<PAGE>   1
    As filed with the Securities and Exchange Commission on August 14, 1998

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

                                   FORM 10-Q

                 [x]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                      SECURITIES EXCHANGE ACT OF 1934
                        For quarterly period ended June 30, 1998

                 [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                 SECURITIES EXCHANGE ACT OF 1934
                 For the transition period from ___________ to ____________

                        Commission File Number:  0-21443

                       PLYMOUTH COMMERCIAL MORTGAGE FUND
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                <C>
                       Delaware                                74-6439983
    (State or other jurisdiction of incorporation   (I.R.S. Employer Identification No.)
                   or organization)
</TABLE>

                         c/o Greystone Advisers, Inc.,
                          13333 Blanco Road, Suite 314
                         San Antonio, Texas 78216-7756
          (Address of principal executive offices, including zip code)

                                  210-493-3971
              (Registrant's telephone number, including area code)

                                 Not Applicable
  (Former name, former address, and former fiscal year, if changed since last
                                    report)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                           [X]   Yes      [ ] No

As of August 12, 1998, 921,627 of the registrant's common shares of beneficial
interest, no par value, were outstanding.
<PAGE>   2
                       PLYMOUTH COMMERCIAL MORTGAGE FUND
                      STATEMENTS OF ASSETS AND LIABILITIES
                      JUNE 30, 1998 AND DECEMBER 31, 1997
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                 JUNE 30, 1998               DECEMBER 31, 1997
                                                                                 -------------               -----------------
                                  ASSETS
                                  ------
<S>                                                                         <C>                           <C>
 INVESTMENTS IN SECURITIES AT FAIR VALUE, COST OF $8,857,185 AND
 $14,538,157                                                                 $           8,816,534         $          15,295,698

 INVESTMENT IN AFFILIATE                                                                 1,094,248                       941,477

 CASH                                                                                      151,256                       568,899

 ACCOUNTS RECEIVABLE                                                                         1,826                         2,026

 ORGANIZATION COSTS, NET                                                                    57,200                        72,800
                                                                                -------------------          --------------------

                               TOTAL ASSETS                                   $         10,121,064         $          16,880,900
                                                                            =======================       =======================


                                LIABILITIES
                                -----------


 ACCOUNTS PAYABLE                                                             $             30,728         $              48,547

 INVESTMENT ADVISORY FEE PAYABLE                                                            51,975                        77,110

 DIVIDEND PAYABLE                                                                                -                       275,001

 NOTE PAYABLE                                                                            1,381,187                     7,981,158

 ESCROW FUNDS                                                                               59,848                        80,924
                                                                                -------------------          --------------------

                             TOTAL LIABILITIES                                           1,523,738                     8,462,740


                                NET ASSETS
                                ----------

 COMMON SHARES OF BENEFICIAL INTEREST, NO PAR VALUE, 1,750,000 SHARES
 AUTHORIZED, 921,627 SHARES ISSUED AND OUTSTANDING                                       7,976,773                     7,976,773

 ACCUMULATED UNDISTRIBUTED NET INVESTMENT LOSS                                          (1,311,602)                     (789,921)

 ACCUMULATED UNDISTRIBUTED NET REALIZED GAINS NET OF DISTRIBUTIONS OF
 $578,097                                                                                2,158,540                       611,696

 ACCUMULATED UNDISTRIBUTED EQUITY OF SUBSIDIARY                                           (185,734)                     (137,929)

 ACCUMULATED UNDISTRIBUTED UNREALIZED GAIN (LOSS) ON INVESTMENTS                           (40,651)                      757,541
                                                                                -------------------          --------------------

 TOTAL NET ASSETS ($9.33 AND $9.13 PER SHARE)                                            8,597,326                     8,418,160



 TOTAL LIABILITIES & NET ASSETS                                               $         10,121,064         $          16,880,900
                                                                            =======================       =======================

</TABLE>


   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS





                                    Page -2-
<PAGE>   3
                       PLYMOUTH COMMERCIAL MORTGAGE FUND
                            STATEMENT OF OPERATIONS
                                  (UNAUDITED)


<TABLE>
<CAPTION>
                                             FOR THE THREE         FOR THE THREE            FOR THE SIX         FOR THE SIX
                                              MONTHS ENDED          MONTHS ENDED            MONTHS ENDED        MONTHS ENDED
                                             JUNE 30, 1998         JUNE 30, 1997            JUNE 30, 1998       JUNE 30, 1997
                                           -----------------     ----------------         ----------------     ---------------
  <S>                                        <C>                     <C>                   <C>                  <C>
  INVESTMENT INCOME:

  INTEREST                                   $      223,110          $       64,457        $      420,284       $     111,215

  OTHER INVESTMENT INCOME                               260                  34,909                   260             107,796
                                           -----------------     -------------------      ----------------     ---------------

  TOTAL INVESTMENT INCOME                           223,370                  99,366               420,544             219,011

  EXPENSES:

  INVESTMENT ADVISORY FEE                           192,263                 100,451               431,356             159,757

  LEGAL AND PROFESSIONAL                             34,659                  40,092                69,268              97,128

  INTEREST EXPENSE                                  143,416                   8,703               314,081               8,957

  OPERATING EXPENSE                                  53,405                  53,519               127,520             108,620
                                           -----------------     -------------------      ----------------     ---------------

  TOTAL EXPENSES                                    423,743                 202,765               942,225             374,462



  NET INVESTMENT LOSS                              (200,373)               (103,399)             (521,681)           (155,451)
                                           -----------------     -------------------      ----------------     ---------------
  REALIZED GAIN ON SALE OF INVESTMENTS            1,032,091                                     1,067,091             268,628

