<PAGE>   1

      As filed with the Securities and Exchange Commission on May 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 March 31, 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 May 14, 1998, 921,627 of the registrant's common shares of beneficial
                   interest, no par value, were outstanding.
<PAGE>   2
                         PART I - FINANCIAL INFORMATION
                       PLYMOUTH COMMERCIAL MORTGAGE FUND
                      Statements of Assets and Liabilities
                      March 31, 1998 and December 31, 1997
                                  (Unaudited)


<TABLE>
<CAPTION>
                                                                                    March 31, 1998          December 31, 1998
                                                                                    --------------          -----------------

 <S>                                                                              <C>                       <C>
                                  Assets
                                  ------

 Investments in securities at fair value, cost of $14,003,682 and
 $14,538,157                                                                      $      14,810,238         $      15,295,698
                                                                                                                   
 Investment in affiliates                                                                 1,075,294                   941,477
                                                                                                                   
 Cash                                                                                       321,727                   568,899
                                                                                                                   
 Accounts Receivable                                                                          2,025                     2,026
                                                                                                                             
 Organization Costs                                                                          65,000                    72,800
                                                                                  -----------------         -----------------
 Total Assets                                                                     $      16,274,284         $      16,880,900
                                                                                  =================         =================
                                                                                                                   
                                                                                                                   
                                Liabilities                                                                        
                                -----------                                                                        
                                                                                                                   
                                                                                                                   
 Accounts Payable                                                                 $         111,210         $          48,547
                                                                                                                   
 Investment Advisory Fee Payable                                                             78,738                    77,110
                                                                                                                   
 Dividend Payable                                                                                 -                   275,001
                                                                                                                   
 Note Payable                                                                             7,747,099                 7,981,158
                                                                                                                   
 Escrow Funds                                                                                67,508                    80,924
                                                                                  -----------------         -----------------
                             Total Liabilities                                    $       8,004,555         $       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                                          (1,111,229)                 (789,921)
                                                                                                                   
 Accumulated undistributed net realized gains net of distributions of                                              
 $578,097 and $578,097                                                                      796,207                   611,696
                                                                                                                   
 Accumulated undistributed equity of subsidiary                                           (198,578)                 (137,929)
                                                                                                                   
 Accumulated undistributed unrealized gain on investments                                   806,556                   757,541
                                                                                  -----------------         -----------------
 Total Net Assets ($8.97 and $9.13 per share)                                             8,269,729                 8,418,160
                                                                                                                   
                                                                                                                   
 Total Liabilities & Net Assets                                                   $      16,274,284         $      16,880,900
                                                                                  =================         =================
</TABLE>


   The accompanying notes are an integral part of these financial statements





                                    Page -2-
<PAGE>   3
                       PLYMOUTH COMMERCIAL MORTGAGE FUND
                            Statements of Operations
                                  (unaudited)


<TABLE>
<CAPTION>
                                         For the three       For the three     For the three       For the three
                                         months ended        months ended      months ended        months ended
                                         March 31, 1998      March 31, 1997    March 31, 1998      March 31, 1997
                                         --------------      --------------    --------------      --------------
<S>                                      <C>                 <C>               <C>                 <C>
INVESTMENT INCOME:

Interest                                 $      197,174      $      46,758     $      197,174      $      46,758

Other Investment Income                               -             72,887                  -             72,887
                                         --------------      -------------     --------------      -------------

Total Investment Income                         197,174              72887                                 72887

EXPENSES:

Investment advisory fee                         239,093             59,306            239,093             59,306

Legal and Professional                           34,609                  -             34,609                  -

Interest expense                                170,665                  -            170,665                  -

Operating expense                                74,115            112,391             74,115            112,391
                                         --------------      -------------     --------------      -------------

Total Expenses                                  518,482            171,697            518,482            171,697



Net Investment Loss                      $    (321,308)      $    (52,052)     $    (321,308)      $    (52,052)
                                         --------------      -------------     --------------      -------------

