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 [FEE REQUIRED]

For the fiscal year ended            December 31, 1997
                          --------------------------------------------

[   ]  TRANSITION  REPORT  PURSUANT TO SECTION  13  OR  15(D)  OF  THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from                  to
                               ----------------    -------------------

Commission file                 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.)

       SUITE 500, 1521 LOCUST STREET, PHILADELPHIA,  PA 19102
----------------------------------------------------------------------
(Address of principal executive offices)                 (Zip Code)

Registrant's telephone number, including area code  (215) 735-5001

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 _X    No

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. [   ]

Aggregate  market  value  of  Units  held  by  non-affiliates  of  the
Registrant: Not Applicable*

*  Securities  not  quoted  in  any  trading  market  to  Registrant's
knowledge.
<PAGE>
                                PART I

Item 1.        Business

               a.   General Development of Business

                Diversified Historic Investors II ("Registrant") is  a
limited  partnership  formed in 1984 under  the  Pennsylvania  Uniform
Limited  Partnership  Act.  As of December 31,  1997,  Registrant  had
outstanding  20,593.3  units  of  limited  partnership  interest  (the
"Units").

                Registrant  is presently in its operating  stage.   It
originally  owned four properties or interests therein.  Its  interest
in  one property has been lost through foreclosure.  It currently owns
three properties or interests therein.  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 Conditions and Results of Operations.

               b.   Financial Information about Industry Segments

                    The Registrant operates in one industry segment.

               c.   Narrative Description of Business

                     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.

                      Since   the  Registrant's  inception,  all   the
properties  acquired  either  by  the Registrant,  or  the  subsidiary
partnerships in which it has an interest, have been rehabilitated  and
certified  as  historic  structures  and  have  received  the  related
investment  tax  credit. Two of the properties  are  held  for  rental
operations and one is operated as a hotel.  As of the date  hereof  it
is  anticipated that all the properties will continue to be  held  for
these  purposes.   At  such  time as real  property  values  begin  to
increase,  the  Registrant will re-evaluate  its  investment  strategy
regarding the properties.

                     As  of December 31, 1997, Registrant owned  three
properties  (or  interests therein), located  in  Pennsylvania  (one),
Maryland  (one),  and Georgia (one).  In total, the  three  properties
contain   269   apartment  units,  73,366  square   feet   ("sf")   of
commercial/retail space and 44 hotel rooms.  As of December 31,  1997,
254  of  the apartment units were under lease at monthly rental  rates
ranging  from $595 to $1,275 and approximately 71,353 sf of commercial
space was under lease at annual rental rates ranging from $5.33 per sf
to  $25.82  per  sf.   Throughout 1997, all of the  hotel  rooms  were
available  for  use.   During 1997, the hotel  maintained  an  average
nightly room rate of $106.06 and average occupancy of 74%.  Rental  of
the  apartments and commercial space is not expected to  be  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.  For further discussion of the properties,  see
Item 2. Properties.

                     The Registrant is affected by and subject to  the
general competitive conditions of the residential and commercial  real
estate industry.  As a result of the overbuilding that occurred in the
1980's,  the  competition in the local markets where the  Registrant's
properties  are  located  is  generally  strong.   As  a  result,  the
Registrant  is  forced  to keep its rent levels competitively  low  in
order  to maintain moderate to high occupancy levels.  One residential
property  is located in the suburbs of Philadelphia and the  other  is
located in the Historic District of the Inner Harbor in Baltimore.  In
both  locations the competition for tenants remains stiff and  several
similar buildings exist.  The apartment market remains stable and  new
construction  remains virtually nonexistent although the  availability
of  favorable home financing has placed pressure on the rental  tenant
base.

                     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.

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

                    See Item 8. Financial Statements and Supplementary
Data.

Item 2.        Properties

                 As   of  the  date  hereof,  Registrant  owned  three
properties,  or  interests  therein.  A summary  description  of  each
property held at December 31, 1997 is given below.

                a.    Tindeco Wharf - consists of 240 apartment  units
and approximately 41,307 sf of commercial space located at 2809 Boston
Street  in  the  Fell's Point-Canton Historic District  of  Baltimore,
Maryland.   In  October  1985, Registrant was  admitted  with  an  85%
interest,  to  Tindeco Wharf Partnership ("TWP"), a  Maryland  general
partnership,  for  a  cash  contribution  of  $7,271,300.   Registrant
subsequently  increased  its ownership  interest  in  TWP  to  90%  by
purchasing  an additional 5% interest for $262,500.  TWP acquired  and
rehabilitated this Property at an approximate cost of $28,600,000 ($66
per  sf), funded by the equity contribution and mortgage financing  of
$21,869,600.  The mortgage financing is comprised of mortgage  revenue
bonds  and  a  Urban  Development Action Grant ("UDAG")  loan.   Other
financing  includes  a  loan  from the  developer  of  $2,300,000  and
operating deficit loans from both the property manager and D,  LTD  in
the  original  amounts  of  $300,000 and $200,000  respectively.   The
excess  of  equity  and mortgage financing over  the  acquisition  and
rehabilitation  costs was utilized to provide various escrow  deposits
and required reserves.

                     The  City  of  Baltimore issued mortgage  revenue
refunding bonds, Series 1992, (GNMA collateralized) for the purpose of
providing permanent financing for TWP. The bonds are backed by a  HUD-
insured  mortgage  ("the note").  The note, held by  GNMA  as  lender,
bears  interest at a rate of 9.75% per annum and is secured by a first
mortgage  on  the  property.  Principal and  interest  is  payable  in
monthly  installments  of $143,801.  The note matures  December  2028.
The  refunding issue bears interest at an average rate of 6.62%.   The
difference in the interest on the mortgage and the refunding bonds  is
returned to the Partnership for operations.

                    The principal balance of the bonds was $16,826,402
at December 31, 1997.  The bonds are comprised of both serial and term
bonds.  The serial bonds bear interest rates ranging from 4.6% to 6.1%
and  mature semi-annually from June 1998 through December  2006.   The
term bonds bear interest at rates ranging from 6.5% to 6.7% and mature
in  2012,  2024,  and 2028.  The UDAG loan (which  has  a  balance  of
$4,953,471  at  December 31, 1997) bore interest at 4% through  August
1994  and  at  7  1/2% thereafter.  This loan is  due  in  2004.   The
developer's  loan  (principal balance of $2,300,000  at  December  31,
1997) and the operating deficit loans (aggregate principal balance  of
$14,104 at December 31, 1997) all bear interest at 12% and are payable
on  a  pro-rata  basis  out  of  cash flow  from  the  property.   The
developer's  loan is due in 2005, or upon earlier sale or  refinancing
of  the property.  The operating deficit loan is due in 2007, or  upon
earlier sale or refinancing of the property.

