UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                        WASHINGTON, DC.  20549
                               FORM 10-K


(Mark One)
[X]  ANNUAL  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended         December 31, 2003
                         ---------------------------------------------

                                  or
[   ]  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                 0-14645
                       -----------------------------------------------

                     DIVERSIFIED HISTORIC INVESTORS II
----------------------------------------------------------------------
        (Exact name of registrant as specified in its charter)

     Pennsylvania                                        23-2361261
-------------------------------                    -------------------
(State or other jurisdiction of                    (I.R.S. Employer
incorporation or organization)                     Identification No.)

                1521 Locust Street, Philadelphia, PA  19102
----------------------------------------------------------------------
(Address of principal executive offices)             (Zip Code)

Registrant's telephone number, including area code    (215) 557-9800
                                                    ------------------

Securities registered pursuant to Section 12(b) of the Act:   NONE
                                                            ----------

Securities registered pursuant to section 12(g) of the Act: 20,593.3 Units
                                                            ------------

                 Units of Limited Partnership Interest
----------------------------------------------------------------------
                           (Title of Class)

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

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

Aggregate  market  value  of  Units  held  by  non-affiliates  of  the
Registrant:                                           Not Applicable *
                                                      ----------------
*Securities not quoted in any trading market to Registrant's knowlege.

Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Act).   Yes ___ No_X_


<PAGE>

This Form 10-K contains  "Unaudited"  financial  statements  for  the
period ended December 31, 2003.  Please refer to the Explanatory Note
below.


                           EXPLANATORY NOTE
                           ----------------

Diversified  Historic Investors II  (the "Registrant") is  filing  the
following Annual Report on Form 10-K for the period ended December 31,
2003 containing "unaudited" consolidated financial statements.

On  July  11,  2005  the  Securities and Exchange  Commission  ("SEC")
notified  the  Registrant of its non-compliance in  meeting  reporting
requirements  under  Section  13(a) or 15(d)  of  the  Securities  and
Exchange Act of 1934. The Registrant's inability to meet its reporting
requirements  is due to the dissolution of its former  auditor,  Gross
Kreger  &  Passio, LLC. This event was discussed in Item 4.01  of  the
Registrant's Form 8-K filed on June 27, 2005.

The  Registrant recently engaged a new firm, Russell Bedford  Stefanou
Mirchandani,  LLP  to  audit  and review the  Registrants  outstanding
consolidated financial statements. The audit fieldwork began  in  July
2005,  however, because of the time expected to be involved in  having
the  new  auditor  perform the audit and review  of  the  consolidated
financial statements, the Registrant cannot advise as to the  date  of
completion of the audit and the filing date of the amendment  to  this
annual report. The Registrant will endeavor to proceed with this audit
as expeditiously as possible.

In  the  interim,  pursuant  to  advice  received  by  the  SEC,   the
Registrant  is filing the consolidated financial statements,  for  the
period  ended  December  31, 2003, contained  throughout  this  annual
report  as  "unaudited"  and has furnished such  financial  statements
without  a  Certified  Independent Auditor's  Report.  The  Registrant
intends to make its report fully compliant with SEC rules and promptly
thereafter will file an amendment to this report with the SEC.

<PAGE>


                                PART I
                                ------

Item 1.   Business
          --------

          a. General Development of Business

           Diversified  Historic  Investors  II  ("Registrant")  is  a
limited  partnership  formed in 1984 under Pennsylvania  law.   As  of
December  31,  2003,  Registrant  had outstanding  20,593.3  units  of
limited partnership interest (the "Units").

           As of December 31, 2003 the registrant was in its operating
stage.  It originally owned four properties or interests therein.  Its
interest  in  two  properties were lost through  foreclosure  and  its
interest  in  a third property was sold. As of December 31,  2003,  it
owned  one  property.   See  Item  2. Properties,  for  a  description
thereof.   For  a discussion of the operations of the Registrant,  see
Part  II,  Item 7. Management's Discussion and Analysis  of  Financial
Condition and Results of Operations.

          b. Financial Information about Industry Segments

             The Registrant operates in one industry segment.

          c. Narrative Description of Business

              General.  Registrant  is in the business  of  operating,
holding,  selling, exchanging and otherwise dealing in and  with  real
properties  containing  improvements  which  are  "Certified  Historic
Structures," as such term is defined in the Internal Revenue Code (the
"Code"),  or which are eligible for designation as such,  for  use  as
apartments,  offices, hotels and commercial spaces, or any combination
thereof, or low income housing eligible for the tax credit provided by
Section  42  of  the  Code, and such other uses  as  the  Registrant's
general partner may deem appropriate.

              All properties acquired either by the Registrant, or the
subsidiary   partnerships  in  which  it   had   an   interest,   were
rehabilitated  and certified as historic structures and  received  the
related  investment  tax credit. As of December 31,  2003,  Registrant
owned  one property located in Georgia.  The property contains  22,559
square feet ("sf") of commercial/retail space and 44 hotel rooms.   As
of December 31, 2003, 13,460 sf of commercial space was under lease at
annual  rental  rates ranging from $13.94 per sf  to  $31.80  per  sf.
Throughout  2003,  all  of  the hotel rooms were  available  for  use.
During  2003,  the hotel maintained an average nightly  room  rate  of
$131.82  and average occupancy of 62%. Rental of the commercial  space
has  not  been  seasonal. However, the hotel does experience  seasonal
changes,  with the busiest months being March, April and  October  and
the slowest months being January and December.

              The hotel is located in Savannah, Georgia and is one  of
several  historic buildings which have been converted into hotels  and
inns.  The hotel relies heavily on the tourist trade which is  on  the
upswing in Savannah.  The hotel is generally considered to be a market
leader,  due  to its location on River Street, the main  shopping  and
entertainment area on the river, and the fact that it provides a  full
array of hotel amenities, not just a bed and breakfast atmosphere.

             Registrant has no employees.  Registrant's activities are
overseen  by  Brandywine Construction & Management, Inc., ("BCMI"),  a
real estate management firm.

              Dissolution. In 2003, the Registrant determined that  it
was  insolvent because (i) the amount of its liabilities exceeded  the
fair  market  value of its assets and (ii) it was unable  to  pay  its
debts  as  they  become due. Accordingly, pursuant to its  partnership
agreement,  Registrant began the process of dissolution. In connection
therewith,  on June 30, 2003, the Registrant transferred its  interest
in  Tindeco Wharf to an affiliate of the owner of the second  mortgage
loan,  which was deemed in default, secured by the property of Tindeco
Wharf.  At  transfer, the liabilities of Tindeco  Wharf  exceeded  the
value of Registrant's interest in Tindeco Wharf. In exchange for  such
interest, Registrant's cost of dissolution, up to $100,000,  was  paid
by the holder of such second mortgage loan.

              In  June 2005, Factors Walk was foreclosed upon  by  its
mortgage holder.

                    d.     Financial  Information  About  Foreign  and
             Domestic Operations and Export Sales.

             See Item 8. Financial Statements and Supplementary Data.


Item 2.   Properties
          ----------

              As  of December 31, 2003, Registrant owned one property;
the River Street Inn/Factor's Walk. This property consists of 44 hotel
rooms and 22,559 sf of commercial space located at 115 E. River Street
in Savannah, Georgia.  In August 1985, Registrant was admitted with  a
99%  interest  in  Factor's Walk Partners ("FWP")  a  Georgia  general
partnership,  for  $3,600,409.  FWP  acquired  and  rehabilitated  the
property for $8,900,409 ($127 per sf), including financing through  an
issuance by a governmental agency of tax-exempt bonds in the principal
amount of $5,800,000. The excess of equity and mortgage financing over
the  acquisition  and  rehabilitation costs was  utilized  to  provide
working capital reserves of $500,000. The bonds bore interest at  TENR
(a  rate  based  on  yields  of high quality,  short-term  tax  exempt
obligations) plus 0.5% until December 30, 1996 and were guaranteed  by
a  private corporation.  On December 30, 1996, both the bonds and  the
guarantee were sold.  The new holder of the bonds exercised its  right
to  convert the interest rate from the variable rate to 14% due to the
credit  rating  of the new guarantor.  The principal  balance  of  the
bonds  at  December 31, 2003 was $5,980,376; the bonds become  due  on
December 31, 2015.