Realized gain on sale of investments             35,000            316,573             35,000            316,573

Realized gain on collection of notes            149,511                  -            149,511                  -

Change in unrealized appreciation on                                                                            
assets                                           49,015          (234,119)             49,015          (234,119)

Equity in earnings of affiliate                (60,649)                  -           (60,649)                  -
                                         --------------      -------------     --------------      -------------

Net increase (decrease) in net assets
resulting from operations                $    (148,431)      $      30,402     $    (148,431)      $      30,402
                                         ==============      =============     ==============      =============
</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 three      For the three
                                                            months ended      months ended      months ended       months ended
                                                            March 31, 1998    March 31, 1997    March 31, 1998     March 31, 1997
                                                            --------------    --------------    --------------     --------------
                                                                                                                                
 <S>                                                        <C>               <C>               <C>                <C>
 Operations before distributions                                                                    
                                                                                                    
 Net investment loss                                            (321,308)          (52,052)         (321,308)           (52,052)
                                                                                                    
 Net realized gain on sale of investments                          35,000           316,573            35,000            316,573
                                                                                                    
 Net realized gain on collections                                 149,511                 -           149,511                  -
                                                                                                    
 Changes in unrealized appreciation on investments                 49,015         (234,119)            49,015          (234,119)
                                                                                                    
 Equity in earnings of affiliates                                (60,649)                 -          (60,649)                  -
                                                            -------------     -------------     -------------      -------------
                                                                                                    
                                                                                                    
 Net increase in net assets from operations before                                                  
 distributions                                                  (148,431)            30,402         (148,431)             30,402
                                                                                                    
                                                                                                    
 Distribution to shareholders from                                                                  
                                                                                                    
 Net realized gain on investments:                                      -          (74,212)                 -           (74,212)
                                                            -------------     -------------     -------------      -------------
                                                                                                    
                                                                                                    
 Total increase in net assets                                   (148,431)          (43,810)         (148,431)           (43,810)
                                                                                                    
                                                                                                    
 Net assets, beginning of period                                8,418,160         8,592,246         8,418,160          8,592,246
                                                            -------------     -------------     -------------      -------------
                                                                                                    
                                                                                                    
 Net assets, end of period                                      8,269,729         8,548,436         8,269,729          8,548,436
                                                            =============     =============     =============      =============
                                                                                                    
                                                                                                    
 Per Share Data                                                                                     
                                                                                                    
                                                                                                    
 Investment income                                                   0.21              0.14              0.21               0.14
                                                                                                    
 Expenses                                                          (0.56)            (0.19)            (0.56)             (0.19)
                                                                                                    
 Net realized gain on sale of investments                            0.04              0.34              0.04               0.34
                                                                                                    
 Net realized gain on collection of notes                            0.16                 -              0.16                  -
                                                                                                    
 Equity in earnings of affiliate                                   (0.06)                 -            (0.06)                  -
                                                                                                    
 Change in unrealized appreciation on assets                         0.05            (0.25)              0.05             (0.25)
                                                            -------------     -------------     -------------      -------------
                                                                                                    
 Increase in net assets from operations before 
 distributions                                                      (0.16)             0.04            (0.16)               0.04
                                                                                                    
 Distributions from realized gain on securities                      0.00            (0.08)              0.00             (0.08)
                                                            -------------     -------------     -------------      -------------
                                                                                                    
                                                                                                    
 Net increase (decrease) in net asset value                        (0.16)            (0.04)            (0.16)             (0.04)
                                                                                                    
                                                                                                    
 Net asset value                                                                                    
                                                                                                    
 Beginning of period                                                 9.13              9.32              9.13               9.32
                                                            -------------     -------------     -------------      -------------
                                                                                                    
 End of period                                                       8.97              9.28              8.97               9.28
                                                            =============     =============     =============      =============
                                                                                                    
 Ratio:                                                                                             
                                                                                                    
 Expenses to Average Assets                                         6.21%             2.00%             6.21%              2.00%
                                                                                                    