                     The  property is managed by BCMI.  As of December
31,  1997, 229 apartment units (95%) and 41,307 sf of commercial space
(100%)  were  under lease.  Monthly rental rates range  from  $595  to
$1,275  for apartments and annual rental rates ranging from  $5.33  to
$19.47  per  sf  for  commercial space.  All  residential  leases  are
renewable,  one-year leases.  The occupancy for the residential  units
for  the  previous four years was 95% for 1996, 97% for 1995, 95%  for
1994   and   92%  for  1993.   The  monthly  rental  range  has   been
approximately  the same since 1993.  The occupancy for the  commercial
space  for  the  previous four years has been 100% for 1996,  85%  for
1995,  93% for 1994 and 93% for 1993.  The range for annual rents  has
been $5.33 to $19.47 per sf for 1996, $5.33 to $18.54 per sf for 1995,
$10.30 to $22.39 per sf for 1994 and $5.88 to $21.36 per sf for  1993.
There  are  four tenants who each occupy ten percent or  more  of  the
rentable  square  footage.   They operate  principally  as  a  medical
office, restaurant, a fitness club and a travel agency.

                     The following is a table showing commercial lease
expirations at Tindeco Wharf for the next five years.

                                                 Total annual       % of gross
              Number of        Total sf of      rental covered     annual rental
 Years     Leases expiring  expiring leases  by expiring leases  from property
              
 1998            0                    0                   0              0%
 1999            3                8,199             137,941              4%
 2000            2                5,419              72,769              2%
 2001            2                6,139              89,016              2%
 2002            0                    0                   0              0%
 Thereafter      2               21,550             207,023              6%

                     For tax purposes, this property has a federal tax
basis of $28,739,044 and is depreciated using the straight-line method
with  a  useful life of 27.5 years.  The annual real estate taxes  are
$420,795 which is based on an assessed value of $17,359,517, taxed  at
a  rate of $6.06 per $100.  It is the opinion of the management of the
Registrant that the property is adequately covered by insurance.

                b.    River Street Inn/Factor's Walk - 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, 1997 was $5,800,000 and
are due in 2015.

                     The  property is managed by BCMI.  As of December
31,  1997, 21,745 sf of the commercial space (96%) was under lease  at
annual rental rates ranging from $7.11 to $25.82 per sf.  The Property
also maintains 44 operating hotel rooms at an average nightly rate  of
$106.06; average occupancy for 1997 was approximately 74%.  The  hotel
occupancy rate for the previous four years was 77% for 1996,  78%  for
1995,  74%  for  1994 and 71% for 1993.  The average room  rates  were
$100.92  for  1996, $94.54 for 1995, $90.18 for 1994  and  $86.59  for
1993.   The  occupancy for the commercial space was 97% for 1996,  83%
for  1995, 92% for 1994 and 83% for 1993.  The range for annual  rents
was  $5.53 to $25.27 per sf for 1996, $5.53 to $24.53 per sf for 1995,
$1.58  to $23.12 per sf for 1994 and $1.56 to $23.16 per sf for  1993.
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
             Number of        Total sf of       rental covered   annual rental
 Years     Leases expiring  expiring leases  by expiring leases  from property
             
 1998            3                7,233              74,405            6%
 1999            0                    0                   0            0%
 2000            3                3,096              52,594            4%
 2001            5                5,834              88,340            7%
 2002            1                  400               5,700           <1%
 Thereafter      1                4,072              46,848            4%

                     Although  no firm commitment has been  made,  the
Registrant anticipates that the leases which are scheduled  to  expire
in  1998  will  be extended due to the long-standing  tenancy  of  the
merchants.

                     For tax purposes, this property has a federal tax
basis  of $9,520,936 and is depreciated using the straight-line method
with  a  useful life of 27.5 years.  The annual real estate taxes  are
$67,506 which is based on an assessed value of $3,343,870, taxed at  a
rate  of $3.40 per $100.  It is the opinion of the management  of  the
Registrant that the property is adequately covered by insurance.

                c.    Washington  Square - consists  of  9,500  sf  of
commercial  space and 29 residential units located at  320  N.  Church
Street,  West  Chester,  Pennsylvania.  In  October  1985,  Registrant
acquired  and rehabilitated the Property for $2,750,000 ($79  per  sf;
such  amount  is  exclusive of $170,883 of capitalized  fees  incurred
which  were  funded  by Registrant's equity contributions),  including
mortgage  financing  of  $1,600,000.   The  mortgage  loan  (principal
balance  of  $1,018,188 at December 31, 1997) bears  interest  at  the
Federal  Reserve  Discount rate plus 2% with a minimum  of  7%  and  a
maximum of 15% (7% at December 31, 1997) and is due in October 2005.

                    The property is managed by an independent property
management  firm.   As of December 31, 1997, 8,301  sf  of  commercial
space  (87%) was rented at annual rates ranging from $8.00 per  sf  to
$13.00  per  sf.   At  December 31, 1997, 25 of the residential  units
(86%)  were under lease at monthly rental rates ranging from  $650  to
$1,050.   All residential leases are renewable, one-year leases.   The
occupancy  for the residential units for the previous four  years  was
100%  for  1996,  97% for 1995, 98% for 1994 and 92%  for  1993.   The
monthly rental range has been approximately the same since 1993.   The
occupancy for the commercial space for the previous four years was 86%
for  1996,  97% for 1995, 100% for 1994 and 100% for 1993.  The  range
for  annual rents has been $6.00 to $13.00 per sf for 1996,  $6.00  to
$12.00  per sf for 1995, $6.00 to $13.23 per sf for 1994 and $6.12  to
$12.12 per sf for 1993.

                     The following is a table showing commercial lease
expirations at Washington Square for the next five years.

                                               Total annual       % of gross
             Number of       Total sf of      rental covered    annual rental
 Years    leases expiring  expiring leases  by expiring leases  from property 
 
 1998           2               2,332              24,236             7%
 1999           0                   0                   0             0%
 2000           0                   0                   0             0%
 2001           2               5,969              51,000            15%
 2002           0                   0                   0             0%

                     There  are two leases which expire in 1998.   The
tenant  in  the first lease terminated the lease effective  April  30,
1998.   The  space is in the process of being leased, along  with  the
current  vacant space, to one of the current tenants in the  building.
Although  no firm commitment has been made, the Registrant anticipates
that  the  second lease which is scheduled to expire in 1998  will  be
extended for at least an additional year, due to the availability of a
renewal option under the lease.

