UNITED STATES
                      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

  For The Period From January 1, 1998 to December 30, 1998 (Termination Date)

                                      or

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

                           Commission file #0-16783

                    Inland Mortgage Investors Fund, L.P.-II
            (Exact name of registrant as specified in its charter)

       Delaware                                  36-3495248
(State of organization)           (I.R.S. Employer Identification Number)

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

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

          Securities registered pursuant to Section 12(b) of the Act:

Title of each class:          Name of each exchange on which registered:
       None                                      None

       Securities registered pursuant to Section 12(g) of the Act:
                           LIMITED PARTNERSHIP UNITS
                               (Title of class)

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 is not contained  herein,  and  will not be contained, to the
best of 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]

State the aggregate market value of  the  voting stock held by nonaffiliates of
the registrant. Not applicable.

The Prospectus of the Registrant  dated  February  10, 1987, as supplemented to
date and filed pursuant to Rule  424(b)  and 424(c) under the Securities Act of
1933 is incorporated by reference in Parts  I, II and III of this Annual Report
on Form 10-K.


                                      -1-



                    INLAND MORTGAGE INVESTORS FUND, L.P.-II
                            (a limited partnership)


                               TABLE OF CONTENTS



                                   Part I                                 Page
                                   ------                                 ----
  Item  1. Business......................................................   3

  Item  2. Properties....................................................   3

  Item  3. Legal Proceedings.............................................   3

  Item  4. Submission of Matters to a Vote of Security Holders...........   3


                                    Part II
                                    -------
  Item  5. Market for the Partnership's Limited Partnership Units
           and Related Security Holder Matters...........................   4

  Item  6. Selected Financial Data.......................................   5

  Item  7. Management's Discussion and Analysis of Financial
           Condition and Results of Operations...........................   6

  Item  8. Financial Statements and Supplementary Data...................   8

  Item  9. Changes in and Disagreements with Accountants
           on Accounting and Financial Disclosure........................  20


                                   Part III
                                   --------
  Item 10. Directors and Executive Officers of the Registrant............  20

  Item 11. Executive Compensation........................................  26

  Item 12. Security Ownership of Certain Beneficial Owners and
           Management....................................................  27

  Item 13. Certain Relationships and Related Transactions................  27


                                    Part IV
                                    -------
  Item 14. Exhibits, Financial Statement Schedules, and Reports
           on Form 8-K...................................................  28


  SIGNATURES.............................................................  29



                                      -2-



                                    PART I



Item 1.  Business

The Registrant, Inland  Mortgage  Investors  Fund, L.P.-II (the "Partnership"),
was formed on  December  24,  1986  pursuant  to  the  Delaware Revised Uniform
Limited Partnership Act.  On  February  10,  1987, the Partnership commenced an
offering of 40,000 Limited Partnership  Units  (the  "Units") at $500 per Unit,
pursuant to a Registration Statement on  Form  S-11 under the Securities Act of
1933.   The  Offering  terminated  on  August  10,  1988,  with  total sales of
18,776.32 Units, resulting in gross offering proceeds of $9,388,158, which does
not include the General Partner's contribution of  $500.  All of the holders of
these Units were admitted to  the  Partnership.  The Partnership funded fifteen
loans between December  1987  and  June  1992  utilizing  $8,131,884 of capital
proceeds collected, net  of  participations.      The  Limited  Partners of the
Partnership shared in the benefits  of  ownership of the Partnership's mortgage
receivable investments in proportion to the  number of Units held.  Inland Real
Estate Investment Corporation was the  General  Partner.  On December 30, 1998,
the Partnership terminated.  In connection with the liquidation and termination
of the Partnership, funds of $30,000 were transferred to the General Partner on
December 23, 1998,  representing  the  estimated potential remaining obligation
(including administrative costs) of the Partnership.  On December 30, 1998, the
Partnership paid a final liquidating  cash distribution to the Limited Partners
in the aggregate amount of  $2,315,239,  which includes repayment proceeds from
the remaining three mortgage loans.

The Partnership was engaged  solely  in  the  business  of making and acquiring
loans collateralized  by  mortgages  on  improved,  income producing properties
located in or  near  Chicago,  Illinois.    The  loans  were serviced by Inland
Mortgage Servicing Corporation, a subsidiary of the General Partner.

The Partnership had no employees during 1998.

The terms of transactions between the Partnership and Affiliates of the General
Partner of the Partnership are set  forth  in  Item  11 below and Note 3 of the
Notes  to  Financial  Statements  (Item  8  of  this  Annual  Report)  to which
reference is hereby made.


Item 2.  Properties

The Partnership owned no real properties.


Item 3.  Legal Proceedings

The Partnership is not subject to any material pending legal proceedings.


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

There were no matters submitted to a vote of security holders during 1998.



                                      -3-



                                    PART II


Item 5.  Market for the  Partnership's  Limited  Partnership  Units and Related
         Security Holder Matters

As of December 30, 1998, there  were  727  holders of Units of the Partnership.
There was no public market  for  Units  nor  was it anticipated that any public
market for Units would  develop.    Reference  is  made  to  Item 6 below for a
discussion of cash distributions made to the Limited Partners.

The Partnership's Liquidity Plan was  available  to  the Limited Partners.  See
"Liquidity Plan" and "Distribution Reinvestment Plan", page 19 and pages 41-42,
respectively, of the Prospectus  of  the  Partnership  dated February 10, 1987,
which is incorporated herein by reference.










































                                      -4-



Item 6.  Selected Financial Data

                    INLAND MORTGAGE INVESTORS FUND, L.P.-II
                            (a limited partnership)

  For the period from January 1, 1998 to December 30, 1998 (Termination Date)
        and for the years ended December 31, 1997, 1996, 1995 and 1994

              (not covered by Report of Independent Accountants)

                            1998       1997       1996       1995       1994
                            ----       ----       ----       ----       ----
Total assets........... $      -     2,870,059  2,952,893  3,660,678  3,919,522
                        =========== ========== ========== ========== ==========

Total income........... $   278,125    292,440    332,279    397,275    407,501
                        =========== ========== ========== ========== ==========

Net income............. $   198,809    228,536    268,982    331,245    337,951
                        =========== ========== ========== ========== ==========
Net income (loss) allocated
  to the one General
  Partner Unit......... $    (6,888)     2,285      2,690     12,782     10,149
                        =========== ========== ========== ========== ==========
Net income allocated
  per Limited Partner
  Unit (b)............. $     10.96      12.05      14.18      16.96      17.46
                        =========== ========== ========== ========== ==========

Distributions to Limited
  Partners from:
Operations (c).........     311,601    266,770    294,272    331,076    375,976
Repayment proceeds.....   2,802,753     80,934    688,458    260,833    768,027
                        ----------- ---------- ---------- ---------- ----------
                        $ 3,114,354    347,704    982,730    591,909  1,144,003
                        =========== ========== ========== ========== ==========
Distributions per
  Unit to Limited
  Partners from (b):
Operations.............       16.60      14.21      15.67      17.63      20.02
Repayment proceeds.....      149.27       4.31      36.67      13.89      40.91
                        ----------- ---------- ---------- ---------- ----------
                        $    165.87      18.52      52.34      31.52      60.93
                        =========== ========== ========== ========== ==========

(a) The above selected financial data  should  be  read in conjunction with the
    financial statements and related  notes  appearing elsewhere in this Annual
    Report.

