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

                    U. S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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



                                   FORM 10-QSB


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



             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2001


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



                         Commission file number 33-11096

                         CRI HOTEL INCOME PARTNERS, L.P.
             Organized pursuant to the Laws of the State of Delaware


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



        Internal Revenue Service - Employer Identification No. 52-1500621

                 11200 Rockville Pike, Rockville, Maryland 20852

                                 (301) 468-9200


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



Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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 [ ]

--------------------------------------------------------------------------------
<PAGE>

                         CRI HOTEL INCOME PARTNERS, L.P.

                              INDEX TO FORM 10-QSB

                    FOR THE QUARTER ENDED SEPTEMBER 30, 2001


                                                                           Page


Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

        Balance Sheets
        - September 30, 2001 and December 31, 2000.......................... 1

        Statements of Income
        - for the three and nine months ended September 30, 2001 and 2000... 2

        Statement of Changes in Partners' (Deficit) Capital
        - for the nine months ended September 30, 2001...................... 3

        Statements of Cash Flows
        - for the nine months ended September 30, 2001 and 2000............. 4

        Notes to Financial Statements
        - September 30, 2001 and 2000....................................... 5

Item 2. Management's Discussion and Analysis of Financial Condition
          and Results of Operations......................................... 11


Part II. OTHER INFORMATION

Item 5. Other Information................................................... 17

Item 6. Exhibits and Reports on Form 8-K.................................... 18

Signature................................................................... 19

<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements

                         CRI HOTEL INCOME PARTNERS, L.P.

                                 BALANCE SHEETS


                                     ASSETS

<TABLE>
<CAPTION>
                                                                                           September 30,   December 31,
                                                                                               2001           2000
                                                                                           ------------    ------------
                                                                                           (Unaudited)
<S>                                                                                        <C>             <C>
Property and equipment - at cost:
  Land .................................................................................   $  1,574,490    $  1,574,490
  Buildings and site improvements ......................................................     13,980,045      13,937,210
  Furniture, fixtures and equipment ....................................................      2,294,089       2,041,320
  Leasehold improvements ...............................................................      2,140,835       2,039,881
                                                                                           ------------    ------------

                                                                                             19,989,459      19,592,901
  Less: accumulated depreciation and amortization ......................................     (8,471,616)     (7,872,375)
                                                                                           ------------    ------------

                                                                                             11,517,843      11,720,526

Hotel operating cash ...................................................................        373,344         176,202
Cash and cash equivalents ..............................................................           --           150,687
Working capital reserve ................................................................         98,328           8,456
Capital improvements, real estate tax and insurance reserves held by servicer ..........        113,682         222,608
Receivables and other assets ...........................................................        675,941         457,830
Acquisition fees, principally paid to related parties,
  net of accumulated amortization of $465,446 and $439,943, respectively ...............        554,658         580,161
Property purchase costs,
  net of accumulated amortization of $82,814 and $78,257, respectively .................         99,452         104,009
                                                                                           ------------    ------------

    Total assets .......................................................................   $ 13,433,248    $ 13,420,479
                                                                                           ============    ============



                   LIABILITIES AND PARTNERS' (DEFICIT) CAPITAL


Current liabilities:
  Accounts payable and accrued expenses ................................................   $    554,231    $    412,299
  Distributions payable ................................................................           --           150,687
  Hotel trade payables .................................................................        261,513         234,636
  Short-term portion of mortgage payable ...............................................        149,962         141,461
                                                                                           ------------    ------------

Total current liabilities ..............................................................        965,706         939,083
                                                                                           ------------    ------------

Long term debt:
  Mortgage payable .....................................................................      8,281,372       8,396,298
                                                                                           ------------    ------------

    Total liabilities ..................................................................      9,247,078       9,335,381
                                                                                           ------------    ------------

Commitments and contingencies

Partners' (deficit) capital:
  General Partner ......................................................................       (305,060)       (307,081)
  Beneficial Assignee Certificates (BACs) Series A;
    868,662 BACs issued and outstanding ................................................      4,491,230       4,392,179
                                                                                           ------------    ------------

    Total partners' capital ............................................................      4,186,170       4,085,098
                                                                                           ------------    ------------

    Total liabilities and partners' capital ............................................   $ 13,433,248    $ 13,420,479
                                                                                           ============    ============

</TABLE>

                          The accompanying notes are an
                             integral part of these
                              financial statements.

                                       -1-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements

                         CRI HOTEL INCOME PARTNERS, L.P.

                              STATEMENTS OF INCOME

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                       For the three months ended     For the nine months ended
                                                              September 30,                 September 30,
                                                       --------------------------    --------------------------
                                                           2001          2000            2001           2000
                                                       -----------    -----------    -----------    -----------
<S>                                                    <C>            <C>            <C>            <C>
Revenue:
  Rooms ............................................   $ 2,251,745    $ 2,217,736    $ 7,232,561    $ 7,088,465
  Telephone ........................................        37,996         48,629        135,031        175,836
  Rental and other .................................        82,047         86,439        256,700        261,891
  Food and beverage ................................        14,035         17,817         47,312         60,477
                                                       -----------    -----------    -----------    -----------

                                                         2,385,823      2,370,621      7,671,604      7,586,669
                                                       -----------    -----------    -----------    -----------

Departmental expenses:
  Rooms ............................................      (696,005)      (692,683)    (2,044,722)    (2,053,516)
  Telephone ........................................       (27,006)       (12,736)       (84,421)       (77,080)
  Rental and other .................................       (32,600)       (33,740)      (100,364)      (104,963)
  Food and beverage ................................       (12,841)       (16,088)       (45,460)       (49,292)
                                                       -----------    -----------    -----------    -----------

                                                          (768,452)      (755,247)    (2,274,967)    (2,284,851)
                                                       -----------    -----------    -----------    -----------

Gross operating income .............................     1,617,371      1,615,374      5,396,637      5,301,818
                                                       -----------    -----------    -----------    -----------

Unallocated operating income (expenses):
  Interest and other income ........................        25,253         26,912         75,279         78,581
  General and administrative .......................      (261,781)      (287,403)      (904,126)      (913,843)
  Building lease ...................................      (101,442)       (91,585)      (468,925)      (456,995)
  Marketing ........................................      (223,991)      (208,180)      (723,819)      (699,849)
  Depreciation and amortization ....................      (278,820)      (243,022)      (820,700)      (751,645)
  Energy ...........................................      (142,311)      (136,893)      (410,252)      (379,295)
  Property taxes ...................................      (152,202)      (150,477)      (456,606)      (435,051)
  Property operations and maintenance ..............      (145,174)      (147,428)      (445,749)      (465,508)
  Management fees ..................................       (83,768)       (83,211)      (269,296)      (266,312)
  Base asset management fee, paid to related parties       (23,438)       (23,438)       (70,313)       (70,313)
  Professional fees ................................       (16,921)       (14,052)       (50,764)       (42,157)
  Loss on disposal of fixed assets .................       (16,000)       (50,000)       (76,000)       (84,000)
                                                       -----------    -----------    -----------    -----------