 Net Investment Income to Average Assets                           (3.85)            -0.61%            (3.86)             -0.61%
</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 Three months                   For the Three months
                                                              ended March 31, 1998                   ended March 31, 1997
                                                              --------------------                   --------------------

 <S>                                                            <C>                                  <C>
 Cash flows from operating activities

 Increase (decreases) in net asserts from operations                                                                     
 before distributions                                           $        (148,431)                   $             30,402
                                                                                                     
                                                                                                     
 Adjustments to reconcile increases in net assets from                                               
 operations before distributions to net cash provided                                                
                                                                                                     
           Amortization of organization costs                                7,800                                  7,800
                                                                                                     
           Change in unrealized appreciation on                           (49,015)                                234,119
           investments                                                                               
                                                                                                     
           Changes in other assets                                               -                                 97,740
                                                                                                     
           Equity in loss of affiliates                                     60,649                                      -
                                                                                                     
           Changes in receivables                                                1                               (21,759)
                                                                                                     
           Changes in repurchase agreement                                       -                            (3,713,501)
                                                                                                     
           Changes in payables                                              64,291                                226,460
                                                                                                     
           Change in escrow                                               (13,416)                                      -
                                                              --------------------                   --------------------
                                                                                                     
 Net cash provided/usedby operating activities                            (78,121)                            (3,169,141)
                                                                                                     
                                                                                                     
 Cash flow from investing activities                                                                 
                                                                                                     
           Purchase of securities and capital                            (523,701)                            (1,621,356)
           expenditures                                                                              
                                                                                                     
           Sale of securities/principal collection on                    1,076,218                   
           securities/transfer to REO                                                                
                                                                                                     
           Investment in affiliate                                       (212,507)                   
                                                              --------------------                   --------------------
 Net cash provided/used  by investing activities                           340,010                            (1,621,356)
                                                                                                     
                                                                                                     
 Cash flow from financing activities                                                                 
                                                                                                     
           Change in note net                                            (234,061)                                      -
                                                                                                     
           Dividends paid                                                (275,001)                                      -
                                                              --------------------                   --------------------
 Net cash used by financing activities                                   (509,062)                   
                                                                                                     
                                                                                                     
 Net decrease in cash and cash equivalents                               (247,172)                            (4,760,094)
                                                                                                     
                                                                                                     
 Cash and cash equivalents at beginning of period                          568,899                              5,082,109
                                                              --------------------                   --------------------
 Cash and cash equivalents at end of period                                321,727                                322,015
                                                              ====================                   ====================
</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.
The Fund 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 the Fund purchases are typically secured by
commercial real estate.

The Fund 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 Article 6 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 the Fund's most recent annual report on Form 10-K.  Interim
         statements are subject to possible adjustments in connection with the
         annual audit of the Fund.  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 the
         Fund's impaired loan portfolio.  As such, the fair value of the
         portfolio is established by the Fund's Board of Trustees using their
         best judgment.  Such values are based upon what the Board believes the
         Fund could reasonably expect to receive for each impaired 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, the Fund's historical experience selling the type
         of loan being valued, various standard financial measurements, the
         remaining contract terms, and prevailing interest rates.

         Certain elements of the valuation procedure involve subjective
         judgment.  Because the majority of the Fund's impaired loans are
         delinquent, no assurance can be given that the Fund will be able to
         recover the fair value that the Board has established.  The Fund's
         impaired loans are not typically backed by any government guarantee or
         private credit enhancement.  In many cases, the Fund 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 only be determined in negotiations between the Fund and
         third parties.

         In asserting its rights, the Fund will often attempt to foreclose on a
         loan and acquire the collateral.  Pursuant to the terms of its credit
         agreement, any real estate that is acquired through foreclosure is
         held by Plymouth REO, a wholly owned subsidiary of the Fund.  Real
         estate acquired through foreclosure is recorded at its estimated fair
         value.

