SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 2O549
                                    FORM 1O-K
(Mark One)
/ x /Annual  Report  Pursuant  to  Section  13 or 15 (d) of the  Securities  and
Exchange Act of 1934 [Fee  required] for fiscal year ended December 31, 1996. or
/ / 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 No. 2-68926.

DSI REALTY  INCOME  FUND VI, a  California  Limited  Partnership  (Exact name of
registrant as specified in governing instruments)

_________California___________________________95-3633566_____
(State of other jurisdiction of               (I.R.S. Employer
incorporation or organization                 identification
                                              number

         37O1 Long Beach Boulevard, Long Beach, California 9O8O7
         (Address of principal executive offices)     (Zip Code)

Registrants telephone number, including area code-(562)595-7711

Securities registered pursuant to Section 12(b) of the Act: none.

Securities registered pursuant to Section 12(g) of the Act:

                     Units of Limited Partnership Interests
                        (Class of Securities Registered)

     Indicate by check mark,  whether the  registrant (l) 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 9O days. Yes_X____. No______.

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

     The Registrant is a limited  partnership and there is no voting stock.  All
units of limited  partnership  sold to date are owned by  non-affiliates  of the
registrant. All such units were sold at $5OO.OO per unit.

<PAGE>

                       DOCUMENTS INCORPORATED BY REFERENCE

Item 8. Registrant's Financial Statements for its fiscal year ended December 31,
     1996, incorporated by reference to Form 10-K, Part II.

Item 11.  Registrant's  Financial  Statements for its fiscal year ended December
     31, 1996, incorporated by reference to Form 10-K, Part III.

Item 12.  Registration  Statement  on  Form  S-11,  previously  filed  with  the
     Securities and Exchange  Commission  pursuant to Securities Act of 1933, as
     amended, incorporated by reference to Form 10-K Part III.

Item 13.  Registrant's  Financial  Statements for its fiscal year ended December
     31, 1996, incorporated by reference to Form 10-K, Part III.

                                     PART I

Item l.  BUSINESS

     Registrant,   DSI  Realty   Income  Fund  VI  (the   "Partnership")   is  a
publicly-held limited partnership organized under the California Uniform Limited
Partnership Act pursuant to a Certificate  and Agreement of Limited  Partnership
(hereinafter  referred  to as  "Agreement")  dated  August 1, 1983.  The General
Partners  are  DSI  Properties,  Inc.,  a  California  corporation,  Diversified
Investors  Agency, a general  partnership,  whose current partners are Robert J.
Conway and Joseph W. Conway,  brothers.  The General  Partners are affiliates of
Diversified Securities,  Inc., a wholly-owned subsidiary of DSI Financial,  Inc.
The General Partners provide similar services to other partnerships. Through its
public  offering of Limited  Partnership  Units,  Registrant  sold  twenty-three
thousand  seven  hundred  fifty-three  (23,753)  units  of  limited  partnership
interests  aggregating  Eleven Million Eight Hundred  Seventy-Six  Thousand Five
Hundred Dollars ($11,876,500).  The General Partners have retained a one percent
(l%)  interest  in all  profits,  losses and  distributions  (subject to certain
conditions)  without making any capital  contribution  to the  Partnership.  The
General  Partners  are not  required  to make any capital  contributions  to the
Partnership in the future. Registrant is engaged in the business of investing in
and operating mini-storage facilities with the primary objectives of generating,
for its  partners,  cash  flow,  capital  appreciation  of its  properties,  and
obtaining  federal  income tax  deductions  so that  during  the early  years of
operations,  all or a  portion  of such  distributable  cash  may not  represent
taxable income to its partners.  Funds obtained by Registrant  during the public
offering period of its units were used to acquire seven mini-storage facilities.
Registrant does not intend to sell additional  limited  partnership  units.  The
term of the  Partnership  is fifty years but it is anticipated  that  Registrant
will sell  and/or  refinance  its  properties  prior to the  termination  of the
Partnership.  The Partnership is intended to be  self-liquidating  and it is not
intended that proceeds from the sale or refinancing of its operating  properties
will be reinvested. Registrant has no full time employees but shares one or more
employees with other publicly-held limited partnerships sponsored by the General
Partners.  The  General  Partners  are vested with  authority  as to the general
management and  supervision  of the business and affairs of Registrant.  Limited
Partners  have no right to  participate  in the  management  or  conduct of such
business and affairs.  An  independent  management  company has been retained to
provide day-to-day  management services with respect to all of the Partnership's
investment properties.