                                                        (1,420,595)    (1,408,777)    (4,621,271)    (4,486,387)
                                                       -----------    -----------    -----------    -----------

Operating income ...................................       196,776        206,597        775,366        815,431

Other expense:
  Interest expense .................................      (166,808)      (169,509)      (497,016)      (506,712)
                                                       -----------    -----------    -----------    -----------

Net income .........................................   $    29,968    $    37,088    $   278,350    $   308,719
                                                       ===========    ===========    ===========    ===========


Net income allocated to General Partner (2%) .......   $       599    $       742    $     5,567    $     6,174
                                                       ===========    ===========    ===========    ===========

Net income allocated to BAC Holders (98%) ..........   $    29,369    $    36,346    $   272,783    $   302,545
                                                       ===========    ===========    ===========    ===========

Net income per BAC,
  based on 868,662 BACs outstanding ................   $      0.03    $      0.04    $      0.31    $      0.35
                                                       ===========    ===========    ===========    ===========
</TABLE>


                          The accompanying notes are an
                             integral part of these
                              financial statements.

                                       -2-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements


                         CRI HOTEL INCOME PARTNERS, L.P.

               STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                  Beneficial
                                                                   Assignee
                                                     General      Certificate
                                                     Partner        Holders        Total
                                                  ------------   -----------    -----------
<S>                                               <C>            <C>            <C>
Partners' (deficit) capital, January 1, 2001 ..   $  (307,081)   $ 4,392,179    $ 4,085,098

  Net income ..................................         5,567        272,783        278,350

  Distributions of $0.20 per BAC ..............        (3,546)      (173,732)      (177,278)
                                                  -----------    -----------    -----------

Partners' (deficit) capital, September 30, 2001   $  (305,060)   $ 4,491,230    $ 4,186,170
                                                  ===========    ===========    ===========

</TABLE>

                          The accompanying notes are an
                             integral part of these
                              financial statements.

                                       -3-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements

                         CRI HOTEL INCOME PARTNERS, L.P.

                            STATEMENTS OF CASH FLOWS

                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                    For the nine months ended
                                                                                           September 30,
                                                                                   ---------------------------
                                                                                       2001            2000
                                                                                   -----------     -----------
<S>                                                                                <C>            <C>
Cash flows from operating activities:
  Net income ...................................................................   $   278,350    $   308,719

  Adjustments  to  reconcile  net  income  to net  cash  provided  by  operating
    activities:
    Depreciation and amortization ..............................................       820,700        751,645
    Loss on disposal of fixed assets ...........................................        76,000         84,000

    Changes in assets and liabilities:
      Increase in receivables and other assets, net ............................      (230,328)      (143,079)
      Increase in accounts payable and accrued expenses ........................       141,932         77,598
      Increase (decrease) in hotel trade payables ..............................        26,877       (105,885)
                                                                                   -----------    -----------

        Net cash provided by operating activities ..............................     1,113,531        972,998
                                                                                   -----------    -----------


Cash flows from investing activities:
  Net additions to property and equipment ......................................      (651,740)      (788,400)
  Net (deposits to) withdrawals from working capital reserve ...................       (89,872)       172,381
  Net withdrawals from capital improvements,
    real estate tax and insurance reserves held by servicer ....................       108,926        110,556
                                                                                   -----------    -----------

        Net cash used in investing activities ..................................      (632,686)      (505,463)
                                                                                   -----------    -----------


Cash flows from financing activities:
  Distributions paid to BAC Holders and General Partner ........................      (327,965)      (150,687)
  Payment of principal on mortgage payable .....................................      (106,425)       (96,730)
                                                                                   -----------    -----------

        Net cash used in financing activities ..................................      (434,390)      (247,417)
                                                                                   -----------    -----------


Net increase in hotel operating cash and cash and cash equivalents .............        46,455        220,118

Hotel operating cash and cash and cash equivalents, beginning of period ........       326,889        230,426
                                                                                   -----------    -----------

Hotel operating cash and cash and cash equivalents, end of period ..............   $   373,344    $   450,544
                                                                                   ===========    ===========



Supplemental disclosure of cash flow information:
  Cash paid during the period for interest .....................................   $   497,017    $   506,712
                                                                                   ===========    ===========
</TABLE>

                          The accompanying notes are an
                             integral part of these
                              financial statements.

                                       -4-

<PAGE>
                         CRI HOTEL INCOME PARTNERS, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                           September 30, 2001 and 2000

                                   (Unaudited)


1.   BASIS OF PRESENTATION

     In the opinion of CRICO Hotel Associates I, L.P. (the General Partner), the
accompanying unaudited financial statements reflect all adjustments,  consisting
of normal recurring accruals, necessary for a fair presentation of the financial
position of CRI Hotel Income Partners,  L. P. (the  Partnership) as of September
30, 2001,  and the results of its operations for the three and nine months ended
September  30,  2001  and  2000 and its cash  flows  for the nine  months  ended
September 30, 2001 and 2000. The results of operations  for the interim  periods
ended  September 30, 2001, are not  necessarily  indicative of the results to be
expected for the full year.

     The  accompanying  unaudited  financial  statements  have been  prepared in
conformity with accounting  principles  generally  accepted in the United States
and with the  instructions  to Form 10-QSB.  Certain  information and accounting
policies  and footnote  disclosures  normally  included in financial  statements
prepared in conformity  with  accounting  principles  generally  accepted in the
United  States have been  condensed  or omitted  pursuant to such  instructions.
These  condensed  financial  statements  should be read in conjunction  with the
financial  statements  and notes thereto  included in the  Partnership's  annual
report on Form 10-KSB at December 31, 2000.

     The Partnership and the chief operating decision maker consider the hotels'
operations as a single homogeneous  business activity as it relates to achieving
their  objectives  of cash  flow  growth  and  capital  appreciation.  The chief
operating  decision  maker  reviews  cash  flow  and  operating  results  in the
aggregate in order to determine  the  appropriate  level of cash  available  for
distribution to the investors in the Partnership.  Accordingly,  the Partnership
considers  itself to operate in a single  reportable  segment in accordance with
Statement of Financial Accounting Standards No. 131.

