                                                                             |   | 6,016              | 5,255              | 13,275             | 15,381            
|Property operating expenses to     non-affiliates                                                                                         |   | 3,075              | 3,154              | 5,439              | 5,186             
|Depreciation                                                                                                                              |   | 82,434             | 95,679             | 273,792            | 287,038           
|Amortization                                                                                                                              |   | 1,513              | 4,524              | 4,539              | 13,570            
|                                                                                                                                          |   | 116,185            | 132,411            | 381,250            | 427,128           
|                                                                                                                                          |   |                    |                    |                    |                   
|Net income                                                                                                                                | $ | 311,246            | 325,566            | 961,562            | 905,075           
|                                                                                                                                          |   |                    |                    |                    |                   
|Net income (loss) allocated to:                                                                                                           |   |                    |                    |                    |                   
|General Partner                                                                                                                           |   | (824)              | (957)              | (2,738)            | (2,870)           
|Limited Partners                                                                                                                          |   | 312,070            | 326,523            | 964,300            | 907,945           
|                                                                                                                                          |   |                    |                    |                    |                   
|Net income                                                                                                                                | $ | 311,246            | 325,566            | 961,562            | 905,075           
|                                                                                                                                          |   |                    |                    |                    |                   
|Net loss allocated to the one                                                                                                             |   |                    |                    |                    |                   
|General Partner Unit                                                                                                                      | $ | (824)              | (957)              | (2,738)            | (2,870)           
|                                                                                                                                          |   |                    |                    |                    |                   
|Net income per Unit, basic and   diluted, allocated to Limited   Partners per weighted average   Limited Partnership Units of   50,095.50 | $ | 6.23               | 6.52               | 19.25              | 18.12             
|                                                                                                                                          |   |                    |                    |                    |                   

See accompanying notes to financial statements.

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INLAND MONTHLY INCOME FUND II, L.P.
(a limited partnership)
Statements of Cash Flows
For nine months ended September 30, 2001 and 2000
(unaudited)



|                                                                                    |   | 2001        | 2000       
|----------------------------------------------------------------------------------- | - | ----------- | -----------
|Cash flows from operating activities:                                               |   |             |            
|Net income                                                                          | $ | 961,562     | 905,075    
|Adjustments to reconcile net income to net cash provided by   operating activities: |   |             |            
|Depreciation                                                                        |   | 273,792     | 287,038    
|Amortization                                                                        |   | 4,539       | 13,570     
|Changes in assets and liabilities:                                                  |   |             |            
|Accounts and rents receivable                                                       |   | 2,156       | 9,392      
|Other assets                                                                        |   | 167         | (96)       
|Deferred rent receivable                                                            |   | (84,513)    | 62,748     
|Accounts payable                                                                    |   | (37,045)    | (17,675)   
|Due to Affiliates                                                                   |   | (1,964)     | 8,621      
|                                                                                    |   |             |            
|Net cash provided by operating activities                                           |   | 1,118,694   | 1,268,673  
|                                                                                    |   |             |            
|Cash flows from financing activities:                                               |   |             |            
|Deposits held for others                                                            |   | 67,363      | (126,428)  
|Cash distributions                                                                  |   | (1,096,965) | (3,524,125)
|                                                                                    |   |             |            
|Net cash used in financing activities                                               |   | (1,029,602) | (3,650,553)
|                                                                                    |   |             |            
|Net increase in cash and cash equivalents                                           |   | 89,092      | (2,381,880)
|Cash and cash equivalents at beginning of period                                    |   | 1,413,462   | 3,665,630  
|                                                                                    |   |             |            
|Cash and cash equivalents at end of period                                          | $ | 1,502,554   | 1,283,750  
|                                                                                    |   |             |            



See accompanying notes to financial statements.

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INLAND MONTHLY INCOME FUND II, L.P.
(a limited partnership)
Notes to Financial Statements
September 30, 2001
(unaudited)

Readers of this Quarterly Report should refer to the Partnership's audited financial statements for the fiscal year ended December 31, 2000, which are included in the Partnership's 2000 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 accounting principles generally accepted in the United States of America 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.

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.



(2)  Deferred Rent Receivable

Certain tenant leases contain provisions providing for scheduled 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 an increase of $222,325 and a decrease of $62,738 for the nine months ended September 30, 2001 and 2000, respectively, of rental income for the period of occupancy for which scheduled rent increases apply and $222,325 and $137,812 in related deferred rent receivable as of September 30, 2001 and December 31, 2000.  These amounts will be collected over the terms of the related leases as scheduled rent payments are made.