  REALIZED GAIN ON COLLECTION OF NOTES              330,243                  14,419               479,754              62,364

  CHANGE IN UNREALIZED APPRECIATION ON             (847,207)                 28,555             (798,192)            (205,564)
  ASSETS

  EQUITY IN EARNINGS OF AFFILIATE                    12,844                 (49,494)             (47,805)             (49,494)
                                           -----------------     -------------------      ----------------     ---------------

  NET INCREASE (DECREASE) IN NET ASSETS
  RESULTING FROM OPERATIONS                  $      327,598          $     (109,919)        $    179,167        $     (79,517)
                                           =================     ===================      ================     ===============
</TABLE>


   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS





                                    Page -3-
<PAGE>   4
                       PLYMOUTH COMMERCIAL MORTGAGE FUND
                      STATEMENTS OF CHANGES IN NET ASSETS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                    FOR THE THREE         FOR THE THREE         FOR THE SIX         FOR THE SIX
                                                    MONTHS ENDED          MONTHS ENDED          MONTHS ENDED        MONTHS ENDED
                                                    JUNE 30, 1998         JUNE 30, 1997         JUNE 30, 1998       JUNE 30, 1997
 <S>                                             <C>                        <C>                   <C>                <C>
 OPERATIONS BEFORE DISTRIBUTIONS:                                                                                   
                                                                                                                    
 NET INVESTMENT LOSS                                $     (200,373)             (103,399)             (521,681)     
                                                                                                                    
 NET REALIZED GAIN ON SALE OF INVESTMENTS                1,032,091                     -             1,067,091            268,628
                                                                                                                    
 NET REALIZED GAIN ON COLLECTIONS                          330,243                14,419               479,754             62,364
                                                                                                                    
 CHANGES IN UNREALIZED APPRECIATION ON                                                                              
 INVESTMENTS                                              (847,208)               28,555              (798,193)          (205,564)
                                                                                                                    
 EQUITY IN EARNINGS OF AFFILIATE                            12,844               (49,494)              (47,805)           (49,494)
                                                   -----------------     ------------------       ---------------    ---------------
                                                                                                                    
 NET INCREASE IN NET ASSETS FROM OPERATIONS                                                                         
 BEFORE DISTRIBUTION TO SHAREHOLDERS                       327,597              (109,919)              179,166             75,934
                                                                                                                    
 DISTRIBUTION TO SHAREHOLDERS FROM:                                                                                 
                                                                                                                    
 NET REALIZED GAIN ON INVESTMENTS                                -                (6,175)                    -            (80,388)
                                                                                                                    
 CAPITAL SHARE TRANSACTIONS                                      -                     -                     -                  -
                                                   -----------------     ------------------       ---------------    ---------------
                                                                                                                    
 TOTAL INCREASE IN NET ASSETS                              327,597              (116,094)              179,166             (4,454)
                                                                                                                    
                                                                                                                    
 NET ASSETS, BEGINNING OF PERIOD                         8,269,729             8,548,434             8,418,160          8,592,246
                                                   -----------------     ------------------       ---------------    ---------------
                                                                                                                    
                                                                                                                    
 NET ASSETS, END OF PERIOD                          $    8,597,326             8,432,341             8,597,326          8,587,792
                                                   =================     ==================       ===============    ===============
                                                                                                                    
                                                                                                                    
 PER SHARE DATA                                                                                                     
                                                                                                                    
                                                                                                                    
                                                                                                                    
 INVESTMENT INCOME                                  $         0.24                  0.11                  0.46               0.24
                                                                                                                    
 EXPENSES                                                    (0.46)                (0.22)                (1.02)             (0.41)
                                                                                                                    
 NET REALIZED GAIN ON SALE OF INVESTMENTS                     1.12                  0.00                  1.16               0.29
                                                                                                                    
 NET REALIZED GAIN ON COLLECTION OF NOTES                     0.36                  0.02                  0.52               0.07
                                                                                                                    
 EQUITY IN EARNINGS OF AFFILIATE                              0.01                 (0.05)                (0.05)             (0.05)
                                                                                                                    
 CHANGE IN UNREALIZED APPRECIATION ON ASSETS                 (0.92)                 0.03                 (0.87)             (0.22)
                                                   -----------------     ------------------       ---------------    ---------------
                                                                                                                    
 INCREASE (DECREASE) IN NET ASSETS FROM                                                                              
 OPERATIONS BEFORE DISTRIBUTIONS                              0.35                 (0.11)                 0.20              (0.08)
                                                                                                                    
                                                   -----------------     ------------------       ---------------    ---------------
                                                                                                                    
 DISTRIBUTIONS FROM REALIZED GAIN ON SECURITIES               0.00                 (0.01)                 0.00              (0.09)
                                                   -----------------     ------------------       ---------------    ---------------
                                                                                                                    
 NET INCREASE (DECREASE) IN NET ASSET VALUE                   0.35                 (0.12)                 0.20              (0.17)
                                                                                                                    
 NET ASSET VALUE                                                                                                    
                                                                                                                    
 BEGINNING OF PERIOD                                          8.97                  9.27                  9.13               9.32
                                                   -----------------     ------------------       ---------------    ---------------

 END OF PERIOD                                      $         9.33                  9.15                  9.33               9.15
                                                   =================     ==================       ===============    ===============
                                                                                                                    
 RATIOS:                                                                                                            
                                                                                                                    
 EXPENSES TO AVERAGE ASSETS                                  -5.02%                -2.39%               -11.07%             -4.40%
                                                                                                                    