              The  property  is managed by BCMI.  As of  December  31,
2003,  13,460  sf  of the commercial space (60%) was  under  lease  at
annual rental rates ranging from $13.94 to $31.80.  The property  also
maintains  44  operating  hotel rooms at an average  nightly  rate  of
$131.82.  The  average occupancy for 2003 was approximately  62%.  The
hotel occupancy rate for the previous four years was 66% in 2002,  66%
for 2001, 61% for 2000, and 66% for 1999.  The average room rates were
$132.95 for 2002, $125.05 for 2001, $124.23 for 2000, and $126.45  for
1999.   The  occupancy for the commercial space was 67% for 2002,  66%
for  2001, and 74% from 1999 to 2000.  The range for annual rents  was
$13.47  to  $31.00 per sf for 2002, $9.63 to $31.00 per sf  for  2001,
$9.63  to $30.00 per sf for 2000, and $7.89 to $26.83 per sf for 1999.
There  are  two  tenants who each occupy ten percent or  more  of  the
rentable square footage.  They operate principally as a restaurant and
a retail store.

              The  following  is  a  table  showing  commercial  lease
expirations at Factor's Walk for the next five years.

                                        Total
                                        annual    % of gross
                          Total sf      rental      annual
              Number of      of       covered by    rental
               Leases     expiring     expiring      from
     Years    expiring     leases       leases     property
     -----    ---------   --------    ----------  ----------

     2004         0             0             0      0%
     2005         2         2,336        56,105     28%
     2006         4         7,374       122,559     61%
     2007         0             0             0      0%
 Thereafter       2           833        22,643     11%

              For  tax purposes, this property has a federal tax basis
of  $10,743,105 and is depreciated using the straight-line method with
a  useful  life  of  27.5  years.  The annual real  estate  taxes  are
$120,391 which is based on an assessed value of $2,832,400 taxed at  a
rate of $42.51 per $1,000. It is the opinion of the management of  the
Registrant that the property is adequately covered by insurance.


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

            For   a   description   of  legal  proceedings   involving
Registrant's   properties,  see  Part  II,  Item   7.   River   Street
Inn/Factor's Walk Partners.


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

           No matter was submitted during the fiscal years covered  by
this report to a vote of security holders.

<PAGE>

                                PART II
                                -------

Item   5.     Market  for  Registrant's  Common  Equity  and   Related
              Stockholder Matters
              --------------------------------------------------------

           a.  There is no established public trading market  for  the
Units.   Trading   in   the  Units  occurs  solely   through   private
transactions.   The  Registrant is not aware of the  prices  at  which
trades  occur.  Registrant's records indicate that 88 Units of  record
were transferred in 2003.

           b.  As of December 31, 2003 there were 2,573 record holders
of Units.
           c. Registrant did not make any cash distributions in 2003 or
2002.


Item 6.   Selected Financial Data
          -----------------------

          The following selected financial data are for the five years
ended  December 31, 2003. The data should be read in conjunction  with
the consolidated financial statements included elsewhere herein.  This
data is not covered by the independent auditors' report.


                    2003        2002        2001        2000        1999
                    ----        ----        ----        ----        ----
                 Unaudited

Rental income  $ 3,071,504 $ 5,601,409 $ 5,340,239 $ 5,462,332 $ 5,015,476
Hotel revenues   1,488,779   1,587,328   1,535,825   1,305,660   1,384,057
Interest income      6,015      11,583      41,165      45,742      23,336
Net income
 (loss)         19,872,306  (2,199,044) (2,294,872) (2,474,642) (4,292,936)
Net income
 (loss) per
 Unit               955.34     (105.72)    (110.32)    (118.97)    (206.38)
Total assets
 (net of
 depreciation
 and
 amortization)   4,632,607  20,846,836  22,043,707  25,074,714  25,880,800
Debt
 obligations     9,076,704  32,608,543  32,739,177  33,792,649  33,306,221

Note:  See  Part II, Item 7(3) Results of Operations for a discussions
of   factors  which  materially  affect  the  comparability   of   the
information reflected in the above table.


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

          (1)  Liquidity

              At  December 31, 2003, Registrant had cash  of  $12,963.
Cash  generated  from operations is used primarily to  fund  operating
expenses  and  debt  service.  The Registrant  is  not  aware  of  any
additional  sources  of  liquidity. Because  Registrant's  liabilities
substantially  exceed its assets, and its ongoing operational  expense
and  debt service requirements substantially exceed its available cash
or cash flow, Registrant is insolvent.

              As  of December 31, 2003, Registrant had restricted cash
of  $27,706  consisting primarily of funds held as security  deposits,
replacement reserves and escrows for taxes.  As a consequence of these
restrictions as to use, Registrant does not deem these funds to  be  a
source of liquidity.

              During  the five years 1999 through 2003, the Registrant
has  realized  significant losses, including the  foreclosure  of  two
properties,  due  to the properties' inability to generate  sufficient
cash  flow to pay their operating expenses and debt service,  and  the
sale  of a third property. As of June 2005, the Registrant's remaining
property, Factors Walk, was foreclosed upon by its mortgage holder. As
a  result  of the foreclosure, no cash was available to the Registrant
to   make   distributions  to  partners  or  pay   the   general   and
administrative expenses owed to the Registrant.
              In  2003, the Registrant determined that it is insolvent
because  (i)  the  amount of its liabilities exceeds the  fair  market
value  of  its assets and (ii) it is unable to pay its debts  as  they
become  due.  Accordingly,  pursuant  to  its  partnership  agreement,
Registrant  began the process of dissolution. In connection therewith,
on  June  30, 2003, the Registrant transferred its interest in Tindeco
Wharf  to an affiliate of the owner of the second mortgage loan, which
was  deemed in default, secured by the property of Tindeco  Wharf.  At
transfer,  the  liabilities of Tindeco Wharf  exceeded  the  value  of
Registrant's interest in Tindeco Wharf. In exchange for such interest,
Registrant's  cost of dissolution, up to $100,000,  was  paid  by  the
holder of such second mortgage loan.

          (2)  Capital Resources

             Any capital expenditures needed are generally replacement
items  and  are  funded  out  of cash from operations  or  replacement
reserves, if any.

          (3)  Results of Operations

              During  2003,  Registrant recognized  a  net  income  of
$19,872,306 ($955.34 per limited partnership unit) compared to  a  net
loss of $2,199,044 ($105.72 per limited partnership unit) in 2002, and
a  net  loss of $2,294,872 ($110.32 per limited partnership  unit)  in
2001.

               Rental  and  hotel  income  was  $4,560,283  in   2003,
$7,188,737  in  2002, and $6,876,064 in 2001. The decrease  in  rental
income  from 2002 to 2003 was due to (i) the sale of Tindeco Wharf  on
June  30,  2003 (ii) a decrease in rented commercial space at  Factors
Walk  from  14,022  sf. in 2002 to 13,460 sf. in  2003,  and  (iii)  a
decrease in hotel income at Factors Walk due to a decrease in  average
occupancy  (66%  to 62%) and a decrease in average  daily  room  rates
($132.95 to $131.82). The increase in rental income from 2001 to  2002
was  due  to an increase in average occupancy (91% to 94%) at  Tindeco
Wharf  and  an  increase in hotel income at Factors  Walk  due  to  an
increase  in average daily room rates from $125.05 in 2001 to  $132.95
in 2002.

              Interest income was $6,015 in 2003, $11,583 in 2002, and
$41,165 in 2001. The decrease in interest income from 2002 to 2003  is
due to a decrease in invested cash balances due to the sale of Tindeco
Wharf  on June 30, 2003. Interest was only generated on six months  of
invested cash balances. The decrease in interest income from  2001  to
2002 is due to a decrease in interest rates and a decrease in invested
cash balances.

               Rental  operations  expense  was  $1,096,076  in  2003,
$2,104,817  in  2002, and $2,028,376 in 2001. The decrease  in  rental
operations expense from 2002 to 2003 was due the sale of Tindeco Wharf
on  June 30, 2003. The increase in rental operations expense from 2001
to  2002  was  due  to an increase in wages and salaries  expense  and
insurance  expense,  partially offset by a decrease  in  miscellaneous
operating expense at Tindeco Wharf. The increase in wages and salaries
expense was due to an increase in office staff salaries and janitorial
wages  paid.  The increase in insurance expense was due  to  insurance
market conditions. The decrease in miscellaneous operating expense was
due to a decrease in parking expense and administrative cable charges.