     The average occupancy levels for each of the Partnership's seven properties
for the years ended December 31, 1996 and December 31, 1995 were as follows:

Location of Property       Average Occupancy       Average Occupancy
                           Level for the Year      Level for the Year
                           Ended Dec. 31, 1996     Ended Dec. 31, 1995

Vallejo, California                  85%                  80%

Santa Rosa, California
(both properties)                    85%                  91%

Arvada, Colorado                     80%                  83%

Las Vegas, Nevada                    84%                  89%

Federal Heights, Colorado            87%                  86%

Colorado Springs, Colorado           86%                  82%

     Please refer to the discussion appearing elsewhere herein under the caption
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  for a  detailed  analysis  of  the  results  of  operations  of  the
Partnership's properties.

     The  business in which the  Partnership  is engaged is highly  competitive.
Each of its  mini-storage  facilities  is located in or near a major urban area,
and  accordingly,   competes  with  a  significant  number  of  individuals  and
organizations  with respect to both the purchase and sale of its  properties and
for rentals.  Generally,  Registrant's business is not affected by the change in
seasons.

<PAGE>

Item 2.  PROPERTIES

     Registrant owns a fee interest in seven  mini-storage  facilities,  none of
which are subject to  long-term  indebtedness.  Please  refer to the  discussion
under Business for a discussion of the average  occupancy rate for each property
owned by the  Partnership.  The  following  table sets forth  information  as of
December 31, 1996 regarding properties owned by the Partnership.

Location          Size of  Net Rentable     No. of            Completion
                  Parcel   Area             Rental Units      Date

Vallejo, CA       3.10 acres 57,845         512                 6/9/81

Arvada, CO        3.75 acres 65,535         662                 1/4/83

Federal
Heights, CO       2.39 acres 39,892         467               10/15/83

Las Vegas, NV     2.20 acres 39,682         431                12/l/82

Santa Rosa, CA    3.38 acres 72,163         626                9/10/83
Colorado
Springs, CO       3.50 acres 60,566         692               11/15/83

Item 3.  LEGAL PROCEEDINGS

     Registrant is not a party to any material pending legal proceedings.

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

         None.

                                     PART II

Item 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
                  RELATED STOCKHOLDER MATTERS

     Registrant,  a  publicly-held  limited  partnership,  sold  23,753  limited
partnership  units  during its  offering  and as of  December 31, 1996 had 831
limited  partners of record.  There is no intention to sell  additional  limited
partnership units nor is there a market for these units.

     Average  cash  distributions  of $15.00 per Limited  Partnership  Unit were
declared  and paid  each  quarter  for the year  ended  December  31,  1996 and
$14.37 per Limited Partnership Unit for the year ended December 31, 1995.  It 
is  Registrant's  expectations  that  distributions  will continue to be paid 
in the future.

Item 6.  SELECTED FINANCIAL DATA
         FOR THE YEARS ENDED DECEMBER 31, 1996, 1995, 1994, 1993, and 1992
--------------------------------------------------------------------------------
                     1996         1995         1994         1993         1992
                     ----         ----         ----         ----         ----

REVENUES          $2,522,074   $2,513,723   $2,410,812   $2,218,414   $1,965,275

COSTS AND
EXPENSES           1,476,606    1,406,458    1,329,740    1,256,159    1,212,087
                  ----------   ----------   ----------   ----------   ----------

NET
INCOME            $1,045,468   $1,107,265   $1,081,072   $  962,255   $  753,188
                  ==========   ==========   ==========   ==========   ==========

TOTAL
ASSETS            $4,903,842   $5,285,147   $5,565,612   $5,842,854   $6,261,578
                  ==========   ==========   ==========   ==========   ==========

NET CASH
PROVIDED BY
OPERATING
ACTIVITIES
                  $1,492,765   $1,522,244   $1,487,138   $  955,785   $  971,655
                  ==========   ==========   ==========   ==========   ==========

CASH
DISTRIBUTIONS
PER $500
LIMITED
PARTNERSHIP
UNIT              $   60.00   $    57.50   $    57.50   $    40.00   $    40.00 
                  ==========   ==========   ==========   ==========   ==========

NET INCOME
PER LIMITED
PARTNERSHIP
UNIT              $    43.57   $    46.15   $    45.06   $    40.11   $    31.39
                  ==========   ==========   ==========   ==========   ==========

<PAGE>

Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS.