 NET INVESTMENT LOSS TO AVERAGE ASSETS                       -2.38%                -1.22%                -6.13%             -1.83%
</TABLE>



   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS





                                    Page -4-
<PAGE>   5
                       PLYMOUTH COMMERCIAL MORTGAGE FUND
                            STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                       FOR THE SIX MONTHS                 FOR THE SIX MONTHS
                                                                       ENDED JUNE 30, 1998                ENDED JUNE 30, 1997
                                                                    ---------------------------      ----------------------------
                                                                    
 <S>                                                                <C>                              <C>
 CASH FLOWS FROM OPERATING ACTIVITIES:                              
                                                                    
 INCREASE (DECREASES) IN NET ASSETS FROM OPERATIONS BEFORE          $                  179,167       $                   (79,517)
 DISTRIBUTIONS                                                      
                                                                    
                                                                    
 ADJUSTMENTS TO RECONCILE INCREASES IN NET ASSETS FROM              
 OPERATIONS BEFORE DISTRIBUTIONS TO NET CASH PROVIDED BY            
 OPERATING ACTIVITIES                                               
                                                                    
            AMORTIZATION OF ORGANIZATION COSTS                                          15,600                            15,600
                                                                    
            CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS                           798,192                           205,564
                                                                    
            CHANGES IN OTHER ASSETS                                                          -                          (352,760)
                                                                    
            EQUITY IN LOSS OF AFFILIATES                                                47,805                            49,494
                                                                    
            CHANGES IN RECEIVABLES                                                         200                             4,024
                                                                    
            CHANGE IN PAYABLES                                                         (42,953)                          (31,303)
                                                                    
            CHANGES IN DIVIDEND PAYABLE                                               (275,001)                           26,970
                                                                    
            CHANGE IN ESCROW                                                           (21,076)                           21,461
                                                                    ---------------------------      ----------------------------
                                                                    
 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES                                      701,934                          (140,467)
                                                                    
                                                                    
 CASH FLOW FROM INVESTING ACTIVITIES:                               
                                                                    
                                                                    
            PURCHASE OF SECURITIES AND CAPITAL EXPENDITURES                           (903,597)                       (7,189,286)
                                                                    
            SALE OF SECURITIES/PRINCIPAL COLLECTION ON              
                    SECURITIES/TRANSFER TO AFFILIATE                                 6,347,995                           840,733
                                                                    
            INVESTMENT IN AFFILIATE                                                     35,996                           (38,000)
                                                                    ---------------------------      ----------------------------
                                                                    
 NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES                                    5,480,394                        (6,386,553)
                                                                    
 CASH FLOW FROM FINANCING ACTIVITIES:                               
                                                                    
                                                                    
                                                                    
            CHANGE IN NOTE, NET                                                     (6,599,971)                        1,552,680
            
            DIVIDENDS PAID                                                                   -                           (74,213)
                                                                    
            DISTRIBUTION FROM NET REALIZED GAIN ON INVESTMENTS                               -                                 -
                                                                    ---------------------------      ----------------------------
                                                                    
 NET CASH PROVIDED BY FINANCING ACTIVITIES                                          (6,599,971)                        1,478,467
                                                                    
                                                                    
 NET DECREASE IN CASH AND CASH EQUIVALENTS                                            (417,643)                       (5,048,552)
                                                                    
                                                                    
                                                                    
 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                      568,899                         5,584,460
                                                                    ---------------------------      ----------------------------
                                                                    
 CASH AND CASH EQUIVALENTS AT END OF PERIOD                         $                  151,256       $                   535,908
                                                                    ===========================      ============================
</TABLE>




   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS





                                    Page -5-
<PAGE>   6

1. ORGANIZATION AND BUSINESS PURPOSE

Plymouth Commercial Mortgage Fund, a Delaware business trust, (the "Fund") was
organized on August 23, 1996 and commenced operations on September 27, 1996.
Plymouth seeks to achieve a high level of current income by purchasing loans
where the obligor is having trouble meeting the loan's contractual
requirements.  The loans that Plymouth purchases are typically secured by
commercial real estate.

Plymouth has elected to be regulated as a business development company under
the Investment Company Act of 1940, as amended ("1940 Act").


2.  SIGNIFICANT ACCOUNTING POLICIES

         A.      Basis of Presentation:  The financial statements included
         herein have been prepared in accordance with generally accepted
         accounting principles for interim financial information and the
         instructions to Form 10-Q and Articles 6 and 10 of Regulation S-X.
         Accordingly, certain information and notes that are required by
         generally accepted accounting principles for complete financial
         statements are not included herein.  The interim statements should be
         read in conjunction with the financial statements and notes included
         in Plymouth's most recent annual report on Form 10-K.  Interim
         statements are subject to possible adjustments in connection with the
         annual audit of Plymouth.  Management believes all adjustments
         necessary for a fair presentation of these interim statements have
         been included.

         B.      Security Valuation:  There is no publicly quoted market for
         Plymouth's loan portfolio.  As such, the fair value of the portfolio
         is established by Plymouth's Board of Trustees using their best
         judgment.  The Board bases its values on what the Board believes
         Plymouth could reasonably expect to receive for each loan in an
         orderly disposition over a reasonable time period.

