<PAGE>   1


                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549
                                   FORM 10-K
              [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
               THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

                  For the fiscal year ended December 31, 1995

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
              For the transaction period from         to 
                                              -------    --------
                         Commission File Number 0-15571

               CAROLINA INVESTMENT PARTNERS, LIMITED PARTNERSHIP
------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

         North Carolina                               56-1494619
(State or other jurisdiction of                    (I.R.S. Employer
incorporation or organization)                     Identification No.)

         4112 Blue Ridge Road, Suite 210
         Raleigh, North Carolina                      27612
------------------------------------------------------------------------------
(Address of principal executive offices)              (Zip Code)

Registrant's telephone number, including area code (919) 781-1700
                                                   --------------
Securities registered pursuant to Section 12(b) of the Act:  None
                                                             -----
Securities registered pursuant to Section 12(g) of the Act:  5,900
Units of Limited Partnership Interests.                      -----

         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     .
                                              -----    -----
         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of the registrant's knowledge,
in definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K [X].

         Market Value of 5,900 Units held by nonaffiliates as of March 21, 1996
was $5,900,000 (based upon offering price of $1,000 per Unit).

         Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.

         5,900 Units outstanding as of March 21, 1996
         --------------------------------------------

The total number of pages contained in this document is 28 pages.

<PAGE>   2



                                     PART I

Item 1.  Business.

         Carolina Investment Partners, Limited Partnership (the "Registrant")
is a limited partnership organized in 1985 under the North Carolina Uniform
Limited Partnership Act.  The Registrant was formed for the purpose of
investing in certain unimproved real properties located in Cary, North
Carolina.  The Registrant acquired these properties, commonly known as the
Martin Parcel and the Wellington Parcel, in 1986.  See "Properties."  The
Registrant has the option to develop the Martin Parcel for office and
institutional uses or hold it for resale.  Its only option for the Wellington
Parcel is to hold it for resale.  At this time the Registrant is not developing
the Martin Parcel and is attempting to resell it.  However, the Registrant will
consider its options with respect to development of the Martin Parcel and may
formulate a plan for development of the Martin Parcel.

         Development of real property in the Research Triangle Area is highly
competitive.  Factors which affect competition include price, financing terms,
economics, location, social and demographic conditions in the surrounding
areas, roads, sewers, utilities and other items of infrastructure, zoning and
similar governmental regulations which affect the cost of development and the
uses of the property.  Many of these factors are beyond the control of the
Registrant.  These competitive conditions may affect the Registrant's ability
to locate purchasers for, or develop, the properties at prices acceptable to
the Registrant.  The Registrant believes, however, that the proximity of the
properties to the full access highway interchange and overpass which connects
the Cary Parkway and U.S. Highway 1 and 64 (the "Interchange") enhances their
marketability and minimizes the effects of competition.  Competitive factors
relating to each property are discussed in greater detail under "Properties".

<PAGE>   3



Item 2.  Properties.

         The Martin Parcel and the Wellington Parcel are located in the
southern portion of Cary, North Carolina, a rapidly expanding community to the
immediate southwest of Raleigh, North Carolina.  Cary is part of a region in
central North Carolina known as the Research Triangle area which includes
Raleigh, Durham, Chapel Hill and the Research Triangle Park.  Both properties
are located near the residential single family subdivisions known as Ridgepath,
Wellington Park, MacGregor Downs, Lochmere, Kildaire Farms, Wimbledon, and
McDonald Woods.  The map below shows the locations of the Registrant's
properties in Cary.


                                    [MAP]

<PAGE>   4



         The Martin Parcel contains approximately 25.1 acres of unimproved land
which is divided into two tracts by the Cary Parkway.  The tract lying to the
west of the Cary Parkway contains 15.76 acres of land, while the tract lying to
the east of the Cary Parkway contains 9.34 acres of land.  The Martin Parcel is
located immediately to the north of the Interchange.

         The Wellington Parcel consists of approximately 16.3 acres of
unimproved land located approximately one-half mile south of the Interchange
and adjacent to the Cary Parkway and Tryon Road.  The Wellington Parcel is part
of a 216- acre planned unit development ("PUD") known as Wellington Park.

         Construction of the residential portions of the Wellington Park PUD
began in June of 1986.  Five residential neighborhoods containing 250 lots have
been developed and sold.  The primary infrastructure and recreation facilities
are complete.  Additional residential units are under construction.  A nursing
home has been built on a parcel of the PUD.

         The Wellington Parcel is bordered to the south by Tryon Road, to the
east by Wellingborough Drive, to the north by Parkton Drive, and to the west by
the Cary Parkway.  Tryon Road has been widened to a 100 foot right-of-way
fronting on the Wellington Parcel.  The Cary Parkway was expanded to four lanes
in 1992 and various extensions of the Cary Parkway have lead to an increase in
traffic at the site.

         The purchase contract between the seller of the Wellington Parcel (the
"Wellington Seller") and the Registrant includes a put option which permits the
Registrant, at its option, to require the Wellington Seller to repurchase the
Wellington Parcel for approximately $3,669,000 on or after July 18, 1989.  The
contract also provides that the Wellington Seller will share evenly with the
Registrant in any profits resulting from the sale of the Wellington Parcel.
However, this equity sharing arrangement was amended during 1990 to increase to
more than 87.5% the percentage of profits to be retained by the Registrant if
the Wellington Parcel is sold to a third party other than by exercise of the
put option by the Registrant.  If the put option is exercised, the Registrant
will retain only 50% of the profit from sale of the Wellington Parcel.  See
Item 11 "Executive Compensation" for a more detailed discussion of the amount
of appreciation to be paid to the Wellington Seller upon resale of the
Wellington Parcel other than through exercise of the put option.