     Certain amounts in the 2000 financial  statements have been reclassified to
conform to the 2001 presentation.


2.   LONG-LIVED ASSETS

     The Partnership reviews long-lived assets for impairment whenever events or
changes in  circumstances  indicate that the carrying amount of an asset may not
be fully recoverable. Recoverability is measured by a comparison of the carrying
amount of an asset to the estimated future  undiscounted net cash flows expected
to be generated by the asset.  If an asset were  determined to be impaired,  its
basis would be adjusted to fair value through the  recognition  of an impairment
loss.


3.   WORKING CAPITAL RESERVE; ADVANCES

     The working  capital reserve of $98,328 and $8,456 as of September 30, 2001
and  December  31,  2000,  respectively,  represents  cash and cash  equivalents
maintained as working capital for the  Partnership.  The working capital reserve
may be increased or reduced by the General Partner as it deems appropriate.

                                       -5-

<PAGE>
                         CRI HOTEL INCOME PARTNERS, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                           September 30, 2001 and 2000

                                   (Unaudited)


3.   WORKING CAPITAL RESERVE; ADVANCES - Continued

     On January 6, 2000,  the  Partnership  advanced  $100,000 to the Scottsdale
hotel in the form of a  non-interest  bearing  loan.  On February  4, 2000,  the
Scottsdale hotel repaid $70,000 of this loan; the remaining  $30,000 balance was
repaid on March 1, 2000.

     On June 28, 2000, the Partnership advanced $150,000 to the Scottsdale hotel
in the form of a  non-interest  bearing loan,  which was repaid during the first
quarter  of  2001.  This  intercompany   balance  has  been  eliminated  in  the
preparation of the accompanying balance sheet at December 31, 2000.

     On September 27, 2001, the Partnership  advanced $100,000 to the Scottsdale
hotel in the form of a  non-interest  bearing loan.  This loan is expected to be
repaid  during  2002.  This  intercompany  balance  has been  eliminated  in the
preparation of the accompanying balance sheet at September 30, 2001.


4.   CAPITAL IMPROVEMENTS, REAL ESTATE TAX AND INSURANCE
       RESERVES HELD BY SERVICER

     In addition to the monthly  loan  installments,  as  discussed  below,  the
Partnership   also  makes  monthly  payments  which  are  escrowed  for  capital
improvements  reserves (CIR) and estimated annual real estate taxes. The monthly
CIR  payment  totaling  $19,365  is held in  escrow  and may be  drawn on by the
Partnership for ongoing capital improvement expenditures and for the replacement
of furniture,  fixtures and equipment at the hotels. The monthly real estate tax
payments equal  one-twelfth of the estimated  yearly taxes and assessments to be
levied on the  hotels,  currently  estimated  as $35,116  per month for the year
2001.  The  servicer of the loan pays such taxes and  assessments  when due from
these escrows. Both the CIR and real estate tax payments are due on the same day
as the monthly principal and interest installments, commencing February 1, 1998,
until the new loan is paid in full.

     During the nine months ended  September 30, 2001 and 2000, the  Partnership
made escrow  deposits  aggregating  $174,281  and  $174,281,  respectively,  for
capital  improvements  and $316,048 and  $354,739,  respectively,  for estimated
annual real estate taxes.  As of September  30, 2001 and December 31, 2000,  the
servicer held $60,910 and $99,854,  respectively,  for capital  improvements and
$49,250 and $119,232,  respectively,  for real estate taxes.  Additionally,  the
servicer  held $3,522 for insurance  reserves as of both  September 30, 2001 and
December 31, 2000.


5.   MORTGAGE PAYABLE

     On December 19, 1997, the Partnership refinanced with Citicorp Real Estate,
Inc. (Citicorp) the Zero Coupon Notes which were originally issued in connection
with the Partnership's acquisition of the hotels. The new loan bears interest at
the rate of 7.72% per annum and matures January 1, 2008. On that date, a balloon
payment in the amount of $7,273,441 will be due. In accordance with the terms of
the new loan, the Partnership began paying monthly installments of principal and
interest  in the  amount of  $67,049  on the first day of each  month  beginning
February 1998. If any such monthly installment is not paid when due, the

                                       -6-

<PAGE>
                         CRI HOTEL INCOME PARTNERS, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                           September 30, 2001 and 2000

                                   (Unaudited)


5.   MORTGAGE PAYABLE - Continued

entire principal  amount  outstanding and accrued interest thereon shall at once
become due and  payable,  at the  option of the  holder.  Subject to  prepayment
terms,  as discussed  below,  the  refinancing of the Zero Coupon Notes does not
preclude the future sale of the hotels, either individually or as a portfolio.

     Under the terms of the new loan, such loan may be prepaid, subject to terms
and  prepayment  penalties  as set  forth  in the  note.  The new  loan has been
securitized in a "no lock" program, which permits the prepayment of the new loan
with a three percent premium during the first three years, a two percent premium
during the next three years, a one percent  premium during the next three years,
and no  penalty  during the final  year.  Additionally,  see Note 9 for  further
information concerning the acquisition and servicing of this loan.

     The Partnership  made  installments  of principal and interest  aggregating
$603,442  during the nine months  ended both  September  30, 2001 and 2000.  The
Partnership's balance on this loan was $8,431,334 and $8,537,759 as of September
30, 2001 and December 31, 2000, respectively.


6.   DISTRIBUTIONS TO BAC HOLDERS

     Distributions  declared  and  payable to BAC  holders of record  during the
first three quarters of 2001 and 2000 follow.