         In establishing the fair value of a loan, the Board considers aspects
         about the individual loan as well as the general economy.  Such
         factors include but are not limited to the type of loan, whether the
         borrower is currently meeting the contractual terms of the obligation,
         the length of time that the borrower has or has not been meeting the
         contractual terms, the probability that the borrower will begin or
         stop making payments, the value of the collateral and the guarantees
         securing the loans, Plymouth's historical experience selling the type
         of loan being valued, various standard financial measurements, the
         remaining contract terms, and prevailing interest rates.  Generally
         the Board does not change the value of the loan from the purchase
         price paid by Plymouth unless there are specific factors indicating
         the value should be revised.

         The valuation procedure involves subjective judgment.  Because the
         majority of Plymouth's impaired loans are delinquent, Plymouth may not
         recover the fair value the Board has established.  Plymouth's
         portfolio is not typically backed by any government guarantee or
         private credit enhancement.  In many cases, Plymouth will also incur
         certain costs and delays in attempting to assert its right to payment
         or in foreclosing on the loan's collateral.  The actual value realized
         on any particular loan will vary from the values determined by the
         Board and can be determined only in negotiations between Plymouth and
         third parties.

         When Plymouth cannot get the debt performing through restructure or
         otherwise, Plymouth generally attempts to foreclose and acquire the
         collateral.  Pursuant to its credit agreement, Plymouth puts real
         estate acquired through foreclosure into Plymouth REO, Inc., a wholly
         owned subsidiary.  Foreclosed real estate is recorded at its estimated
         fair value.





                                    Page -6-
<PAGE>   7
         C.      Federal Income Taxes:  Plymouth has elected the special income
         tax treatment available to "regulated investment companies" under
         Subchapter M of the Internal Revenue Code.  If Plymouth qualifies as a
         regulated investment company and distributes to shareholders annually
         in a timely manner at least 90% of its investment company taxable
         income, as defined by the Internal Revenue Code (i.e., net investment
         income, including accrued discount, and net short-term capital gains),
         it will not be subject to federal income tax on the portion of its
         taxable investment income and net capital gain distributed to
         shareholders.  In addition, if Plymouth distributes in a timely manner
         98% of its net capital gain income for each fiscal year, and
         distributes 98% of its investment company taxable income for each
         calendar year (as well as any income not distributed in prior years),
         it will not be subject to the 4% nondeductible federal excise tax
         imposed with respect to certain undistributed income of regulated
         investment companies.

         D.      Distributions to Shareholders: In respect of its second
         quarter operations, the Board declared and Plymouth paid a dividend to
         shareholders of record as of July 18, 1998 in the amount of
         $506,894.85, which is 55 cents per share.  The dividend was paid on 
         July 18, 1998.

         E.      Other:  Principal and interest payments due on Plymouth's
         portfolio notes are recognized on the date received.  Interest income
         is typically not accrued because of the impaired nature of Plymouth's
         portfolio.

3.  INVESTMENT ADVISORY AGREEMENT

Plymouth has to entered into an Investment Advisory Agreement (Agreement) with
Greystone Advisers, Inc., a Delaware corporation, (Adviser).  Initially, the
Adviser was a federally registered investment adviser under the Investment
Advisers Act of 1940.  The Securities Markets Improvements Act of 1996,
however, altered the requirements for federal investment adviser registration.
To maintain its federal registration, the Adviser would have needed to have at
least $25,000,000.00 in assets under management.  Accordingly, as of July 8,
1997, the Adviser was required by law to, and did, withdraw its federal
registration.  Further, upon consultation with Texas securities counsel, the
Adviser determined that it was not required to have a Texas investment adviser
registration.  Accordingly, until such time as the Adviser reaches
$25,000,000.00 under management, it will have no investment adviser
registration.  When that threshold is achieved, it intends to reregister under
the Investment Advisers Act.

Under the Agreement, the Adviser manages the investments of Plymouth, subject
to the supervision and control of Plymouth's Board of Trustees.  Specifically,
the Adviser identifies, evaluates, structures, closes and monitors the
investments made by Plymouth.  The Agreement remains in effect until January
26, 1999.  Thereafter, it will need to be renewed at least annually by the
Board of Trustees, including a majority of its members casting their votes in
person who are not interested persons of Plymouth (as defined by the 1940 Act)
at a meeting called for the purpose of voting on such approval, or by a vote of
a majority of the outstanding voting securities of Plymouth.  The Agreement can
be terminated by Plymouth at any time, without payment of any penalty, on sixty
day's written notice to the Adviser if the decision to terminate has been made
by the Board of Trustees or by a vote of a majority of the outstanding voting
securities of Plymouth.  The Agreement will terminate automatically in the
event of its assignment.

The Adviser is required to pay all expenses that are incurred in rendering its
services.  Generally, these expenses include the cost of office space,
telephone service, equipment and personnel required to perform its obligations
under the Agreement.  Plymouth will be required to pay its operating expenses
and reimburse the Adviser promptly for expenses that the Adviser may pay on
Plymouth's behalf, except those specifically required to be borne by the
Adviser under the Agreement.  Without limitation, the expenses to be borne by
Plymouth will include: all expenses of any offering and sale by Plymouth of its
shares; the fees and





                                    Page -7-
<PAGE>   8
disbursements of Plymouth's counsel, accountants, and custodian; fees and
expenses incurred in producing and effecting filings with federal and state
securities administrators; costs of Plymouth's periodic reports to and other
communications with Plymouth's shareholders; fees and expenses of members of
Plymouth's Board of Trustees who are not directors, officers or employees of
the Adviser; premiums for the fidelity bond maintained by Plymouth; all costs
related to portfolio investments, including without limitation financing costs,
legal and accounting fees, expenses related to protecting or maintaining the
value of the loan portfolio or its underlying collateral, and other
professional or technical fees and expenses (e.g., credit reports, title
searches and delivery charges, property taxes, insurance premiums,
long-distance telephone charges, costs of specialized consultants such as
accountants or industry-specific technical experts, and travel expenses)
incurred in acquiring, monitoring, negotiating, working-out, and effecting
disposition of such investments, as well as responding to any litigation
arising therefrom; and all expenses related to any borrowings by Plymouth.