                              RESULTS OF OPERATIONS

1996 COMPARED TO 1995

     Total revenues increased from $2,513,723 in 1995 to $2,522,074 in 1996, 
while total expenses increased from $1,406,458 to  $1,476,606  resulting in a
decrease in net income from $1,107,265 to $1,045,468.  Rental revenues remained
relatively constant as average occupancy remained at 85% for the Partnership's
seven mini-storage facilities in 1996 as compared to 1995.  The Partnership is
continuing its marketing efforts to attract and keep new tenants in its various
mini-storage facilities.  The increase in operating expenses of approximately
$69,600 (11.6%) was due primarily to increases in  yellow  pages  advertising   
costs, real estate tax expense and salaries and  wages  partially  offset by a 
decrease in office expenses.  General  and  administrative  expenses increased  
slightly as a result of some relatively insignificant fluctuations in various
expense accounts.  The General Partners' incentive management fee available 
for distribution on which this fee is based.


1995 COMPARED TO 1994

     Total  revenues  increased  from  $2,410,812 in 1994 to $2,513,723 in 1995,
while total  expenses  increased from  $1,329,740 to $1,406,458 resulting in an
increase in net income from $1,081,072 to $1,107,265.  The  approximate $97,000
(4%) increase in rental revenues can be attributed to higher unit rental rates
as average occupancy decreased from 88% to 85% for the Partnership's seven  
mini-storage  facilities  in both  1995  and  1994.  The increase in operating  
expenses of  approximately $29,000 (5.1%) was due primarily to increases in 
salaries and wages, maintenance and repair  costs and  workers' office  expenses
partially offset by a decrease in yellow page advertising costs.  General and 
administrative  expenses increased by approximately $27,000 (13.5%) primarily 
due to higher property management  fees partially offset by lower professional  
fees.  Property management fees, which are based on revenue, increased due to 
the increase in rental income and an increase in these fees from 5% to 6% of 
rental income.  The General Partners' incentive management fee remained 
constant.


                         LIQUIDITY AND CAPITAL RESOURCES

     Net cash  provided  by  operating  activities  decreased  by  approximately
$29,000  (1.9%) in 1996  compared to 1995  primarily  due to the decrease in 
net income partially offset by any  increase in customer  deposits and other
liabilities.  Net cash provided by operating  activities  increased by  
approximately $35,000  (2.4%) in 1995 compared to 1994  primarily due to the 
increase in net income. 

     Cash used in financing activities, as set forth in the statements of cash
flows, has consisted solely of cash distributions to partners. Effective with
the third quarter 1994 distribution, the General Partners decided to increase
distributions to an amount which yields an annualized return of 9% of limited
partners' capital contributions from the previous 8% level.  In addition, 
special distributions of 3%, 2.5% and 3% were declared and paid on December 15,
1996, 1995 and 1994 respectively.  These actions were the result of the 
Partnership's increased cash flow from the operations of its properties.

     Cash used in investing  activities,  as set forth in the statements of cash
flows, has consisted  solely of acquisitions of equipment for the  Partnership's
mini storage properties. The Partnership has no material commitments for capital
expenditures.

     The  General  Partners  plan  to  continue  their  policy  of  funding  the
continuing  improvement  and  maintenance  of Partnership  properties  with cash
generated from operations.  The Partnership's resources appear to be adequate to
meet its needs for the next twelve months.

     The General  Partners  are not aware of any  environmental  problems  which
could  have a  material  adverse  effect  upon  the  financial  position  of the
Partnership.