                     For  tax  purposes of depreciation, this property
has  federal  tax  basis  of $2,868,054 and is depreciated  using  the
straight-line  method with a useful life of 27.5  years.   The  annual
real  estate taxes are $29,059 which is based on an assessed value  of
$119,610  taxed at a rate of $24.295 per $100.  It is the  opinion  of
the  management  of  the  Registrant that the property  is  adequately
covered by insurance.

Item 3.        Legal Proceedings

                a.    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.

                                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.   Registrant  does not anticipate  any  such  market  will
develop.    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 92 Units of  record
were sold or exchanged in 1997.

                b.    As  of December 31, 1997, there are 2,565 record
holders of Units.

                c.   Registrant did not declare any cash dividends  in
1997 or 1996.

Item 6.        Selected Financial Data

                The following selected financial data are for the five
years ended December 31, 1997.  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.

                        1997        1996        1995        1994        1993
                 
 Rental income      $ 4,463,462 $ 4,303,963 $ 4,103,099 $ 3,950,879 $ 3,763,979
 Hotel revenues       1,282,525   1,282,662   1,230,057   1,108,942   1,227,925
 Interest income         29,639      18,654      28,988       9,219      10,300
 Net loss            (3,457,494) (2,262,184) (2,426,416) (2,869,321) (4,825,243)
 Net loss per Unit      (166.22)    (108.75)    (116.65)    (137.94)    (231.97)
 Total assets (net of27,143,753  28,633,916  29,418,648  30,742,909  31,466,054
 depreciation and
 amortization)
 Debt obligations    32,712,165  33,087,679  33,161,299  33,527,230  33,547,443

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

               (1)  Liquidity

                     At  December  31, 1997, Registrant  had  cash  of
$71,023.   Cash  generated from operations is used primarily  to  fund
operating  expenses  and  debt service.  If cash  flow  proves  to  be
insufficient,   the   Registrant  will  attempt  to   negotiate   loan
modifications with the various lenders in order to remain  current  on
all obligations and to defer administrative costs.  The Registrant  is
not aware of any additional sources of liquidity.

                    As of December 31, 1997, Registrant had restricted
cash  of  $1,293,871 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.

                     In  recent  years  the  Registrant  has  realized
significant losses, including the foreclosure of one property, due  to
the  properties'  inability to generate sufficient cash  flow  to  pay
their  operating expenses and debt service.  At the present time,  all
three  remaining  properties are able to pay their operating  expenses
and debt service but it is unlikely that any cash will be available to
the Registrant to pay its general and administrative expenses.  In the
legal  proceeding  involving the Morrison Clark Inn (See  "Results  of
Operations" below in this Item 7), if Capital Bank executes  upon  its
$1,800,000 judgment with respect to the Registrant, it is expected  to
have  significant  adverse  impact on the Registrant  since  there  is
insufficient  available cash to pay the judgment.  Any such  execution
could   result  in  a  forced  sale  of  the  Registrant's   remaining
properties.   However, the Registrant has in the past,  been  able  to
obtain  forbearance on execution for several years upon payment  of  a
$20,000 fee to the judgment creditor and believes it may be able to do
so  when the current forbearance period ends in July 1998.   See  Part
II. Item 7. Morrison Clark Inn.

                     It  is the Registrant's intention to continue  to
hold  the  properties until they can no longer meet the  debt  service
requirements and the properties are foreclosed, or the market value of
the  properties increases to a point where they can be sold at a price
which  is  sufficient to repay the underlying indebtedness  (principal
plus accrued interest).

               (2)  Capital Resources

                     Due  to the relatively recent rehabilitations  of
the   properties,  any  capital  expenditures  needed  are   generally
replacement  items  and  are funded out of  cash  from  operations  or
replacement  reserves, if any.  The Registrant is  not  aware  of  any
factors  which would cause historical capital expenditures levels  not
to   be   indicative  of  capital  requirements  in  the  future   and
accordingly,  does  not believe that it will have to  commit  material
resources to capital investment for the foreseeable future.

               (3)  Results of Operations

                     During  1997, Registrant incurred a net  loss  of
$3,457,494 ($166.22 per limited partnership unit), compared to  a  net
loss of $2,262,184 ($108.75 per limited partnership unit), in 1996 and
a  net  loss of $2,426,416 ($116.65 per limited partnership unit),  in
1995.

                     Rental and hotel income increased from $5,333,156
in 1995 to $5,586,625 in 1996 and to $5,745,987 in 1997.  The increase
from  1996 to 1997 was the result of an increase in residential rental
income due to increases in the average rental rates at both Washington
Square  and Tindeco Wharf and an increase in the average rental  rates
in  the commercial space at Factor's Walk.  The increase from 1995  to
1996 was the result of an increase in the average rental rates of  the
residential  units, and an increase in the average  occupancy  of  the
commercial  space at Tindeco Wharf.  The increase in hotel income  was
due  to an increase in the average room rates at Factor's Walk ($94.54
to $100.92).

                     Interest income decreased from $28,988 in 1995 to
$18,654  in 1996 and increased to $29,639 in 1997.  The decrease  from
1995  to  1996  and the increase from 1996 to 1997 was the  result  of
changes  in  the balances of the restricted cash which  generated  the
interest income.

                      Rental   operations  expenses   increased   from
$1,654,247 in 1995 to $1,684,209 in 1996 to $1,858,157 in  1997.   The
increase from 1996 to 1997 was due to an increase in legal expense  at
Tindeco Wharf as a result of legal fees incurred in connection with  a
review of the underlying loan documents partially offset by a decrease
in  utilities expense due to a decrease in the average consumption  at
both  Tindeco Wharf and Washington Square.  The increase from 1995  to
1996  is the result of higher legal fees at Tindeco Wharf due to  fees
incurred  in  connection with the approval by HUD of a new  management
agreement  and higher maintenance and utilities expense at  Washington
Square due to the inclement weather experienced in the winter of  1996
partially offset by a decrease in maintenance expense at Tindeco Wharf
due to the renegotiation of the cable television contract.