               Hotel  operations  expense  was  $1,398,173  in   2003,
$1,337,487  in  2002, and $1,257,784 in 2001. The  increase  in  hotel
operations  expense  from  2002 to 2003 was  due  to  an  increase  in
insurance  expense, maintenance expense and wages  and  salaries.  The
increase  in  insurance  expense  was  due  to  the  changing   market
conditions.   The  increase  in maintenance  expense  was  due  to  an
increase in electrical, mechanical and general building repairs.   The
increase in wages and salaries expense was due to an increase in sales
and  inn managers. The increase in hotel operations expense from  2001
to  2002  was  due  to  an  increase in wages  and  salaries  expense,
insurance expense, and real estate tax expense, partially offset by  a
decrease  in  legal and professional fees. The increase in  wages  and
salaries expense was due to an increase in sales manager salaries  and
housekeeper wages paid. The increase in insurance expense was  due  to
insurance  market conditions. The increase in real estate tax  expense
was  due  to  an increase in the appraised value of the property.  The
decrease  in  legal  and professional fees was due to  non-  recurring
appraisal fees incurred during the fourth quarter of 2001.

              Interest  expense was $2,914,074 in 2003, $4,197,597  in
2002,  and  $4,216,229 in 2001. The decrease in interest expense  from
2002  to  2003 was due to the sale of Tindeco Wharf on June 30,  2003.
The  decrease  in  interest expense from 2001 to 2002  was  due  to  a
decrease  in prime rate used to calculate interest expense on  a  note
payable  at Tindeco Wharf. The increase in interest expense at Factors
Walk  was  due  to  an increase in principal balance  upon  which  the
interest  was calculated due to additions made to pay various expenses
and leasing commissions.

              Depreciation  and  amortization was $1,080,871  in  2003
$1,759,463   in  2002,  and  $1,781,784  in  2001.  The  decrease   in
depreciation  expense from 2002 to 2003 was due to the sale  of  fixed
assets of Tindeco Wharf. The decrease from 2001 to 2002 was due to the
foreclosure of Washington Square on March 22, 2001.

              In  2003,  approximately $20,541,000 of book income  was
recognized at the Registrant's properties even though no net cash  was
distributed or distributable to Registrant there from. Included in the
book  gain for 2003 is a book gain on the disposition of fixed  assets
in  the amount of $21,777,364. In 2002 the registrant incurred a  loss
of  approximately  $1,831,000 compared  to  a  loss  of  approximately
$2,008,000  during  2001.  Included  in  the  loss  for  2001  is   an
extraordinary  gain on the extinguishment of debt  in  the  amount  of
$68,458.

             On June 30, 2003, the Registrant transferred its interest
in  Tindeco Wharf to an affiliate of the owner of the second  mortgage
loan,  which  was  deemed  in default, secured  by  the  property.  At
transfer,  the  liabilities of Tindeco Wharf  exceeded  the  value  of
Registrant's interest in Tindeco Wharf. In exchange for such interest,
Registrant's  cost of dissolution, up to $100,000,  was  paid  by  the
holder  of  such  second  mortgage  loan.  Because  this  resulted  in
extinguishment  of the liabilities associated with the property,  even
though no cash was received, the Registrant recognized a book gain  on
sale in the amount of $21,777,364 in 2003.

                Effective  as of March 22, 2001 Washington Square  was
foreclosed by the holder of the mortgage and a judgment. As a  result,
the Registrant recognized a book gain on the extinguishment of debt in
the  amount of $68,458 which is the difference between the debt of the
property and the net book value of the assets.


Item 7A.  Quantitative and Qualitative Disclosures About Market Risk
          ----------------------------------------------------------

             All of our assets and liabilities are denominated in U.S.
dollars, and as a result, we do not have exposure to currency exchange
risks.

              We  do not engage in any interest rate, foreign currency
exchange  rate  or  commodity price-hedging  transactions,  and  as  a
result, we do not have exposure to derivatives risk.

<PAGE>


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

                   DIVERSIFIED HISTORIC INVESTORS II
                   ---------------------------------
                        (a limited partnership)

              INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
              ------------------------------------------

                   AND FINANCIAL STATEMENT SCHEDULES
                   ---------------------------------


Consolidated financial statements:                            Page
                                                              ----

   Consolidated  Balance  Sheets at  December  31,  2003       11
(unaudited) and 2002

   Consolidated Statements of Operations for  the  Years       12
Ended December 31, 2003 (unaudited), 2002, and 2001

   Consolidated  Statements  of  Changes  in   Partners'       13
Equity   for  the  Years  Ended  December  31,   2003
(unaudited), 2002, and 2001

   Consolidated Statements of Cash Flows for  the  Years       14
Ended December 31, 2003 (unaudited), 2002, and 2001

   Notes    to    consolidated   financial    statements     15-22
(unaudited)


Financial statement schedules (unaudited):

   Schedule   XI   -   Real   Estate   and   Accumulated     23-24
Depreciation (unaudited)

   Notes to Schedule XI (unaudited)                            25






All other schedules are omitted because they are not applicable or the
required information is shown in the consolidated financial statements
or notes thereto.

<PAGE>


                  DIVERSIFIED HISTORIC INVESTORS II
                  ---------------------------------
                        (a limited partnership)

                      CONSOLIDATED BALANCE SHEETS
                      ---------------------------
                      December 31, 2003 and 2002

                                Assets
                                ------
                                             2003        2002
                                             ----        ----
                                          (Unaudited)

Rental properties at cost:
 Land                                   $   200,000  $   847,082
 Buildings and improvements              10,365,244   39,014,097
 Furniture and fixtures                     855,612    3,627,466
                                        -----------  -----------
                                         11,420,856   43,488,645
  Less - accumulated depreciation        (7,109,896) (26,361,987)
                                        -----------  -----------
                                          4,310,960   17,126,658
Cash and cash equivalents                    12,963      119,481
Restricted cash                              27,706    1,639,333
Accounts receivable                         131,673      252,319
Other assets (net of accumulated
 amortization of $119,916
 and $550,675)                              149,305    1,709,045
                                        -----------  -----------
          Total                         $ 4,632,607  $20,846,836
                                        ===========  ===========


                Liabilities and Partners' Equity
                --------------------------------

Liabilities:
 Debt obligations                       $ 9,076,704  $32,608,543
 Accounts payable:
  Trade                                   4,164,610    4,003,547
  Related parties                         1,723,539    3,008,831
 Interest payable                         2,931,268   13,968,150
 Tenant security deposits                    14,385      323,436
 Other liabilities                        1,650,964    1,735,498
                                        -----------  -----------
          Total liabilities              19,561,470   55,648,005
Partners' deficit                       (14,928,863) (34,801,169)
                                        -----------  -----------
          Total                         $ 4,632,607  $20,846,836
                                        ===========  ===========


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

<PAGE>




                   DIVERSIFIED HISTORIC INVESTORS II
                   ---------------------------------
                        (a limited partnership)

                 CONSOLIDATED STATEMENTS OF OPERATIONS
                 -------------------------------------

         For the years ended December 31, 2003, 2002 and 2001

                                      2003         2002         2001
                                      ----         ----         ----
                                  (Unaudited)

Revenues:
 Rental income                   $ 3,071,504   $5,601,409   $5,340,239
 Hotel income                      1,488,779    1,587,328    1,535,825
 Interest income                       6,015       11,583       41,165
 Other income                         17,838            0        3,614
 Book gain on sale                21,777,364            0            0
                                 -----------   ----------   ----------
      Total revenues              26,361,500    7,200,320    6,920,843
                                 -----------   ----------   ----------
Costs and expenses:
 Rental operations                 1,096,076    2,104,817    2,028,376
 Hotel operations                  1,398,173    1,337,487    1,257,784
 Interest                          2,914,074    4,197,597    4,216,229
 Depreciation and amortization     1,080,871    1,759,463    1,781,784
                                 -----------   ----------   ----------
      Total costs and expenses     6,489,194    9,399,364    9,284,173
                                 -----------   ----------   ----------
Net income (loss) before
 extraordinary item               19,872,306   (2,199,044)  (2,363,330)
Extraordinary gain on
 extinguishment of debt                    0            0       68,458
                                 -----------   ----------   ----------
       Net income (loss)         $19,872,306  ($2,199,044) ($2,294,872)
                                 ===========   ==========   ==========