                                      2001                        2000
                             --------------------       ---------------------
          Quarter Ended        Total      Per BAC         Total       Per BAC
          -------------      ---------    -------       ---------     -------

          March 31           $      --    $    --       $      --     $    --
          June 30              173,732       0.20         147,673        0.17
          September 30              --         --         147,673        0.17
                             ---------    -------       ---------     -------
                             $ 173,732    $  0.20       $ 295,346     $  0.34
                             =========    =======       =========     =======

                                      -7-

<PAGE>
                         CRI HOTEL INCOME PARTNERS, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                           September 30, 2001 and 2000

                                   (Unaudited)


7.   COMMITMENTS

     a.   Hotel operations management agreements
          --------------------------------------

          The  Partnership  entered into  management  agreements  with Bryanston
     Group  d/b/a  Buckhead  Hotel  Management   Company,   Inc.  (Buckhead)  in
     connection with operation of the hotels. The management  agreements,  which
     expire  between  November  2002 and July  2003,  provide  for a base  asset
     management  fee of 3.5% of gross revenues from  operations.  The management
     agreements  also call for a marketing fee of 1.5% of net room  revenues,  a
     reservation fee of 2.3% of gross revenues from rental of hotel guest rooms,
     and an incentive  management  fee  generally  equal to 25% of net cash flow
     available  after payment of a preferred cash flow return to the Partnership
     equal to 11% of the aggregate  purchase  price for Series A hotels owned by
     the  Partnership.  No incentive  management  fees were earned for the first
     three quarters of 2001 or 2000.

     b.   Operating lease agreements
          --------------------------

          The Partnership  assumed an existing lease agreement from Days Inns in
     connection with the acquisition of the leasehold interest in the Scottsdale
     Days Inn. The  assumption  transfers  the rights to operate the property on
     the lease's  existing terms over the remaining life of the lease. The lease
     has been extended to expire on December 31, 2003.  The lease may be renewed
     at the option of the  lessee for an  additional  five year  period.  Annual
     lease  payments  are equal to the  greater of $140,450 or 22% of total room
     revenue and 2.5% of food and beverage  revenue.  Minimum lease  payments of
     $11,704 are payable monthly, with a quarterly analysis of the actual amount
     due. For the three months ended September 30, 2001 and 2000, lease payments
     were  $101,442  and  $91,585,  respectively;  for  the  nine  months  ended
     September  30, 2001 and 2000,  lease  payments  were $468,925 and $456,995,
     respectively.

     c.   Scottsdale, Roseville and Minneapolis capital improvements
          ----------------------------------------------------------

          During 2000, the General  Partner  approved a $930,000  renovation and
     capital improvement project for the Scottsdale hotel, to be funded from the
     working  capital  reserve of the Partnership in the amounts of $488,000 and
     $292,000  in  2000  and  2001,   respectively,   and  from  the  Scottsdale
     replacements  reserve in the  amounts of  $90,000  and  $60,000 in 2000 and
     2001, respectively. During 2000, $481,955 was funded by the Partnership and
     $51,785  was  funded  from  the  Scottsdale  replacements  reserve  for the
     Scottsdale  renovation  project.  During 2001, $252,726 was funded from the
     Partnership's  working  capital  reserve  and  $92,050  was funded from the
     Scottsdale  replacements  reserve to complete this project,  for a total of
     $878,516, which is less than the approved amount of $930,000.

          During  2000,  the  General  Partner  approved a  $145,000  renovation
     project for the  Roseville  hotel,  to be funded  from the working  capital
     reserve of the  Partnership in the amount of $70,000 and from the Roseville
     replacements  reserve in the amount of $75,000.  During  2000,  $20,409 was
     funded  from the  Partnership's  working  capital  reserve  and $75,526 was
     funded from the Roseville  replacements  reserve for this  project.  During
     2001, $46,192 was funded from the Partnership's  working capital reserve to
     complete  this  project,  for a total of  $142,127,  which is less than the
     approved amount of $145,000.

                                       -8-

<PAGE>
                         CRI HOTEL INCOME PARTNERS, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                           September 30, 2001 and 2000

                                   (Unaudited)


7.   COMMITMENTS - Continued

          In April 2001, the Partnership  approved a $280,000 renovation project
     for the Minneapolis hotel. The cost will be funded from the working capital
     reserve  of  the  Partnership  in the  amount  of  $217,000  and  from  the
     Minneapolis  replacements  reserve in the amount of $63,000. As of November
     8, 2001, $72,813 was funded from the Partnership's  working capital reserve
     and $42,917 was funded from the Minneapolis  replacements  reserve for this
     project.


8.   GROUND LEASE AGREEMENTS

     The Partnership  leases a portion of the  Minneapolis  Days Inn property to
Vicorp  Restaurants,   Inc.  (Vicorp),  which  is  operating  a  Baker's  Square
restaurant on the property.  Gross rental income pursuant to the lease agreement
with Vicorp,  which is included in interest and other income in the accompanying
statements  of income,  was  $14,987  and  $14,481  for the three  months  ended
September 30, 2001 and 2000,  respectively;  for the nine months ended September
30,  2001  and  2000,   such  gross  rental  income  was  $44,963  and  $43,443,
respectively.

     The  Partnership  leases an  adjacent  building on the  Roseville  Days Inn
property  to Happy  Chef  Systems,  Inc.  (Happy  Chef).  Happy  Chef,  in turn,
subleases  this space to the India  Palace,  which  operates a restaurant on the
property.  During the third  quarter  2000,  Happy Chef  exercised the third and
final option on this lease, thereby extending the term for five additional years
through September 30, 2005. Happy Chef continues to sublease this space to India
Palace.  Gross rental income  pursuant to the lease  agreement  with Happy Chef,
which is included in interest and other income in the accompanying statements of
income,  was $7,500  and  $22,500  for each of the three and nine month  periods
ended September 30, 2001 and 2000, respectively.


9.   RELATED PARTY TRANSACTIONS

     In accordance with the terms of the Partnership Agreement,  the Partnership
is obligated to reimburse the General Partner or its affiliates for their direct
expenses in  connection  with managing the  Partnership.  The  Partnership  paid
$11,890  and $49,414 for the three and nine months  ended  September  30,  2001,
respectively,  and  $10,837  and  $36,866  for the three and nine  months  ended
September  30,  2000,  to the  General  Partner  or  its  affiliates  as  direct
reimbursement of expenses incurred on behalf of the Partnership. Such reimbursed
expenses are included in the  accompanying  statements  of income as general and
administrative expenses.

     In accordance with the terms of the Partnership Agreement,  the Partnership
is obligated to pay the General  Partner  and/or its  affiliates  an annual base
asset  management fee  (Management  Fee) equal to 0.50% of the weighted  average
balance of the adjusted partnership  investment during the period, as defined in
the Partnership Agreement.  The Partnership paid a Management Fee of $23,438 and
$70,313 for each of the three and nine month  periods  ended  September 30, 2001
and 2000.

                                       -9-

<PAGE>
                         CRI HOTEL INCOME PARTNERS, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                           September 30, 2001 and 2000

                                   (Unaudited)


9.   RELATED PARTY TRANSACTIONS - Continued

     The $8.9 million loan originated and  underwritten by Citicorp (see Note 5)
was acquired by CRIIMI MAE Inc., and was included in a  securitization  by it in
June 1998. As master and special servicer for the loan pool, CRIIMI MAE Services
Limited Partnership,  a CRIIMI MAE Inc. affiliate,  will retain a portion of the
cash flow, as well as any  prepayment  penalties.  The Chairman and President of
CRIIMI MAE Inc. are the Chairman and President, respectively, of, and holders of
100% of the equity  interest in, C.R.I.,  Inc.,  which is the general partner of
CRICO Hotel  Associates I, L.P.,  which,  in turn, is the General Partner of the
Partnership.