                    Hotel operations expense increased from $1,037,365
in  1995  to  $1,317,387 in 1996 to $1,385,410 in 1997.  The  increase
from  1996  to  1997  is the result of an increase  in  administration
expenses  partially  offset by a decrease in rent and  management  fee
expense.  Administrative expense increased due to a misapplication  of
payments  on  a  note  payable where the  payments  should  have  been
classified as administrative expenses.  Rent expense decreased due  to
the  assignment  of a lease with respect to the adjacent  property  to
another   entity  which  will  develop  that  property  (see   below).
Management  fee  expense decreased due to a change in  the  management
contract which allows for a management fee based on a fixed percentage
of  revenues.  The increase from 1995 to 1996 is due to an increase in
rent  expense and management fees.  Rent expense increased due to  the
execution of a lease between FWP and the building adjacent to it.  FWP
had  entered into the lease with the intention of expanding the  River
Street  Inn but as set forth above, thereafter the lease was  assigned
to  another  party  for development of the property, while  management
fees increased due to the increase in hotel income.

                    Interest expense decreased from $3,231,126 in 1995
to  $3,198,970  in  1996  and increased to $3,975,462  in  1997.   The
increase  from  1996  to  1997 is due to an increase  in  the  average
interest  rate at Factor's Walk combined with an increase in  interest
expense  at Tindeco Wharf due to the accrual of interest on  a  higher
average  balance on the second mortgage.  The decrease  from  1995  to
1996  is  due  to a decrease in the average interest rate at  Factor's
Walk  partially offset by an increase in interest expense  at  Tindeco
Wharf  due  to the accrual of interest on a higher average balance  on
the second mortgage.

                      Depreciation  and  amortization  increased  from
$1,667,832 in 1995 to $1,707,209 in 1996 to $1,714,090 in  1997.   The
increase from 1996 to 1997 is due to an increase at Tindeco Wharf  due
to  the depreciation of fixed asset additions.  The increase from 1995
to  1996 is the result of the amortization at the River Street Inn  of
leasing  commissions incurred in 1996 as a result of the extension  of
several  of  the  commercial tenant leases and the  execution  of  the
adjacent building lease in the first quarter of 1996.

                    In 1997, losses of $2,711,000 were incurred at the
Registrant's  three  properties compared to  $1,772,000  in  1996  and
$1,924,000  in  1995.   A discussion of property operations/activities
follows:

                     In  1997,  Tindeco  Wharf  sustained  a  loss  of
$1,642,000  including  $1,175,000  of  depreciation  and  amortization
expense and $708,000 of deferred interest (reflecting interest accrued
but  not paid on the developer's and operating deficit loans) compared
to  a  loss  of  $1,544,000 including $1,162,000 of  depreciation  and
amortization expense and $846,000 of deferred interest in 1996  and  a
loss   of   $1,550,000,  including  $1,151,000  of  depreciation   and
amortization expense and $874,000 of deferred interest in  1995.   The
increase in the loss from 1996 to 1997 is the result of an increase in
interest,  depreciation,  and legal expense  partially  offset  by  an
increase  in  residential rental income and interest  income  combined
with  a decrease in utilities expense due to a decrease in the average
consumption.   Interest expense increased due to an  increase  in  the
principal  balance  upon  which interest is calculated.   Depreciation
expense increased due to the depreciation of fixed asset additions and
legal  fees increased due to fees incurred in connection with a review
of the underlying loan documents.  Residential rental income increased
due  to  an  increase in the average rental rates and interest  income
increased due an increase in the balance of the restricted cash  which
generates the interest income.  The decrease in the loss from 1995  to
1996  is  due  to  an  increase in rental income  and  a  decrease  in
maintenance  expense  partially offset  by  an  increase  in  interest
expense  and  legal  fees.   The  increase  in  rental  income  is   a
combination  of  an  increase  in the  average  rental  rates  of  the
residential  units  and an increase in the average  occupancy  of  the
commercial   space.   Maintenance  expense  decreased   due   to   the
renegotiation  of  the  cable television contract.   Interest  expense
increased  due to the accrual of interest on a higher balance  on  the
second  mortgage  and  legal fees increased due to  fees  incurred  in
connection with the approval by HUD of a new management agreement.

                     On June 30, 1992, DHP, Inc. assigned to D, LTD  a
note receivable, from TWP to the Registrant, that had been assigned to
DHP,  Inc.   The  note was in the stated amount of $261,600  and  bore
interest at 10%; the note was due on June 30, 1997.  On March 23, 1993
D,  LTD  obtained  a judgment on this note in Common Pleas  Court  for
Philadelphia  County, Pennsylvania.  The judgment  provided  that  all
future distributions, in any form, due to the Registrant on account of
its  ownership interest in TWP, be immediately delivered  to  D,  LTD.
Interest  accrued  during 1995 was $2,864.  This note  was  repaid  in
1995.

                     In  1997,  River Street Inn sustained a  loss  of
$1,038,000 including $372,000 of depreciation and amortization expense
compared to a loss of $199,000 including $381,000 of depreciation  and
amortization  expense  in  1996  and a  loss  of  $354,000,  including
$355,000  of  depreciation expense in 1995.  The increased  loss  from
1996   to  1997  is  the  result  of  an  increase  in  interest   and
administration  expenses partially offset by  an  increase  in  rental
income  and  a decrease in rent and management fee expense.   Interest
expense  increased  due  to  an increase  in  the  interest  rate  and
administrative expense increased due to a misapplication  of  payments
on  a  note payable where the payments should have been classified  as
administrative expenses.  Rental income increased due to  an  increase
in  the  average rental rates in the commercial space  of  the  hotel.
Rent  expense decreased due to the assignment of a lease with  respect
to  the  adjacent property to another entity which will  develop  that
property  (see  below).  Management fee expense  decreased  due  to  a
change  in  the management contract which allows for a management  fee
based on a fixed percentage of revenues.  The decreased loss from 1995
to 1996 is due to an increase in hotel and extraordinary income and  a
decrease in interest expense partially offset by an increase in  rent,
management fees, and amortization expense.  Hotel income increased due
to  an  increase  in the average room rates ($94.54 to $100.92)  while
extraordinary  income  increased due to  the  recognition  of  a  gain
resulting from the settlement agreement with J. A. Jones (see  below).
Interest  expense decreased due to a decrease in the average  interest
rate.   Rent expense increased due to the execution of a lease between
FWP and the building adjacent to it, as referred to above.  Management
fees  increased due to the increase in hotel income while amortization
expense  increased  due  to the amortization  of  leasing  commissions
incurred  in  1996  as a result of the extension  of  several  of  the
commercial  tenant  leases and the execution of the adjacent  building
lease in the first quarter of 1996.