Net loss per limited
 partnership unit:
 Loss before extraordinary item  $    955.34  ($   105.72) ($   113.61)
 Extraordinary item                        0            0         3.29
                                 -----------   ----------   ----------
Total loss per limited
 partnership unit                $    955.34  ($   105.72) ($   110.32)
                                 ===========   ==========   ==========

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

<PAGE>




                    DIVERSIFIED HISTORIC INVESTORS II
                    ---------------------------------
                        (a limited partnership)

        CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' EQUITY
        ------------------------------------------------------
         For the years ended December 31, 2003, 2002 and 2001


                                      Dover
                                    Historic
                                    Advisors     Limited
                                      I (1)    Partners (2)    Total
                                    --------   ------------    -----

Percentage participation in
 profit or loss                       1%           99%          100%
                                      ==           ===          ====

Balance at December 31, 2000      ($474,492) ($29,832,761) ($30,307,253)
Net loss                            (22,949)   (2,271,923)   (2,294,872)
                                   --------   -----------   -----------
Balance at December 31, 2001       (497,441)  (32,104,684)  (32,602,125)
Net loss                            (21,990)   (2,177,054)   (2,199,044)
                                   --------   -----------   -----------
Balance at December 31,2002        (519,431)  (34,281,738)  (34,801,169)
Net income                          198,723    19,673,583    19,872,306
                                   --------   -----------   -----------
Balance at December 31, 2003
 (Unaudited)                      ($320,708) ($14,608,155) ($14,928,863)
                                   ========   ===========   ===========

 (1) General Partner.

 (2) 20,593.3 limited partnership units outstanding at  December 31,
     2003, 2002, and 2001.


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

<PAGE>

                    DIVERSIFIED HISTORIC INVESTORS II
                    ---------------------------------
                        (a limited partnership)

                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                 -------------------------------------

         For the years ended December 31, 2003, 2002 and 2001


                                         2003         2002         2001
                                         ----         ----         ----
                                     (Unaudited)

Cash flows from operating
 activities:
 Net income (loss)                  $19,872,306  ($2,199,044) ($2,294,872)
 Adjustments to reconcile net loss
  to net cash provided by
  operating activities:
  Depreciation and amortization       1,080,871    1,759,463    1,781,784
  Extraordinary gain                          0            0      (68,458)
  Book gain on Sale of
   Tindeco Wharf                    (21,777,364)           0            0
 Changes in assets and liabilities:
  (Increase) decrease in restricted
   cash                                (620,019)  (1,074,877)   1,202,782
  Decrease (increase) in accounts
   receivable                            23,485      (56,403)       4,525
  Decrease (increase) in other assets   216,391      641,909     (805,007)
  (Decrease) Increase in accounts
   payable - trade                      (37,667)     227,338       94,903
  Increase (decrease) in accounts
   payable - related parties
                                        452,355      257,751      123,251
  Increase in interest payable          834,063      508,796      198,745
  Increase in tenant security
   deposits                              11,069       39,349        6,357
  (Decrease) increase in other
   liabilities                          (42,238)      99,574      145,332
                                    -----------   ----------   ----------
    Net cash provided by operating
     activities                          13,252      203,856      389,342
                                    -----------   ----------   ----------
Cash flows from investing
 activities:
 Proceeds from the sale of
  fixed assets                          100,000            0            0
 Capital expenditures                  (152,172)    (129,005)    (248,415)
                                    -----------   ----------   ----------
    Net cash used in investing
     activities                         (52,172)    (129,005)    (248,415)
                                    -----------   ----------   ----------
Cash flows from financing
 activities:
 Borrowings under debt obligations            0          520      157,472
 Payments of principal under debt
  obligations                           (67,597)    (131,154)    (146,816)
                                    -----------   ----------   ----------
     Net cash (used in) provided
      by financing activities           (67,597)    (130,634)      10,656
                                    -----------   ----------   ----------
(Decrease) increase in cash and
  cash equivalents                     (106,517)     (55,783)     151,583
Cash and cash equivalents at
 beginning of year                      119,480      175,264       23,681
                                    -----------   ----------   ----------
Cash and cash equivalents at
 end of year                        $    12,963   $  119,481   $  175,264
                                    ===========   ==========   ==========


Supplemental Disclosure of Cash Flow
 Information:
 Cash paid during the year for
  interest                          $1,644,274    $3,347,070   $3,689,055


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

<PAGE>



                 DIVERSIFIED HISTORIC INVESTORS II
                 ---------------------------------
                     (a limited partnership)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           ------------------------------------------
                           (Unaudited)


NOTE A - ORGANIZATION
---------------------

Diversified  Historic Investors II (the "Partnership") was  formed  in
December  1984  to acquire, rehabilitate, and manage  real  properties
which  are  certified historic structures as defined in  the  Internal
Revenue  Code  (the "Code"), or which are eligible for designation  as
such, utilizing mortgage financing and the net proceeds from the  sale
of  limited  partnership  units.  Rehabilitations  undertaken  by  the
Partnership  were  done  with  a view to  obtaining  certification  of
expenditures  therefore as "qualified rehabilitation expenditures"  as
defined  in  the Code.  The General Partner, Dover Historic  Advisors,
has  the exclusive responsibility for all aspects of the Partnership's
operations


NOTE B - SIGNIFICANT ACCOUNTING POLICIES
----------------------------------------

A  summary  of  the  significant accounting policies  applied  in  the
preparation  of  the  accompanying consolidated  financial  statements
follows:

1.   Principles of Consolidation

The  accompanying consolidated financial statements of the Partnership
include  the accounts of two subsidiary partnerships (the "Ventures"),
in  which  the Partnership has controlling interests, with appropriate
elimination  of  inter-partnership transactions  and  balances.  These
financial  statements  reflect  all adjustments  (consisting  only  of
normal   recurring  adjustments)  which,  in  the   opinion   of   the
Partnership's General Partner, are necessary for a fair  statement  of
the results for the years presented.

2.   Depreciation

Depreciation  is  computed  using the straight-line  method  over  the
estimated useful lives of the assets.  Buildings and improvements  are
depreciated over 25 years and furniture and fixtures over five years.

3.   Finance Costs

Loan fees have been incurred with respect to certain loans.  Such fees
are  being  amortized over the terms of the related loans  (18  to  40
years) and being charged to amortization expense.

The  Partnership prepaid all amounts due under a ground lease for  one
of  its properties.  Such prepayment is being amortized over the  term
of the lease (75 years) and being charged to amortization expense.

Tindeco Wharf Partnership ("TWP") incurred $818,465 of settlement fees
in  conjunction  with a bond refinancing.  These settlement  fees  are
included in other assets and are being amortized over the term of  the
bond  issue.   Accumulated amortization was $233,955 and  $211,319  at
December 31, 2002 and 2001, respectively.

4.   Cash and Cash Equivalents

The Partnership considers all highly liquid instruments purchased with
a maturity of less than three months to be cash equivalents.

5.   Net Income per Limited Partnership Unit

The  net  income per limited partnership unit is based on the weighted
average  number  of limited partnership units outstanding  during  the
period (20,593.3 in 2003, 2002 and 2001).

6.   Income Taxes

Income  taxes or credits resulting from earnings or losses are payable
by  or  accrue  to  the  benefits  of the  partners;  accordingly,  no
provision   has  been  made  for  income  taxes  in  these   financial
statements.

7.   Restricted Cash

Restricted  cash  includes amounts held for tenant security  deposits,
insurance and real estate tax reserves.

8.   Revenue Recognition

Revenues  are recognized when rental payments are due on  a  straight-
line  basis.   Rental payments received in advance are deferred  until
earned.