<PAGE>

Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Attached hereto as Exhibit l is the information required to be set forth as
Item 8, Part II hereof.

Item 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                  ACCOUNTING AND FINANCIAL DISCLOSURE.

     None.

                                    PART III

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT'S
                  GENERAL PARTNER

     The General Partners of Registrant are the same as when the Partnership was
formed, i.e., DSI Properties,  Inc., a California  corporation,  and Diversified
Investors Agency. As of December 31, 1996,  Messrs.  Robert J. Conway and Joseph
W. Conway,  each of whom own approximately  45.43% of the issued and outstanding
capital stock of DSI  Financial,  Inc., a California  corporation,  are the sole
partners of Diversified Investor Agency. Messrs. Robert J. and Joseph W. Conway,
together  with Mr.  Joseph W.  Stok,  currently  comprise  the  entire  Board of
Directors of DSI Properties, Inc.

     Mr. Robert J. Conway is 63 years of age and is a licensed  California  real
estate  broker,  and since 1965 has been  President and a member of the Board of
Directors of  Diversified  Securities,  Inc.,  and since 1973  President,  Chief
Financial Officer and a member of the Board of Directors of DSI Properties, Inc.
Mr. Conway received a Bachelor of Science Degree from Marquette  University with
majors in Corporate Finance and Real Estate.

     Mr.  Joseph W.  Conway  is age 67 and has been  Executive  Vice  President,
Treasurer and a member of the Board of Directors of Diversified Securities, Inc.
since 1965 and since 1973 the Vice President,  Treasurer and member of the Board
of Directors of DSI  Properties,  Inc.  Mr.  Conway  received a Bachelor of Arts
Degree from Loras College with a major in Accounting.

     Mr.  Joseph  W.  Stok is age 73 and  has  been a  member  of the  Board  of
Directors of DSI  Properties,  Inc.  since 1994, a Vice President of Diversified
Securities,   Inc.  since  1973,  and  an  Account  Executive  with  Diversified
Securities, Inc. since 1967.

Item 11.  EXECUTIVE COMPENSATION (MANAGEMENT REMUNERATION AND
                  TRANSACTIONS)

     The  information  required  to be  furnished  in  Item  11 of  Part  III is
contained  in  Registrant's  Financial  Statements  for its  fiscal  year  ended
December 31, 1996,  which together with the report of its independent  auditors,
Deloitte & Touche LLP,  attached hereto as Exhibit 1 and incorporated  herein by
this reference. In addition to such information:

     (a)  No annuity,  pension or retirement benefits are proposed to be paid by
          Registrant  to any of  the  General  Partners  or to  any  officer  or
          director of the corporate General Partner;

     (b)  No  standard or other  arrangement  exists by which  directors  of the
          Registrant are compensated;

     (c)  The  Registrant  has not  granted  any option to  purchase  any of its
          securities; and

     (d)  The Registrant has no plan, nor does the Registrant  presently propose
          a plan,  which  will  result  in any  remuneration  being  paid to any
          officer or director upon termination of employment.

Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT

     As of  December  31,  1996,  no person of record  owned more than 5% of the
limited partnership units of Registrant,  nor was any person known by Registrant
to own of record and beneficially,  or beneficially  only, more than 5% thereof.
The balance of the  information  required to be furnished in Item 12 of Part III
is contained in  Registrant's  Registration  Statement on Form S-11,  previously
filed  pursuant  to the  Securities  Act of  1933,  as  amended,  and  which  is
incorporated  herein  by this  reference.  The only  change  to the  information
contained in said  Registration  Statement on Form S-11 is the fact that Messrs.
Benes and Blakley have retired and Messrs. Robert J. Conway and Joseph W. Conway
equity  interest in DSI Financial,  Inc.,  parent of DSI  Properties,  Inc., has
increased. Please see information contained in Item 10 hereinabove.

<PAGE>

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The  information  required  to be  furnished  in  Item  13 of  Part  III is
contained  in  Registrant's  Financial  Statements  for its  fiscal  year  ended
December 31, 1996 attached hereto as Exhibit l and  incorporated  herein by this
reference.