                     FWP  is  involved  in  one  legal  proceeding  as
discussed below:

                      J.   A.  Jones  Construction  Company  ("Jones")
contracted  with  FWP  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  and
this appeal 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, 6.5% at December 31, 1997) and  is  due  on
October 1, 2011.  Interest is due quarterly with the first payment due
September 1, 1997.  The Registrant recognized a gain in the amount  of
$238,312 for the excess of the amount of the judgment over the  amount
stipulated in the settlement agreement in 1996.

                     On June 30, 1992, DHP, Inc. assigned to D, LTD  a
note receivable, from FWP to the Registrant, 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%.  The judgment  provided  that  all
future distributions, in any form, due to the Registrant on account of
its  ownership interest in FWP, be immediately delivered  to  D,  LTD.
Interest accrued during 1997 was $18,307. The balance of the  note  at
December 31, 1997 was $132,186.

                     In  1997, Washington Square sustained a  loss  of
$31,000 including $113,000 of depreciation expense compared to a  loss
of  $29,000 including $110,000 of depreciation expense in 1996  and  a
loss  of  $20,000 including $110,000 of depreciation expense in  1995.
The  increase in the loss from 1996 to 1997 is due to an  increase  in
interest expense partially offset by an increase in rental income  due
to an increase in the average rental rates and a decrease in utilities
expense.   Interest expense increased due to default interest incurred
on  the  mortgage while utilities expense decreased due  to  the  mild
weather experienced in 1997.  The increased loss from 1995 to 1996  is
due  to  an  increase in rental operations expense such as maintenance
and utilities expense resulting from the inclement weather experienced
in the winter of 1996.

                     On June 30, 1992, DHP, Inc. assigned to D, LTD  a
note  receivable from the Registrant 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  1997
and  1996  was  $408,037 and $44,034, respectively.  Payments  on  the
judgment  are  to  be  made from available cash flow  and  before  any
distribution  can be made to the Registrant's limited  partners.   The
balance of the note at December 31, 1997 is $938,338.

                      In   February  1993,  one  of  the  Registrant's
properties, the Morrison-Clark Inn, was foreclosed by the lender.   In
November 1993, the lender obtained a judgment in the matter of Capital
Bank,  N.A.  v.  Diversified Historic Investors II in  the  amount  of
$1,800,000.  In return for payment of $20,000, Capital Bank has agreed
to  forbear  from  executing  on  the judgment  until  July  6,  1998.
Although  there  have been no discussions, the Registrant  anticipates
that  it  will be able to extend the forbearance agreement for several
more years for similar consideration.

Item 8.        Financial Statements and Supplementary Data

               Registrant is not required to furnish the supplementary
financial information referred to in Item 302 of Regulations S-K.
<PAGE>
                     Independent Auditor's Report

To the Partners of
Diversified Historic Investors II

We  have  audited  the  accompanying consolidated  balance  sheets  of
Diversified Historic Investors II (a Pennsylvania Limited Partnership)
and  its subsidiaries as of December 31, 1997 and 1996 and the related
consolidated statements of operations, changes in partners' equity and
cash  flows  for  the years ended December 31, 1997,  1996  and  1995.
These consolidated financial statements are the responsibility of  the
Partnership's management.  Our responsibility is to express an opinion
on  these  consolidated financial statements based on our audits.   We
did  not  audit the financial statements of Tindeco Wharf Partnership,
which  statements reflect total assets of $19,292,293 and  $20,325,765
as of December 31, 1997 and 1996, and total revenues of $3,751,874 and
$3,649,724,  respectively for the years then ended.  Those  statements
were audited by other auditors whose report has been furnished to  us,
and  our  opinion, insofar as it relates to the amounts  included  for
Tindeco Wharf Partnership, is based solely on the report of the  other
auditors.

We conducted our audits in accordance with generally accepted auditing
standards.   Those  standards require that we  plan  and  perform  the
audits  to  obtain reasonable assurance about whether the consolidated
financial  statements  are free of material  misstatement.   An  audit
includes  examining, on a test basis, evidence supporting the  amounts
and  disclosures in the consolidated financial statements.   An  audit
also includes assessing the accounting principles used and significant
estimates  made  by  management, as well  as  evaluating  the  overall
financial statement presentation.  We believe that our audits and  the
report of other auditors provides a reasonable basis for our opinion.

In  our  opinion,  based on our audits and the  report  of  the  other
auditors,  the  consolidated financial statements  referred  to  above
presents  fairly, in all material respects, the financial position  of
Diversified Historic Investors II and subsidiaries as of December  31,
1997  and  1996,  and the results of their operations and  their  cash
flows  for  the  years  ended December 31,  1997,  1996  and  1995  in
conformity with generally accepted accounting principles.

Our  audits  were made for the purpose of forming an  opinion  on  the
basic  financial  statements taken as a whole.  The Schedule  of  Real
Estate  and Accumulated Depreciation on page 29 is presented  for  the
purposes  of  additional analysis and is not a required  part  of  the
basic  financial statements.  Such information has been  subjected  to
the  auditing  procedures applied in the audit of the basic  financial
statements  and,  in  our opinion, is fairly stated  in  all  material
respects  in  relation to the basic financial statements  taken  as  a
whole.


Gross, Kreger & Passio
Philadelphia, Pennsylvania
March 18, 1998
<PAGE>
                     Independent Auditor's Report

To the Partners of
Tindeco Wharf Partnership

We  have  audited  the  accompanying consolidated  balance  sheets  of
Tindeco  Wharf Partnership as of December 31, 1997 and 1996,  and  the
related statements of operations, partners' deficit and cash flows for
the   years   then   ended.   These  financial  statements   are   the
responsibility of the Partnership's management.  Our responsibility is
to  express  an  opinion on these financial statements  based  on  our
audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit
to  obtain reasonable assurance about whether the financial statements
are free of material misstatement.  An audit includes examining, on  a
test  basis,  evidence supporting the amounts and disclosures  in  the
financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as  well
as  evaluating  the  overall  financial  statement  presentation.   We
believe that our audits provide a reasonable basis for our opinion.

In  our  opinion, the financial statements referred to  above  present
fairly,  in  all material respects, the financial position of  Tindeco
Wharf Partnership as of December 31, 1997 and 1996, and the result  of
its  operations, changes in partners' deficit and cash flows  for  the
years  then  ended  in  conformity with generally accepted  accounting
principles.