9.   Rental Properties

Rental  properties are stated at cost.  A provision for impairment  of
value  is recorded when a decline in value of a property is determined
to  be  other  than  temporary as a result  of  one  or  more  of  the
following:  (1)  a property is offered for sale at a price  below  its
current  carrying  value,  (2)  a  property  has  significant  balloon
payments  due within the foreseeable future for which the  Partnership
does  not have sufficient resources, and anticipates it will be unable
to  obtain  replacement financing or debt modification  sufficient  to
allow it to continue to hold the property over a reasonable period  of
time, (3) a property has been, and is expected to continue, generating
significant  operating  deficits and  the  Partnership  is  unable  or
unwilling to sustain such deficits and has been unable, or anticipates
it   will  be  unable,  to  obtain  debt  modification,  financing  or
refinancing  sufficient to allow it to continue to hold  the  property
for  a  reasonable  period  of time or, (4)  a  property's  value  has
declined  based on management's expectations with respect to projected
future operational cash flows and prevailing economic conditions.   An
impairment  loss is indicated when the undiscounted sum  of  estimated
future  cash flows from an asset, including estimated sales  proceeds,
and  assuming a reasonable period of ownership up to 5 years, is  less
than  the  carrying  amount  of the asset.   The  impairment  loss  is
measured  as the difference between the estimated fair value  and  the
carrying   amount  of  the  asset.  In  the  absence  of   the   above
circumstances,  properties and improvements are stated  at  cost.   An
analysis is done on an annual basis at December of each year.

10.  Use of Estimates

The  preparation  of  the  financial  statements  in  conformity  with
generally accepted accounting principles requires management  to  make
estimates  and  assumptions that affect the amounts  reported  in  the
financial  statements  and accompanying notes.  Actual  results  could
differ from those estimates.


NOTE C - DEBT OBLIGATIONS
-------------------------

Debt obligations were as follows:

                                                 December 31,
                                              2003          2002
                                              ----          ----
                                          (Unaudited)

Mortgage  loan,  interest  only  at  14%; $7,276,704    $7,273,790
principal   due   December   31,    2015,
collateralized  by  the  related   rental
property

Mortgage  loan,  interest  at  12%,   due  1,800,000     1,800,000
January  1, 1992, collateralized  by  the
related rental property (A)


Mortgage revenue bonds comprised  of  the          0    16,281,282
following:   $1,440,000 of Serial  Bonds,
interest rates ranging from 4.6% to 6.1%,
maturing  semi-annually  from  June   20,
2000, to December 20, 2006; $1,650,000 of
Term  Bonds,  interest at 6.5%,  maturing
December  20,  2012; $8,260,000  of  Term
Bonds,   interest   at   6.6%,   maturing
December  20,  2024; $5,605,000  of  Term
Bonds,   interest   at   6.7%,   maturing
December 20, 2028; collateralized by  the
related rental property (C)

Second   mortgage  loan,  principal   and          0     4,953,471
interest  at  7.5%,  payable  in  monthly
installments  of  $36,606  to  July  2005
based  upon available cash flow, at which
time  the  balance is due; collateralized
by the related rental property (B) (C)

Note  payable  to  a developer,  interest
accrues  at 12%, of which 6% interest  is
payable  annually; deferred  interest  is
payable   out  of  cash  flow   after   a
preference return to the Partnership with
interest  accruing on the unpaid  amount;
principal and unpaid interest due at  the
earlier  of  sale or refinancing  of  the
property or 2005; unsecured (C)                    0     2,300,000
                                          ----------   -----------
                                          $9,076,704   $32,608,543
                                          ==========   ===========

(A)  Interest  payments were not made after August 1991.   Lender
     declared  default and accelerated payment of the note in February
     1992.   The partnership which owns the property filed a  petition
     of  reorganization in May 1992.  In November 1992, the  automatic
     stay  was lifted and the property which collateralizes this  loan
     was  foreclosed  by  the lender in February 1993.   However,  the
     partnership  guaranteed $1,800,000 of the original note  balance,
     which is included in debt obligations.

(B)  Interest and principal after August 1, 1990 due only  to  the
     extent of available cash flow.  Any unpaid principal and interest is
     deferred.  Additional interest equal to 20% of net cash flow from
     operations, as defined, in excess of $1,075,000 is payable annually.
     The lender is also entitled to receive 10% of the net proceeds from
     the sale of the property as defined.  No interest was paid during
     2002, 2001 or 2000.

(C)  On June 30, 2003, the Registrant transferred its interest  in
     Tindeco Wharf to an affiliate of the owner of the second mortgage loan
     secured by the property of Tindeco Wharf. At transfer, the liabilities
     of  Tindeco Wharf exceeded the value of Registrant's interest  in
     Tindeco Wharf. In exchange for such interest, Registrant's cost of
     dissolution, up to $100,000, will be paid by the holder of such second
     mortgage loan.


Approximate  maturities of mortgage loan obligations, at December  31,
2003 for each of the succeeding five years are as follows:

Year ending December 31,        (Unaudited)

     2004                        $1,800,000
     2005                                 0
     2006                                 0
     2007                                 0
     2008                                 0
     Thereafter                   7,276,704
                                 ----------
                                 $9,076,704
                                 ==========


NOTE D - ACQUISITIONS
---------------------

The  Partnership  acquired one property and three general  partnership
interests  in Ventures during the period August 1985 to October  1985,
as discussed below.

In  August  1985,  the Partnership was admitted, with  a  99%  general
partner interest, to a Pennsylvania general partnership, which owns  a
building located in Savannah, Georgia, consisting of 22,559 commercial
square  feet  and a 44 room hotel, for a cash capital contribution  of
$3,600,409.

In  October  1985, the Partnership was admitted, with an  85%  general
partner interest, to a Pennsylvania general partnership, which owned a
54-room  hotel  located  in  Washington,  D.C.,  for  a  cash  capital
contribution   of   $1,820,100.   The   Partnership's   interest   was
subsequently  reduced  to  69% when an affiliate  of  the  Partnership
acquired a 19% interest.  The lender foreclosed in 1993.

In  October  1985,  the Partnership purchased a three-story  building,
consisting  of  29  residential apartments and 9,500  square  feet  of
commercial  space, for a cash consideration of $1,320,883. The  lender
foreclosed on March 22, 2001.

In  October  1985, the Partnership was admitted, with an  85%  general
partner  interest,  to a Maryland general partnership,  which  owns  a
building located in Baltimore, Maryland, consisting of 240 residential
units  and 41,307 square feet of commercial space, for a cash  capital
contribution of $7,271,300.  The Partnership subsequently purchased an
additional  5% interest for $262,500. On June 30, 2003, the Registrant
transferred  its interest in TWP to an affiliate of the owner  of  the
second mortgage loan secured by the property of TWP. At transfer,  the
liabilities of TWP exceeded the value of Registrant's interest in TWP.
In exchange for such interest, Registrant's cost of dissolution, up to
$100,000, will be paid by the holder of such second mortgage loan.


NOTE E- COMMITMENTS AND CONTINGENCIES
-------------------------------------

Pursuant to certain agreements, the developers of and lenders  to  the
properties are entitled to share in the following:

1.   15%  to  50%  of  net  cash  flow from operations  above  certain
     specified amounts

2.   10%  to  45% of the net proceeds, as defined, of the sale of  the
     respective property. Generally, the Partnership is entitled to  a
     priority  distribution of the net proceeds of sale prior  to  any
     payments to developers.

J.  A.  Jones Construction Company ("Jones") contracted with  Factor's
Walk  Partners  ("FWP"),  a  subsidiary of the  Partnership,  for  the
renovation  of what was originally a warehouse, into the River  Street
Inn/Factor's  Walk.   During  construction,  numerous  disputes  arose
between  the parties.  As a result of those disputes, Jones  abandoned
the  project prior to completion and filed suit in the matter of  J.A.
Jones  Construction Company v. Factor's Walk Partners  in  the  United
States  District  Court  for the Northern  District  of  Georgia.   On
January  1, 1994, the court entered a judgment in favor of  Jones  and
against  FWP  in  the  amount  of $1,069,017.   The  judgment  accrued
interest at 9.5% and $62,562 of interest was accrued in both 1995  and
1994.   FWP filed an appeal which was held in abeyance while  FWP  and
Jones  participated  in  a  court sponsored  settlement  program.   On
November 8, 1996, a settlement agreement was reached whereby a note in
the  amount of $1,000,000 was issued.  The note calls for 6%  interest
until September 1, 1997, with the rate increasing .5% on each August 1
thereafter to a maximum of prime plus 2% (therefore, 6.25% at December
31,  2003)  and is due on October 1, 2011.  Interest is due  quarterly
with the first payment due September 1, 1997.