                                     PART IV

Item 14  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a)(l) Attached hereto and incorporated herein by this reference as Exhibit
          l are Registrant's  Financial Statements and Supplemental Schedule for
          its fiscal year ended December 31, 1996,  together with the reports of
          its independent  auditors,  Deloitte & Touche.  See Index to Financial
          Statements and Supplemental Schedule.

     (a)(2) Attached hereto and incorporated herein by this reference as Exhibit
          2 is Registrant's  letter to its Limited Partners regarding its Annual
          Report for its fiscal year ended December 31, 1996.

     (b)  There have been no form  8-K's  filed  during the last  quarter of the
          period covered by this Report.

                                   SIGNATURES

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

DSI REALTY INCOME FUND VI,
a California Limited Partnership
by:  DSI Properties, Inc., a
California corporation, as
General Partner



By_____________________________     Dated:  March 28, 1997
  ROBERT J. CONWAY, President
  (Chief Executive Officer, Chief
  Financial Officer, and Director)



By____________________________      Dated:  March 28, 1997
  JOSEPH W. CONWAY (Executive
  Vice President and Director)

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

DSI REALTY INCOME FUND VI,
a California Limited Partnership
by:  DSI Properties, Inc., a
California corporation, as
General Partner



By:__________________________               Dated:  March 28, 1997
  ROBERT J. CONWAY, President,
  Chief Executive Officer, Chief
  Financial Officer, and Director


By___________________________               Dated:  March 28, 1997
  JOSEPH W. CONWAY
  (Executive Vice President
  and Director)

<PAGE>

                            DSI REALTY INCOME FUND VI

                              CROSS REFERENCE SHEET

                        FORM 1O-K ITEMS TO ANNUAL REPORT


PART I, Item 3. There are no legal proceedings pending or threatened.

PART I, Item 4.  Not applicable.

PART II, Item 5.  Not applicable.

PART II, Item 6. The information required is contained in Registrant's Financial
Statements for its fiscal year ended December 31, 1996, attached as Exhibit l to
Form 10-K.

PART II, Item 8. See Exhibit l to Form 10-K filed herewith.

PART II, Item 9.  Not applicable.

<PAGE>
                                    EXHIBIT l

DSI REALTY INCOME FUND VI
(A California Real Estate Limited Partnership)

SELECTED FINANCIAL DATA
FIVE YEARS ENDED DECEMBER 31, 1996
--------------------------------------------------------------------------------

                         1996        1995        1994        1993        1992

REVENUES              $2,522,074  $2,513,723  $2,410,812  $2,218,414  $1,965,275

COSTS AND EXPENSES     1,476,606   1,406,458   1,329,740   1,256,159   1,212,087
                      ----------  ----------  ----------  ----------  ----------
NET INCOME            $1,045,468  $1,107,265  $1,081,072  $  962,255  $  753,188
                      ==========  ==========  ==========  ==========  ==========
TOTAL ASSETS          $4,903,842  $5,285,147  $5,565,612  $5,842,854  $6,261,578
                      ==========  ==========  ==========  ==========  ==========
NET CASH PROVIDED BY
OPERATING ACTIVITIES  $1,492,765  $1,522,244   1,487,138  $  955,785  $  971,655
                      ==========  ==========  ==========  ==========  ==========
CASH DISTRIBUTIONS
PER $500 LIMITED
PARTNERSHIP UNIT      $    60.00  $    57.50  $    57.50  $    40.00  $    40.00
                      ==========  ==========  ==========  ==========  ==========
NET INCOME PER
LIMITED
PARTNERSHIP UNIT      $    43.57  $    46.15  $    45.06  $    40.11  $    31.39
                      ==========  ==========  ==========  ==========  ==========



The following are  reconciliations  between the operating  results and partners'
equity per the financial  statements and the Partnership's income tax return for
the year ended December 31, 1996.