Reznick Fedder and Silverman
Baltimore, Maryland
February 4, 1998
<PAGE>
                   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, 1997 and 1996      17
                                                             
     Consolidated  Statements of Operations for the Years Ended
       December 31, 1997, 1996, and 1995                            18
                                                                   
     Consolidated  Statements  of Changes in Partners' Equity
       for  the  Years  Ended December 31, 1997, 1996, and 1995     19
                                                                    
     Consolidated  Statements of Cash Flows for the Years Ended
       December  31,  1997, 1996, and 1995                          20
                                                    
     Notes to consolidated financial statements                   21-27
                                                       
Financial statement schedules:                                 

     Schedule XI - Real Estate and Accumulated Depreciation         29
                                                     
     Notes to Schedule XI                                           30










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, 1997 and 1996

                                Assets

                                              1997                   1996
Rental properties at cost:                  
   Land                                   $   934,582           $   934,582
   Buildings and improvements              39,666,989            39,577,198
   Furniture and fixtures                   2,866,600             2,740,645
                                           ----------            ----------
                                           43,468,171            43,252,425
   Less - accumulated depreciation        (19,522,725)          (17,857,486)
                                           ----------            ----------
                                           23,945,446            25,394,939
                                  
Cash and cash equivalents                      71,023                79,567
Restricted cash                             1,293,871             1,300,767
Accounts receivable                            48,911                47,497
Other assets (net of accumulated   
  amortization of $288,791 and $239,940)    1,784,502             1,811,146
                                           ----------            ----------
               Total                      $27,143,753           $28,633,916
                                           ==========            ==========
                                 Liabilities and Partners' Equity
                                         
Liabilities:                           
   Debt obligations                       $32,712,165           $33,087,679
   Accounts payable:                                              
        Trade                               2,565,803             2,208,559
        Related parties                       345,603               611,243
   Interest payable                         9,576,402             8,313,125
   Tenant security deposits                   242,687               236,677
   Other liabilities                        2,260,486             1,278,532
                                           ----------            ---------- 
               Total liabilities           47,703,146            45,735,815
                                           ----------            ----------
Partners' equity                          (20,559,393)          (17,101,899)
                                           ----------            ----------
               Total                      $27,143,753           $28,633,916
                                           ==========            ==========

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, 1997, 1996 and 1995

                                             1997         1996          1995
                                                        
Revenues:                              
   Rental income                         $4,463,462    $4,303,963    $4,103,099
   Hotel income                           1,282,525     1,282,662     1,230,057
   Interest income                           29,639        18,654        28,998
                                          ---------     ---------     ---------
               Total revenues             5,775,626     5,605,279     5,362,154
                                          ---------     ---------     ---------
Costs and expenses:               
   Rental operations                      1,858,158     1,684,209     1,654,247
   Hotel operations                       1,385,410     1,317,387     1,037,365
   General and administrative               300,000       198,000       198,000
   Interest                               3,975,462     3,198,970     3,231,126
   Depreciation and amortization          1,714,090     1,707,209     1,667,832
                                          ---------     ---------     ---------
               Total costs and expenses   9,233,120     8,105,775     7,788,570
                                          ---------     ---------     ---------
Loss before extraordinary item           (3,457,494)   (2,500,496)   (2,426,416)
                                     
Extraordinary gain                                0       238,312             0
                                          ---------     ---------     ---------
Net loss                                ($3,457,494)  ($2,262,184)  ($2,426,416)
                                          =========     =========     =========
Net loss per limited partnership unit: 
   Loss before extraordinary item       ($   166.22)  ($   120.21)  ($   116.65)
   Extraordinary gain                             0         11.46             0
                                          ---------     ---------     ---------
                                        ($   166.22)  ($   108.75)  ($   116.65)
                                          =========     =========     =========

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, 1997, 1996 and 1995


                                            Dover                           
                                          Historic      Limited       
                                        Advisors (1) Partners (2)      Total
                                                    
Percentage participation in profit or loss  1%           99%           100%
                                            
Balance at December 31, 1994            ($290,468)  ($11,614,350)  ($11,904,818)
Prior period adjustment                    (5,085)      (503,396)      (508,481)
Net loss                                  (24,264)    (2,402,152)    (2,426,416)
                                          -------     ----------     ----------
Balance at December 31, 1995             (319,817)   (14,519,898)   (14,839,715)
Net Loss                                  (22,622)    (2,239,562)    (2,262,184)
                                          -------     ----------     ----------
Balance at December 31, 1996             (342,439)   (16,759,460)   (17,101,899)
Net Loss                                  (34,575)    (3,422,919)    (3,457,494)
                                          -------     ----------     ----------
Balance at December 31, 1997            ($377,014)  ($20,182,379)  ($20,559,393)
                                          =======     ==========     ==========

 (1)   General Partner.

 (2)   20,593.3 limited partnership units outstanding at December  31,
       1997, 1996, and 1995.

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, 1997, 1996 and 1995

                                              1997         1996         1995
                                           
Cash flows from operating activities:
   Net loss                               ($3,457,494) ($2,262,184) ($2,426,416)
   Adjustments to reconcile net loss to
     net cash provided by operating
     activities:
Depreciation and amortization               1,714,090     1,707,209   1,667,832
Extraordinary gain                                  0      (238,312)          0
Changes in assets and liabilities,   
  net of disposals due to foreclosure:
   Decrease (increase) in restricted cash       6,896      (608,740)    (84,988)
   (Increase) decrease in accounts receivable  (1,414)        2,533     (18,732)
   Increase in other assets                   (22,207)      (98,386)    (25,256)
   Increase in accounts payable - trade       357,244     1,341,822     148,964
   Decrease in accounts payable - related
     parties                                 (265,640)      (67,326)   (138,309)
   Increase in interest payable             1,263,277     1,622,880   1,041,348
   Increase (decrease) in tenant security
     deposits                                   6,010        (5,027)     (5,435)
   Increase (decrease) in other liabilities   981,954    (1,102,965)    421,518
                                            ---------     ---------   ---------
      Net cash provided by operating 
        activities:                           582,716       291,504     580,526
                                            ---------     ---------   ---------
Cash flows from investing activities:   
   Capital expenditures                      (215,746)     (253,239)   (201,013)
                                            ---------     ---------   ---------
      Net cash used in investing activities: (215,746)     (253,239)   (201,013)
                                            ---------     ---------   ---------
Cash flows from financing activities:      
   Payments of principal under debt 
     obligations                             (375,514)      (73,620)   (365,931)
                                            ---------     ---------   ---------
      Net cash used in financing activities: (375,514)      (73,620)   (365,931)
                                            ---------     ---------   ---------
(Decrease) increase in cash and cash
    equivalents                                (8,544)      (35,355)     13,582
Cash and cash equivalents at beginning of year 79,567       114,922     101,340
                                            ---------     ---------   ---------
Cash and cash equivalents at end of year   $   71,023    $   79,567  $  114,922
                                            =========     =========   =========

Supplemental Disclosure of Cash Flow Information: 
   Cash paid during the year for interest  $2,712,185    $1,486,204  $1,848,790

The accompanying notes are an integral part of these financial statements.
<PAGE>
                   DIVERSIFIED HISTORIC INVESTORS II
                        (a limited partnership)
                                   

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 consistently 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 $791,054 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 $120,695  and  $97,576  at
December 31, 1997 and 1996, 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 1997, 1996 and 1995).