During the term of this Agreement, Plymouth pays to the Adviser, on the 15th
day of each month: (a) a fee calculated at an effective annual rate of 5.94% of
Plymouth's invested assets as of the end of the previous month; and (b) a fee
calculated at an effective annual rate of 0.48% of Plymouth's cash and
short-term investments as of the end of the previous month.  For purposes of
calculating the fee to be paid on a monthly basis, "invested assets" means the
asset value as determined by the Board as of the end of the previous fiscal
quarter minus cash, short-term investments, intangible assets, and the amount
of collections applied to the carrying value of the loan portfolio since the
end of the previous quarter, plus the cost of loans purchased and capitalized
advances to protect portfolio investments or underlying collateral since the
end of the previous quarter.

At the shareholders' meeting on April 28, 1998, the shareholders approved the
execution and delivery of minor revisions to the existing Agreement.  The
Agreement is the same as it was in all material respects, and none of the above
description arises from any of those revisions.  The revisions reflected the
changed name of the adviser from Emerald to Greystone and clarified the
adviser's authority to perform loan servicing functions with respect to
Plymouth's assets.

4.  INVESTMENTS

Plymouth invests primarily in impaired loans of companies that qualify as
"eligible portfolio companies" as defined in Section 2(a)(46) of the 1940 Act
or in securities that otherwise qualify for investment as permitted in Section
55(a)(1) through (6). These loans are carried on the Statement of Assets and
Liabilities as of June 30, 1998, at fair value, as determined in good faith by
Plymouth's Board of Trustees.

These loans typically are offered at auction in packages of multiple loans.
Sellers include entities such as the Federal Deposit Insurance Corporation
(FDIC), banks, savings and loans, insurance companies and other financial
institutions.  Plymouth's investments in loan packages will be directed by the
Adviser.  Plymouth holds its real estate assets in a wholly-owned subsidiary as
required in the agreement establishing its senior credit facility.

Generally, a loan is considered impaired when, based on current information and
events, it is probable that a creditor will be unable to collect all amounts
due according to the contractual terms of the loan agreement unless the
borrower receives material assistance.  While several types of impaired loans
are available for purchase, Plymouth's portfolio is concentrated in impaired
loans secured by commercial real estate.  For both financial and regulatory
reasons, commercial banks, either directly or indirectly through the FDIC, make
these loans available for sale in packages with prices that are typically more
than $1 million per package.  Often the sale of impaired loans in this market
offers creditors the only alternative to foreclosure.





                                    Page -8-
<PAGE>   9
5.  INDEBTEDNESS

Plymouth has an $8,000,000 line of credit with a Texas bank that is secured by
a first lien on all of Plymouth's assets.  As of June 30, 1998 the balance on
Plymouth's credit facility was $1,381,187.  As of August 3, 1998, Plymouth
could borrow approximately an additional $1,990,000.  The amount the bank will
lend increases in relation to increases in capital stemming from assets
previously purchased so that, depending on the age of the portfolio loans,
Plymouth could work its way up to or near the full $8,000,000 credit line.  See
the discussion regarding Plymouth's borrowing base set forth below under
"Liquidity and Capital Resources."

6.  STOCK OPTION PLAN

At the annual shareholders meeting on April 28, 1998, the shareholders approved
a proposal for a stock option plan for the officers of Plymouth.  The proposal
approved by the shareholders provides for a total 50,000 shares in the plan.
The options will expire ten years after issuance, vest after three years,
contain a minimum exercise price of $10.00, and may not be exercised except in
connection with a registered offering.

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF LIQUIDITY, CAPITAL RESOURCES,
AND RESULTS OF OPERATIONS.

Liquidity and Capital Resources

As of June 30, 1998, Plymouth had $8,597,326 in net assets and had borrowed an
additional $1,381,187 on its credit line.  Plymouth declared and, on July 18,
1998, paid a 55 cents per share dividend based on its second quarter results.
The dividend is not reflected in the financial statements presented.

Plymouth's liquidity consists of its capital not invested in loans plus the
amount that is available on its line of credit.  As Plymouth tries to remain
fully invested at all times, it generally has uninvested capital only when
assets are liquidated.  Availability on its line of credit is tied to the
credit limit and a borrowing base.

Plymouth's experience is that it holds assets for approximately eleven months.
Therefore, on average, invested capital will not be available for the purchase
of new assets until approximately eleven months from when it was last spent.
Individual assets vary significantly, however, and it is difficult to predict
which assets will be held longer and which can be liquidated sooner.

Under the current loan agreement, Plymouth can borrow the lesser of $8,000,000
or its borrowing base.  The borrowing base limits advances to a declining
percentage applied to the lesser of cost or current fair market value.  On a
new purchase, the allowable percentage is 60%.  After Plymouth has held the
asset for six months, the advance rate declines to 48% (See page 3 of
Plymouth's December 31, 1997 Form 10-K for the other decline thresholds).  This
borrowing base decline after six months combined with Plymouth's average eleven
month's holding time for assets potentially could deny Plymouth liquidity
needed to purchase new assets as they become available.  As of August 3, 1998,
Plymouth had the ability to borrow approximately an additional $1,990,000.  The
borrowing capacity has increased significantly since May 4, 1998 when borrowing
capacity was $291,000.  The $291,000 figure included a temporary $600,000
credit line increase extended by the bank.  The temporary credit line increase
is no longer in effect.  The primary reason for the borrowing capacity increase
is that, in June 1998, Plymouth conducted a loan auction in which it sold many
of its older assets, thereby reducing the average age of its portfolio.
Another smaller auction is planned for September 1998.