                                                      Operating        Partners'
                                                        Results         Equity

Per financial statements                             $ 1,045,468    $ 4,526,901
Excess tax depreciation                                  (89,780)    (2,005,706)
Accrued property taxes                                                  (88,000)
Deferred rental revenues                                  10,164         71,946
Accrued incentive management fees                                       (16,219)
Acquisition costs capitalized for tax purposes                          134,382
Accrued distributions to partners                                       269,920
Other                                                                    (1,994)
                                                     -----------    -----------
Per Partnership income tax return                    $   965,852    $ 2,891,230
                                                     ===========    ===========
Taxable income per $500 limited
partnership unit                                     $     40.66
                                                     ===========
<PAGE>

DSI REALTY INCOME FUND VI
(A California Real Estate Limited Partnership)


INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE

                                                                            Page

FINANCIAL STATEMENTS:

    Independent Auditors' Report                                             F-1

    Balance Sheets at December 31, 1996 and 1995                             F-2

    Statements of Income for the Three
        Years Ended December 31, 1996                                        F-3

    Statements of Changes in Partners' Equity for
        the Three Years Ended December 31, 1996                              F-4

    Statements of Cash Flows for the Three Years
        Ended December 31, 1996                                              F-5

    Notes to Financial Statements                                            F-6


SUPPLEMENTAL SCHEDULE:

    Independent Auditors' Report                                             F-8

    Schedule XI - Real Estate and Accumulated Depreciation                   F-9


SCHEDULES OMITTED:

Financial  statements and schedules not listed above are omitted  because of the
     absence  of  conditions  under  which  they are  required  or  because  the
     information is included in the financial  statements named above, or in the
     notes thereto.

<PAGE>

INDEPENDENT AUDITORS' REPORT
To the Partners of
DSI Realty Income Fund VI:

We have audited the accompanying  balance sheets of DSI Realty Income Fund VI, a
California Real Estate Limited  Partnership (the  "Partnership")  as of December
31, 1996 and 1995,  and the related  statements of income,  changes in partners'
equity,  and cash flows for each of the three years in the period ended December
31, 1996. 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,  such  financial  statements  present  fairly,  in all material
respects,  the  financial  position of DSI Realty Income Fund VI at December 31,
1996 and 1995,  and the results of its operations and its cash flows for each of
the three  years in the  period  ended  December  31, 1996, in  conformity  with
generally accepted accounting principles.


January 31, 1997

<PAGE>
DSI REALTY INCOME FUND VI
(A California Real Estate Limited Partnership)

BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
--------------------------------------------------------------------------------


ASSETS                                                  1996             1995

CASH AND CASH EQUIVALENTS                           $   560,121      $   506,933

PROPERTY, At cost (net of accumulated
depreciation of $5,853,319
in 1996 and $5,418,826 in 1995)
(Notes 1, 2 and 3)                                    4,305,379        4,739,872

OTHER ASSETS                                             38,342           38,342
                                                    -----------      -----------
TOTAL                                               $ 4,903,842      $ 5,285,147
                                                    ===========      ===========

LIABILITIES AND PARTNERS' EQUITY

LIABILITIES:
Distribution due partners                           $   269,920      $   269,920
Incentive management fee payable to
general partners (Note 4)                                                  3,775
Property management fees payable (Note 1)                12,082           12,413
Customer deposits and other liabilities                  94,939           78,029
                                                    -----------      -----------
Total liabilities                                       376,941          364,137
                                                    -----------      -----------
PARTNERS' EQUITY (Notes 1 and 4):
General partners                                        (48,017)        (44,075)
Limited partners (23,753 limited
partnership units outstanding
at December 31, 1996 and 1995)                        4,574,918        4,965,085
                                                   ------------      -----------
Total partners' equity                                4,526,901        4,921,010
                                                   ------------      -----------
TOTAL                                               $ 4,903,842      $ 5,285,147
                                                   ============      ===========

See accompanying notes to financial statements.