         Upon the sale of the Wellington Parcel or the Martin Parcel, the
General Partner is entitled to a broker listing fee under some circumstances.
See Item 11 "Executive Compensation."  In addition to the broker listing fee,
in the event the parcel is sold by a broker unaffiliated with the General
Partner, the Registrant may pay such unaffiliated broker a 2.5%
broker-reallowance fee.

Item 3.  Legal Proceedings.

         No material legal proceedings are pending against the Registrant or
its properties.

<PAGE>   5



Item 4.  Submission of Matters to a Vote of Security Holders.

         No matters were submitted to a vote by the limited partners of the
Registrant during the fourth quarter of 1995.

                                    PART II

Item 5.  Market for the Registrant's Common Equity and Related Stockholder
Matters.

                 (a)      The Registrant has no common stock.  There is no
established public trading market for the Units.

                 (b)      The Registrant had 977 Limited Partners holding 5,900
Units as of March 21, 1996.  The number of Limited Partners was determined by
the Partnership's records maintained by the General Partner.

                 (c)      The Registrant has not paid cash dividends or made
cash distributions since its formation and does not anticipate making cash
distributions until either or both of its properties are sold.  Until the
Limited Partners have received distributions of cash from the Registrant of an
aggregate amount equal to 100% of the Capital Contributions of the Limited
Partners, plus an additional return equivalent to 10% per annum simple interest
on their "Unreturned Capital Contributions", the Limited Partners will receive
at least 99% of all distributions of cash, which will be distributed and
allocated among them in the ratio which the number of Units owned by each of
them bears to the total number of Units outstanding.  Thereafter, the
Registrant's distributions will be allocated 90% to the Limited Partners and
10% to the General Partner.  "Unreturned Capital Contribution" means the
Capital Contribution of a Limited Partner less any distributions of cash made
by the Registrant to such Limited Partner.

<PAGE>   6



Item 6.  Selected Financial Data.

<TABLE>
<CAPTION>
Summary of             1995          1994      1993           1992        1991
Operations:            ----          ----      ----           ----        ----
            
<S>              <C>           <C>          <C>         <C>         <C>
Income           $   39,158    $    2,776   $    2,570  $    4,703  $   13,524

Expenses         $   41,455        35,529       40,735      36,343      34,432

Net Loss         $   (2,297)      (32,753)     (38,165)    (31,640)    (20,908)

Net Loss
per
limited
partnership
unit             $     (.39)   $    (5.55)  $    (6.47) $    (5.36) $    (3.54)

Selected
Balances:

Land held
for
Investment       $4,822,183    $4,822,183   $4,822,183  $4,822,183  $4,822,183

Total assets     $4,855,624     4,826,351    4,878,893   4,899,144   4,936,813

General
Partner's
equity                  -0-           -0-          -0-         -0-         -0-

Limited
Partners'
equity           $4,818,568     $4,820,865  $4,853,618  $4,891,783  $4,923,423
                                                                         
</TABLE>

<PAGE>   7



Item 7.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations.

         The Registrant's operations resulted in a net loss of $2,297 during
1995, compared to net losses of $32,753 in 1994 and $38,165 in 1993.  The
primary differences between 1995 and 1994 were:

1.       In 1995 the Registrant had timber removed from one of its properties
         resulting in income of $35,664.  Income from the sale of timber was
         $1,648 in 1994 when trees were thinned on the Martin East parcel.

2.       Expenses in 1995 include:

         -       interest expense on a new note (see below),

         -       the cost of appraisals for the Registrant's properties,

         -       costs of filing the Registrant's reports with the SEC
                 electronically (which is now required),

         -       legal, printing, and mailing costs relating to the contract to
                 sell the Wellington Parcel (see below) and related 8-K filings
                 with the SEC, and

         -       lower property taxes due to a property tax rate reduction.

Primary operating differences between 1995 and 1993 were:

1.       There was no timber income in 1993, as compared to income of $35,664
         in 1995.

2.       Expenses in 1995 include:

         -       interest expense on a new note (see below),

         -       the cost of appraisals for the Registrant's properties,

         -       costs of filing the Registrant's reports with the SEC
                 electronically (which is now required),

         -       printing and mailing costs relating to the contract to sell
                 the Wellington Parcel (see below) and related 8-K filings with
                 the SEC,

         -       lower property tax rates due to a property tax rate reduction,
                 and

         -       lower legal and accounting fees.

         On February 2, 1995 the Registrant borrowed $55,000 from the General
Partner to replenish its cash balance which had been depleted by operating
expenses.  The note is payable upon the sale of the Registrant's properties or
other sources of funds but must be paid no later than June 1, 1996.  The note
bears interest at prime plus one percent.  Interest is payable quarterly.

         In February and March 1995, the Registrant had timber removed from its
properties generating income of $35,664, which was repaid against the loan from
the General Partner.

         The Registrant, Churchill & Banks, Ltd. ("Churchill & Banks"), and ADA
Corporation of North Carolina ("ADA"), which is affiliated with the General
Partner, have executed an agreement for Churchill & Banks to purchase certain
tracts of real property owned by the Registrant (the Wellington Parcel) and
ADA.  The agreement was amended on August 9, 1995.  The

<PAGE>   8



purchase price for the land to be received by the Registrant is $5.25 per net
square foot.  The Registrant believes the Wellington Parcel is approximately
16.3 acres, which would yield a sales price of $3,727,647.  Square footage is
to be verified by survey.  Closing for the sale of the property is to occur on
April 23, 1996.  The Purchase Agreement and the Amendment contain a number of
conditions to closing which must be satisfied prior to closing.  Consequently,
although there are no indications as of March 21,1996 that the sale will not
close as planned, there can be no assurance this Agreement will result in a
closing.