     C.R.I.,  Inc., the general partner of the General  Partner,  has contracted
with  Capitol  Hotel  Group,  Inc.  (CHG) to perform  certain  asset  management
services  related to the  oversight  of the  operations  and  management  of the
hotels.  The  Chairman  and  President  of C.R.I.,  Inc.  are the  Chairman  and
President,  respectively,  of, and  (effective as of January 1, 2000) holders of
100% of the equity interest in, CHG.




                                      # # #





                                      -10-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis
        ------------------------------------
          of Financial Condition and Results of Operations
          ------------------------------------------------

     CRI Hotel Income Partners, L.P.'s (the Partnership) Management's Discussion
and Analysis of Financial  Condition and Results of Operations  section contains
information  that  may  be  considered  forward  looking,  including  statements
regarding  the effect of  governmental  regulations.  Actual  results may differ
materially from those  described in the forward  looking  statements and will be
affected by a variety of factors including seasonality with respect to the hotel
industry,  national and local economic conditions, the general level of interest
rates, governmental regulations affecting the Partnership and interpretations of
those  regulations,   the  competitive  environment  in  which  the  Partnership
operates, and the availability of working capital.

                                Terrorist Attacks
                                -----------------

     On  September  11,  2001,  terrorists  launched  attacks on the World Trade
Center in New York City and the Pentagon in Washington,  D.C. The attacks had an
immediate  and  significant   adverse  effect  on  the  United  States  economy,
particularly on the travel and hospitality  industries.  The hotels in which the
Partnership  is invested  have been  adversely  affected in the aftermath of the
September 11th  terrorist  attacks.  Since the attacks,  some of the hotels have
experienced significant short-term declines in occupancy and revenue compared to
the prior year. At present, it is not possible to predict either the severity or
duration  of  such  declines.   Weaker  hotel   performance   could  impact  the
Partnership's  ability to pay operating expenses and short term commitments,  to
fund the working  capital and capital  improvements  reserves,  to fund  capital
projects,  and to pay distributions to BAC holders. The Partnership is currently
unable to estimate the impact that the September 11th  terrorist  attacks or any
future  terrorist  attacks or other  developments  in the war on terrorism could
have on its operations, liquidity, or capital resources.

     As a result of the  uncertainty,  coupled  with the facts that three of the
hotels are entering the winter months in which they traditionally have the least
business,  and that the other two hotels are  located in resort  areas that have
been impacted by the decline in tourism,  the General  Partner has decided it is
necessary  to  reserve  all cash.  Therefore,  the  Partnership  will not make a
distribution  to BAC holders for the third quarter of 2001. The General  Partner
is working closely with the hotels' manager to institute  stricter  cost-cutting
and cost-control  measures in an effort to maintain  liquidity at the hotels. In
addition, the General Partner immediately halted all hotel renovations that were
in progress on  September  11,  2001.  At present,  it is  uncertain  when hotel
renovations  will  resume.  The  General  Partner  will  continue to monitor the
situation,  and will reevaluate the Partnership's ability to make a distribution
to BAC holders for the fourth quarter of 2001 in February 2002.

                          Financial Condition/Liquidity
                          -----------------------------

     The  Partnership  expects that the hotels in the  aggregate  will  generate
sufficient cash flow to achieve a positive cash flow after  operating  expenses.
In addition to the periodic  replacement  of fixed  assets,  which are primarily
funded  from  the  capital  improvements   reserves,  the  General  Partner  has
determined  that  certain  capital   improvements  are  needed  to  enhance  the
marketability  of the hotels.  Since 1997, the Partnership has funded a total of
approximately $2 million from the working capital reserve to the hotels for such
capital improvements.

     During 2000, the General Partner approved a $930,000 renovation and capital
improvement  project  for the  Scottsdale  hotel,  to be funded from the working
capital  reserve of the  Partnership  in the amounts of $488,000 and $292,000 in
2000 and 2001, respectively, and from the Scottsdale replacements reserve in the
amounts of $90,000  and  $60,000 in 2000 and 2001,  respectively.  During  2000,
$481,955  was  funded  by the  Partnership  and  $51,785  was  funded  from  the
Scottsdale  replacements reserve for the Scottsdale  renovation project.  During
2001,  $252,726 was funded from the  Partnership's  working  capital reserve and
$92,050 was funded from the  Scottsdale  replacements  reserve to complete  this
project,  for a total of  $878,516,  which is less than the  approved  amount of
$930,000.

                                      -11-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis
        ------------------------------------
          of Financial Condition and Results of Operations - Continued
          ------------------------------------------------

     During 2000, the General Partner approved a $145,000 renovation project for
the  Roseville  hotel,  to be funded  from the  working  capital  reserve of the
Partnership in the amount of $70,000 and from the Roseville replacements reserve
in the amount of $75,000. During 2000, $20,409 was funded from the Partnership's
working capital  reserve and $75,526 was funded from the Roseville  replacements
reserve for this project. During 2001, $46,192 was funded from the Partnership's
working capital reserve to complete this project, for a total of $142,127, which
is less than the approved amount of $145,000.

     In April 2001, the Partnership  approved a $280,000  renovation project for
the Minneapolis  hotel. The cost will be funded from the working capital reserve
of  the  Partnership  in  the  amount  of  $217,000  and  from  the  Minneapolis
replacements  reserve in the amount of $63,000.  As of November 8, 2001, $72,813
was funded from the Partnership's working capital reserve and $42,917 was funded
from the Minneapolis  replacements reserve for this project. As discussed above,
the General Partner has temporarily halted further expenditures on this project.

     The Partnership's  liquidity and future results of operations are primarily
dependent upon the performance of the underlying hotels. Hotel operations may be
materially  affected by changing market conditions and by seasonality  caused by
variables  such as  vacations,  holidays and climate.  The  Partnership  closely
monitors its liquidity and cash flow in an effort to ensure that sufficient cash
is available  for  operating  requirements,  and for possible  distributions  to
Beneficial Assignee Certificate (BAC) holders. See above for a discussion of the
impact of the recent  terrorist  attacks  on the  Partnership's  operations  and
liquidity.

