U.S. Securities and Exchange Commission
                         	Washington, D.C.  20549

                               	FORM 10-QSB
(Mark One)
[X]	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934

       For the quarterly period ended         March 31, 2000


[ ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

       For the transition period from                   to

       Commission file number          0-2864


                          DIVERSIFIED REALTY, INC.
      (Exact name of small business issuer as specified in its charter)

           Montana                                  81-0268110
(State or other jurisdiction of         (IRS Employer Identification No.)
incorporation or organization)

            128 Second Street South, Great Falls, Montana   59405
	                   (Address of principal executive offices)

                             (406) 727-2600
	                       (Issuer's telephone number)


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


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


             	APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
	                PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. Yes         No


                	APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:

          Class                           Outstanding at March 31, 2000
$.10 Par Value Common Stock                      5,370,927 Shares


Transitional Small Business Disclosure Format (Check One): Yes   ;  No   X

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                         	DIVERSIFIED REALTY, INC.

                                	INDEX

                            	MARCH 31, 2000




                                                            	Page Number
PART I

Condensed Financial Statements:

Balance Sheet -
  March 31, 2000	                                                  2

Statements of Income -
  Three Months Ended March 31, 2000 and 1999                       3

Statements of Cash Flows -
  Three Months Ended March 31, 2000 and 1999                       4

Notes to Financial Statements                                      5

Management's Discussion and Analysis of the
      Statements of Income                                         6


PART II

  Other Information	                                               7

  Signatures		                                                     8

                                    1
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                         	DIVERSIFIED REALTY, INC.

                              	BALANCE SHEET

                           	AS OF MARCH 31, 2000





     ASSETS
Current Assets
  Cash                                                            $ 2,207,467
  Due From Parent Company                                              82,667

     Total Current Assets                                           2,290,134


Property, Plant and Equipment, Net                                    224,063

            TOTAL ASSETS                                          $ 2,514,197


    LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
  Accounts Payable and Accrued Expenses                           $    32,168

  Income Taxes Payable                                                 14,668

    Total Current Liabilities                                          48,636


Stockholders' Equity
  Common Stock - $.10 Par Value,
   11,000,000 shares authorized,
   5,375,000 shares issued                                            537,500
  Additional Paid-In-Capital                                        1,929,408
  Retained Earnings                                                     1,670
  Cost of Common Stock in Treasury                                     (1,217)

   Total Stockholders' Equity                                       2,467,361

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                        $ 2,514,197



                      	See Notes to Financial Statements

                                     2
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                         	DIVERSIFIED REALTY, INC.

                         	 STATEMENTS OF INCOME


                                                 For The Three Months Ended
                                                          March 31,
                                                      2000            1999

Operating Revenues                               $   53,079      $   48,515

Operating Expenses                                   18,110          17,099

                                                     34,969          31,416

Provision for Income Taxes                          (14,500)        (13,000)

Net Income                                       $   20,469       $  18,416





                    	See Notes to Financial Statements

                                   3
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                       	DIVERSIFIED REALTY, INC.

                       	STATEMENTS OF CASH FLOWS

                                                  For The Three Months Ended
                                                          March 31,
                                                       2000           1999
CASH FLOWS FROM OPERATING ACTIVITIES

Net Cash Provided By
  Operating Activities                            $   42,063     $   39,087



CASH FLOWS FROM FINANCING ACTIVITIES

Cash Purchases of Treasury Stock                          (7)          (578)

Net Cash Advances
  From (To) Parent Company                           (55,509)           600

Net Cash Provided (Used) By
  Financing Activities                               (55,516)            22

NET INCREASE (DECREASE) IN CASH                      (13,453)        39,109

CASH - BEGINNING OF PERIOD                         2,220,920      2,132,849

CASH - END OF PERIOD                              $2,207,467     $2,171,958


                     	See Notes to Financial Statements

                                   4
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                          DIVERSIFIED REALTY, INC.

                      	NOTES TO FINANCIAL STATEMENTS

                             	MARCH 31, 2000


In the opinion of management, all adjustments necessary (consisting of only
normal recurring accruals) have been made to the unaudited financial
statements to present fairly the financial position as of March 31, 2000 and
the results of the Company's operations and cash flows for the three months
ended March 31, 2000 and 1999.

The results of operations for the three months ended March 31, 2000 and 1999
are not necessarily indicative of the results to be expected for the full
year.

Parent -

M Corp, Great Falls, Montana owns approximately 95% of the outstanding shares
of the Company.

                                   5
<PAGE>


                        	DIVERSIFIED REALTY, INC.

                   	MANAGEMENT'S DISCUSSION AND ANALYSIS
	                       OF THE STATEMENTS OF INCOME

                            	MARCH 31, 2000

A summary of the period to period changes in items included in the statements
of income is shown below.





                                                     COMPARISON OF
                                                     Three Months
                                                         Ended
                                                       March 31,
                                                     2000 and 1999

                                                       Increases
                                                      (Decreases)

Revenues                                           $  4,564     9.4%

Operating Expenses                                 $  1,011     5.9%

Net Income                                         $  2,053    11.1%




Revenues increased $4,564 (9.4%) in the first quarter of 2000 as compared
with the first quarter of 1999 due primarily to an increase in interest
revenues ($6,690; 28.7%) partially offset by a decrease in rental revenues
($2,174, 10.8%). Interest revenues increased primarily due to an increase
in interest-earning deposits maintained by the Company and an increase in
interest rates earned by the company. Operating expenses increased $1,011
(5.9%) in the first quarter of 2000 as compared with the first quarter of
1999. The increase in operating expenses during the first quarter of 2000 as
compared with the first quarter of 1999 was due primarily to increases in
operating expenses. The provision for income tax expense increased
$1,500, 11.5%, in the first quarter of 2000 as compared with the first
quarter of 1999 due primarily to the increase in pretax income.





                                    6
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                        	DIVERSIFIED REALTY, INC.

                                	PART II

                           	OTHER INFORMATION

                             	MARCH 31, 2000


ITEM 1     LEGAL PROCEEDINGS

           None

ITEM 2     CHANGES IN SECURITIES AND USE OF PROCEEDS

           None

ITEM 3     DEFAULTS UPON SENIOR SECURITIES

           None

ITEM 4     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

           None

ITEM 5     OTHER INFORMATION

           None

ITEM 6     EXHIBITS AND REPORTS ON FORM 8-K

           None


                                   7

<PAGE>
                               	SIGNATURES




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





                          	 DIVERSIFIED REALTY, INC.
	                                Registrant



Date:  April 28, 2000                  s/D. Elwess
                                         D. Elwess
                                         Assistant
                                         Secretary-Treasurer


Date:  April 28, 2000                  s/Jerry K. Mohland
                                         Jerry K. Mohland,
                                         Accountant



                                  8

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