Form 10-KSB

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

              |_| Annual report pursuant to section 13 or 15(d)
                  of the  Securities  Exchange Act of 1934 (fee
                  required)  For the Year  Ended  December  31,
                  2004
                                        OR
              |X| Transition  report  pursuant to section 13 or
                  15(d) of the Securities  Exchange Act of 1934
                  (no fee required) For the  transition  period
                  from June 25, 2004 to December 31, 2004

                        Commission File number 333-120276

                       ATEL Capital Equipment Fund XI, LLC

            California                                         20-1357935
 (State or other jurisdiction of                           (I. R. S. Employer
  incorporation or organization)                           Identification No.)

        600 California Street, 6th Floor, San Francisco, California 94108
                    (Address of principal executive offices)

        Registrant's telephone number, including area code (415) 989-8800
        Securities registered pursuant to section 12(b) of the Act: None
        Securities registered pursuant to section 12(g) of the Act: None

Indicate  by a check  mark  whether  the  registrant  (1) has filed all  reports
required to be filed by section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes |_| No |X|

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

State the issuer's revenues for the most recent fiscal year: Not applicable.

State the aggregate market value of voting stock held by  non-affiliates  of the
registrant: Inapplicable





                       DOCUMENTS INCORPORATED BY REFERENCE

 None





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                                     PART I

Item 1:  BUSINESS

Not applicable.

Item 2:  PROPERTIES

Not applicable.

Item 3:  LEGAL PROCEEDINGS

Not applicable.

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

Not applicable.

                                     PART II

Item 5:  MARKET FOR REGISTRANT'S LIMITED LIABILITY COMPANY UNITS
              AND RELATED MATTERS

Not applicable.

Item 6:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
              AND RESULTS OF OPERATIONS

Not applicable.

Item 7:  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See the  Report  of  Independent  Auditors,  Financial  Statements  and Notes to
Financial Statements attached hereto at pages 3 through 5.


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   REPORT OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



The Members
ATEL Capital Equipment Fund XI, LLC

We have audited the  accompanying  balance sheet of ATEL Capital  Equipment Fund
XI, LLC (a development stage enterprise)(the Company)as of December 31, 2004 and
the related  statements  of changes in  members'  capital and cash flows for the
period from June 25, 2004 (inception) through December 31, 2004. These financial
statements are the responsibility of the Company's management.Our responsibility
is to express an opinion on these financial statements based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  We were not engaged to perform an
audit of the Company's  internal  control over  financial  reporting.  Our audit
included  consideration of internal control over financial  reporting as a basis
for designing audit  procedures that are appropriate in the  circumstances,  but
not for the  purpose  of  expressing  an  opinion  on the  effectiveness  of the
Company's internal control over financial reporting.  Accordingly, we express no
such  opinion.  An audit also  includes  examining,  on a test  basis,  evidence
supporting the amounts and  disclosures in the financial  statements,  assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall  financial  statement  presentation.  We believe that our
audit provides a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of ATEL Capital Equipment Fund XI,
LLC (a  development  stage  enterprise)  at  December  31,  2004 and the related
statements  of changes in  members'  capital  and cash flows for the period from
June 25, 2004  (inception)  through  December 31, 2004, in conformity  with U.S.
generally accepted accounting principles.

                                                          /s/ ERNST & YOUNG LLP

San Francisco, California
March 1, 2005




                       ATEL CAPITAL EQUIPMENT FUND XI, LLC
                        (a development stage enterprise)

                                  BALANCE SHEET

                                DECEMBER 31, 2004


                                     ASSETS


Cash                                                                     $ 600
                                                                     ==========


                                MEMBERS' CAPITAL


Members' Capital as of June 25, 2004
     Managing Member                                                     $ 100
     Initial Member                                                        500
                                                                     ----------
Total members' capital                                                     600
                                                                     ==========


                    STATEMENT OF CHANGES IN MEMBERS' CAPITAL

                  FOR THE PERIOD FROM JUNE 25, 2004 (INCEPTION)
                            THROUGH DECEMBER 31, 2004


<TABLE>
<CAPTION>
                                                        Initial Member            Managing
                                                     Units         Amount         Member         Total

<S>                                                         <C>         <C>            <C>           <C>
Members' Capital as of June 25, 2004
     (inception)                                             -            $ -            $ -           $ -
Capital contributions                                       50            500            100           600
                                                  ------------- -------------- -------------- -------------
Members' capital as of December 31, 2004                    50          $ 500          $ 100         $ 600
                                                  ============= ============== ============== =============
</TABLE>


                             STATEMENT OF CASH FLOWS

                  FOR THE PERIOD FROM JUNE 25, 2004 (INCEPTION)
                            THROUGH DECEMBER 31, 2004

Financing activities:
Capital contributions received                                         $ 600
                                                                     --------

Net increase in cash                                                     600
Cash at inception                                                          -
                                                                     --------
Cash at end of period                                                  $ 600
                                                                     ========

                             See accompanying notes.


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                       ATEL CAPITAL EQUIPMENT FUND XI, LLC
                        (a development stage enterprise)

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 2004


1. Organization and Limited Liability Company matters:

ATEL  Capital  Equipment  Fund XI, LLC (a  development  stage  enterprise)  (the
"Fund") was formed  under the laws of the state of  California  on June 25, 2004
for the purpose of acquiring  equipment to engage in equipment leasing and sales
activities.  The Fund shall continue until December 31, 2025.  Contributions  in
the  amount  of $600  were  received  as of  December  31,  2004,  $100 of which
represented the Managing  Member's (ATEL Financial  Services,  LLC's) continuing
interest, and $500 of which represented the Initial Member's capital investment.
As a limited liability  company,  the liability of any individual member for the
obligations of the Fund is limited to the extent of capital contributions to the
Fund by the individual member.