6.     Restricted Cash

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

7.     Revenue Recognition

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

8.     Rental Properties

Rental  properties are stated at cost.  A provision for impairment  of
value is recorded when a decline in value of 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
the  resources  to meet, 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.


NOTE C - DEBT OBLIGATIONS

Debt obligations were as follows:

                                                            December 31,
                                                          1997         1996
                                                    
Mortgage loan, interest only at 14% at December 31,   $ 5,800,000  $ 5,800,000
1997 and 1996;  principal due in 2015, collateralized
by the related rental property
                                                        
Mortgage loan, interest at 12%, collateralized by the   1,800,000    1,800,000
related rental property with maturity at January 1, 
1992 (A)                                              
                                                
Mortgage loans, interest at the Federal Reserve         1,018,188    1,076,725
Discount rate plus 2% with a minimum of 7% and a
maximum of 15%  (7% and 7.25% at December 31, 1997 and
1996, respectively), principal and interest payable
monthly based on a 20-year amortization schedule;
collateralized by the related rental property;
principal due October 1, 2005                          
                                                    
Mortgage revenue bonds comprised of the following:     16,826,402   16,907,100
$1,440,000 Serial Bonds, interest rates ranging from 
4.6% to 6.1%, maturing semi-annually from June 20, 1998,
to December 20, 2006; $1,650,000 Term Bonds, interest at
6.5%, maturing December  20, 2012; $8,260,000 Term Bonds,
interest at 6.6%, maturing December 20, 2024; $5,605,000
Term Bonds, interest at 6.7%, maturing December 20, 2028;
collateralized by the related rental property
     
Notes payable to a property management company, bearing   14,104       250,383
interest at 12% per annum; principal and interest to be
repaid from the earliest positive cash flow from operations
or capital transactions, or within 90 days of termination
of the management agreement; unpaid principal and interest 
due upon the earlier of sale or refinance of the property
or December 1, 2007
                                                       
Second mortgage loan, principal and interest at 7.5%,  4,953,471     4,953,471
payable in monthly installments of $36,606 to July 2005,
at which time the balance is due; collateralized by the
related rental property (B)
                                                  
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                                              2,300,000     2,300,000
                                                      ----------    ----------
                                                     $32,712,165   $33,087,679
                                                      ==========    ==========

(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, is 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 additional interest was paid during 1997, 1996  or
       1995.

Approximate  maturities of mortgage loan obligations at  December  31,
1997, for each of the succeeding five years are as follows:

Year Ending December 31,               
                                       
                   1998             $ 1,888,942
                   1999                  98,013
                   2000                 108,008
                   2001                 119,023
                   2002                 130,926
                   Thereafter        30,367,253
                                     ----------
                                    $32,712,165
                                     ==========
NOTE E - 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 contribution of $1,320,883.

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.

NOTE F- COMMITMENTS AND CONTINGENCIES

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

1.     15% of net cash flow from operations (one property), and 15% to
       50%  of  net cash flow from operations above certain  specified
       amounts (two properties);

2.     10%  to 45% of the net proceeds, as defined, of the sale of the
       respective  properties  (three  properties).   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, 6.5% at  December
31,  1997)  and is due on October 1, 2011.  Interest is due  quarterly
with  the  first  payment  due September  1,  1997.   The  Partnership
recognized  a  gain in the amount of $238,312 for the  excess  of  the
amount  of  the judgment over the amount stipulated in the  settlement
agreement in 1996.

NOTE G - RELATED PARTY TRANSACTIONS

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  1997  and
1996 was $408,037 and $44,034, 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, 1997 was $938,338.

On June 30, 1992, DHP, Inc. assigned to D, LTD a note receivable, from
TWP  to the Partnership, that had been assigned to DHP, Inc.  The note
was  in  the stated amount of $261,600 and bore interest at  10%;  the
note  was  due on June 30, 1997.  On March 23, 1993 D, LTD obtained  a
judgment  on this note in Common Pleas Court for Philadelphia  County,
Pennsylvania.  The judgment provided that all future distributions, in
any  form, due to the Partnership on account of its ownership interest
in  TWP, be immediately delivered to D, LTD.  Interest accrued  during
1995 was $2,864.  This note was repaid in 1995.

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%.  The judgment provides that all future distributions, in  any
form,  due to the Partnership on account of its ownership interest  in
FWP, be immediately delivered to D, LTD.  Interest accrued during 1997
and  1996  was $15,771 and $18,307, respectively. The balance  of  the
note at December 31, 1997 was $132,186.

The   seller  of  Washington  Square  agreed  to  lend  funds  to  the
Partnership  to  cover  cash  flow deficits  for  a  five-year  period
expiring  in 1990.  The Partnership borrowed $97,008 through  December
1988.   The  loan bears interest at 12%, with principal  and  interest
payments out of cash flow.  Interest accrued during both 1997 and 1996
was  $11,641.   The  balance  of the note at  December  31,  1997  was
$213,418.

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,
                                         1997           1996           1995
                                        ------         ------         ------
Net loss - book                     ($ 3,457,494)  ($ 2,262,184)  ($ 2,426,416)
   Depreciation                          (86,047)      (221,239)       (83,317)
   Interest                            1,277,877        864,793        954,653
   Guarantor fees                        121,800        121,800        121,800
   Investor service fee                 (200,000)        10,000         10,000
   Administrative fee                    342,000              0              0
   Gain on foreclosure                         0       (238,312)             0
   Other                                  (1,191)             0              0
Minority interest - tax only             147,592         93,373        120,702
                                      ----------     ----------     ---------- 
Net loss - tax                      ($ 1,855,463)  ($ 1,631,769)  ($ 1,302,578)
                                      ==========     ==========     ==========

Partners' equity - book             ($20,559,393)  ($17,101,899)  ($14,839,715)
Costs of issuance                      2,471,196      2,471,196      2,471,196
Cumulative tax over (under) book loss  6,376,859      5,394,643      5,186,244
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)      (619,813)      (422,016)
                                      ----------     ----------     ----------
Partners' equity - tax              ($11,784,069)  ($ 9,604,024)  ($ 7,352,442)
                                      ==========     ==========     ==========
<PAGE>                                   
                                   