NOTE F - RELATED PARTY TRANSACTIONS
-----------------------------------

On June 30, 1992, DHP, Inc. assigned to D, LTD a note receivable, from
FWP  to  the Partnership that had been assigned to DHP, Inc. The  note
was in the stated amount of $55,951 and bore interest at 10%; the note
was  due  on  June 30, 1997.  On January 13, 1994 D,  LTD  obtained  a
judgment  on this note in the amount of $73,184 in Common Pleas  Court
for  Philadelphia County, Pennsylvania. The judgment accrues  interest
at  15%. On March 31, 2000 the note was sold. Interest accrued  during
2000  was  $22,620. The balance of the note at December 31,  2003  was
$197,409.   Interest  accrued  during  2003  and  2002  was   $30,023,
respectively.  The  balance  of the note  at  December  31,  2003  was
$197,409.

On  June 30, 1992, DHP, Inc. assigned to D, LTD a note receivable from
the  Partnership  in  the stated amount of $404,046.   The  note  bore
interest  at 10% and was due on June 30, 1997.  On March 23, 1993,  D,
LTD  obtained  a  judgment on this note in the amount of  $454,299  in
Common  Pleas  Court  for  Philadelphia  County,  Pennsylvania.    The
judgment  accrues interest at 15%.  Interest accrued during  2003  and
2002  was  $226,896  and  $212,948,  respectively.   Payments  on  the
judgment  are  to  be  made from available cash flow  and  before  any
distribution  can be made to the Partnership's limited  partners.  The
balance of the note at December 31, 2003 was $1,617,665.

Tindeco  Wharf  Partnership  accrued to Dover  Historic  Advisors,  an
affiliate of a partner, and Boston Street Properties, Inc.,  a  former
partner,  an annual investor service fee of $10,000 each.  These  fees
were  paid from available cash flow subsequent to the payment  of  the
operating  deficit  loan and current interest on the  development  fee
note.  No fees were paid during 2003 or 2002. Accrued investor service
fees was $120,000 at December 31, 2002.


NOTE G - EXTRAORDINARY GAIN
---------------------------

Effective as of March 22, 2001 Washington Square was foreclosed by the
holder  of  the mortgage and a judgment.  As a result, the  Registrant
recognized an extraordinary gain on this foreclosure in the amount  of
$68,458  which is the difference between the debt of the property  and
the net book value of the assets.


NOTE H - INCOME TAX BASIS RECONCILIATION
----------------------------------------

Certain  items  enter  into  the  determination  of  the  results   of
operations in different time periods for financial reporting  ("book")
purposes and for income tax ("tax") purposes.  Reconciliations of  net
loss and partners' equity follows:

                                  For the Years Ended December 31,
                                    2003         2002        2001
                                    ----         ----        ----
                                (Unaudited)

Net loss - book                 $19,872,306 ($ 2,199,044) ($ 2,294,872)
Gaap to tax difference -
 Book Gain on Sale of
 Tindeo Wharf                    (6,981,724)           0             0
 Depreciation                        66,854     (143,025)     (262,345)
 Interest                           957,539    1,038,997       982,822
 Other interest                           0            0      (240,000)
 Guarantor fees                     121,800      121,800       121,800
 Investor service fee                10,000       20,000        20,000
 Other                              (12,489)     (28,196)      110,692
Minority interest - tax only         37,882       66,070        97,016
Extraordinary gain on
 extinguishment of debt                   0            0      (259,981)
                                -----------  -----------   -----------
Net loss - tax                  $14,072,168 ($ 1,123,398) ($ 1,724,868)
                                ===========  ===========   ===========

Partners' equity - book        ($14,928,863)($34,801,169) ($32,602,125)
Costs of issuance                 2,471,196    2,471,196     2,471,196
Cumulative tax over (under)
 book loss                        5,756,972    9,006,582     8,481,727
Facade easement donation
 (tax only)                         203,778      203,778       203,778
Prior period adjustment              48,071       48,071        48,071
Capital adjustments (tax only)     (324,580)    (324,580)     (324,580)
                                -----------  -----------   -----------
Partners' equity - tax         ($ 6,773,426)($23,396,122) ($21,721,933)
                                ===========  ===========   ===========




NOTE I - BOOK GAIN ON SALE
--------------------------

The  Registrant has determined that it was insolvent because  (i)  the
amount of its liabilities exceeded the fair market value of its assets
and  (ii)  it  was  unable  to  pay its  debts  as  they  become  due.
Accordingly,  pursuant to its Partnership Agreement, Registrant  began
the process of dissolution. In connection therewith, on June 30, 2003,
the  Registrant  transferred  its interest  in  Tindeco  Wharf  to  an
affiliate  of the owner of the second mortgage loan, which was  deemed
in default, secured by the property of Tindeco Wharf. At transfer, the
liabilities  of  Tindeco  Wharf exceeded  the  value  of  Registrant's
interest in Tindeco Wharf. In exchange for such interest, Registrant's
cost  of  dissolution, up to $100,000, will be paid by the  holder  of
such  second mortgage loan. The Registrant recognized a book  gain  on
the sale in the amount of $21,777,364.


NOTE J - QUARTERLY FINANCIAL DATA (UNAUDITED)
---------------------------------------------

The  following represents summarized quarterly financial data  of  the
Registrant   which,  in  the  opinion  of  management,  reflects   all
adjustments,   consisting  only  of  normal   recurring   adjustments,
necessary  for  a  fair  presentation of the Registrant's  results  of
operations:

                      For The Three Months Ended - (Unaudited)
                  December 31, September 30,  June 30,   March 31,
                  ------------ -------------  --------   ---------
                                           2003
                  ------------------------------------------------
Revenues:
 Rental income      $ 83,958   $124,460    $ 1,503,700  $1,359,385
 Hotel income        342,859    355,041        468,940     321,940
 Book gain on sale         0          0     21,777,364           0
 Other income         17,837          0              0           0
 Interest income          11          0          2,950       3,055
                    --------   --------    -----------  ----------
  Total revenues     444,665    479,501     23,752,954   1,684,380
                    --------   --------    -----------  ----------
Costs and expenses:
 Rental operations         0          0        579,135     520,745
 Hotel operations    315,645    397,769        396,716     284,241
 Interest            486,145    385,115        930,696   1,112,117
 Depreciation and
  amortization       110,155    109,762        434,472     426,482
                    --------   --------    -----------  ----------
  Total costs and
    expenses         911,945    892,646      2,341,019   2,343,585
                    --------   --------    -----------  ----------
Net loss           ($467,280) ($413,145)   $21,411,935 ($  659,205)
                    ========   ========    ===========  ==========


Net loss per
 limited
 partnership unit: ($  22.46) ($  19.86)    $ 1,029.35 ($   31.69)


NOTE K SUBSEQUENT EVENT
-----------------------

In June 2005, Factors Walk was foreclosed upon by its mortgage holder.