(b) The net income per Unit, basic  and diluted, and distributions per Unit are
    based upon the weighted average number of Units outstanding of 18,776.32.

(c) This  amount  represents  distributions   to   the  Limited  Partners  from
    operations, a portion of which may have been funded by the General Partner.



                                      -5-



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


Liquidity and Capital Resources

On February 10, 1987, the  Partnership  commenced an Offering of 40,000 Limited
Partnership Units pursuant to a  Registration  Statement on Form S-11 under the
Securities Act of 1933.   The  Offering  terminated  on  August 10, 1988 with a
total of 18,776.32 Units being sold to the public at $500 per Unit resulting in
$9,388,158  gross offering  proceeds  which  were  received by the Partnership,
which  does  not  include  the   General  Partner's  $500  contribution.    The
Partnership funded fifteen loans between  December 1987 and June 1992 utilizing
$8,131,884 of capital proceeds collected,  net  of participations.  On December
30, 1998, the Partnership terminated.    In connection with the liquidation and
termination of  the  Partnership,  funds  of  $30,000  were  transferred to the
General Partner on  December  23,  1998,  representing  the estimated potential
remaining obligation (including administrative  costs)  of the Partnership.  On
December 30, 1998, the Partnership  paid  a final liquidating cash distribution
to the Limited Partners in  the  aggregate amount of $2,315,239, which includes
repayment proceeds from the remaining three mortgage loans.


Results of Operations

Interest and fees on mortgage  loans  receivable decreased for the period ended
December 30, 1998,  as  compared  to  the  year  ended  December  31, 1997, due
primarily to the prepayment of  the  mortgage loan receivable collateralized by
the property located  at  7409-13  Seeley,  Chicago,  Illinois  and the partial
paydowns  throughout  1997   and   1998   on   the   mortgage  loan  receivable
collateralized  by  the  property  located  at  7432  Washington,  Forest Park,
Illinois.  Interest and  fees  on  mortgage  loans receivable decreased for the
year ended December 31, 1997, as compared  to the year ended December 31, 1996,
due primarily to the prepayment  of the mortgage loan receivable collateralized
by the property located at 1881, 1885 and 1889 Edgebrook, Chicago, Illinois and
the partial paydowns throughout 1996  and  1997 on the mortgage loan receivable
collateralized  by  the  property  located  at  7432  Washington,  Forest Park,
Illinois.

Interest on investments increased for  the  period  ended December 30, 1998, as
compared to the year ended December 31,  1997, and decreased for the year ended
December 31, 1997, as compared to the  year ended December 31, 1996, due to the
timing of the Partnership receiving  repayment  proceeds on loans that paid off
and were invested before being distributed to the Limited Partners.

Other income increased for the period  ended  December 30, 1998, as compared to
the year ended December 31, 1997, and decreased for the year ended December 31,
1997, as compared to the year ended December 31, 1996, due to the timing of the
Partnership receiving late  charges  and  prepayment  penalties on the mortgage
loans receivable.







                                      -6-



Professional services to Affiliates decreased for the period ended December 30,
1998 and the year  ended  December  31,  1997,  as  compared  to the year ended
December 31, 1996, due to decreases  in accounting services.  This decrease was
partially offset in 1998 by an  increase in legal services required relating to
the liquidation of the  Partnership.    Professional services to non-affiliates
increased for the period  ended  December  30,  1998,  as compared to the years
ended December 31, 1997  and  1996,  due  to  increases in legal and accounting
services required relating to the liquidation of the Partnership.

General and administrative  expenses  to  Affiliates  decreased  for the period
ended December 30, 1998, as compared  to  the year ended December 31, 1997, due
to decreases in data processing  and  investor  services expenses.  General and
administrative  expenses  to  non-affiliates  increased  for  the  period ended
December 30, 1998, as compared to  the  years ended December 31, 1997 and 1996,
due to increases in printing and state tax expenses.


Year 2000 Issues

As of December 30,  1998,  Inland  Mortgage Investors Fund, L.P.-II terminated,
and therefore, will not be impacted by the so-called "Year 2000 Issue."


Inflation

To provide a hedge against the effects of inflation, the Partnership invested a
portion of  its  offering  proceeds  in  first  mortgage  loans with adjustable
interest rates, as described in  Note  4  of  the Notes to Financial Statements
(Item 8 of this Annual Report).


Item 7(a). Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.























                                      -7-



Item 8.  Financial Statements and Supplementary Data


                    INLAND MORTGAGE INVESTORS FUND, L.P.-II
                            (a limited partnership)


                                     Index
                                     -----
                                                                          Page
                                                                          ----
Report of Independent Accountants........................................   9

Financial Statements:

  Balance Sheets, December 30, 1998 (Termination Date)
    and December 31, 1997................................................  10

  Statements of Operations, for the period from January 1, 1998 to
    December 30, 1998 (Termination Date) and for
    the years ended December 31, 1997 and 1996...........................  11

  Statements of Partners' Capital, for the period from January 1, 1998
    to December 30, 1998 (Termination Date) and for
    the years ended December 31, 1997 and 1996...........................  12

  Statements of Cash Flows, for the period from January 1, 1998 to
    December 30, 1998 (Termination Date) and for
    the years ended December 31, 1997 and 1996...........................  13

  Notes to Financial Statements..........................................  14



Schedules not filed:

All schedules have been omitted as  the required information is inapplicable or
the information is presented in the financial statements or related notes.



















                                      -8-



                       REPORT OF INDEPENDENT ACCOUNTANTS




The Partners of Inland Mortgage
  Investors Fund, L.P. - II

In our opinion, the accompanying  balance  sheets and the related statements of
operations, partners' capital and  cash  flows  present fairly, in all material
respects, the financial  position  of  Inland  Mortgage Investors Fund, L.P.-II
(the "Company") at December 30, 1998 and  December 31, 1997, and the results of
their operations and their cash flows for  each  of the two years in the period
ended December 31, 1997 and  the  period  from  January 1, 1998 to December 30,
1998 (date of  termination)  in  conformity  with generally accepted accounting
principles.  These financial statements are the responsibility of the Company's
management; our responsibility  is  to  express  an  opinion on these financial
statements based on our audits.  We conducted our audits of these statements in
accordance with generally  accepted  auditing  standards  which require that we
plan and perform the  audit  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,  assessing   the  accounting  principles  used  and
significant estimates made by management,  and evaluating the overall financial
statement presentation.   We believe that our audits provide a reasonable basis
for the opinion expressed above.

As discussed in note 1 of  the  financial statements, on December 30, 1998, the
Partnership was terminated  subsequent  to  the  distribution  of its remaining
assets.