                       SUPPLEMENTAL INFORMATION
<PAGE>                                   
                       DIVERSIFIED HISTORIC INVESTORS II
                            (a limited partnership)
                                                           
              SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION
                               DECEMBER 31, 1997
                                   
                                                                       Costs
                                                                   Capitalized
                                                                    Subsequent
                                                                  to Acquisition
                                               Initial Cost
                                               to Partnership (b)

                                                     Buildings and    
Description (a)               Encumbrances    Land   Improvements   Improvements
                                   (f)
                                                                 
44 room hotel with
21,500 square feet
of commercial space
in Savannah, GA                $ 5,800,000  $200,000  $ 9,178,160  $   820,528
                                                                           
29 apartment units and          
9,500 square feet of
commercial space
in West Chester, PA              1,018,188    87,500    2,833,383       34,671
                                               
262 apartment units and     
39,000 square feet of
commercial space                                
in Baltimore, MD                24,093,977   647,082    2,000,000   27,666,847
                                ----------   -------   ----------   ---------- 
                               $30,912,165  $934,582  $14,011,543  $28,522,046
                                ==========   =======   ==========   ==========

                                        Gross Amount at which
                                        Carried at December 31, 1997
                                  
                                  Buildings and         Accum     Date of Date
Description (a)            Land   Improvements   Total  Depr.     Const   Acq.
                                                (c)(d)  (d)(e)    (a)
44 room hotel with
21,500 square feet                                         
of commercial space
in Savannah, GA         $200,000 $ 9,998,688 $10,198,68 $ 4,656,087 85-86 8/9/85
                                                                 
29 apartment units and
9,500 square feet of 
commercial space                                             
in West Chester, PA       87,500   2,868,054  2,955,554   1,416,852  198510/1/85
                                                                 
262 apartment units and                                      
39,000 square feet of
commercial space                                                   
in Baltimore, MD         647,082  29,666,847 30,313,929  13,449,786 85-8610/15/8
                         -------  ----------  ---------  ----------
                        $934,582 $42,533,589 $43,468,17  $19,522,72  
                         =======  ==========  =========   =========
<PAGE>

                    DIVERSIFIED HISTORIC INVESTORS
                        (a limited partnership)
                                   
                         NOTES TO SCHEDULE XI
                                   
                           December 31, 1997

(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 are rehabilitated.

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

(C)    The  aggregate cost of real estate owned at December 31,  1997,
       for  Federal  income tax purposes is approximately $41,128,034.
       However, 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:

                                            1997          1996          1995
Balance at beginning of year            $43,252,425   $42,999,186   $42,798,173
Additions during the year:      
   Improvements                             215,746       253,239       201,013
                                         ----------    ----------    ----------
Balance at end of year                  $43,468,171   $43,252,425   $42,999,186
                                         ==========    ==========    ==========
Reconciliation of accumulated depreciation:
                                            1997          1996          1995
Balance at beginning of year            $17,857,486   $16,210,001   $14,575,699
Depreciation expense for the year         1,665,239     1,647,485     1,634,302
                                         ----------    ----------    ----------
Balance at end of year                  $19,522,725   $17,857,486   $16,210,001
                                         ==========    ==========    ==========

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

(F)    See Note F to the financial statements for further information.
<PAGE>
Item  9.       Changes  in  and Disagreements  with  Accountants  on
               Accounting and Financial Disclosure

               None.

                               PART III

Item 10.       Directors and Executive Officers of Registrant

                a.  Identification of Directors - Registrant has  no
                    directors.

               b.   Identification of Executive Officers

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

Name              Age     Position          Term of Office    Period Served
                                                            
SWDHA, Inc.       --      Partner in DHA    Partner in DHA    Since May 1997
                                                                       
EPK, Inc.         --      Partner in DHA    Partner in DHA    Since May 1997

                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.   There  is  no  family
relationship between or among the executive officers and/or any person
nominated or chosen by Registrant to become an executive officer.

               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 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 an affiliate 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
ventures.

             Donna M. Zanghi (age 40) 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.  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 32) 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 1997, 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
1997, 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 1997 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  -  No  equity
security  of Registrant are beneficially owned by any person named  in
paragraph c. of Item 10.

                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 1995 through 1997.

               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.
<PAGE>

                                PART IV

Item 14. (A)   Exhibits, Financial Statement Schedules and Reports  on
Form 8-K.

               1.   Financial Statements:

                    a.  Consolidated Balance Sheets at December 31, 1997
                        and 1996.

                    b.  Consolidated Statements of Operations for the Years
                        Ended December 31, 1997, 1996 and 1995.

                    c.  Consolidated Statements of Changes in Partners'
                        Equity for the Years Ended December 31, 1997, 1996
                        and 1995.

                    d.  Consolidated Statements of Cash Flows for the Years
                        Ended December 31, 1997, 1996 and 1995.

                    e.  Notes to consolidated financial statements.

               2.   Financial statement schedules:

                    a.  Schedule XI - Real Estate and Accumulated Depreciation.

                    b.  Notes to Schedule XI.

               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   are
                                        listed  in  Item 2. Properties  of  this
                                        Form 10-K.

                    (b)  Reports on Form 8-K:

                         No reports were filed on Form 8-K during the
                         quarter ended December 31, 1997.

                    (c)  Exhibits:

                         See Item 14(A)(3) above.
<PAGE>

                              SIGNATURES

             Pursuant to the requirement of Section 13 or 15(d) 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
                                             
Date: April 15, 1998         By: Dover Historic Advisors, General Partner
      --------------                                       
                                 By: EPK, Inc., Partner
                                                 
                                     By:  /s/ Spencer Wertheimer
                                         -----------------------
                                         SPENCER WERTHEIMER
                                         President and Treasurer
                                                      
                                     By:  /s/ Michele F. Rudoi
                                         -----------------------
                                         MICHELE F. RUDOI
                                         Assistant Secretary

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

      Signature                      Capacity                 Date

DOVER HISTORIC ADVISORS              General Partner

By: EPK, Inc., Partner

    By: /s/ Spencer Wertheimer                           April 15, 1998
        ----------------------                           --------------
        SPENCER WERTHEIMER
        President and Treasurer

    By: /s/ Michele F. Rudoi                             April 15, 1998
        -----------------------                          --------------
        MICHELE F. RUDOI
        Assistant Secretary