<PAGE>




                       SUPPLEMENTAL INFORMATION






<PAGE>



                   DIVERSIFIED HISTORIC INVESTORS II
                   ---------------------------------
                        (a limited partnership)

          SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION
                                DECEMBER 31, 2003
                                  (UNAUDITED)




                                                      Costs
                                                   Capitalized
                                                   Subsequent
                            Initial Cost to            to
                            Partnership (b)        Acquisition
                            ---------------        -----------


                                         Buildings     Land
                                            and        and
                 Encumbrances            Improve-   Improve-
Description (a)      (f)       Land       ments       ments
---------------  ------------  ----      ---------  --------
44 room hotel
with 22,559
square feet of
commercial
space in
Savannah, GA      $7,276,704 $200,000   $9,178,160 $2,042,696

240 apartment
units and 41,802
square feet of
commercial
space in
Baltimore, MD              0         0           0           0
                  ----------  --------   ---------- ----------
                  $7,276,704  $200,000   $9,178,160 $2,042,696
                  ==========  ========   ========== ==========

                             Gross Amount at which Carried at
                                    December 31, 2003
                             --------------------------------
                                     (Unaudited)



                             Buildings            Accumu-   Date
                                and                lated     of
                              Improv-    Total     Depr.   Constr.   Date
Description (a)       Land     ments    (c) (d)   (d) (e)    (a)   Acquired
--------------        ----   ---------  -------   -------- ------- --------
44 room hotel
with 22,559
square feet of
commercial
space in                                                      1985-
Savannah, GA      $200,000 $11,220,856 $11,420,856 $7,109,896 1986  8/9/85

240 apartment
units and 41,802
square feet
of commercial
space in                                                     1985-
Baltimore, MD           0           0           0          0 1988 10/15/85
                 -------- ----------- ----------- ----------
                 $200,000 $11,220,856 $11,420,856 $7,109,896
                 ======== =========== =========== ==========

<PAGE>

                   DIVERSIFIED HISTORIC INVESTORS II
                   ---------------------------------
                        (a limited partnership)

                         NOTES TO SCHEDULE XI

                           December 31, 2003

(A)  All  properties are certified historic structures as  defined  in
     the  Internal  Revenue Code, or are eligible for  designation  as
     such.   The "date of construction" refers to the period in  which
     such properties were rehabilitated.

(B)  Includes  development/rehabilitation costs incurred  pursuant  to
     development  agreements  entered into when  the  properties  were
     acquired.

(C)  The aggregate cost of real estate owned at December 31, 2003, for
     Federal income tax purposes is $10,743,105. The depreciable basis
     of  buildings and improvements is reduced for federal income  tax
     purposes   by   the  investment  tax  credit  and  the   historic
     rehabilitation credit obtained.

(D)  Reconciliation of real estate:

                                        2003        2002        2001
                                        ----        ----        ----
                                    (Unaudited)
Balance at beginning of year       $43,488,645 $43,359,639 $46,163,905
Additions during the year:
 Improvements                          152,172     129,006     248,415
 Deductions due to sale/
  foreclosure                      (32,219,961)          0  (3,052,681)
                                   ----------- ----------- -----------
Balance at end of year             $11,420,856 $43,488,645 $43,359,639
                                   =========== =========== ===========

Reconciliation of accumulated depreciation:
                                        2003        2002        2001
                                        ----        ----        ----
Balance at beginning of year      $26,361,987 $24,658,035 $24,737,850
Depreciation expense for the year   1,080,871   1,703,952   1,725,944
Decreases due to sale/
 foreclosure                      (20,332,962)          0  (1,805,759)
                                  ----------- ----------- -----------
Balance at end of year            $ 7,109,896 $26,361,987 $24,658,035
                                  =========== =========== ===========

(E)  See  Note  B to the financial statements for depreciation  method
     and lives.

(F)  See  Note E to the financial statements for information regarding
     certain contingencies.

<PAGE>


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

          None.


Item 9A.   Controls and Procedures
           -----------------------

      We maintain disclosure controls and procedures that are designed
to  ensure that information required to be disclosed in our Securities
Exchange  Act  of 1934 reports is recorded, processed, summarized  and
reported and that such information is accumulated and communicated  to
our  management, including our managing partner's principal  executive
officer  and  principal  financial officer, as appropriate,  to  allow
timely  decisions  regarding required disclosure.   In  designing  and
evaluating  the  disclosure  controls and procedures,  our  management
recognized  that  any  controls and procedures,  no  matter  how  well
designed  and  operated,  can  provide only  reasonable  assurance  of
achieving   the   desired  control  objectives,  and  our   management
necessarily was required to apply its judgment in evaluating the cost-
benefit relationship of possible controls and procedures.

      Under  the  supervision  of  our  managing  partner's  principal
executive officer and principal financial officer we have carried  out
an  evaluation of the effectiveness of our adopted disclosure controls
and  procedures  as of the end of the period covered by  this  report.
Based  upon  that  evaluation, our managing  partner's  president  and
treasurer  concluded that our disclosure controls and  procedures  are
effective.

      There  have been no significant changes in our internal controls
over   financial  reporting  that  has  materially  affected,  or   is
reasonably  likely  to  materially affect, our internal  control  over
financial reporting during our most recent fiscal quarter.


<PAGE>


                               PART III
                               --------

Item 10.  Directors and Executive Officers of Registrant
          ----------------------------------------------

          a.  Identification  of  Directors  -  Registrant  has   no
directors.

          b.   Identification of Executive Officers

          f.   Involvement in Certain legal proceedings. - None

          g.   Promoters and control persons. - Not Applicable

          h.   Audit committee financial expert - None

              The  General Partner of the Registrant is Dover Historic
Advisors (DoHA), a Pennsylvania general partnership.  The partners  of
DoHA are as follows:


                                  Term of
Name            Age  Position     Office      Period Served
----            ---  --------     -------     -------------

SWDHA, Inc.      --  Partner in  No fixed     Since May 1997
                     DoHA          term

EPK, Inc.        --  Partner in  No fixed     Since May 1997
                     DoHA          term


          c.   Identification of Certain Significant Employees.
Registrant has no  employees.   Its  administrative  and  operational
functions  are carried  out  by  a property management and partnership
administration firm engaged by the Registrant.

          d.   Family Relationships. None

          e.  Business  Experience.  DoHA is  a  general  partnership
formed  in  August 1985.  The General Partner is responsible  for  the
management  and  control of the Registrant's  affairs  and  will  have
general responsibility and authority in conducting its operations.

          On  May  13, 1997, SWDHA, Inc. and EPK, Inc. were  appointed
partners of DoHA.  Spencer Wertheimer, the President and Sole Director
of  SWDHA,  Inc.,  is  an attorney with extensive experience  in  real
estate activities and ventures.

         EPK, Inc. is a Delaware corporation formed for the purpose of
managing properties or interests therein.  EPK, Inc. is a wholly-owned
subsidiary  of D, LTD, an entity formed in 1985 to act as the  holding
company  for  various  corporations engaged  in  the  development  and
management of historically certified properties and conventional  real
estate  as  well  as  a provider of financial (non-banking)  services.
EPK, Inc. is a partner of DoHA.

         The officers and directors of EPK, Inc. are described below.

           Spencer  Wertheimer  was  appointed  on  May  13,  1997  as
President, Treasurer and Sole Director of EPK, Inc.  Mr. Wertheimer is
an  attorney  with extensive experience in real estate activities  and
ventures.

          Donna  M. Zanghi (age 46) was appointed on May 13,  1997  as
Vice  President  and  Secretary of EPK, Inc.   Ms.  Zanghi  previously
served  as  Secretary and Treasurer of DHP, Inc. (an affiliate  of  D,
Ltd.) since June 14, 1993 and as a Director and Secretary/Treasurer of
D,  LTD.   She was associated with DHP, Inc. and its affiliates  since
1984  except  for the period from December 1986 to June 1989  and  the
period from November 1, 1992 to June 14, 1993.

          Michele F. Rudoi (age 38) was appointed on May 13,  1997  as
Assistant  Secretary  of  EPK, Inc.  Ms. Rudoi  previously  served  as
Assistant  Secretary and Director of both D, LTD and DHP,  Inc.  since
January 27, 1993.


Item 11.  Executive Compensation
          ----------------------

           a. Cash Compensation - During 2003, Registrant has paid  no
cash compensation to DoHA, any partner therein or any person named  in
paragraph c. of Item 10.  Certain fees have been paid to DHP, Inc.  by
Registrant.

           b.  Compensation Pursuant to Plans - Registrant has no plan
pursuant to which compensation was paid or distributed during 2003, or
is  proposed  to be paid or distributed in the future,  to  DoHA,  any
partner  therein, or any person named in paragraph c. of  Item  10  of
this report.

           c. Other Compensation - No compensation not referred to  in
paragraph  a.  or  paragraph b. of this Item was paid  or  distributed
during  2003  to  DoHA, any partner therein, or any  person  named  in
paragraph c. of Item 10.

           d. Compensation of Directors - Registrant has no directors.

           e.   Termination  of  Employment  and  Change  of  Control
Arrangement - Registrant has no compensatory plan or arrangement, with
respect  to  any  individual, which results or will  result  from  the
resignation  or  retirement of any individual, or any  termination  of
such  individual's  employment with Registrant or  from  a  change  in
control   of   Registrant   or   a   change   in   such   individual's
responsibilities following such a change in control.