                                         PRICEWATERHOUSECOOPERS LLP

Chicago, Illinois
March 15, 1999





















                                      -9-



                    INLAND MORTGAGE INVESTORS FUND, L.P.-II
                            (a limited partnership)

                                Balance Sheets

                     December 30, 1998 (Termination Date)
                             and December 31, 1997


                                    Assets
                                    ------
                                                       1998          1997
                                                       ----          ----
Cash and cash equivalents (Note 1)................ $      -          169,895
Accrued interest receivable.......................        -           35,419
Mortgage loans receivable (Note 4)................        -        2,664,745 
                                                   ------------  ------------
Total assets...................................... $      -        2,870,059
                                                   ============  ============


                       Liabilities and Partners' Capital
                       ---------------------------------
Liabilities:
  Due to affiliates (Note 3)...................... $      -            1,544
  Unearned income (Note 1)........................        -            1,044 
                                                   ------------  ------------
Total liabilities.................................        -            2,588 
                                                   ------------  ------------
Partners' capital (Notes 1, 2 and 3):
  General Partner:
    Capital contribution..........................         500           500
    Cumulative net income.........................     244,458       251,346
    Supplemental Capital Contribution.............     125,945        77,871
    Supplemental distributions to Limited Partners    (125,945)      (77,871)
    Cumulative cash distributions.................    (244,958)     (244,958)
                                                   ------------  ------------
                                                          -            6,888 
  Limited Partners:                                ------------  ------------
    Units of $500. Authorized 40,000
      Units, 18,776.32 outstanding (net of
      offering costs of $1,072,632, of which
      $89,040 was paid to Affiliates).............   8,315,526     8,315,526
    Cumulative net income.........................   5,805,004     5,599,307
    Supplemental Capital Contributions from
      General Partner.............................     125,945        77,871
    Cumulative cash distributions................. (14,246,475)  (11,132,121)
                                                   ------------  ------------
                                                          -        2,860,583 
                                                   ------------  ------------
Total Partners' capital...........................        -        2,867,471 
                                                   ------------  ------------
Total liabilities and Partners' capital........... $      -        2,870,059
                                                   ============  ============


                See accompanying notes to financial statements.


                                     -10-



                    INLAND MORTGAGE INVESTORS FUND, L.P.-II
                            (a limited partnership)

                           Statements of Operations

 For the period from January 1, 1998 to December 30, 1998 (Termination Date) 
              and for the years ended December 31, 1997 and 1996


                                         1998          1997          1996
Income:                                  ----          ----          ----
  Interest and fees on mortgage
    loans receivable (Note 4)....... $   238,487       264,013       291,605
  Interest on investments...........      19,230        13,925        16,647
  Other income......................      20,408        14,502        24,027 
                                     ------------  ------------  ------------
                                         278,125       292,440       332,279 
                                     ------------  ------------  ------------
Expenses:
  Professional services to
    Affiliates......................       7,467         6,574         9,831
  Professional services to
    non-affiliates..................      41,130        23,348        21,142
  General and administrative
    to Affiliates...................      20,858        26,126        24,683
  General and administrative
    to non-affiliates...............       9,861         7,856         7,641 
                                     ------------  ------------  ------------
                                          79,316        63,904        63,297 
                                     ------------  ------------  ------------
Net income.......................... $   198,809       228,536       268,982
                                     ============  ============  ============

Net income (loss) allocated to (Note 2):
  General Partner..................  $    (6,888)        2,285         2,690
  Limited Partners..................     205,697       226,251       266,292 
                                     ------------  ------------  ------------
Net income.......................... $   198,809       228,536       268,982
                                     ============  ============  ============

Net income (loss) allocated to the one
  General Partner Unit.............. $    (6,888)        2,285         2,690
                                     ============  ============  ============

Net income allocated to Limited
  Partners per weighted average
  Limited Partnership Units of
  18,776.32, basic and diluted...... $     10.96         12.05         14.18
                                     ============  ============  ============






                See accompanying notes to financial statements.


                                     -11-



                    INLAND MORTGAGE INVESTORS FUND, L.P.-II
                            (a limited partnership)


                        Statements of Partners' Capital

 For the period from January 1, 1998 to December 30, 1998 (Termination Date) 
              and for the years ended December 31, 1997 and 1996


                                        General      Limited
                                        Partner      Partners       Total   
                                     ------------  ------------  ------------
Balance at January 1, 1996.......... $     6,131     3,644,165     3,650,296

Net income..........................       2,690       266,292       268,982
Supplemental Capital Contributions
  made by the General Partner on
  behalf of the Limited Partners....        -           16,682        16,682
Distributions to Partners
  ($52.34 per weighted average
  Limited Partnership Units of
  18,776.32)........................      (4,218)     (982,730)     (986,948)
                                     ------------  ------------  ------------
Balance at December 31, 1996........       4,603     2,944,409     2,949,012

Net income..........................       2,285       226,251       228,536
Supplemental Capital Contributions
  made by the General Partner on
  behalf of the Limited Partners....        -           37,627        37,627
Distributions to Partners
  ($18.52 per weighted average
  Limited Partnership Units of
  18,776.32)........................        -         (347,704)     (347,704)
                                     ------------  ------------  ------------
Balance at December 31, 1997........       6,888     2,860,583     2,867,471

Net income (loss)...................      (6,888)      205,697       198,809
Supplemental Capital Contributions
  made by the General Partner on
  behalf of the Limited Partners....        -           48,074        48,074
Distributions to Partners
  ($42.56 per weighted average
  Limited Partnership Units of
  18,776.32)........................        -       (3,114,354)   (3,114,354)
Balance at December 30, 1998         ------------  ------------  ------------
  (Termination Date)................ $      -             -             -
                                     ============  ============  ============







                See accompanying notes to financial statements.


                                     -12-



                    INLAND MORTGAGE INVESTORS FUND, L.P.-II
                            (a limited partnership)

                           Statements of Cash Flows

 For the period from January 1, 1998 to December 30, 1998 (Termination Date) 
              and for the years ended December 31, 1997 and 1996



                                         1998          1997          1996
Cash flows from operating activities:    ----          ----          ----
  Net income........................ $   198,809       228,536       268,982
  Adjustments to reconcile net income
      to net cash provided by
      operating activities:
    Changes in assets and liabilities:
      Accrued interest receivable...      35,419        (1,468)       (3,382)
      Accounts payable..............        -             -             (859)
      Due to Affiliates.............      (1,544)         (146)       (2,088)
      Unearned income...............      (1,044)       (1,147)       (3,554)
 Net cash provided by operating      ------------  ------------  ------------
  activities........................     231,640       225,775       259,099 
                                     ------------  ------------  ------------
Cash flows from investing activities:
  Principal payments collected (net)   2,664,745        76,715       636,995 
Net cash provided by investing       ------------  ------------  ------------
  activities........................   2,664,745        76,715       636,995 
                                     ------------  ------------  ------------
Cash flows from financing activities:
  Supplemental Capital Contribution.      48,074        37,627        16,682
  Distributions paid................  (3,114,354)     (347,704)     (986,948)
Net cash used in financing           ------------  ------------  ------------
  activities........................  (3,066,280)     (310,077)     (970,266)
Net increase (decrease) in cash      ------------  ------------  ------------
  and cash equivalents..............    (169,895)       (7,587)      (74,172)
Cash and cash equivalents at
  beginning of period...............     169,895       177,482       251,654 
Cash and cash equivalents at end of  ------------  ------------  ------------
  period............................ $      -          169,895       177,482
                                     ============  ============  ============














                See accompanying notes to financial statements.