         As of March 21, 1996, the Registrant has $19,554 in cash and
short-term investments, which is insufficient to meet its needs during the next
year.  The General Partner anticipates the sale and closing of the Wellington
Parcel (see discussion above) in April 1996.  This sale, when closed, will
provide the Registrant with funds which will be sufficient to meet its
presently anticipated needs.  The Registrant expects to retain approximately
$300,000 from the Wellington sale for future operating needs and distribute the
remainder to the partners in accordance with the Partnership Agreement.  If the
Wellington Parcel sale does not close, the Registrant may obtain additional
financing to meet its present operating needs.

         The Registrant maintains its excess funds in a money market account at
Triangle Bank.  The General Partner believes this account is an appropriate
investment of the Registrant's funds.  Until either of the properties is sold,
placed into development and/or refinanced, the Registrant anticipates deficits
from operations and administrative expenses.

Item 8.  Financial Statements and Supplementary Data.

         Registrant's financial statements are included elsewhere herein.  See
"List of Financial Statements."

Item 9.  Changes in and Disagreements with Accountant on Accounting and
         Financial Disclosure.

         Effective January 11, 1994, the Registrants replaced Ernst & Young
with Lynch & Howard, P.A. as the independent accountants engaged as the
principal accountant to audit the Registrant's financial statements.  The
Registrant and Ernst & Young mutually agreed that termination of the
relationship between the Registrant and Ernst & Young was in the best interest
of the Registrant.

         The decision to change accountants was made by the General Partner of
the Registrant.

         During the period from January 1, 1993 through January 11, 1994, there
was no disagreement between the Registrant and Ernst & Young on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure, which disagreement, if not resolved to the satisfaction of
Ernst & Young, could have caused Ernst & Young to make a reference to the
subject matter of the disagreement in connection with its report.

         No "reportable events" as defined in Items 304(a) (1) (v) of
Regulation S-K occurred during the period from January 1, 1993 through January
11, 1994.

<PAGE>   9



                                    PART III

Item 10. Directors and Executive Officers of the Registrant.

         The Registrant has no directors or executive officers.  The Registrant
is managed, and its investment decisions are made, by the general partners of
the General Partner.  The General Partner is Walsmith Associates Two, a North
Carolina general partnership.  Except as expressly provided in the Partnership
Agreement, the General Partner has the power to do any and all things necessary
or incident to the conduct of the Registrant's business.  The general partners
of the General Partner are:

<TABLE>
<CAPTION>
                                                            Business Experience During
                                                             Past Five Years, Family
                                                         Relationships and Directorships
NAME                        AGE                                in Public Companies       
----                        ---                         ----------------------------------
<S>                         <C>            <C>
Donald F. Walston           54             President since 1982, and founder of Howard Perry and Walston Realty, Inc., a
                                           residential real estate brokerage company located in the Research Triangle
                                           area of North Carolina.

Alton L. Smith, III         47             Since 1985, Mr. Smith has been President of Triangle Development Company of
                                           Raleigh, Inc., a real estate development company.  In addition, Mr. Smith is a
                                           principal owner, and Executive Vice President of Howard Perry & Walston
                                           Realty, Inc.  Mr. Smith is also an officer and director of Trademark
                                           Properties, Inc.  Mr. Smith is the brother of C. Stephen Smith.

C. Stephen Smith            46             From 1985 through June of 1987, Mr. Smith was affiliated with both Howard
                                           Perry & Walston Realty, Inc. and Triangle Development Company of Raleigh, Inc.
                                           Mr. Smith is now an independent commercial real estate broker.  Mr. Smith is
                                           the brother of Alton L. Smith, III.
</TABLE>

         To the knowledge of the Registrant, no person is the beneficial owner
of more than 590 units 10% of the outstanding Units.

         Wellington Park Associates, a North Carolina general partnership, is
required to repurchase the Wellington parcel if the Registrant exercises its
put option (See "Properties").  The three general partners of the General
Partner of the Registrant, are all general partners of Wellington Park
Associates.  Accordingly, a conflict of interest exists between the general
partners of the General Partner and the Registrant with respect to the put
option.  For that reason, the put option may only be exercised with the prior
approval of the limited partners of the Registrant who own at least
seventy-five (75%) percent of the outstanding Units of the Registrant.

Item 11. Executive Compensation.

         The Agreement of Limited Partnership of the Registrant (the
"Partnership Agreement") governs the amount of compensation payable to Walsmith
Associates, Two, the General Partner of the Registrant.

<PAGE>   10




         Each year any portion of the properties of the Registrant remain
undeveloped, the Registrant pays the General Partner an annual $3,000
management fee.  This fee for 1995 was paid to the General Partner by the
Registrant during the year ended December 31, 1995.

         If any portion of the Registrant's properties are developed by the
Registrant, the Registrant will pay the General Partner a 3% development fee
based upon he cost of improvements, net of land.  No amounts were paid to the
General Partner as a development fee during the year ended December 31, 1995.

         The Registrant may also pay personnel engaged by or on its behalf to
coordinate or supervise development, construction and operational activities,
including partners and employees of its General Partner.  During the year ended
December 31, 1995, the Registrant paid affiliates of the General Partner $2,671
for record keeping, securities law filings and other administrative services.
No other amounts were paid for services during the year ended December 31, 1995
to the General Partner or any of its partners or employees.

         If the Registrant operates developed projects, the General Partner
will receive standard leasing commissions and standard property management
fees.  No amounts were paid during the year ended December 31, 1995.