     The Partnership's net cash provided by the hotels' operating activities for
the nine  months  ended  September  30,  2001 and 2000 was  adequate  to support
operating,  investing and financing  requirements.  The Partnership  anticipates
that  existing  cash  resources  along with  future  cash flows from the hotels'
operations,  in the aggregate,  will be sufficient to pay operating expenses and
short term  commitments,  to fund the working  capital and capital  improvements
reserves,  and to  fund  the  capital  projects,  as  discussed  above.  Current
liabilities  at September 30, 2001 were  $965,706,  which  represented a $26,623
increase from the balance at December 31, 2000. This increase primarily resulted
from  increases  in  accounts  payable  and  accrued  expenses,  and hotel trade
payables, partially offset by a decrease in distributions payable.

Financing
---------

     On December  19, 1997,  the  Partnership  refinanced  the Zero Coupon Notes
which were originally issued in connection with the Partnership's acquisition of
the hotels.  In accordance with the terms of the new loan, the Partnership  made
installments  of principal  and interest  aggregating  $603,442  during the nine
months ended both September 30, 2001 and 2000. The Partnership's balance on this
loan was  $8,431,334  and  $8,537,759  as of September 30, 2001 and December 31,
2000, respectively.

Capital Improvements, Real Estate Tax and Insurance Reserves Held by Servicer
-----------------------------------------------------------------------------

     In addition to the monthly  loan  installments,  as  discussed  above,  the
Partnership   also  makes  monthly  payments  which  are  escrowed  for  capital
improvements  reserves and estimated  annual real estate taxes.  During the nine
months ended September 30, 2001 and 2000, the  Partnership  made escrow deposits
aggregating  $174,281 and $174,281,  respectively,  for capital improvements and
$316,048 and $354,739,  respectively, for estimated annual real estate taxes. As
of  September  30, 2001 and December  31,  2000,  the servicer  held $60,911 and
$99,854,  respectively,  for capital  improvements  and  $49,250  and  $119,232,
respectively,  for real estate taxes. Additionally, the servicer held $3,522 for
insurance reserves as of both September 30, 2001 and December 31, 2000.

                                      -12-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis
        ------------------------------------
          of Financial Condition and Results of Operations - Continued
          ------------------------------------------------

Working Capital Reserve; Advances
---------------------------------

     The working  capital reserve of $98,328 and $8,456 as of September 30, 2001
and  December  31,  2000,  respectively,  represents  cash and cash  equivalents
maintained as working capital for the  Partnership.  The working capital reserve
may be increased or reduced by the General Partner as it deems appropriate.

     On January 6, 2000,  the  Partnership  advanced  $100,000 to the Scottsdale
hotel in the form of a  non-interest  bearing  loan.  On February  4, 2000,  the
Scottsdale hotel repaid $70,000 of this loan. The remaining  $30,000 balance was
repaid on March 1, 2000.

     On June 28, 2000, the Partnership advanced $150,000 to the Scottsdale hotel
in the form of a  non-interest  bearing loan,  which was repaid during the first
quarter  of  2001.  This  intercompany   balance  has  been  eliminated  in  the
preparation of the accompanying balance sheet at December 31, 2000.

     On September 27, 2001, the Partnership  advanced $100,000 to the Scottsdale
hotel in the form of a  non-interest  bearing loan.  This loan is expected to be
repaid  during  2002.  The  intercompany  balance  has  been  eliminated  in the
preparation of the accompanying balance sheet at September 30, 2001.

Distributions to BAC Holders
----------------------------

     Distributions  declared  and  payable to BAC  holders of record  during the
first three quarters of 2001 and 2000 follow.

                                       2001                        2000
                             ----------------------      ----------------------
          Quarter Ended        Total        Per BAC        Total        Per BAC
          -------------      ---------      -------      ---------      -------

          March 31           $      --      $    --      $      --      $    --
          June 30              173,732         0.20        147,673         0.17
          September 30              --           --        147,673         0.17
                             ---------      -------      ---------      -------
                             $ 173,732      $  0.20      $ 295,346      $  0.34
                             =========      =======      =========      =======


     See above for further  discussion  regarding the General Partner's decision
to suspend distributions for the quarter ended September 30, 2001.

                      Results of Operations -- Partnership
                      ------------------------------------

     The Partnership's net income,  which consists principally of the results of
hotel operations, decreased $7,120 during the three month period ended September
30,  2001,  from the  comparable  period in 2000,  due to a $11,818  increase in
unallocated operating expenses,  offset by a $2,701 decrease in interest expense
and a $1,997  increase in gross  operating  income.  The increase in unallocated
operating   expenses  was  primarily  due  to  increases  in  depreciation   and
amortization expense,  marketing expense, and building lease expense,  partially
offset by  decreases  in the loss on disposal of fixed  assets,  and general and
administrative  expense.  The increase in gross  operating  income was due to an
increase in rooms revenue  partially  offset by a decrease in telephone  revenue
and an increase in telephone expense.

     The Partnership's net income decreased $30,369 during the nine month period
ended September 30, 2001, from the comparable  period in 2000 primarily due to a
$134,884  increase  in  unallocated  operating  expenses,  offset  by a  $94,819
increase in gross operating  income and a $9,696  decrease in interest  expense.
The  increase  in  unallocated  operating  expenses  was  due  to  increases  in
depreciation  and  amortization  expense,  energy  expense,  marketing  expense,
property

                                      -13-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis
        ------------------------------------
          of Financial Condition and Results of Operations - Continued
          ------------------------------------------------

tax  expense,  and  building  lease  expense,  partially  offset by decreases in
property  operations and  maintenance  expense,  and general and  administrative
expense.  The increase in gross operating income was due to an increase in rooms
revenue  and a decrease  in rooms  expense,  partially  offset by  decreases  in
telephone  revenue,  and food and  beverage  revenue,  as well as an increase in
telephone expense.

     See the  following  discussion  for an analysis of each hotel's  results of
operations for the three and nine months ended September 30, 2001 and 2000.

                         Results of Operations -- Hotels
                         -------------------------------

Operating statistics
--------------------

     The  hotels'   results  of  operations  are  affected  by  changing  market
conditions  and by seasonality  caused by variables such as vacations,  holidays
and climate.  Based on the hotels' operating budgets and historical  trends, the
following  months should provide the highest gross operating income and net cash
flow.

                 Hotel Location                Peak Months
                 --------------                -----------
                 Clearwater, FL                October through April
                 Minneapolis, MN               May through October
                 Plymouth, MN                  June through October
                 Roseville, MN                 May through October
                 Scottsdale, AZ                January through May

     At present, it is not possible to predict how the Clearwater and Scottsdale
hotels,  which are now entering their traditional peak months,  will be impacted
by the recent terrorist attacks.