                                     -13-



                    INLAND MORTGAGE INVESTORS FUND, L.P.-II
                            (a limited partnership)

                         Notes to Financial Statements

  For the period from January 1, 1998 to December 30, 1998 (Termination Date)
              and for the years ended December 31, 1997 and 1996


(1) Organization, Liquidation and Basis of Accounting

Inland Mortgage Investors  Fund,  L.P.-II  (the  "Partnership"),  was formed on
December 24, 1986, pursuant to the Delaware Revised Uniform Limited Partnership
Act to make or acquire  loans  collateralized  by mortgages on improved, income
producing properties.   On  February  10,  1987,  the  Partnership commenced an
offering of  40,000  Limited  Partnership  Units  ("Units")  at  $500 per Unit,
pursuant to a Registration Statement on  Form  S-11 under the Securities Act of
1933.   The  Offering  terminated  on  August  10,  1988,  with  total sales of
18,776.32 Units, resulting in gross offering proceeds of $9,388,158, which does
not include the General Partner's contribution of  $500.  All of the holders of
these Units were admitted to  the  Partnership.  The Partnership funded fifteen
loans between December  1987  and  June  1992  utilizing  $8,131,884 of capital
proceeds collected, net  of  participations.      The  Limited  Partners of the
Partnership shared in the benefits  of  ownership of the Partnership's mortgage
receivable investments in proportion to the number of Units held.   Inland Real
Estate Investment Corporation was the  General  Partner.  On December 30, 1998,
the Partnership terminated.  In connection with the liquidation and termination
of the Partnership, funds of $30,000 were transferred to the General Partner on
December 23, 1998,  representing  the  estimated potential remaining obligation
(including administrative costs) of the Partnership.  On December 30, 1998, the
Partnership paid a final liquidating  cash distribution to the Limited Partners
in the aggregate amount of  $2,315,239,  which includes repayment proceeds from
the remaining three mortgage loans.

The preparation of financial  statements  in conformity with generally accepted
accounting principles required  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 have differed from those estimates.

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

Loan assumption fees received  were  deferred  as unearned income and amortized
over the remaining life of the related loan.

The Partnership  considers  all  highly  liquid  investments  purchased with an
original maturity of three months or less to be cash equivalents.

The Partnership sold  participations  in  mortgage  receivables  which may have
yielded the Partnership a return which was greater than the return based on the
stated interest rate of the  instrument.    The differential between the stated
rate and the interest rate  paid  to  the  participant was recognized as income
over the term of the mortgage loan.



                                     -14-



                    INLAND MORTGAGE INVESTORS FUND, L.P.-II
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)


Interest income on mortgage  loans  receivable  was  accrued  when earned.  The
accrual of interest, on loans that  were  in default, was discontinued when, in
the opinion of the General  Partner,  the  borrower  had not complied with loan
work-out arrangements.  Once a  loan  had  been placed on a non-accrual status,
all cash received was applied  against  the outstanding loan balance until such
time as the borrower had  demonstrated  an  ability  to make payments under the
terms of the original  or  renegotiated  loan  agreement.   The General Partner
evaluated the collectibility of the mortgage  loans on a quarterly basis.  This
evaluation included  determining  the  valuation  of  the  underlying operating
property subject to the mortgage.    Should  a  portion of the principal of the
mortgage loan have been  considered  unrecoverable either through collection or
foreclosure, a provision would have been  made to reduce the carrying amount of
the mortgage loans.

The Partnership believed that the  interest  rates associated with the mortgage
receivable approximated the market  interest  rates,  and as such, the carrying
amount of the mortgages receivable approximated their fair value.

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

Statement of Financial Accounting  Standards  No.  128 "Earnings per Share" was
adopted by the Partnership for the  year  ended  December 31, 1997 and has been
applied to all prior  earnings  periods  presented in the financial statements.
The Partnership had no dilutive securities.

























                                     -15-



                    INLAND MORTGAGE INVESTORS FUND, L.P.-II
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)


The Partnership records are maintained  on  the  accrual basis of accounting in
accordance with generally accepted accounting principles ("GAAP").  The Federal
income tax return has been prepared  from such records after making appropriate
adjustments to  reflect  the  Partnership's  accounts  as  adjusted for Federal
income tax reporting  purposes.    Such  adjustments  are  not  recorded on the
records of the Partnership.   The  net  effect  of these items is summarized as
follows:

                                      1998                       1997        
                             -----------------------   -----------------------
                                GAAP        Tax           GAAP        Tax
                                Basis       Basis         Basis       Basis   
                             ----------- -----------   ----------- -----------
Total assets................ $     -           -        2,870,059   2,870,059

Partners' capital:
  General Partner...........       -           -            6,888      13,274
  Limited Partners..........       -           -        2,860,583   2,854,197

Net income (loss):
  General Partner...........     (6,888)    (61,348)        2,285     (35,343) 
  Limited Partners..........    205,697     260,157       226,251     263,877

Net income per Limited
  Partnership Unit, basic and
  diluted...................      10.96       13.86         12.05       14.05


The net income per Limited Partnership  Unit is based upon the weighted average
number of Units outstanding of 18,776.32.


(2) Partnership Agreement

The Partnership Agreement  defines  the  distribution  of  Operating Cash Flow.
Such Operating Cash Flow was distributed 90% to the Limited Partners and 10% to
the General Partner.   Of  the  10%  of  Operating  Cash  Flow allocated to the
General Partner, one-half was subordinated  to the Limited Partners' receipt of
a Cumulative  Preferred  Return  of  11%  per  annum.    Distributions  of Loan
Repayment Proceeds were distributed first to the Limited Partners in proportion
to their Participating Percentages until they received an amount equal to their
Invested Capital  plus  any  deficiency  in  the  Cumulative  Preferred Return.
Thereafter,  any  remaining  Repayment   Proceeds   which  were  available  for
distribution were distributed  90%  to  the  Limited  Partners  and  10% to the
General Partner.





                                     -16-



                    INLAND MORTGAGE INVESTORS FUND, L.P.-II
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)


The General Partner was allocated net  operating  profits in an amount equal to
the greater of  1%  of  net  operating  profits  or  the  amount of the General
Partner's distributive share of Operating  Cash  Flow, with the balance of such
net operating profits allocated to  the  Limited Partners.  The General Partner
was allocated net operating profits from  repayments  in an amount equal to the
General Partner's distributive share of Repayment Proceeds, with the balance of
such net operating profits allocated  to  the  Limited Partners.  Net operating
losses were  allocated  1%  to  the  General  Partner  and  99%  to the Limited
Partners.


(3) Transactions with Affiliates

The General Partner  and  its  Affiliates  were  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
the professional services to Affiliates and general and administrative expenses
to Affiliates, of which $1,544 was unpaid at December 31, 1997.

Inland Mortgage Servicing  Corporation,  a  subsidiary  of the General Partner,
serviced the Partnership's mortgage  loans  receivable.   Its services included
processing  mortgage  loan  collections  and  escrow  deposits  and maintaining
related records.  For these services, the Partnership was obligated to pay fees
at an annual  rate  equal  to  1/4  of  1%  of  the  outstanding mortgage loans
receivable balance of the Partnership.  Such  fees of $6,168 in 1998, $6,444 in
1997 and $6,988 in 1996 have been  incurred  and paid to the subsidiary and are
included  in  the   Partnership's   general   and  administrative  expenses  to
Affiliates.