         C.      Federal Income Taxes - The Fund has elected the special income
         tax treatment available to "regulated investment companies" under
         Subchapter M of the Internal Revenue Code.  If the Fund





                                    Page -6-
<PAGE>   7
         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 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 the Fund 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 - The Fund paid no dividends to
         shareholders in respect of its operations during the first quarter of
         1998, and none were declared.

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

3.  INVESTMENT ADVISORY AGREEMENT

The Fund 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 the Fund, subject
to the supervision and control of the Fund's Board of Trustees.  Specifically,
the Adviser identifies, evaluates, structures, closes and monitors the
investments made by the Fund.  The Agreement remains in effect until September
22, 1998.  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 the Fund (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 the Fund.  The Agreement can
be terminated by the Fund 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 the Fund.  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.  The Fund will be required to pay its operating expenses
and reimburse the Adviser promptly for expenses that the Adviser may pay on the
Fund's behalf, except those specifically required to be borne by the Adviser
under the Agreement.  Without limitation, the expenses to be borne by the Fund
will include: all expenses of any offering and sale by the Fund of its shares;
the fees and disbursements of the Fund's counsel, accountants, and custodian;
fees and expenses incurred in producing and effecting filings with federal and
state securities administrators; costs of the Fund's periodic reports to and
other communications with the Fund's shareholders; fees and expenses of members
of the Fund's Board of Trustees





                                    Page -7-
<PAGE>   8
who are not directors, officers or employees of the Adviser; premiums for the
fidelity bond maintained by the Fund; 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 the Fund.

During the term of this Agreement, the Fund pays to the Adviser, on the 15th
day of each month: (a) a fee calculated at an effective annual rate of 5.94% of
the Fund'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 the Fund'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.


4.  INVESTMENTS

The Fund 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 March 31, 1998, at fair value, as determined in good faith by
the Fund'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.  The Fund's investments in loan packages will be directed by the
Adviser.  The Fund 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, the Fund'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.  Quite often the sale of impaired loans in this
market offers creditors the only alternative to foreclosure.


5.  INDEBTEDNESS

The Fund has an $8,000,000 line of credit with a Texas bank that is secured by
a first lien on all of the Fund's assets.  As of March 31, 1998 the Fund had
borrowed $7,747,099 on the credit facility.  As of May 11, 1998, the Fund 's
borrowings were $6,225,201.  See the discussion regarding the Fund's borrowing
base set forth below under "Liquidity and Capital Resources."





                                    Page -8-
<PAGE>   9
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF LIQUIDITY, CAPITAL RESOURCES,
AND RESULTS OF OPERATIONS.


Liquidity and Capital Resources

As of March 31, 1998, Plymouth has $8,269,729 in net assets and had borrowed an
additional $7,747,099 on its credit line.

Plymouth's liquidity consists of its capital not invested in loans plus the
amount that is available on its line of credit with Comerica Bank, N.A.  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 the 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 spent on
present assets.  Individual assets vary significantly, however, and it is
difficult to predict which assets will have to be held longer and which may be
liquidated sooner.

Plymouth is currently able to 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 May 4, 1998, Plymouth had the ability to
borrow an additional $291,000 (taking into account the $600,000 increase in the
borrowing base discussed in the next paragraph).

Plymouth purchased a majority of its current notes in October, 1997.  As to
those assets, Plymouth's base dropped in April 1998.  The borrowing base
decrease was mitigated by two factors: (i) improved collections in March and
April and (ii) a verbal agreement with Plymouth's lender to permit a temporary
$600,000 increase in the borrowing base.  This increase will be stepped down
over time, and the bank expects Plymouth not to need the increase by the end of
July.  While the higher borrowing base is in effect, Comerica will
participate in any new asset purchase decisions or advances on the line.

For Plymouth's need for the stepped up base to end in July 1998, as expected by
the lender, Plymouth must continue to achieve the collections it achieved in
March and April of 1998.  If it fails to do so, it will need to negotiate a new
arrangement with its lender or face a liquidity problem.  To avoid a repetition
of the problem, Plymouth plans to space out the purchases for its portfolio so
that major portions of it do not concurrently cross the borrowing base decline
threshold.