         Until the limited partners receive distributions equal to at least
their capital contributions, plus an additional return equal to 10% per annum
simple interest on their unreturned capital contributions, the General Partner
will receive one (1%) percent of all distributions.  Thereafter, the General
Partner will receive ten (10%) percent of distributions.  The General Partner
received no distributions during the year ended December 31, 1995.

         Upon the sale of the Martin Parcel and the Wellington Parcel, the
General Partner will be paid a broker listing fee of two and one-half (2.5%)
percent (with respect to the Martin Parcel) and two and one-half (2.5%) percent
(with respect to the Wellington Parcel) of the sales price if the sale is to a
party unaffiliated with the General Partner.  If the property is sold by a
broker unaffiliated with the General Partner, the Registrant may also pay the
unaffiliated broker a five (5%) percent broker-reallowance fee.  No broker fees
were paid by the Registrant during the year ended December 31, 1995.

         Under the terms of a put option as amended on February 1, 1990, the
Registrant is required to pay to Wellington Park Associates (the "Wellington
Seller"), an affiliate of the General Partner, a portion of the appreciation on
any sale of the Wellington Parcel, including a sale pursuant to the
Registrant's exercise of the put option.  The Wellington Seller will receive
fifty (50%) percent of the appreciation (which is the amount by which the gross
sales price exceeds $1,223,175, the original cost to the Registrant of the
Wellington Parcel) if the put option is exercised.  Upon sale of the Wellington
Parcel to an unaffiliated third party other than by exercise of the put option,
the amount payable to the Wellington Seller will equal fifty (50%) percent of
the appreciation reduced by the sum of the following:  (a) for each year from
March 6, 1990 to the sale date (with partial years prorated according to the
number of days prior to closing of such sale), ten (10%) percent of the amount
by which (i) the gross proceeds from sale of the Wellington Parcel, exceed (ii)
fifty (50%) percent of the appreciation (the "Interest Factor"); plus (b)
seventy-five (75%) percent of the amount the Wellington Seller will receive
upon sale of the Wellington Parcel remaining after subtracting the Interest
Factor.

<PAGE>   11



The Interest Factor could result in reduction of the amount to be received by
the Wellington Seller to zero, but cannot result in the Wellington Seller owing
any payment to the Registrant.  As the Wellington Parcel was not sold during
the year ended December 31, 1995, the Registrant did not pay any amounts to the
Wellington Seller during that year.

         Information abut comparative five-year return on investment in the
Registrant compared to market indexes has not been included herein because
there is no public market in Units of the Registrant.  The limited partnership
agreement of the Registrant places substantial restrictions on transfer of
Units of the Registrant.  Accordingly, the Registrant believes comparisons to
indexes of publicly traded securities would not be meaningful disclosure for
investors.

Item 12. Security Ownership of Certain Beneficial Owners and
         Management.

         (a)     As of March 21, 1996, no person was known by the Registrant to
beneficially own more than 5% of the Units.  As of March 21, 1996, no general
partner of the General Partner had beneficial ownership in any Units.

         (b)     As a limited partnership, the Registrant has no officers and
directors, although Alton L. Smith, III, a general partner of the General
Partner, serves the Registrant in the role of its principal financial
"officer".  The General Partner has contributed $1,000 to the Registrant's
capital account; however, this contribution is not treated as the equivalent of
a Unit of limited partnership interest.  The General Partner's contribution
constitutes less than 1% of the total capital contributed to the Registrant.
Messrs. Walston, Smith and Smith are general partners of the General Partner.
Neither the General Partner nor Messrs. Walston, Smith or Smith beneficially
own any Units of the limited partnership.

Item 13. Certain Relationships and Related Transactions.

         See Item 11 "Executive Compensation."

                                    PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
         8-K.

         (a)     The following documents are filed as part of this report:

                 (1)      List of Financial Statements:
                          See "List of Financial Statements."

                 (2)      List of Financial Statement Schedules: All schedules
                          are omitted as they are not applicable or the
                          required information is shown in the financial
                          statements or the notes thereto.

                 (3)      Exhibits:  Exhibit Index.  All exhibits are
                          incorporated by reference.

         (b)     No Current Report on Form 8-K was filed during the quarter
ended December 31, 1995.

         (c)     The following exhibits have been filed by the Registrant with
the Securities and Exchange Commission under the Securities Exchange Act of

<PAGE>   12



1934 (File Number 0-15571) and are incorporated herein by reference:

<TABLE>
<CAPTION>
                                                                    Document from which
                 Description                                           Incorporated    
                 -----------                                        -------------------
                 <S>                                                <C>
                 Amended Agreement of                               The Annual Report on
                 Limited Partnership                                Form 10-K for the year
                 of the Registrant                                  ended December 31, 1986,         
                                                                    page 36.

                 Purchase Agreement                                 The Annual Report on
                 between the Registrant                             Form 10-K for the year    
                 and Walsmith Associates                            ended December 31, 1986,  
                 regarding the Martin                               page 108.                 
                 Parcel

                 Purchase Agreement                                 The Annual Report on
                 between the Registrant                             Form 10-K for the year
                 and Wellington Park                                ended December 31, 1986,
                 Associates regarding                               page 118.
                 the Wellington Parcel

                 Agreement between the                              The Annual Report on
                 North Carolina                                     Form 10-K for the year
                 Department of                                      ended December 31,
                 Transportation and                                 1986, page 128.
                 Walsmith Associates

                 Assignment and                                     The Annual Report on
                 Assumption Agreement                               Form 10-K for the year   
                 between the Registrant                             ended December 31,       
                 and Walsmith Associates.                           1986, page 135.          