The General Partner was required to make Supplemental Capital Contributions, if
necessary, from time to time in  sufficient amounts to allow the Partnership to
make cumulative distributions to the Limited  Partners amounting to at least 7%
per  annum  on  their  Invested  Capital.     The  cumulative  amount  of  such
Supplemental Capital Contributions is $125,945,  all of which has been received
from the General Partner.















                                     -17-

<TABLE>

                                      INLAND MORTGAGE INVESTORS FUND, L.P.-II
                                              (a limited partnership)

                                           Notes to Financial Statements
                                                    (continued)

(4) Mortgage Loans Receivable

Mortgage loans receivable were collateralized  principally  by  first  mortgages and wrap mortgages on multi-family
residential properties located in Chicago, Illinois or  its surrounding metropolitan area, except for the Evanston,
Illinois loan which was collateralized by a  multi-use  retail  and  office building and the Richton Park, Illinois
loan which was collateralized by a shopping  mall.    As additional collateral, the Partnership held assignments of
rents and leases or personal guarantees of  the  borrowers.    Generally,  the mortgage notes were payable in equal
monthly installments based on 20 or 30 year amortization periods.

Mortgage loans receivable consist of the following:

                                                                                        Monthly        
                                                                                         P & I               Balance at
                            Interest                   Balloon                          Payments           end of period      
                            Rate at     Maturity         at                             (net) at       -----------------------
  Property Location         12/31/97      Date         Maturity    Prepayment           12/31/97          1998        1997    
---------------------       --------   ----------     ----------   ----------          ---------       ----------  -----------
<S>                          <C>       <C>            <C>          <C>                 <C>             <C>          <C>
1549-71 Sherman and    (A)   9.50%     October 1997   $1,542,834   60 days notice      $ 15,130        $     -      1,569,892
   627 Grove, Evanston                  Extended                   & 3% penalty
                                       Month to Month

7409-13 Seeley,        (B)   9.22%     November          418,274   60 days notice         3,770              -        424,119
   Chicago                              1998                       & 3% penalty

Richton Park Plaza,    (C)  10.000%    January           317,205   At any time            2,979              -        321,328
   Richton Park                         1999                       without penalty

3900 Cornelia/         (D)   9.04%     October           267,402   At any time            2,428              -        272,149
3508-10 Springfield,                    1998                       without penalty
   Chicago

7432 Washington,       (E)  10.000%    July               50,300   At any time              644              -         77,257 
   Forest Park                          2001                       without penalty
                                                                                                       $     -      2,664,745

                                                                                                       =========== ===========

</TABLE>

                                     -18-



                    INLAND MORTGAGE INVESTORS FUND, L.P.-II
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)


(A) In October 1997, the loan  collateralized  by the property located at 1549-
    1571 Sherman Avenue matured.  The loan term had been extended on a month to
    month basis to allow the  borrower  time  to  proceed with refinancing.  In
    October  1997,  Inland  Real  Estate  Investment  Corporation,  the General
    Partner,  purchased  the  participating  interest   in  the  loan  from  an
    unaffiliated third party and had accepted  the  terms of the month to month
    extension.  All other terms remained the same.

    On December 18, 1998,  the  General  Partner  purchased  this loan from the
    Partnership for 100% of  its  outstanding  principal balance of $1,542,834,
    plus accrued interest and reimbursement for payment of real estate taxes on
    the property paid by the  Partnership.    The proceeds were included in the
    final distribution to the Limited Partners on December 30, 1998.

(B) On May 12, 1998, the loan collateralized by the property located at 7409-13
    Seeley, Chicago, Illinois was prepaid by  the borrower.  The total proceeds
    received  were  $428,285,  which  represented  the  loan  balance,  accrued
    interest and accrued late charges.    The  proceeds were distributed to the
    Limited Partners in July 1998.

(C) On December 18, 1998,  an  Affiliate  of  the General Partner purchased the
    loan collateralized by the Richton  Park  Plaza property located in Richton
    Park, Illinois from the Partnership  for  100% of its outstanding principal
    balance of $317,538 plus accrued  interest.   The proceeds were included in
    the final distribution to the Limited Partners on December 30, 1998. 

(D) On December 21, 1998,  an  Affiliate  of  the General Partner purchased the
    loan  collateralized  by  the  property  located  at  3900 Cornelia/3508-10
    Springfield,  Chicago,  Illinois  from  the  Partnership  for  100%  of its
    outstanding principal  balance  of  $267,402  plus  accrued  interest.  The
    proceeds were included in the final distribution to the Limited Partners on
    December 30, 1998.

(E) The borrower on the  loan  collateralized  by  the property located at 7432
    Washington, Forest Park, Illinois made additional principal payments on the
    loan during 1998 aggregating $27,429.  On  October 1, 1998, an Affiliate of
    the General Partner purchased this  loan  from  the Partnership for 100% of
    its outstanding principal balance  of  $50,300  plus accrued interest.  The
    proceeds were distributed to the Limited Partners in October 1998.











                                     -19-



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

There were no disagreements on accounting or financial disclosure during 1998.



                                   PART III


Item 10. Directors and Executive Officers of the Registrant

The  General  Partner  of  the   Partnership,  Inland  Real  Estate  Investment
Corporation, was organized in 1984 for the purpose of acting as general partner
of limited partnerships formed to  acquire,  own and operate real property, and
make  and  acquire  loans  collateralized  by  mortgages  on  improved,  income
producing multi-family  residential  properties.    The  General  Partner  is a
wholly-owned subsidiary of The Inland Group,  Inc.  In 1990, Inland Real Estate
Investment Corporation became the replacement General Partner for an additional
301  privately-offered   real   estate   limited   partnerships  syndicated  by
Affiliates. The General  Partner  has  responsibility  for  all  aspects of the
Partnership's operations.   The  relationship  of  the  General  Partner to its
Affiliates is described under the  caption  "Conflicts of Interest" at pages 10
and 11 of the Prospectus, incorporated herein by reference.

Officers and Directors

The officers, directors and key  employees  of  The  Inland Group, Inc. and its
Affiliates ("Inland") that are  likely  to  provide services to the Partnership
are as follows:


                                  Functional Title

Daniel L. Goodwin..........  Chairman and Chief Executive Officer
Robert H. Baum.............  Executive Vice President-General Counsel
G. Joseph Cosenza..........  Senior Vice President-Acquisitions
Robert D. Parks............  Senior Vice President-Investments
Brenda G. Gujral...........  President and Chief Operating Officer-IREIC
Catherine L. Lynch.........  Treasurer
Roberta S. Matlin..........  Assistant Vice President-Investments
Mark Zalatoris.............  Assistant Vice President-Due Diligence
Patricia A. Challenger.....  Vice President-Asset Management
Frances C. Panico..........  Vice President-Mortgage Corporation
Raymond E. Petersen........  Vice President-Mortgage Corporation
Paul J. Wheeler............  Vice President-Personal Financial Services Group
Kelly Tucek................  Assistant Vice President-Partnership Accounting
Venton J. Carlston.........  Assistant Controller









                                     -20-



    DANIEL L. GOODWIN (age 55)   is  Chairman  of the Board of Directors of The
Inland Group, Inc.,  a  billion-dollar  real  estate and financial organization
located in Oak Brook,  Illinois.    Among  Inland's subsidiaries is the largest
property management firm in  Illinois  and  one  of the largest commercial real
estate and mortgage banking firms in the Midwest.