<PAGE>

DSI REALTY INCOME FUND VI
(A California Real Estate Limited Partnership)

STATEMENTS OF INCOME
THREE YEARS ENDED DECEMBER 31, 1996
--------------------------------------------------------------------------------


                                               1996         1995         1994

REVENUES:
Rental revenues                              $2,502,484   $2,496,840  $2,399,645
Interest income                                  19,590       16,883      11,167
                                             ----------   ----------   ---------
Total revenues                                2,522,074    2,513,723   2,410,812
                                            ----------   ----------   ----------
EXPENSES:
 Depreciation (Note 2)                          434,493     434,494      414,792
 Operating expenses (Note 1)                    668,541     598,905      569,588
 General and administrative                     230,369     226,667      199,351
 General partners' incentive
  management fee (Note 4)                       143,203     146,392      146,009
                                            ----------   ----------   ----------
Total expenses                               1,476,606    1,406,458    1,329,740
                                            ----------   ----------   ----------
NET INCOME                                  $1,045,468   $1,107,265   $1,081,072
                                            ==========   ==========   ==========
AGGREGATE NET INCOME ALLOCATED
TO (Note 4):
Limited partners                            $1,035,013   $1,096,192   $1,070,261
General partners                                10,455       11,073       10,811
                                            ----------   ----------   ----------
TOTAL                                       $1,045,468   $1,107,265   $1,081,072
                                            ==========   ==========   ==========
NET INCOME PER LIMITED PARTNERSHIP
UNIT (Notes 2 and 4)                        $    43.57   $    46.15   $    45.06
                                            ==========   ==========   ==========

See accompanying notes to financial statements.

<PAGE>

DSI REALTY INCOME FUND VI
(A California Real Estate Limited Partnership)

STATEMENTS OF CHANGES IN PARTNERS' EQUITY
THREE YEARS ENDED DECEMBER 31, 1996
--------------------------------------------------------------------------------


                                         General       Limited
                                        Partners       Partners         Total


BALANCE AT JANUARY 1, 1994             ($38,367)      5,530,231       5,491,864

 Net income                              10,811       1,070,261       1,081,072

 Distributions                          (13,796)     (1,365,798)     (1,379,594)
                                        -------      ----------      -----------
BALANCE AT DECEMBER 31, 1994            (41,352)      5,234,694       5,193,342

 Net income                              11,073       1,096,192       1,107,265

 Distributions                          (13,796)     (1,365,801)     (1,379,597)
                                        -------     -----------     -----------
BALANCE AT DECEMBER 31, 1995           ($44,075)    $ 4,965,085     $ 4,921,010
                 
 Net income                              10,455       1,035,013       1,045,468

 Distributions                          (14,397)     (1,425,180)     (1,439,577)
                                        -------     -----------     -----------
BALANCE AT DECEMBER 31,1996            $(48,017)    $ 4,574,918     $ 4,526,901
 
See accompanying notes to financial statements.

<PAGE>

DSI REALTY INCOME FUND VI
(A California Real Estate Limited Partnership)

STATEMENTS OF CASH FLOWS
THREE YEARS ENDED DECEMBER 31, 1996
--------------------------------------------------------------------------------


                                            1996          1995          1994

CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers            $ 2,502,484   $ 2,485,458   $ 2,399,645 
Cash paid to suppliers and employees     (1,029,309)     (980,097)     (923,674)
Interest received                            19,590        16,883        11,167
                                        -----------     -----------   ----------
  Net cash provided by operating
  activities                              1,492,765     1,522,244     1,487,138

CASH FLOWS FROM FINANCING ACTIVITIES -
Distributions to partners                (1,439,577)   (1,379,597)   (1,349,603)

CASH FLOWS FROM INVESTING ACTIVITIES -
Additions to property                                     (42,964)      (27,159)
                                        -----------   -----------   ------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS                             53,188        99,683       110,376

CASH AND CASH EQUIVALENTS,
AT BEGINNING OF YEAR                        506,933       407,250       296,874
                                        -----------   -----------   ------------
CASH AND CASH EQUIVALENTS,
AT END OF YEAR                          $   560,121   $   506,933   $   407,250
                                        ===========   ===========   ============
RECONCILIATION OF NET INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Net income                              $ 1,045,468   $ 1,107,265   $ 1,081,072
Adjustments to reconcile net income
to net cash provided by operating
activities:
 Depreciation                               434,493       434,494       414,792 
 Changes in assets and liabilities:
 Other assets                                             (11,382)          (15)
 Incentive management fee payable to
  general partners                           (3,775)       (1,486)      (15,760)
 Property management fees payable              (331)        3,777           626
 Customer deposits and other
  liabilities                                16,910       (10,424)        6,423
                                        -----------   -----------   ------------
NET CASH PROVIDED BY OPERATING
ACTIVITIES                              $ 1,492,765   $ 1,522,244   $ 1,487,138
                                        ===========   ===========   ============

See accompanying notes to financial statements.