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

           a.  Security Ownership of Certain Beneficial  Owners  -  No
person is known to Registrant to be the beneficial owner of more  than
five percent of the issued and outstanding Units.

           b. Security Ownership of Management - None.

           c.  Changes  in Control - Registrant does not know  of  any
arrangement, the operation of which may at a subsequent date result in
a change in control of Registrant.


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

           Pursuant to Registrant's Amended and Restated Agreement  of
Limited   Partnership,  DoHA  is  entitled  to  10%  of   Registrant's
distributable cash from operations in each year.  There  was  no  such
share allocable to DoHA for fiscal years 1998 through 2003.

           On  June  30,  1992, DHP, Inc. assigned to D,  LTD  a  note
receivable, from FWP to the Partnership that had been assigned to DHP,
Inc. The note was in the stated amount of $55,951 and bore interest at
10%;  the note was due on June 30, 1997.  On January 13, 1994  D,  LTD
obtained  a judgment on this note in the amount of $73,184  in  Common
Pleas  Court  for  Philadelphia  County,  Pennsylvania.  The  judgment
accrues interest at 15%. On March 31, 2000 the note was sold. Interest
accrued  during 2000 was $22,620. The balance of the note at  December
31,  2003  was  $197,409. Interest accrued during 2003  and  2002  was
$30,023,  respectively. The balance of the note at December  31,  2003
was $197,409.

           On  June  30,  1992, DHP, Inc. assigned to D,  LTD  a  note
receivable from the Partnership in the stated amount of $404,046.  The
note bore interest at 10% and was due on June 30, 1997.  On March  23,
1993,  D,  LTD  obtained  a judgment on this note  in  the  amount  of
$454,299  in Common Pleas Court for Philadelphia County, Pennsylvania.
The  judgment accrues interest at 15%.  Interest accrued  during  2003
and  2002  was $226,896 and $212,948, respectively.  Payments  on  the
judgment  are  to  be  made from available cash flow  and  before  any
distribution  can be made to the Partnership's limited  partners.  The
balance of the note at December 31, 2003 was $1,617,665.

            Tindeco   Wharf  Partnership  accrued  to  Dover  Historic
Advisors,  an  affiliate of a partner, and Boston  Street  Properties,
Inc.,  a  former  partner, an annual investor service fee  of  $10,000
each. These fees were paid from available cash flow subsequent to  the
payment  of  the  operating deficit loan and current interest  on  the
development  fee note. Accrued investor service fees were $120,000  at
December 31, 2002. No fees were paid during 2003 or 2002.

           a.  Certain  Business Relationships  -  Registrant  has  no
directors.

           b.  Indebtedness  of Management - No executive  officer  or
significant  employee of Registrant, Registrant's general partner  (or
any  employee thereof), or any affiliate of any such person, is or has
at any time been indebted to Registrant.


Item 14.  Principal Accountant Fees and Services
          --------------------------------------

      The  following table presents the aggregate fees billed for each
of  the  services listed below for each of the Registrant's  last  two
fiscal years.


                                             2003        2002
                                             ----        ----
                                          (Unaudited)

Audit Fees (1).........................     $ 5,000      $5,000
Audit - Related Fees (2)...............        -           -
Tax Fees (3)...........................      16,500      16,500
All Other Fees (4).....................        -           -
                                            -------     -------
Total..................................     $21,500     $21,500
                                            =======     =======



 1.  Audit  Fees - Audit fees for the years ended  December  31,
     2003,  respectively, were accrued for professional services  to
     be  performed by Russell Bedford Mirchandani Stefanou, LLP  for
     the  audits  of  the consolidated financial statements  of  the
     Registrant,  statutory audits and subsidiary  audits,  issuance
     of  comfort letters related to financing transactions, and with
     review of documents filed with the SEC.

     Audit   fees   for   the   years  ended  December   31,   2002,
     respectively, were for professional services rendered by  Gross
     Kreger  &  Passio,  L.L.C. for the audits of  the  consolidated
     financial  statements of the Registrant, statutory  audits  and
     subsidiary  audits,  issuance of  comfort  letters  related  to
     financing  transactions,  and with review  of  documents  filed
     with the SEC.

 2.  Audit-Related Fees - Audit-related fees  as  of  the  years
     ended  December 31, 2003 and 2002, respectively, would  consist
     of   the  aggregate  fees  billed  for  assurance  and  related
     services that are reasonably related to the performance of  the
     audit   or  review  of  the  unaudited  consolidated  financial
     services  and  are  not  disclosed under  "Audit  Fees"  above;
     however,  no  such assurance or services were provided  in  the
     relevant periods.

 3.  Tax Fees - Tax fees as of the years ended December 31, 2003
     and  2002,  respectively,  were for  services  related  to  tax
     compliance, rendered by Brandywine Construction and  Management
     Inc.  including  preparation  of tax  returns  and  claims  for
     refund, tax planning and tax advice, including assistance  with
     and representation in tax audits.

 4.  All  Other  Fees  - All other fees as of  the  years  ended
     December 31, 2003 and 2002, respectively, would consist of  the
     aggregate  fees  billed  for products  and  services  described
     under  audit fees, audit - related fees and tax fees;  however,
     no  such  products and services were provided in  the  relevant
     periods.


<PAGE>

                                PART IV
                                -------

Item 15. (A) Exhibits, Financial Statement Schedules and Reports
         -------------------------------------------------------

          1. Financial Statements:

                            a.     Consolidated  Balance  Sheets   at
                 December 31, 2003 (Unaudited) and 2002.

                            b.   Consolidated Statements of Operations
                 for  the  Years Ended December 31, 2003  (Unaudited),
                 2002 and 2001.

                            c.   Consolidated Statements of Changes in
                 Partners'  Equity  for the Years Ended  December  31,
                 2003 (Unaudited), 2002 and 2001.

                            d.   Consolidated Statements of Cash Flows
                 for  the  Years Ended December 31, 2003  (Unaudited),
                 2002 and 2001.

                             e.     Notes  to  consolidated  financial
                 statements (Unaudited)


            2.   Financial statement schedules:

                             a.     Schedule  XI-  Real   Estate   and
                 Accumulated Depreciation (Unaudited)

                             b.   Notes to Schedule XI (Unaudited)


            3.   Exhibits:

              (a)  Exhibit Number   Document
                   --------------   --------

                    3               Registrant's  Amended   and
                                    Restated   Certificate   of
                                    Limited   Partnership   and
                                    Agreement    of     Limited
                                    Partnership,     previously
                                    filed  as part of Amendment
                                    No.   2   of   Registrant's
                                    Registration  Statement  on
                                    Form       S-11,        are
                                    incorporated   herein    by
                                    reference.

                  21                Subsidiaries     of     the
                                    Registrant

                  31 (Not attached) Certification pursuant to
                                    Rule 13a-14(a) / 15d -
                                    14(a)
                                    (To  be  filed with amended
                                    10-K/A)

                  32 (Not attached) Certification  pursuant  to
                                    18  U.S.C. Section 1350, as
                                    Adopted     Pursuant     to
                                    Section    906    of    the
                                    Sarbanes-Oxley Act of 2002
                                    (To  be  filed with Amended
                                    10-K/A)

              (c)  Exhibits:
                   See  Item  15(A)   (3)  above.

<PAGE>


                              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:  September 22, 2005  DIVERSIFIED HISTORIC INVESTORS II
       ------------------  ---------------------------------
                           By: Dover Historic Advisors, its general
                               partner

                              By: EPK, Inc., managing partner

                                  By:  /s/ Spencer Wertheimer
                                       ----------------------
                                       SPENCER WERTHEIMER
                                       President (principal executive
                                       officer, principal financial
                                       officer)


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


                         DIVERSIFIED HISTORIC INVESTORS II
                         ---------------------------------

                           By: Dover Historic Advisors, its general
                           partner

                              By: EPK, Inc., managing partner


Date:  September 22, 2005          By: /s/ Spencer Wertheimer
       ------------------              ----------------------
                                       SPENCER WERTHEIMER
                                       President (principal executive
                                       officer, principal financial
                                       officer)

<PAGE>