Mr. Goodwin has served as Director  of  the  Avenue  Bank  of Oak Park and as a
director of the Continental Bank of  Oakbrook  Terrace.  He was Chairman of the
Bank Holding Company of American National Bank  of DuPage.  Currently he is the
Chairman of the Board of Inland Mortgage Investment Corporation.

Mr. Goodwin has been in the  housing  industry  for more than 28 years, and has
demonstrated a lifelong interest in  housing-related  issues.  He is a licensed
real estate broker and a member  of  the National Association of Realtors.  Mr.
Goodwin has developed thousands of  housing  units in the Midwest, New England,
Florida, and the Southwest.  He  is  also the author of a nationally recognized
real estate reference book for the management of residential properties.

Mr. Goodwin has served on  the  Board  of the Illinois State Affordable Housing
Trust Fund for the past six years.   He is an advisor for the Office of Housing
Coordination Services of the State  of  Illinois,  and  a member of the Seniors
Housing Committee of the  National  Multi-Housing  Council.  Recently, Governor
Edgar appointed Mr. Goodwin as Chairman of the Housing Production Committee for
the Illinois State Affordable Housing Conference.    He also served as a member
of the Cook County  Commissioner's  Economic Housing Development Committee, and
he was the Chairman of the  DuPage  County  Affordable Housing Task Force.  The
1992 Catholic Charities Award  was  presented  to  Mr.  Goodwin for his work in
addressing affordable housing needs.   The  City  of Hope designated him as the
Man of the Year for the Illinois  construction industry.  In 1989,  the Chicago
Metropolitan  Coalition  on  Aging  presented  Mr.  Goodwin  with  an  award in
recognition of his  efforts  in  making  housing  more  affordable to Chicago's
Senior Citizens.  On May 4, 1995, PADS, Inc. (Public Action to Deliver Shelter)
presented Mr. Goodwin  with  an  award,  recognizing  The  Inland  Group as the
leading corporate provider of transitional  housing  for the homeless people of
DuPage County.  Mr. Goodwin also  serves  as Chairman of New Directions Housing
Corporation, a leading provider of affordable housing in northern Illinois.

Mr. Goodwin is a product  of  Chicago-area schools, and obtained his Bachelor's
and Master's Degrees  from  Illinois  Universities.    Following graduation, he
taught for five  years  in  the  Chicago  Public  Schools.    His commitment to
education has continued through his  work  with  the BBF Family Services' Pilot
Elementary School in  Chicago,  and  the  development  of the Inland Vocational
Training Center  for  the  Handicapped  located  at  Little  City  in Palatine,
Illinois.  He  personally  established  an  endowment  which  funds a perpetual
scholarship program for inner-city  disadvantaged  youth.   In 1990 he received
the Northeastern  Illinois  University  President's  Meritorious Service Award.
Mr. Goodwin  holds  a  Master's  Degree  in  Education  from  Northern Illinois
University, and in 1986, he was awarded an Honorary Doctorate from Northeastern
Illinois University College of Education.    More  than 12 years ago, under Mr.
Goodwin's direction, Inland instituted  a  program to educate disabled students
about the workplace.  Most  of  these  original  students are still employed at
Inland today, and Inland  continues  as  one  of  the  largest employers of the
disabled in DuPage County.  Mr. Goodwin has  served as a member of the Board of
Governors of Illinois State Colleges  and  Universities,  and he is currently a
trustee of Benedictine University.  He was elected Chairman of the Northeastern
Illinois University Board of Trustees in January 1996.


                                     -21-



In 1988 he received the  Outstanding  Business  Leader Award from the Oak Brook
Jaycees and in March 1994,  he  won  the  Excellence in Business Award from the
DuPage Area Association of Business and Industry.  Additionally, he was honored
with a dinner sponsored by Little  Friends  on  May 17, 1995 for rescuing their
Parent-Handicapped Infant Program  when  they  lost  their  lease.   He was the
recipient of the 1995 March  of  Dimes  Life Achievement Award and was recently
recognized as the 1998  Corporate  Leader  of  the  Year  by the Oak Brook Area
Association of Commerce and Industry.    The  Ray Graham Association for People
with Disabilities honored Mr. Goodwin as  the  1999  Employer of the Year.  For
many years, he  has  been  Chairman  of  the  National  Football League Players
Association Mackey Awards for the benefit  of inner-city youth and he served as
the  recent  Chairman  of  the   Speakers   Club   of  the  Illinois  House  of
Representatives.

    ROBERT H. BAUM (age  55)  has  been  with  The  Inland  Group, Inc. and its
affiliates since 1968 and is one of  the four original principals.  Mr. Baum is
Vice Chairman and Executive Vice President-General Counsel of The Inland Group,
Inc.  In his  capacity  as  General  Counsel,  Mr.  Baum is responsible for the
supervision  of  the  legal  activities  of  The  Inland  Group,  Inc.  and its
affiliates.  This responsibility  includes  the  supervision  of The Inland Law
Department and serving as liaison with outside counsel.  Mr. Baum has served as
a member  of  the  North  American  Securities  Administrators Association Real
Estate Advisory Committee and as a  member of the Securities Advisory Committee
to the Secretary  of  State  of  Illinois.    He  is  a  member of the American
Corporation Counsel Association and  has  also  been  a  guest lecturer for the
Illinois State Bar Association.   Mr. Baum has been admitted to practice before
the Supreme Court of the United States,  as well as the bars of several federal
courts of appeals and federal district  courts  and  the State of Illinois.  He
received his B.S. Degree from the  University  of Wisconsin and his J.D. Degree
from Northwestern University School of Law.   Mr. Baum has served as a director
of American National Bank  of  DuPage  and  currently  serves  as a director of
Westbank.  Mr. Baum  also  is  a  member  of  the Governing Council of Wellness
House, a charitable  organization  that  provides  emotional support for cancer
patients and their families. 

    G. JOSEPH COSENZA (age 55)  has  been  with  The Inland Group, Inc. and its
affiliates since 1968 and is one of  the four original principals.  Mr. Cosenza
is a Director  and  Vice  Chairman  of  The  Inland  Group,  Inc. and oversees,
coordinates and directs Inland's  many  enterprises.   In addition, Mr. Cosenza
immediately  supervises  a  staff  of  nine  persons  who  engage  in  property
acquisition.  Mr. Cosenza has been  a  consultant to other real estate entities
and lending institutions on property appraisal methods.

Mr. Cosenza received his B.A.  Degree from Northeastern Illinois University and
his M.S. Degree from  Northern  Illinois  University.    From  1967 to 1968, he
taught at the LaGrange School District  in  Hodgkins, Illinois and from 1968 to
1972, he served as  Assistant  Principal  and  taught in the Wheeling, Illinois
School District.  Mr. Cosenza has been a licensed real estate broker since 1968
and an active member of  various  national  and local real estate associations,
including the National Association of Realtors and the Urban Land Institute.