                 Amendment to Offer to                              The Annual Report on      
                 Purchase and Contract for                          Form 10-K for the year    
                 Sale of Real Estate dated                          ended December 31,        
                 as of February 1, 1990                             1989, page 28.            
                 between the Registrant
                 and Wellington Park
                 Associates.

                 Agreement for the Purchase                         Current Report on Form    
                 and Sale of Real Estate dated                      8-K dated April 20,       
                 as of April 20, 1995 between                       1995, page 5.             
                 the Registrant, Churchill &
                 Banks, Ltd., and ADA Corporation
                 of North Carolina.

                 First Amendment to the Agreement                   Current Report on Form
                 for the Purchase and Sale of                       8-K dated August 9,
                 Real Estate dated August 9, 1995                   1995, page 4.
                 between the Registrant, Churchill
                 & Banks, Ltd., and ADA Corporation
                 of North Carolina.

</TABLE>

         (d)     All financial statement schedules are omitted because they are
not applicable or the required information is shown in the financial statements
attached hereto or notes thereto.


<PAGE>   13



                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) 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 on March  21, 1996.

                                             CAROLINA INVESTMENT PARTNERS
                                             
                                             By:  WALSMITH ASSOCIATES TWO,
                                                     General Partner
                                             
                                             
                                             By:  /s/ Alton L. Smith, III  
                                                ---------------------------
                                                     Alton L. Smith, III
                                                     General Partner and
                                                     Principal Financial Officer



         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature                                          Capacity                                           Date
---------                                          --------                                           ----
<S>                                                <C>                                                <C>                
/s/Donald F. Walston                               General Partner of                                 March 21, 1996  
----------------------                             Walsmith Associates                               
Donald F. Walston                                  Two, general partner   
                                                   of the Registrant      
                                                                          
                                                                          

/s/Alton L. Smith, III                             General Partner of                                 March 21, 1996
----------------------                             Walsmith Associates            
Alton L. Smith, III                                Two, general partner  
                                                   of the Registrant     
                                                                         
</TABLE>

Supplemental Information to be Furnished With Reports Filed Pursuant to Section
15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant
to Section 12 of the Act.

No annual report or proxy statement has been or will be sent to the Limited
Partners of the Registrant.

<PAGE>   14



                           ANNUAL REPORT ON FORM 10-K

                             ITEMS 8 AND 14 (a) (1)

                              FINANCIAL STATEMENTS

                          LIST OF FINANCIAL STATEMENTS

                          YEAR ENDED DECEMBER 31, 1995

               CAROLINA INVESTMENT PARTNERS, LIMITED PARTNERSHIP

                            RALEIGH, NORTH CAROLINA

<PAGE>   15



Form 10-K--Items, 8, 14 (a) (1) and (2) and (d)

CAROLINA INVESTMENT PARTNERS, LIMITED PARTNERSHIP

December 31, 1995


LIST OF FINANCIAL STATEMENTS

The following financial statements of Carolina Investment Partners, Limited
Partnership are included in Item 8:

<TABLE>
<CAPTION>
<S>                                                               <C>
Independent Auditors Report . . . . . . . . . . . . . . . . . . . F-1

Balance Sheets--December 31, 1995 and 1994. . . . . . . . . . . . F-2

Statements of Operations--Years Ended
 December 31, 1995, 1994 and 1993 . . . . . . . . . . . . . . . . F-3

Statements of Changes in Partners' Equity--Years Ended
 December 31, 1995, 1994, and 1993. . . . . . . . . . . . . . . . F-4

Statements of Cash Flows--Years Ended December 31, 1995,
 1994, and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . F-5

Notes to Financial Statements . . . . . . . . . . . . . . . . . . F-6
</TABLE>

Schedules to the financial statements for which provision is made in the
applicable accounting regulations of the Securities and Exchange Commission are
inapplicable or the required information is included in the financial
statements or the notes thereto.




<PAGE>   16
[LYNCH & HOWARD, P.A. LETTERHEAD]


                         INDEPENDENT AUDITOR'S REPORT




      To the Partners
      Carolina Investment Partners Limited Partnership
      Raleigh, North Carolina


      We have audited the accompanying balance sheets of Carolina Investment
      Partners Limited Partnership as of December 31, 1995 and December 31,
      1994, and the related statements of operations, changes in partners'
      equity and cash flows for each of the three years in the period ended
      December 31, 1995. These financial statements are the responsibility of
      the Partnership's management. Our responsibility is to express an opinion
      on these financial statements based on our audits.

      We conducted our audits in accordance with generally accepted auditing
      standards.  Those standards require that we plan and perform the audits
      to obtain reasonable assurance about whether the financial statements are
      free of material misstatement.  An audit includes examining, on a test
      basis, evidence supporting the amounts and disclosures in the financial
      statements.  An audit also includes assessing the accounting principles
      used and significant estimates made by management, as well as evaluating
      the overall financial statement presentation.  We believe that our audits
      provide a reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present
      fairly, in all material respects, the financial position of Carolina
      Investment Partners Limited Partnership as of December 31, 1995 and
      December 31, 1994, and the results of its operations and its cash flows
      for each of the three years in the period ended December 31, 1995 in
      conformity with generally accepted accounting principles.



      /s/ Lynch & Howard, P.A.