     The  Partnership's  statements of income include  results of operations for
each of the hotels as summarized below.  Gross Operating Income represents total
revenue from rooms, telephone, food and beverage, and rental and other, less the
related  departmental  expenses.  Operating  Income  represents  Gross Operating
Income  less  unallocated  operating  expenses.  The results of  operations  and
average  occupancy for the hotels for the three and nine months ended  September
30, 2001 and 2000, follow.

<TABLE>
<CAPTION>
                                 Gross Operating Income         Gross Operating Income
                               for the three months ended      for the nine months ended
                                     September 30,                   September 30,
                               --------------------------      --------------------------
                                  2001           2000              2001           2000
                               ----------     ----------       -----------     ----------
         <S>                   <C>            <C>              <C>             <C>
         Clearwater, Fl        $  152,651     $  174,695       $   824,574     $  742,461
         Minneapolis, MN          545,727        529,436         1,394,850      1,409,658
         Plymouth, MN             282,088        307,861           712,026        733,359
         Roseville, MN            319,319        319,751           809,529        780,126
         Scottsdale, AZ           317,586        283,631         1,655,658      1,636,214
                               ----------     ----------       -----------     ----------
                               $1,617,371     $1,615,374       $ 5,396,637     $5,301,818
                               ==========     ==========       ===========     ==========
</TABLE>

                                                       -14-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis
        ------------------------------------
          of Financial Condition and Results of Operations - Continued
          ------------------------------------------------

<TABLE>
<CAPTION>

                                                Operating Income (Loss)                 Operating Income
                                              for the three months ended           for the nine months ended
                                                     September 30,                        September 30,
                                             -----------------------------       ----------------------------
                                                2001               2000              2001             2000
                                             ----------         ----------       -----------       ----------
         <S>                                 <C>                <C>              <C>               <C>
         Clearwater, Fl                      $   10,993         $   30,540       $   317,349       $  244,048
         Minneapolis, MN                        316,216            304,757           712,361          721,863
         Plymouth, MN                           131,702            151,757           260,337          276,742
         Roseville, MN                          162,102            164,144           337,655          310,962
         Scottsdale, AZ                         (79,420)          (100,738)          204,966          225,250
         Depreciation and partnership
           operating expenses                  (344,817)          (343,863)       (1,057,302)        (963,434)
                                             ----------         ----------       -----------       ----------
                                             $  196,776         $  206,597       $   775,366       $  815,431
                                             ==========         ==========       ===========       ==========
</TABLE>

<TABLE>
<CAPTION>
                                                  Average Occupancy                    Average Occupancy
                                              for the three months ended          for the nine months ended
                                                    September 30,                        September 30,
                                             -----------------------------       ----------------------------
                                                2001               2000              2001             2000
                                             ----------         ----------       -----------       ----------
         <S>                                 <C>                <C>              <C>               <C>
         Clearwater, Fl                            47%               50%              58%               58%
         Minneapolis, MN                           92%               90%              83%               86%
         Plymouth, MN                              78%               84%              72%               74%
         Roseville, MN                             88%               81%              79%               77%
         Scottsdale, AZ                            71%               72%              78%               80%
                                                  ---               ---              ---               ---
         Weighted Average Occupancy (1)            75%               75%              75%               76%
                                                  ===               ===              ===               ===
</TABLE>

(1)  Weighted  average  occupancy is computed by taking into  consideration  the
     number of rooms at each location.

                      Three Months Ended September 30, 2001
                      -------------------------------------

Clearwater,  Florida:  Gross operating income and operating income for the three
month period ended  September 30, 2001 decreased from the same period in 2000 as
a result of a three  point  decrease  in average  occupancy  coupled  with a two
percent  decrease in the average room rate.  The decreases in average  occupancy
and the average room rate reflect the impact of the weakening economy on tourism
in the area.  The most notable  declines in average  occupancy  occurred  during
September 2001, in the wake of the September 11th terrorist attacks.

Minneapolis,  Minnesota:  Gross  operating  income and operating  income for the
three month period ended  September 30, 2001  increased  from the same period in
2000 as a result of a two point increase in average occupancy, while the average
room rate remained constant.  The increase in average occupancy was the due to a
long term housing  contract for students of the  University  of Minnesota in the
fall of 2001. Contributing to the increase in operating income were decreases in
general and  administrative  expenses,  and property  operations and maintenance
expense. Partially offsetting the increase in operating income were increases in
marketing expense and energy expense.

Plymouth,  Minnesota:  Gross operating income and operating income for the three
month period ended  September 30, 2001 decreased from the same period in 2000 as
a result of a six point  decrease in average  occupancy,  while the average room
rate remained constant. The decrease in average occupancy was due to the slowing
economy  coupled  with the hotel's  inability  to replace,  in 2001,  the demand
generated by a major  convention  held in the area during 2000. The most notable
declines in average occupancy occurred during September 2001, in the wake of the
September 11th terrorist attacks.

                                      -15-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis
        ------------------------------------
          of Financial Condition and Results of Operations - Continued
          ------------------------------------------------

Roseville,  Minnesota:  Gross operating  income for the three month period ended
September 30, 2001 remained fairly constant with the same period in 2000 despite
a seven point increase in average occupancy,  partially offset by a five percent
decrease in the average rate. The increases in average occupancy and the average
room rate were due to an increase in lower-rated  room nights from  construction
crews doing work in the area.  Operating income for the three month period ended
September 30, 2001 decreased slightly from the same period in 2000 primarily due
to  increases  in property  operations  and  maintenance  expense and  insurance
expense, partially offset by a decrease in general and administrative expense.

Scottsdale,  Arizona:  Gross  operating  income and operating loss for the three
month period ended September 30, 2001 improved from the same period in 2000 as a
result of a ten percent increase in the average room rate, partially offset by a
one point decrease in average  occupancy.  The increase in the average room rate
was due to less tour and travel business which was offset by higher-rated  group
business An increase in average  occupancy  during the first half of the quarter
was offset by a notable decline in average  occupancy  during September 2001, in
wake  of  the  September  11th  terrorist  attacks.   Partially  offsetting  the
improvement  in  operating  loss  were  increases  in  building  lease  expense,
marketing expense, and property tax expense.