Mr. Cosenza has also been Chairman  of  the  Board of American National Bank of
DuPage, and has  served  on  the  Board  of  Directors  of  Continental Bank of
Oakbrook Terrace.  He  is  presently  a  Director  on  the Board of Westbank in
Westchester and Hillside, Illinois.


                                     -22-



    ROBERT D. PARKS  (age  55)    is  a  Director  of  The  Inland Group, Inc.,
President,  Chairman  and  Chief  Executive   Officer  of  Inland  Real  Estate
Investment Corporation and President,  Chief Executive Officer, Chief Operating
Officer and Affiliated Director of Inland Real Estate Corporation.

Mr. Parks is responsible for  the ongoing administration of existing investment
programs,  corporate  budgeting  and  administration  for  Inland  Real  Estate
Investment Corporation.   He  oversees  and  coordinates  the  marketing of all
investments and investor relations. 

Prior to joining Inland, Mr.  Parks  was  a  school teacher in Chicago's public
schools.  He received his B.A. degree from Northeastern Illinois University and
his M.A. degree from the University  of  Chicago.    He is a member of the Real
Estate Investment Association and a member of NAREIT.

    BRENDA G. GUJRAL  (age  56)  is  President  and  Chief Operating Officer of
Inland Real Estate Investment  Corporation  (IREIC),  the parent company of the
Advisor.  She is  also  President  and  Chief  Operating Officer of the Dealer-
Manager, Inland Securities Corporation  (ISC),  a  member  firm of the National
Association of Securities Dealers (NASD).

Mrs. Gujral has overall responsibility  for  the operations of IREIC, including
the distribution  of  checks  to  over  50,000  investors,  review  of periodic
communications to those investors, the  filing  of quarterly and annual reports
for Inland's publicly registered  investment  programs  with the Securities and
Exchange Commission, compliance with other  SEC and NASD securities regulations
both for IREIC and ISC,  review  of  asset management activities, and marketing
and communications with  the  independent  broker/dealer firms selling Inland's
current and prior programs.  Mrs.  Gujral works with internal and outside legal
counsel in structuring and registering  the prospectuses for IREIC's investment
programs.

Mrs. Gujral has been with  Inland  for  18  years, becoming an officer in 1982.
Prior to joining  Inland,  she  worked  for  the  Land  Use Planning Commission
establishing an office in Portland,  Oregon,  to implement land use legislation
for that state.

She is a graduate of California State  University.   She holds Series 7, 22, 39
and 63 licenses from the NASD  and  is  a member of the National Association of
Real Estate Investment Trusts (NAREIT)  and  the National Association of Female
Executives.

    CATHERINE L. LYNCH (age 40) joined  Inland  in 1989 and is the Treasurer of
Inland Real  Estate  Investment  Corporation.    Ms.  Lynch  is responsible for
managing the Corporate Accounting  Department.    Prior  to joining Inland, Ms.
Lynch worked in the  field  of  public  accounting  for KPMG Peat Marwick since
1980.    She  received  her  B.S.  degree  in  Accounting  from  Illinois State
University.  Ms. Lynch is  a  Certified  Public  Accountant and a member of the
American  Institute  of  Certified  Public  Accountants  and  the  Illinois CPA
Society.  She is registered with the National Association of Securities Dealers
as a Financial Operations Principal.






                                     -23-



    ROBERTA S. MATLIN (age 54)   joined  Inland in 1984 as Director of Investor
Administration  and  currently  serves  as  Senior  Vice President-Investments.
Prior to that, Ms. Matlin spent 11  years with the Chicago Region of the Social
Security Administration of the  United  States  Department  of Health and Human
Services.  She is  a  Director  of  Inland  Real Estate Investment Corporation,
Inland Securities Corporation, and  Inland  Real Estate Advisory Services, Inc.
As Senior  Vice  President-Investments,  she  directs  the  day-to-day internal
operations of the General Partner.    Ms.  Matlin received her B.A. degree from
the University of Illinois.  She is registered with the National Association of
Securities Dealers, Inc. as a General Securities Principal.

    MARK ZALATORIS (age 41) joined Inland  in 1985 and currently serves as Vice
President of Inland Real  Estate  Investment Corporation.  His responsibilities
include the coordination of due  diligence activities by selling broker/dealers
and is also involved  with  limited  partnership asset management including the
mortgage funds.  Mr.  Zalatoris  is  a  graduate  of the University of Illinois
where he received  a  Bachelors  degree  in  Finance  and  a  Masters degree in
Accounting and Taxation.   He  is  a  Certified  Public  Accountant and holds a
General Securities License with Inland Securities Corporation.

    PATRICIA A. CHALLENGER (age  46)  joined  Inland  in  1985.  Ms. Challenger
serves as Senior Vice President of Inland Real Estate Investment Corporation in
the area of Asset Management.  As  head of the Asset Management Department, she
develops  operating  and   disposition   strategies  for  all  investment-owned
properties.    Ms.  Challenger  received  her  Bachelor's  degree  from  George
Washington University and  her  Master's  from  Virginia  Tech University.  Ms.
Challenger was selected and  served  from  1980-1984 as Presidential Management
Intern, where she was part of a special government-wide task force to eliminate
waste, fraud and abuse  in  government  contracting  and  also served as Senior
Contract Specialist  responsible  for  capital  improvements  in 109 government
properties.  Ms. Challenger is  a  licensed real estate broker, NASD registered
securities sales representative and is a member of the Urban Land Institute. 

    FRANCES C. PANICO (age 49)    joined  Inland  in  1972 after earning a B.A.
degree from Northern Illinois University in Business and Communication.  She is
currently  President  of  Inland   Mortgage  Servicing  Corporation,  Sr.  Vice
President of Inland Mortgage Investment  Corporation  and Sr. Vice President of
Inland Mortgage  Corporation.    Ms.  Panico  oversees  the  operation  of loan
services, which has a loan  portfolio  in  excess  of  $430  million.  She is a
member of the loan committee which approves  loans funded by IMIC and IMC.  She
monitors IMIC's assets,  and  is  the  business  person  in  charge of loans in
foreclosure. She previously served on the  Board of Directors for Burbank State
Bank and supervised  the  origination,  processing  and underwriting of single-
family mortgages.  Ms. Panico also packaged and sold loans to Freddie Mac. 













                                     -24-



    RAYMOND E. PETERSEN (age  59)    joined  Inland  in  1981.  Mr. Petersen is
responsible for  the  selection  and  approval  of  all  corporate  and limited
partnership financing, as well as  for  the daily supervision of the commercial
lending activity of Inland Mortgage  Corporation    where he is President.  For
the six years prior to  joining  Inland,  Mr.  Petersen was affiliated with the
mortgage banking firm of Downs, Mohl Mortgage Corporation, serving as President
and Chief Executive  Officer.    Previously  he  was  also  associated with the
mortgage banking houses of B.B. Cohen  &  Company and Percy Wilson Mortgage and
Finance Corporation.  Mr.  Petersen's  professional  credentials include a B.A.
degree from DePaul University, senior membership in the National Association of
Review  Appraisers,  state  licensed  as  a  real  estate  broker  and licensed
securities representative.  Mr. Petersen  was  also  a Director and Chairman of
the Asset and Liability Committee  of  American  National Bank of Downers Grove
and is currently a Director of Westbank of Westchester, Illinois.