      February 27, 1996



                                     F-1


<PAGE>   17
                                                                       EXHIBIT A

                          CAROLINA INVESTMENT PARTNERS
                              LIMITED PARTNERSHIP
                            Raleigh, North Carolina
                                 BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                  December 31
                                                          -------------------------
                                                              1995          1994
                                                          ----------    -----------
  <S>                                                     <C>           <C>
  ASSETS:
     Cash                                                 $      542    $      812
     Short-term investments                                   32,796         3,253
     Land held for investment  (Note 6)                    4,822,183     4,822,183
     Other asset                                                 103           103
                                                          ----------    ----------

                                                          $4,855,624    $4,826,351
                                                          ==========    ==========

                       LIABILITIES AND PARTNERS' EQUITY

  LIABILITIES:
     Trade accounts payable and other liabilities         $   20,992    $    5,486
     Notes payable - related party                            16,064             0
                                                          ----------    ----------
           Total  Liabilities                             $   37,056    $    5,486


  PARTNERS' EQUITY:
     General Partner's equity                             $        0    $        0
     Limited partners' equity; 5,900 units
       authorized, issued and outstanding                  4,818,568     4,820,865
                                                          ----------    ----------
           Total Partners' Equity                         $4,818,568    $4,820,865
                                                          ----------    ----------

                                                          $4,855,624    $4,826,351
                                                          ==========    ==========
</TABLE>




  The Notes to Financial Statements are an integral part of this statement.

                                     F-2

<PAGE>   18
                                                                       EXHIBIT B

                          CAROLINA INVESTMENT PARTNERS
                              LIMITED PARTNERSHIP
                            Raleigh, North Carolina
                            STATEMENTS OF OPERATIONS




<TABLE>
<CAPTION>
                                                                                Year Ended December 31
                                                                           -------------------------------
                                                                              1995        1994       1993
                                                                           ---------  ---------- ---------
  <S>                                                                      <C>        <C>        <C>
  REVENUES:
      Sales of timber - net                                                $  35,664  $   1,648  $       0
      Interest and other income                                                3,494      1,128      2,570
                                                                           ---------  ---------  ---------
           Total Revenues                                                  $  39,158  $   2,776  $   2,570
                                                                           
  GENERAL AND ADMINISTRATIVE EXPENSES                                        (41,455)   (35,529)   (40,735)
                                                                           ---------  ---------  ---------
  NET LOSS                                                                 $  (2,297) $ (32,753) $ (38,165)
                                                                           =========  =========  =========
                                                                           
                                                                           
  ALLOCATION OF NET LOSS (Note 2):                                         
      General Partner                                                      $       0  $       0  $       0
      Limited partners                                                        (2,297)   (32,753)   (38,165)
                                                                           ---------  ---------  ---------
                                                                           $  (2,297) $ (32,753) $ (38,165)
                                                                           =========  =========  =========
                                                                           
  NET LOSS PER LIMITED PARTNERSHIP UNIT                                    
      (Based on 5,900 weighted average limited                             
      partnership units outstanding during each year)                      $   (0.39) $   (5.55) $   (6.47)
                                                                           =========  =========  =========
</TABLE>




  The Notes to Financial Statements are an integral part of this statement.

                                     F-3

<PAGE>   19

                                                                       EXHIBIT C

                          CAROLINA INVESTMENT PARTNERS
                              LIMITED PARTNERSHIP
                            Raleigh, North Carolina
                   STATEMENTS OF CHANGES IN PARTNERS' EQUITY


<TABLE>
<CAPTION>
                                                     Limiited         General         Limited
                                                   Partnership       Partner's       Partners'
                                                      Units           Equity          Equity         Total
                                                  ------------     -----------     -----------    ------------
<S>                                               <C>              <C>             <C>            <C>
BALANCE AT JANUARY 1, 1993                               5,900     $         -     $ 4,891,783    $  4,891,783
                                                              
NET LOSS FOR 1993                                            -               -         (38,165)        (38,165)
                                                  ------------     -----------     -----------    ------------   
BALANCE AT DECEMBER 31, 1993                             5,900     $         -     $ 4,853,618    $  4,853,618
                                                               
NET LOSS FOR 1994                                            -               -         (32,753)        (32,753)
                                                  ------------     -----------     -----------    ------------   
BALANCE AT DECEMBER 31, 1994                             5,900     $         -     $ 4,820,865    $  4,820,865
                                                              
NET LOSS FOR 1995                                            -               -          (2,297)         (2,297)
                                                  ------------     -----------     -----------    ------------      
BALANCE AT DECEMBER 31, 1995                             5,900     $         -     $ 4,818,568    $  4,818,568
                                                  ============     ===========     ===========    ============
</TABLE>


The Notes to Financial Statements are an integral part of this statement.

                                     F-4

<PAGE>   20

                                                                       EXHIBIT D

                          CAROLINA INVESTMENT PARTNERS
                              LIMITED PARTNERSHIP
                            Raleigh, North Carolina
                            STATEMENTS OF CASH FLOWS




<TABLE>
<CAPTION>
                                                                 Year Ended December 31
                                                      ------------------------------------------
                                                        1995            1994              1993
                                                      --------        ----------        --------
<S>                                                   <C>             <C>               <C>
OPERATING ACTIVITIES:
 Net loss                                             $ (2,297)       $ (32,753)        $(38,165)
 Adjustments to reconcile net loss to
   net cash used in operating acitivities
     Changes in operating assets and liabilities:
       Trade accounts payable                           15,506          (19,789)          17,914
                                                      --------        ----------        --------
       Net Cash Provided By (Used In)
         Operating Activities                         $ 13,209        $ (52,542)        $(20,251)
                                                      --------        ----------        --------

FINANCING ACTIVITIES:                                                                         
 Proceeds from note payable                             55,000        $       -         $      -
 Repayment of note payable                             (38,936)               -                -
                                                      --------        ----------        --------
                                                      $ 16,064        $       -         $      -
                                                      --------        ----------        --------
                                                      
NET INCREASE (DECREASE) IN CASH                       $ 29,273        $ (52,542)        $(20,251)
                                                      
CASH AND CASH EQUIVALENTS -                           
  BEGINNING OF YEAR                                      4,065           56,607           76,858
                                                      --------        ----------        --------
CASH AND CASH EQUIVALENTS -                           
  END OF YEAR                                         $ 33,338        $   4,065         $ 56,607
                                                      ========        =========         ========

SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:

  Cash paid during the year for interest              $  1,805        $       -         $      -
                                                      ========        =========         ========
</TABLE>



The Notes to Financial Statements are an integral part of this statement.