As of September 30, 2001, Elite, the tenant of the Colonial Manor Nursing Home, has made the deferred rental payment, which was due on February 1, 2001.  The General Partner and Elite have agreed to a revised ten-year lease, which began as of July 1, 2001.  Under the new lease, Elite will received a five month rent abatement with the first payment due on December 1, 2001 and a 17% reduction in the annual rent.

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INLAND MONTHLY INCOME FUND II, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
September 30, 2001
(unaudited)



(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 $4,875 and $6,839 was unpaid as of September 30, 2001 and December 31, 2000, respectively.

An Affiliate of the General Partner earned Property Management Fees of $13,275 and $15,381 for the nine months ended September 30, 2001 and 2000, respectively, in connection with managing the Partnership's properties.  Such fees are included in property operating expenses to Affiliates, all of which was paid as of September 30, 2001 and 2000.

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 2001, the Partnership paid a distribution of $120,162 to the Limited Partners.

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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 "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.  On November 30, 1999, the Partnership sold another of its properties, Eurofresh Plaza.  As of September 30, 2001, cumulative distributions to Limited Partners totaled $27,907,685, of which $4,395,565 represents proceeds from the sale of The Wholesale Club, $2,392,818 represents proceeds from the sale of Eurofresh Plaza, and $21,119,302 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, 2001, the Partnership had cash and cash equivalents of approximately $1,502,554 which includes approximately $474,000 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 property upgrades, distributions and for other 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, 2001, 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.



Results of Operations

At September 30, 2001, the Partnership owns three operating properties.  Two of the Partnership's three 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 lease of the other property owned by the Partnership, K mart, provides that the Partnership be responsible for maintenance of the structure and the parking lot and the tenant is required to reimburse the Partnership for portions of insurance, real estate taxes and common area maintenance.

Rental income increased for the nine months ended September 30, 2001, as compared to the nine months ended September 30, 2000, due to an increase in the straight-lined rental amounts on the Colonial Manor Living Center.



As of September 30, 2001, Elite, the tenant of the Colonial Manor Nursing Home, has made the deferred rental payment, which was due on February 1, 2001.  The General Partner and Elite have agreed to a revised ten-year lease, which began as of July 1, 2001.  Under the new lease, Elite will received a five month rent abatement with the first payment due on December 1, 2001 and a 17% reduction in the annual rent.



Interest income decreased for the nine months ended September 30, 2001, as compared to the nine months ended September 30, 2000, due to an increase in cash available to invest in short-term investments during the first quarter of 2000 due to the sale of Eurofresh Plaza.  Proceeds of $2,392,818 from this sale were distributed in February 2000.

Professional services to non-affiliates decreased for the nine months ended September 30, 2001, as compared to the nine months ended September 30, 2000, due to a decrease in accounting fees.

General and administrative expenses to Affiliates decreased for the nine months ended September 30, 2001, as compared to the nine months ended September 30, 2000, due to a decrease in data processing expenses.  General and administrative expenses to non-affiliates decreased for the nine months ended September 30, 2001, as compared to the nine months ended September 30, 2000, due to a decrease in the Illinois replacement tax expense.



The following is a list of approximate occupancy levels for the Partnership's investment properties as of the end of each quarter during 2000 and 2001:

|                        | 2000  |       | 2001 
|----------------------- | ----- | ----- | -----
|Properties              | 03/31 | 06/30 | 09/30
|                        |       |       |      
|Scandinavian Health Spa | 100%  | 100%  | 100% 
|Broadview Heights, Ohio |       |       |      
|                        |       |       |      
|Colonial Manor          | 100%  | 100%  | 100% 
|LaGrange, Illinois      |       |       |      
|                        |       |       |      
|K mart                  | 100%  | 100%  | 100% 
|Chandler, Arizona       |       |       |      





PART II - Other Information

Items 1 through 6(b) are omitted because of the absence of conditions under which they are required.

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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 13, 2001                        
|      |                                          
|      |                                          
|      | /S/ PATRICIA A. DELROSSO                 
|      |                                          
|By:   | Patricia A. DelRosso                     
|      | Senior Vice President                    
|Date: | November 13, 2001                        
|      |                                          
|      |                                          
|      | /S/ KELLY TUCEK                          
|      |                                          
|By:   | Kelly Tucek                              
|      | Principal Financial Officer and          
|      | Principal Accounting Officer             
|Date: | November 13, 2001