    PAUL J. WHEELER (age  46)    joined  Inland  in  1982  and is currently the
President of Inland Real Estate Equities,  Inc., the entity responsible for all
corporately owned  real  estate.    Mr.  Wheeler  received  his  B.A. degree in
Economics from  DePauw  University  and  an  M.B.A.  in Finance/Accounting from
Northwestern University.   Mr.  Wheeler  is  a  Certified Public Accountant and
licensed real estate broker.    For  three  years  prior to joining Inland, Mr.
Wheeler was Vice President/Finance at the real estate brokerage firm of Quinlan
& Tyson, Inc.

    KELLY TUCEK (age  36)  joined  Inland  in  1989  and  is  an Assistant Vice
President of Inland Real Estate Investment Corporation.  As of August 1996, Ms.
Tucek is responsible for  the  Investment  Accounting Department which includes
all public partnership accounting functions along with quarterly and annual SEC
filings.  Prior to joining Inland, Ms.  Tucek was on the audit staff of Coopers
and Lybrand since  1984.    She  received  her  B.A.  Degree  in Accounting and
Computer Science from North Central College.

    VENTON J. CARLSTON (age 41)    joined  Inland  in 1985 and is the Assistant
Controller of Inland Real Estate Investment Corporation where he supervises the
corporate  bookkeeping  staff  and   is  responsible  for  financial  statement
preparation and budgeting for Inland Real Estate Investment Corporation and its
subsidiaries.    Prior  to  joining  Inland,  Mr.  Carlston  was  a partnership
accountant with JMB Realty.   He  received  his  B.S. degree in Accounting from
Southern Illinois University.   Mr.  Carlston  is a Certified Public Accountant
and a member of the Illinois CPA  Society.   He is registered with the National
Association of Securities Dealers, Inc. as a Financial Operations Principal.
















                                     -25-



Item 11. Executive Compensation

The General Partner was entitled to receive a share of cash distributions, when
and as cash   distributions  were  made  to  the Limited Partners, as described
under the caption "Cash  Distributions"  and  a  share  of profits or losses as
described  under  the  caption  "Allocation  of  Profits  and  Losses"  of  the
Prospectus.

The Partnership  was  permitted  to  engage  in  various transactions involving
Affiliates of the General Partner  of  the  Partnership, as described under the
captions "Compensation and Fees" at pages  8  and 9, "Conflicts of Interest" at
pages 10 and  11  of  the  Prospectus  and  at  pages  A-9  through A-17 of the
Partnership Agreement, included  as  an  exhibit  to  the  Prospectus, which is
hereby incorporated herein  by  reference.    The  relationship  of the General
Partner (and its directors and officers)  to  its Affiliates is set forth above
in Item 10.

The General Partner was also entitled  to reimbursement for salaries and direct
expenses of employees for  the  administration  of  the  Partnership.  In 1998,
costs relating to such services were $22,157, all of which was paid.

A subsidiary of the General Partner earned mortgage servicing fees of $6,168 in
1998, in connection with servicing the Partnership's mortgage loans receivable.


































                                     -26-



Item 12. Security Ownership of Certain Beneficial Owners and Management

                    
(a) The Liquidity Plan (page  19  of  the  Prospectus  of the Partnership dated
    February 10, 1987, which  is  incorporated  herein  by reference) owned the
    following Units of the Partnership:


                                 Amount and Nature
                                   of Beneficial             Percent
    Title of Class                   Ownership               of Class  
    --------------               -----------------         ------------
    Limited Partnership          5,401.45 Units, Directly     28.77%
     Units


(b) The officers and directors of the  General Partner of the Partnership owned
    as a group the following Units of the Partnership:

                                 Amount and Nature
                                   of Beneficial             Percent
    Title of Class                   Ownership               of Class  

    Limited Partnership          One Unit Directly         Less than 1%
     Units

    No officer or director of the  General Partner of the Partnership possessed
    a right to acquire beneficial ownership of Units of the Partnership.

    All of the outstanding  shares  of  the  General Partner of the Partnership
    were owned by an Affiliate of its officers and directors as set forth above
    in Item 10.

(c) There existed no arrangement,  known  to  the Partnership, the operation of
    which may have, at a subsequent  date,  resulted  in a change in control of
    the Partnership.

Item 13. Certain Relationships and Related Transactions

There were  no  significant  transactions  or  business  relationships with the
General Partner, Affiliates or their  management  other than those described in
Items 10 and 11 above and Note  3  of the Notes to Financial Statements (Item 8
of this Annual Report).














                                     -27-



                                    PART IV



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


    (a)  The Financial Statements listed in the  index on page 8 of this Annual
         Report are filed as part of this Annual Report.

    (b)  Exhibits.  The following documents are filed as part of this Report:

         3  Amended  and   Restated   Agreement   of  Limited  Partnership  and
         Certificate of Limited Partnership,  included  as  Exhibits A and B to
         the  Prospectus  dated  February   10,   1987,  as  supplemented,  are
         incorporated herein by reference thereto.

         28 Prospectus dated February  10,  1987,  as supplemented, included in
         post-effective Amendment No.  2  to  Form S-11 Registration Statement,
         File No. 33-11110, is incorporated herein by reference thereto.

    (c)  Financial Statement Schedules:

         All  schedules  have  been  omitted  as  the  required  information is
         inapplicable  or  the  information   is  presented  in  the  Financial
         Statements or related notes.

    (d)  Reports on Form 8-K

         None

No Annual Report or proxy  material  for  the  year  1998  has been sent to the
Partners of the Partnership.   An  Annual  Report  will be sent to the Partners
subsequent to this  filing  and  the  Partnership  will  furnish copies of such
report to the Commission when it is sent to the Partners.






















                                     -28-



                                  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.

                            INLAND MORTGAGE INVESTORS FUND, L.P.-II
                            Inland Real Estate Investment Corporation
                            General Partner

                                  /s/ Robert D. Parks

                            By:   Robert D. Parks
                                  Chairman of the Board
                                  and Chief Executive Officer
                            Date: March 22, 1999

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:

                            By:   Inland Real Estate Investment Corporation
                                  General Partner

                                  /s/ Robert D. Parks

                            By:   Robert D. Parks
                                  Chairman of the Board
                                  and Chief Executive Officer
                            Date: March 22, 1999

                                  /s/ Mark Zalatoris

                            By:   Mark Zalatoris
                                  Vice President
                            Date: March 22, 1999

                                  /s/ Kelly Tucek

                            By:   Kelly Tucek
                                  Principal Financial Officer
                                  and Principal Accounting Officer
                            Date: March 22, 1999

                                  /s/ Daniel L. Goodwin

                            By:   Daniel L. Goodwin
                                  Director
                            Date: March 22, 1999

                                  /s/ Robert H. Baum

                            By:   Robert H. Baum
                                  Director
                            Date: March 22, 1999


                                     -29-