                                     F-5
<PAGE>   21
                          CAROLINA INVESTMENT PARTNERS
                              LIMITED PARTNERSHIP
                            RALEIGH, NORTH CAROLINA
                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 1995

(1)   ORGANIZATION AND NATURE OF OPERATIONS

      Carolina Investment Partners Limited Partnership (the "Partnership") was
      organized in 1985 to invest in real property which it will sell or lease
      undeveloped or develop into office or commercial projects.  Walsmith
      Associates Two, a North Carolina General Partnership, is the general
      partner ("General Partner").


(2)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      STATEMENT OF CASH FLOWS

      For the purposes of reporting cash flows, the Partnership considers cash
      equivalents to be cash on hand, cash in banks, and short-term investments
      (six months or less) in certificates of deposit.  The Partnership made no
      cash payment for income taxes.

      LAND HELD FOR INVESTMENT

      Land held for investment is stated at the lower of net realizable value
      or contract cost plus highway interchange construction costs and
      capitalized appraisal, survey, and closing costs.  Net realizable value
      has been determined based on comparison of the cost of land held to sales
      of similar property.

      There are no material differences between the book and federal tax cost
      basis of the property.

      INCOME TAXES

      No provision has been made for income taxes since income or loss is
      includable in the partners' returns as they report to tax authorities in
      their respective capacities as partners.

      ALLOCATION OF NET INCOME OR NET LOSS

      Pursuant to the Partnership Agreement, the General Partner is allocated
      1% of net income.  The limited partners receive 99% of net income until
      their original capital contributions plus interest have been distributed
      (see Cash Distribution Policy below).  Thereafter, the net income is
      allocated 10% to the General Partner and 90% to the limited partners.



                                     F-6


<PAGE>   22


                          CAROLINA INVESTMENT PARTNERS
                              LIMITED PARTNERSHIP
                            RALEIGH, NORTH CAROLINA
                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 1995



(2)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

      ALLOCATION OF NET INCOME OR NET LOSS - CONTINUED

      Net loss is allocated 10% to the General Partner and 90% to the limited
      partners.  The Partnership Agreement provides that no partner's capital
      account balance shall be less than zero.  Thus, no loss was allocated to
      the General Partner for the year ended December  31, 1995, 1994 or 1993.

      For purposes of the allocation, net income or net loss is the amount
      recognized by the Partnership for federal income tax purposes, excluding
      gains or losses from the disposition of land.  For the years ended
      December 31, 1995, 1994 and 1993 there were no material differences
      between net loss as reported for financial statement and federal income
      tax purposes.


      CASH DISTRIBUTION POLICY

      The General Partner receives cash to the extent it is allocated income.
      Otherwise, all distributions are to the limited partners until such time
      as these distributions equal 100% of their original capital contributions
      plus an additional return of 10% per annum simple interest on their
      outstanding capital contribution (original contributions as reduced by
      any prior distributions).  Thereafter, Partnership distributions will be
      allocated 10% to the General Partner and 90% to the limited partners.


      MANAGEMENT'S USE OF ESTIMATES

      The preparation of financial statements in conformity with generally
      accepted accounting principles requires management to make estimates and
      assumptions.  These 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 period.  Actual results could differ from those
      estimates.




                                     Page 2

<PAGE>   23



                          CAROLINA INVESTMENT PARTNERS
                              LIMITED PARTNERSHIP
                            RALEIGH, NORTH CAROLINA
                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 1995


(3)   FAIR VALUE OF FINANCIAL INSTRUMENTS

      CASH AND SHORT-TERM INVESTMENTS

      The carrying amount approximates fair value because of the short maturity
      of these instruments.

      NOTE PAYABLE - RELATED PARTY

      The fair value of the Partnership's note payable - related party is
      deemed to be the same as its carrying amount.  The fair market value is
      estimated based on the quoted market prices for the same or similar
      issues or on the current rates that the Partnership can obtain for debt
      of the same remaining maturity.

(4)   RELATED PARTY TRANSACTIONS

      Pursuant to the Partnership Agreement, the Partnership pays the General
      Partner a $3,000 annual management fee while the property is in an
      undeveloped state.  In addition, affiliates of the General Partner
      performed Partnership accounting, SEC reporting, administrative services
      and engineering consulting totaling $2,671, $2,523 and $4,172 during
      1995, 1994 and 1993, respectively.  Amounts payable to related parties at
      December 31, 1995 and 1994 were $1,044 and $135, respectively.

(5)   NOTE PAYABLE - RELATED PARTY

      On February 2, 1995 the General Partner made a loan to the Partnership of
      $55,000.  The purpose of this loan was to fund the current operating
      expenses of the Partnership.  The note is payable upon the sale of
      Partnership properties or other sources of funds that become available
      but must be paid in full no later than June 1, 1996.  The note accrues
      interest at prime plus one percent and the interest is payable quarterly.
      The balance of this loan at December  31, 1995 was $16,064.  Interest
      expense for the year ended December 31, 1995 was $1,805.