Plymouth's present credit line expires on September 27, 1998.  When seeking a
renewal or replacement line, Plymouth will attempt to restructure the line so
that its borrowing base does not decline with age or at least so that the
decline is slowed and reduced.





                                    Page -9-
<PAGE>   10
There are no material, unused sources of liquidity.

Results of Operations

         Six Months Ended 6/30/98

During the six month period ending June 30,1998, Plymouth purchased nine
additional loans with a cost of $721,702 and a total outstanding principal
balance of $1,044,073.  Plymouth's per share value increased to $9.33 from
$9.13 at December 31, 1997.  The increase was due to strong results realized at
the June 1998 loan auction that exceeded expected unrealized gains.  For the
period Plymouth realized approximately $1,000,000 in taxable income and
declared a dividend to shareholders of 55 cents per share.  The dividend was
paid on July 18, 1998 to shareholders of record on that date.  The aggregate
amount of the dividend was $506,894 and represents approximately half of
taxable income for the period.  If the accompanying June 30, 1998 financial
statements reflected the dividend, the per share value would decline to $8.78.

During the six month period ending June 30,1998, Plymouth had gross collections
of $8,315,123, including fifty-five notes that settled or sold for an average
return on investment of approximately 31.05%.  That return on investment takes
into the account the original cost, gross collections, and direct expenses and
is calculated on collections and expenses both within and without the six month
period.  The 31.05% return does not include overhead such as the adviser fee
and interest expense.  Plymouth's collections resulted in a net increase in net
assets from operations, before changes in unrealized appreciation on
investments and equity in earnings of affiliates, of $1,025,164 for the six
month period ending June 30, 1998.  The gain principally arises from loan sales
effected through a loan auction held in June 1998.  The GAAP net increase in
assets for the six month period was $179,167 after a change in unrealized
appreciation of ($798,192).  The number is negative because gain was moved from
unrealized to realized as a result of the loan auction.  If it has product
available for sale, Plymouth intends to hold loan auctions quarterly so as to
maximize returns.

Plymouth's asset value can be affected by adjustments to portfolio fair market
value by Plymouth's Board of Trustees.  For the quarter ending June 30, 1998,
the balance sheet shows an accumulated undistributed, unrealized loss on
investments of $40,651.  This loss is principally attributable to reductions of
expected cash flows to net present value.  The loss includes three loans with
an expected cash loss of $265,956.  The unrealized losses are expected to
affect Plymouth's income statement in a manner corresponding to the effect of
the unrealized gains on loans in the June loan auction.

         Comparable Period for Previous Year

By way of comparison, for the period ending June 30,1997, Plymouth realized a
GAAP gain of $175,541.  The lower gain is attributable to there being fewer
assets under management and to the timing of collections.   The magnitude of
Plymouth's GAAP gain in the second quarter of 1998 ($1,025,164) is
significantly affected by the loans moving in groups through Plymouth's
resolution process.  A large group of loans was ready for sale during that
quarter, but that will not always be the case in future quarters.  While
management tries to keep Plymouth's portfolio spread out, that is difficult to
do.  At such time as Plymouth may be able to increase its capitalization
significantly, the lumps attributable to loans moving through the resolution
process  will be less significant and performance should be more uniform.

         Three Month Period Ending June 30, 1998 and Comparable Period Ending
June 30, 1997

For the three month period ending June 30, 1998, Plymouth realized gross
collections of $1,265,975 and realized a net increase in net assets from
operations, before changes in unrealized appreciation on investments and equity
in earnings of affiliates, of $1,161,961.  The magnitude of both the
collections and the gain arose





                                   Page -10-
<PAGE>   11
from the June 1998 loan auction.  For the comparable period in 1997, Plymouth
realized a net decrease in net assets from operations, before changes in
unrealized appreciation on investments and equity in earnings of affiliates, of
($88,980).  Most of Plymouth's collections come upon final disposition of the
loan (such as the recent loan auction) and, at June 30, 1997, most of
Plymouth's assets were still too young to be at the state of final disposition,
and as of June 30, 1997 Plymouth had too few loans and loans not held long
enough to permit an auction or other large sale

PART II - OTHER INFORMATION

Item 1:  LEGAL PROCEEDINGS

         None.

Item 2:  CHANGES IN SECURITIES

         None.

Item 3:  DEFAULTS UPON SENIOR SECURITIES

         None.

Item 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         (A)  Matters were submitted to shareholders at the annual meeting of
              shareholders held on April 28, 1998.

         (B)  The following persons were elected to serve as members of the 
              Board of Trustees:

                 Ronald K. Calgaard, James R. Clifton, Willis H. Wagner,
                 Goodhue W. Smith III, Robert R. Swendson

                 Mr. Wagner has subsequently resigned and the trustees filled
                 his seat with the election of Eric S. Foultz.  No members of
                 the Board of Trustees had terms continuing past the meeting so
                 that each member was newly elected at the annual meeting.