                      Nine months Ended September 30, 2001
                      ------------------------------------

Clearwater,  Florida:  Gross operating  income and operating income for the nine
month period ended  September 30, 2001 increased from the same period in 2000 as
a result of an eight  percent  increase  in the  average  room  rate,  while the
average occupancy remained  constant.  The increase in the average room rate was
primarily  the result of Super Bowl  XXXV,  which was held in Tampa,  Florida in
January 2001. Contributing to the increase in operating income were decreases in
property  tax  expense,  and  general  and  administrative  expense.   Partially
offsetting the increase in operating income were increases in energy expense and
marketing expense.

Minneapolis, Minnesota: Gross operating income and operating income for the nine
month period ended  September 30, 2001 decreased from the same period in 2000 as
a result of a three point decrease in average  occupancy,  partially offset by a
three  percent  increase  in the  average  room rate.  The  decrease  in average
occupancy was due to the  weakening  economy,  budget cuts at the  University of
Minnesota,  and the hotel's inability to replace,  in 2001, the demand generated
by a major  convention held in the area during 2000. The increase in the average
rate was due to higher  negotiated rates for special events and conventions held
in the area.  Contributing to the decrease in operating income were increases in
energy  expense and property tax expense.  Offsetting  the decrease in operating
income were decreases in property  operations and maintenance  expense,  general
and administrative expense, and marketing expense.

Plymouth,  Minnesota:  Gross operating  income and operating income for the nine
month period ended  September 30, 2001 decreased from the same period in 2000 as
a result of a two point decrease in average  occupancy,  as discussed  above for
the three  month  period,  partially  offset by a one  percent  increase  in the
average rate. Contributing to the decrease in operating income were increases in
energy  expense and  marketing  expense.  Offsetting  the  decrease in operating
income were  decreases in property tax expense,  and general and  administrative
expense.

                                      -16-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis
        ------------------------------------
          of Financial Condition and Results of Operations - Continued
          ------------------------------------------------

Roseville,  Minnesota:  Gross operating income and operating income for the nine
month period ended  September 30, 2001 increased from the same period in 2000 as
a result of a two percent  increase in the average  room rate coupled with a two
point increase in average occupancy.  The increases in the average room rate and
average  occupancy were due to the NCAA Final Four college  basketball  playoffs
and other corporate and sporting events held in the area. Also, a strong base of
long-term  construction  business helped improve occupancy.  Contributing to the
increase in operating  income were decreases in marketing  expense,  and general
and  administrative  expense.  Partially  offsetting  the  increase in operating
income was an increase in property operations and maintenance expense.

Scottsdale,  Arizona:  Gross  operating  income for the nine month  period ended
September 30, 2001  increased from the same period in 2000 as a result of a four
percent  increase  in the  average  room rate,  partially  offset by a two point
decrease in average  occupancy,  as discussed  above for the three month period.
Operating  income for the nine month period ended  September 30, 2001  decreased
from the same period in 2000  primarily  due to increases in marketing  expense,
building lease  expense,  property tax expense,  and general and  administrative
expense,  partially offset by a decrease in property  operations and maintenance
expense.


Part II. OTHER INFORMATION
Item 5. Other Information
        -----------------

     There is no established market for the purchase and sale of BACs,  although
various  informal  secondary  market services exist. Due to the limited markets,
however, investors may be unable to sell or otherwise dispose of their BACs.

     On December 12, 2000,  Everest  Properties  (Everest),  a BAC holder of the
Partnership,  initiated  an  unregistered  tender offer to purchase no more than
4.3% of the  outstanding  BACs at a price of $3.75 per BAC unit.  Everest stated
that it made  the  offer  for the  express  purpose  of  holding  the  BACs  for
investment  purposes  and not  with a view to  resale.  The  price  offered  was
determined solely at the discretion of Everest and did not necessarily represent
the fair  market  value of each BAC.  The Everest  offer  expired on January 11,
2001.

     On  December  13,  2000,  Madison  Capital  (Madison),  a BAC holder of the
Partnership,  initiated  an  unregistered  tender offer to purchase no more than
3.58% of the outstanding  BACs at a price of $3.75 per BAC unit.  Madison stated
that it made  the  offer  for the  express  purpose  of  holding  the  BACs  for
investment  purposes  and not  with a view to  resale.  The  price  offered  was
determined solely at the discretion of Madison and did not necessarily represent
the fair  market  value of each BAC.  The Madison  offer  expired on January 12,
2001.

     The General Partner did not express any opinion and remained neutral toward
the offers for the purchase of BACs described above.

     If more than five percent of the total outstanding BACs are transferred due
to sale in any one calendar year (not counting  certain exempt  transfers),  the
Partnership could be taxed as a "publicly traded  partnership," with potentially
severe tax implications for the Partnership and its investors. Specifically, the
Partnership  could be taxed as a corporation  and the income and losses from the
Partnership  would no longer be considered a passive  activity.  From January 1,
2000 through August 4, 2000,  approximately  4.9% of outstanding BACs were sold.
Accordingly,  to remain within the five percent safe harbor, effective August 7,
2000, the General Partner of the Partnership halted recognition of any transfers
that  exceeded the safe harbor limit  through  December 31, 2000.  This halt was
lifted  effective  January 1, 2001. From January 1, 2001 through March 14, 2001,
approximately 4.8% of outstanding BACs were sold. Accordingly,  to remain within
the five percent  safe harbor,  effective  March 19, 2001,  the General  Partner
again

                                      -17-

<PAGE>
Part II. OTHER INFORMATION
Item 5. Other Information - Continued
        -----------------

halted  recognition  of any further  transfers that could exceed the safe harbor
limit through December 31, 2001. This halt will be lifted  effective  January 1,
2002.


Item 6. Exhibits and Reports on Form 8-K
        --------------------------------

     a.   None.

     b.   No  reports  on Form 8-K were  filed  with the  Commission  during the
          quarter ended September 30, 2001.

     All other items are not applicable.

                                      -18-

<PAGE>


                                    SIGNATURE


     In accordance  with the  requirements  of the Exchange Act, the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                              CRI HOTEL INCOME PARTNERS, L.P.
                              -------------------------------------------------
                              (Registrant)

                              by:  CRICO Hotel Associates I, L.P.
                                   --------------------------------------------
                                   General Partner

                                   by:  C.R.I., Inc.
                                        ---------------------------------------
                                        its General Partner



November 13, 2001                       by:  /s/ Michael J. Tuszka
-----------------                            ----------------------------------
DATE                                         Michael J. Tuszka
                                               Vice President
                                               and Chief Accounting Officer
                                               (Principal Financial Officer
                                               and Principal Accounting Officer)


                                      -19-

<PAGE>