                                     Page 3


<PAGE>   24


                          CAROLINA INVESTMENT PARTNERS
                              LIMITED PARTNERSHIP
                            RALEIGH, NORTH CAROLINA
                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 1995


(6)   LAND HELD FOR INVESTMENT AND RELATED COMMITMENTS

      WELLINGTON PARCEL

      In July 1986, the Partnership purchased for $1,223,175 an undeveloped
      16.309 acre parcel of land in Cary, North Carolina, known as the
      Wellington Parcel, from an affiliate of the General Partner.  The land is
      carried at the lower of net realizable value or contract cost plus
      capitalized purchase and closing costs.  The purchase contract provides
      that the Partnership will share evenly with the affiliate in any profits
      resulting from the sale of the Wellington Parcel.  The Partnership may,
      at its option, require the affiliate to repurchase the Wellington Parcel
      for approximately $3,669,000 (the "Put Option").  A 75% vote of the
      limited partners is required for this Put Option to be exercised.

      At a meeting of the limited partners held in March 1990, less than 75% of
      the partners voted to exercise the Put Option discussed above.  A new
      agreement was entered into called the Put Option Agreement Amendment.
      Under the terms of the Put Option Agreement Amendment, the Partnership
      will retain a greater percentage of the property appreciation upon sale
      of the Wellington Parcel to an unaffiliated third party than would be
      retained if the Put Option were exercised.  If the limited partners elect
      to exercise the Put Option at a later date, the Put Option Agreement
      Amendment will be void.


      MARTIN PARCEL

      In June 1986, the Partnership purchased for approximately $3,080,200 an
      undeveloped 26.7 acre parcel of land in Cary, North Carolina, known as
      the Martin Parcel, from an affiliate of the General Partner.  The land is
      carried at the lower of net realizable value or contract cost plus
      highway interchange construction costs and capitalized purchase and
      closing costs.






                                     Page 4


<PAGE>   25


                          CAROLINA INVESTMENT PARTNERS
                              LIMITED PARTNERSHIP
                            RALEIGH, NORTH CAROLINA
                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 1995


(7)   CONTINGENCIES - GOING CONCERN

      The accompanying financial statements have been prepared on a going
      concern basis, which assumes the realization of assets and the
      satisfaction of liabilities in the normal course of business.  Based on
      current conditions, the Partnership does not have sufficient operating
      capital to meet its financial obligations during the next twelve months.
      However, the General Partner anticipates the sale and closing of the
      Wellington Parcel in April of 1996.  The proceeds from this sale will be
      sufficient to meet the Partnership's operating capital needs during the
      coming twelve months.  The purchase agreement and the amendment to the
      purchase agreement contain a number of conditions to closing which must
      be satisfied prior to closing.  Therefore, it is possible that the
      agreement will not result in a closing.  If the sale does not occur, the
      General Partner will procure outside financing or make a loan to the
      Partnership to meet current operating needs.

                                     Page 5



<PAGE>   26
                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT ITEM              DESCRIPTION                                SEQUENTIAL PAGE NO.
------------              -----------                                -------------------
<S>                       <C>
3.1                       Amended Agreement of Limited                  
                          Partnership of the                            
                          Registrant filed as an                        
                          exhibit to the Annual Report                  
                          on Form 10-K for the year                     
                          ended December 31, 1986,                      
                          page 36.                                      
                                                                        
10.1                      Purchase Agreement between                    
                          Registrant and Walsmith                       
                          Associates regarding the                      
                          Martin Parcel filed as an                     
                          exhibit to the Annual Report                  
                          on Form 10-K for the year                     
                          ended December 31, 1986,                      
                          page 108.                                     
                                                                        
10.2                      Purchase Agreement between                    
                          the Registrant and                            
                          Wellington Park Associates                    
                          regarding the Wellington                      
                          Parcel filed as an exhibit                    
                          to the Annual Report on Form                  
                          10-K for the year ended                       
                          December 31, 1986, page 118.                  
                                                                        
10.3                      Agreement between the North                   
                          Carolina Department of                        
                          Transportation and Walsmith                   
                          Associates filed as an                        
                          exhibit to the Annual Report                  
                          on Form 10-K for the year                     
                          ended December 31, 1986,                      
                          page 128.                                     
                                                                        
10.4                      Assignment and Assumption                     
                          Agreement between the                         
                          Registrant and Walsmith                       
                          Associates filed as an                        
                          exhibit to the Annual Report                  
                          on Form 10-K for the year                     
                          ended December 31, 1986,                      
                          page 135.                                     
                                                                        
10.5                      Amendment to Offer to                         
                          Purchase and Contract for                     
                          Sale of Real Estate dated as                  
                          of February 1, 1990 between                   
                          the Registrant and                            
                          Wellington Park Associates,                   
                          a North Carolina general                      



</TABLE>

<PAGE>   27


<TABLE>
<S>                       <C>
                          partnership, filed as an               
                          exhibit to the Annual Report           
                          on Form 10-K for the year              
                          ended December 31, 1989,               
                          page 28.                               
                                                                 
10.6                      Agreement for the Purchase             
                          and Sale of Real Estate dated          
                          as of April 20, 1995 between           
                          the Registrant, Churchill &            
                          Banks, Ltd., and ADA                   
                          Corporation of North Carolina,         
                          filed on Form 8-K dated April          
                          20, 1995, page 5.                      
                                                                 
10.7                      First Amendment to the Agreement
                          for the Purchase and Sale of           
                          Real Estate dated August 9,            
                          1995 between the Registrant,
                          Churchill & Banks, Ltd., and
                          ADA Corporation of North               
                          Carolina, filed on Form 8-K            
                          dated August 9, 1995, page 4.          
                                                               
27                        Financial Data Schedule (for SEC use only)
</TABLE>