         (C) The matters voted on and the votes tabulated are as follows:

                 (1) Election of trustees.  The specific votes were as set
                 forth in the following tables (allocating the shares of Robert
                 Swendson, Goodhue W. Smith III, and SouthWest Federated, Inc.
                 in the same proportions as the votes of the other
                 shareholders):

<TABLE>
<CAPTION>
                 Proposition                           % For               % Against             % Abstain              Check
 <S>                                                  <C>                    <C>                   <C>                 <C>
 Dr. Ronald K. Calgaard                               100.00%                0.00%                 0.00%               100.00%

 James R. Clifton                                     100.00%                0.00%                 0.00%               100.00%

 Goodhue W. Smith III                                 100.00%                0.00%                 0.00%               100.00%

 Willis Wagner                                        98.51%                 1.49%                 0.00%               100.00%

 Robert R. Swendson                                   100.00%                0.00%                 0.00%               100.00%
</TABLE>

Shares owned by Smith, Swendson, and SWF total 46,247.


<TABLE>
                             <S>              <C>               <C>             <C>
                             Smith            Swendson          SWF             Totals
</TABLE>





                                   Page -11-
<PAGE>   12
<TABLE>
 <S>                          <C>               <C>            <C>                <C>
 Total Shares                 15,500.00         10,050.00      20,697.00          46,247.00
 Owned

 Calgaard For                 15,500.00         10,050.00      20,697.00          46,247.00

 Calgaard Against                  0.00              0.00           0.00               0.00

 Calgaard Abstain                  0.00              0.00           0.00               0.00

 Clifton For                  15,500.00         10,050.00      20,697.00          46,247.00

 Clifton Against                   0.00              0.00           0.00               0.00

 Clifton Abstain                   0.00              0.00           0.00               0.00

 Wagner For                   15,269.05          9,900.26      20,388.61          45,557.92

 Wagner Against                  230.95            149.74         308.39             689.08

 Wagner Abstain                    0.00              0.00           0.00               0.00

 Swendson For                 15,500.00         10,050.00      20,697.00          46,247.00

 Swendson Against                  0.00              0.00           0.00               0.00

 Swendson Abstain                  0.00              0.00           0.00               0.00

 Smith For                    15,500.00         10,050.00      20,697.00          46,247.00

 Smith Against                     0.00              0.00           0.00               0.00

 Smith Abstain                     0.00              0.00           0.00               0.00
</TABLE>


                 (2)  Investment Advisory Agreement.  The shareholders were
                 asked to approve a slightly revised investment advisory
                 agreement, although the revisions did not change any economic
                 terms of the relationship between Plymouth and the Advisor.
                 The shareholders returning their proxies voted on the
                 continuation of the agreement as set forth in the following
                 tables (allocating the shares of Robert Swendson, Goodhue W.
                 Smith III, and SouthWest Federated, Inc. in the same
                 proportions as the votes of the other shareholders):

<TABLE>
<CAPTION>
                 Proposition                           % For               % Against             % Abstain              Check
 <S>                                                  <C>                    <C>                   <C>                 <C>
 Revised Advisory Agreement                           97.02%                 0.00%                 2.98%               100.00%
</TABLE>

Shares owned by Smith, Swendson, and SWF total 46,247.

<TABLE>
<CAPTION>
                             Smith          Swendson            SWF              Totals
 <S>                       <C>               <C>             <C>                   <C>
 Total Shares Owned        15,500.00         10,050.00       20,697.00             46,247.00

 Advisory Agmt For         15,038.10          9,750.51       20,080.23             44,868.84

 Advisory Agmt                  0.00              0.00            0.00                  0.00
 Against

 Advisory Agmt                461.90            299.49          616.77              1,378.16
 Abstain
</TABLE>





                                   Page -12-
<PAGE>   13
                 (3)  Auditors.  The shareholders were asked to approve the
                 selection of KPMG Peat Marwick as the auditors of Plymouth.
                 The shareholders returning their proxies voted in favor of
                 such selection as set forth in the following tables
                 (allocating the shares of Robert Swendson, Goodhue W. Smith
                 III, and SouthWest Federated, Inc. in the same proportions as
                 the votes of the other shareholders):

<TABLE>
<CAPTION>
                 Proposition                           % For               % Against             % Abstain              Check
 <S>                                                  <C>                    <C>                   <C>                 <C>
 KPMG Peat Marwick                                    96.28%                 3.72%                 0.00%               100.00%
</TABLE>

Shares owned by Smith, Swendson, and SWF total 46,247.

<TABLE>
<CAPTION>
                              Smith           Swendson           SWF             Totals
 <S>                         <C>              <C>             <C>                 <C>
 Total Shares Owned          15,500.00        10,050.00       20,697.00           46,247.00

 KPMG For                    14,923.40         9,676.14       19,927.07           44,526.61

 KPMG Against                   576.60           373.86          769.93            1,720.39

 KPMG Abstain                     0.00             0.00            0.00                0.00
</TABLE>

                 (4)  Stock Option Plan.  The shareholders were asked to
                 approve a plan whereby officers of Plymouth would be granted
                 options to purchase shares of Plymouth.  The plan was to have
                 the following characteristics:

               1.     There shall be no transfer of options except through a
                      decedent's estate.

               2.     There shall be no exercise except in connection with a
                      registered offering.

               3.     The options shall expire ten years after issuance, and
                      they are not vested until three years after issuance, the
                      condition of vesting being that the holder remain in the
                      employ of Greystone Advisers, Inc.

               4.     The exercise price for the options shall be the net asset
                      value determined by the trustees for the applicable
                      period, but such price shall not be less than $10.00.

               5.     The issuance of options at any one time shall be limited
                      to a number that will not exceed limitations applicable
                      to the Trust regarding the number of outstanding options,
                      such restrictions at this time limiting the permissible
                      number of additional options to 30,000.