Management intends to try to smooth out its purchases to mitigate this problem.
Its ability to do so depends, in part, on whether suitable assets are available
for purchase when Plymouth is able to free up liquidity for new purchases.  The
best long term solution for the problem is an increase in capital.  With a
significant increase in capital, individual loan acquisitions would be a less
significant percentage of Plymouth's overall portfolio.  A steady borrowing
base that does not decline with age, or that does not decline so rapidly, would
also mitigate the problem.

There are no material, unused sources of liquidity.





                                    Page -9-
<PAGE>   10
Results of Operations

During the three month period ending March 31,1998, Plymouth purchased seven
additional loans with a cost of $516,902 and a total outstanding principal
balance of $670,427.  Plymouth's per share value declined to $8.97 per share
from $9.13 at December 31,1997.  The decline was due to a realized GAAP loss of
$136,797.  Plymouth did not declare a dividend for the first quarter 1998 due
to a tax loss of $86,874 for that period.

During the three month period ending March 31,1998, Plymouth had gross
collections of $1,275,961. This included eight notes that settled or sold for
an average return on investment of roughly 35.50%.  This return takes into the
account the original cost, gross collections, and direct expenses.  It does not
include overhead such as the adviser fee and interest expense.  The above gross
collections resulted in a GAAP realized loss of $136,797 for the three month
period.  The loss was due to slow  collections in January and February of
approximately $412,000.  For those months, Plymouth posted a loss of
approximately $187,000.  In March gross collections increased to $865,920, and
the fund posted approximately a $51,000 profit.  In April gross collections
have continued to rise.  When Plymouth is fully invested in notes, as it was at
the end of 1997 and throughout the first quarter of 1998, the fund needs to
have gross monthly collections of between $800,000 and $900,000 to be
profitable and maintain per share value, although increased costs could prevent
profitability even at that level.

Plymouth's asset value can be affected by adjustments to portfolio fair market
value by Plymouth's Board of Trustees.  For the quarter ending March 31, 1998,
however, the Trustees' adjustments had a de minimis effect on the Company's
balance sheet.

By way of comparison, for the period ending March 31,1997, Plymouth realized a
GAAP gain of $264,521 as a result of low operational expenses and an
exceptional return on one asset with no cost assigned to it, while for the
period ending March 31, 1998, Plymouth realized a GAAP loss of $148,431.
Plymouth was newly formed in the fourth quarter of 1996 and Plymouth still had
significant uninvested capital in the first quarter of 1997, so operations in
that period do not provide a meaningful point of comparison with the operations
in the first quarter of 1998.

Plymouth is working to increase collections both through more aggressive
collection policies and through a more aggressive sales program.  Plymouth is
presently developing an auction program through which it hopes to rapidly sell
its performing loans.  Nevertheless, as a small fund Plymouth's income will
vary with the timing of collections.  At such time as Plymouth can
significantly increase its capital, variations attributable to individual loans
will have less effect on overall operations.


PART II - OTHER INFORMATION

Item 1:  LEGAL PROCEEDINGS

         None.

Item 2:  CHANGES IN SECURITIES

         None.
         None.

Item 3:  DEFAULTS UPON SENIOR SECURITIES

         None.
         None.





                                   Page -10-
<PAGE>   11
Item 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.

Item 5:  OTHER INFORMATION

         John Mosher, Vice President and Chief Financial Officer,  resigned
         from both Plymouth and its adviser effective March 20, 1998.  The
         Company does not expect his departure will have a material effect on
         operations.  Greystone Advisers, Inc. has reallocated his
         responsibilities among other employees and does not plan to replace
         him at this time.

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(1)

                          (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)

                 (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 (1)

         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.





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

(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 -11-
<PAGE>   12
                             PLYMOUTH COMMERCIAL MORTGAGE FUND
                             

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

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





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