As of December 31, 2004, the Fund had not commenced  operations other than those
relating to organizational  matters.  The Fund, or the Managing Member on behalf
of the Fund, will incur costs in connection with the organization,  registration
and issuance of the Limited Liability Company Units (Units).  The amount of such
costs to be  borne by the Fund is  limited  by  certain  provisions  of the ATEL
Capital Equipment Fund XI, LLC limited  liability  company  operating  agreement
dated October 24, 2004 (the "Operating Agreement").

Cash:

Cash is maintained in a standard non-interest bearing checking account.

Use of estimates:

The  preparation  of the  financial  statements in  conformity  with  accounting
principles  generally accepted in the United States requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  consolidated   balance  sheet.  Actual  results  could  differ  from  those
estimates.

2. Income taxes:

The Fund does not provide  for income  taxes since all income and losses are the
liability  of the  individual  members  and are  allocated  to the  members  for
inclusion in their individual tax returns.

3. Members' capital:

As of December 31, 2004, 50 Units ($500) were issued and  outstanding.  The Fund
is authorized to issue up to 15,000,000 additional Units.

The Fund Net Income,  Net Losses, and Distributions are to be allocated 92.5% to
the Members and 7.5% to the Managing Member.

4. Commitments and management:

The terms of the  Operating  Agreement  provide that the Managing  Member and/or
affiliates are entitled to receive  certain fees, in addition to the allocations
described  above,  which are more fully  described in Section 8 of the Operating
Agreement.  The  additional  fees  to  management  include  fees  for  equipment
management and resale.



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Item  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURES None.

Item 8a.  CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

Under  the  supervision  and  with the  participation  of our  management  (ATEL
Financial  Services,  LLC as Managing  Member of the  registrant,  including the
chief  executive  officer and chief  financial  officer),  an  evaluation of the
effectiveness  of the  design  and  operation  of the  Partnership's  disclosure
controls and procedure [as defined in Rules  240.13a-14(c)  and 15d-14(c)  under
the  Securities  Exchange Act of 1934] was  performed as of a date within ninety
days before the filing date of this annual report.  Based upon this  evaluation,
the chief executive  officer and chief financial  officer  concluded that, as of
the evaluation  date, our disclosure  controls and procedures were effective for
the  purposes  of  recording,  processing,   summarizing  and  timely  reporting
information required to be disclosed by us in the reports that we file under the
Securities  Exchange Act of 1934 and that such  information is  accumulated  and
communicated  to our  management  in order to allow timely  decisions  regarding
required disclosures.

Changes in internal controls

There have been no  significant  changes in our  internal  controls  or in other
factors that could  significantly  affect our disclosure controls and procedures
subsequent to the evaluation  date, nor were there any significant  deficiencies
or material weaknesses in our internal controls.

                                    PART III

Item 9.  DIRECTORS AND EXECUTIVE OFFICERS

Not applicable.

Item 10.  EXECUTIVE COMPENSATION

Not applicable.

Item 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
            MANAGEMENT

Not applicable.

Item 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Not applicable.


                                     PART IV

Item 13.  EXHIBITS AND REPORTS ON FORM 8-K

  (a)Reports on Form 8-K for the fourth quarter of 2004 None.

  (b)Exhibits
        (31.1)  Certification of Paritosh K. Choksi
        (31.2)  Certification of Dean L. Cash
        (32.1)  Certification Pursuant to 18 U.S.C. section 1350 of Dean L. Cash
        (32.2)  Certification Pursuant to 18 U.S.C. section 1350 of Paritosh K.
                Choksi



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                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.



        Date:          3/29/2005

                       ATEL Capital Equipment Fund XI, LLC
                                  (Registrant)


        By: ATEL Financial Services, LLC,
            Managing Member of Registrant



            By:  /s/ Dean L. Cash
                 ------------------------------------------
                 Dean Cash
                 President of ATEL Financial Services LLC
                 (Managing Member)





            By:  /s/ Paritosh K. Choksi
                 ------------------------------------------
                 Paritosh K. Choksi
                 Executive Vice President of ATEL Financial
                 Services LLC (Managing Member)






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


SIGNATURE                              CAPACITIES                         DATE



      /s/ Dean L. Cash     President, Chairman and Chief Executive     3/29/2005
-------------------------- Officer of ATEL Financial Services LLC
         Dean Cash



   /s/ Paritosh K. Choksi  Executive Vice President and director       3/29/2005
-------------------------- of ATEL Financial Services LLC,
     Paritosh K. Choksi    Principal financial officer of registrant;
                           principal financial officer and director
                           of ATEL Financial Services LLC




  /s/ Donald E. Carpenter  Principal accounting officer of             3/29/2005
-------------------------- registrant; principal accounting officer
    Donald E. Carpenter    of ATEL Financial Services LLC






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


No proxy  materials  have been or will be sent to  security  holders.  An annual
report will be furnished to security  holders  subsequent  to the filing of this
report on Form 10-KSB,  and copies thereof will be furnished  supplementally  to
the Commission when forwarded to the security holders.

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