The shareholders returning their proxies voted on the plan as set forth in the
following tables (allocating the shares of Robert Swendson, Goodhue W. Smith
III, and SouthWest Federated, Inc. in the same proportions as the votes of the
other shareholders):

<TABLE>
<CAPTION>
           Proposition                                % For               % Against             % Abstain              Check
 <S>                                                  <C>                    <C>                   <C>                 <C>
 Employee Stock Option                                97.02%                 2.98%                 0.00%               100.00%
</TABLE>

Shares owned by Smith, Swendson, and SWF total 46,247.


<TABLE>
<CAPTION>
                                Smith            Swendson            SWF             Totals
 <S>                           <C>               <C>               <C>             <C>
 Total Shares Owned            15,500.00         10,050.00         20,697.00       46,247.00

 Option For                    15,038.10          9,750.51         20,080.23       44,868.84
</TABLE>





                                   Page -13-
<PAGE>   14
<TABLE>
 <S>                              <C>               <C>               <C>           <C>
 Option Against                   461.90            299.49            616.77        1,378.16

 Option Abstain                     0.00              0.00              0.00            0.00
</TABLE>

         (D)  Not applicable.

Item 5: OTHER INFORMATION

         Ted J. Hanes, Vice President Portfolio Management, left Plymouth
         effective July 3, 1998.  Larry D. Krause has assumed his
         responsibilities.  The Company does not expect Mr. Hanes' departure
         will have a material effect on operations and does not plan to replace
         him at this time.

         As noted in the management discussion and analysis, management
         believes Plymouth's performance would be both improved and stabilized
         if Plymouth had more capital.  Accordingly, management is currently
         investigating raising additional capital.  Its goal is to raise at
         least some of the funds needed before the end of 1998.  Management
         does not yet have an agreement with an investment banker with respect
         to such an offering.

         In the past, Plymouth has operated under ambiguity as to what loans to
         sole proprietorships would properly be considered as issued by
         eligible portfolio companies.  Loans to sole proprietorships were a
         significant percentage of those in Plymouth's target market.  Plymouth
         sought clarification from the Securities and Exchange Commission and ,
         in a July 1998 no-action letter, the Commission stated that it would
         not recommend regulatory action against Plymouth if Plymouth treats
         sole proprietorships as eligible portfolio companies.  This relief
         will enable Plymouth to bid on packages it would previously have had
         to pass up.  With expanded choices, Plymouth hopes to get a better
         portfolio mix at better prices.

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a) EXHIBITS-

                 (2)Plan of acquisition, reorganization, arrangement,
                    liquidation or succession: (None)

                 (3)(i)   (A)Certificate of Trust of the registrant, as filed
                          August 23, 1996(1) 
                          (B)Declaration of Trust of the registrant, dated 
                          August 23, 1996(1)

                 (3)(ii)Bylaws of the registrant, dated September 3, 1996(1)

                 (4)      (A)Loan Agreement between Comerica Bank-Texas and the
                          registrant, dated September 27, 1996(2)

                          (B)Agreement to furnish to the Commission upon
                          request a copy of Subordinated Note Agreement between
                          the registrant and SouthWest Holding Company, Inc.,
                          dated September 27, 1996(2)





   -----------------------------------

   (1)Incorporated herein by reference from registrant's initial registration
      statement on Form 10 (File No.  0-21443), as filed with the Commission on
      September 27, 1996.

   (2)Incorporated herein by reference from amendment number 1 of the
      registrant's initial registration statement on Form 10 (File No.
      0-21443), as filed with the Commission on January 15, 1997.

(1)  Incorporated herein by reference from the registrant's initial
registration statement on Form 10 (File No. 0-21443), as filed with the
commission on January 15, 1997.

(2)  Incorporated herein by reference from amendment #1to the registrant's
initial registration statement on Form 10 (File No.  0-21443), as filed with
the commission on January 15, 1997.

(3)  Filed herewith.

(4)  Incorporated herein by reference from the registrant's Form 10-Q filed
with the Commission for the period ending June 30, 1997 on or about August 14,
1997.

                                   Page -14-

<PAGE>   15

     (10)     (A)Investment Advisory Agreement by and between the registrant and
              Greystone Advisers, Inc.(3)

              (B)Custodial Agreement by and between Broadway National Bank, 
              Comerica Bank--Texas and the registrant, dated September 27, 
              1996(4)

     (15)     Letter re unaudited interim financial information: (None)

     (18)     Letter re change in accounting principles: (None)

     (19)     Report furnished to security holders: (None)

     (22)     Published report regarding matters submitted to vote
              of security holders: (None)

     (23)     Consents of experts and counsel: (None)

     (24)     Power of attorney: (None)

     (27)     Financial Data Schedule

         REPORTS ON FORM 8-K- None.

                                   SIGNATURES

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

                                  PLYMOUTH COMMERCIAL MORTGAGE FUND

                                  /s/ Robert R. Swendson
August 14, 1998
                                  --------------------------------------------
                                  Robert R. Swendson, President and Chief
                                  Executive Officer

                                  /s/ Patrick J. Panzarella
August 14, 1998
                                  --------------------------------------------
                                  Patrick J. Panzarella, Chief Financial
                                  Officer (Principal Financial Officer)





 ----------------------------------

  (3)Incorporated by reference from registrant's Form 10-Q for the period ending
  March 31, 1998 (File No.  0-21433), as filed with the Commission on May 14,
  1998.

  (4)Incorporated by reference from registrant's Form 10-Q for the period ending
  June 30, 1997 (File No.  0-21433), as filed with the Commission on or about
  August 14, 1997.


                                   Page -15-