<PAGE>

DSI REALTY INCOME FUND VI
(A California Real Estate Limited Partnership)

NOTES TO FINANCIAL STATEMENTS
THREE YEARS ENDED DECEMBER 31, 1996


1.   GENERAL

     DSI Realty  Income Fund VI, a California  Real Estate  Limited  Partnership
     (the  "Partnership"),  has two general partners (DSI  Properties,  Inc. and
     Diversified  Investors  Agency) and limited  partners owning 23,753 limited
     partnership  units,  which  were  purchased  for $500 a unit.  The  general
     partners have made no capital  contribution  to the Partnership and are not
     required to make any capital  contribution  in the future.  The Partnership
     has a maximum  life of 50 years and was formed on March 27,  1981 under the
     California  Uniform  Limited  Partnership  Act for the  primary  purpose of
     acquiring and operating real estate.

     The  Partnership  owns seven  mini-storage  facilities  located in Vallejo,
     California;  Arvada,  Federal Heights and Colorado Springs,  Colorado;  Las
     Vegas,  Nevada  and two in Santa  Rosa,  California.  All  facilities  were
     purchased from Dahn Corporation  ("Dahn").  Dahn is not affiliated with the
     Partnership.  Dahn is  affiliated  with  other  partnerships  in which  DSI
     Properties,  Inc. is a general  partner.  The  mini-storage  facilities are
     operated for the  Partnership  by Dahn under various  agreements  which are
     subject  to  renewal  annually.  Under  the  terms of the  agreements,  the
     Partnership  is required to pay Dahn a property  management fee equal to 6%
     of gross revenue from operations, as defined.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Cash and Cash  Equivalents  - The  Partnership  classifies  its  short-term
     investments  purchased with an original maturity of three months or less as
     cash equivalents.

     Property and  Depreciation  - Property is recorded at cost and is comprised
     primarily of  mini-storage  facilities.  Depreciation is provided for using
     the straight-line  method over an estimated useful life of 20 years for the
     facilities.  Building improvements are depreciated over a five year period.

     Income  Taxes  - No  provision  has  been  made  for  income  taxes  in the
     accompanying  financial  statements.  The  taxable  income  or  loss of the
     Partnership  is allocated to each partner in  accordance  with the terms of
     the Agreement of Limited  Partnership.  Each partner's tax status, in turn,
     determines  the  appropriate  income  tax for its  allocated  share  of the
     Partnership taxable income or loss.  The net difference between the bases
     of the Partnership's assets and liabilities for federal income tax purposes
     and as reported for financial statement purposes is $1,635,671.

     Revenues - Rental revenue is recognized using the accrual method based 
     on contractual amounts provided for in the lease agreements, which 
     approximates recognition on a straight-line basis.  The term of the lease
     agreements is usually less than one year.

     Net  Income  per  Limited   Partnership  Unit  -  Net  income  per  limited
     partnership  unit is  computed  by  dividing  net income  allocated  to the
     limited  partners by the  weighted  average  number of limited  partnership
     units outstanding during each year (23,753 in 1996, 1995 and 1994).

     Estimates - The  preparation  of financial  statements in  conformity  with
     generally accepted  accounting  principles requires the Partnership to make
     estimates and  assumptions  that affect the reported  amounts of assets and
     liabilities and disclosure of contingent assets and liabilities at the date
     of the  financial  statements  and the  reported  amounts of  revenues  and
     expenses  during the  reporting  period.  Actual  results could differ from
     those estimates.

     Impairment of Long-Lived Assets - The Partnership regularly reviews long-
     lived assets for impairment whenever events or changes in circumstances 
     indicate that the carrying amount of the asset may not be recoverable.
     If the sum of the expected future cash flow is less than the carrying 
     amount of the asset, the Partnership recognizes an impairment.  As of
     December 31, 1996, no impairment losses were recognized.

3.   PROPERTY

     At December 31, 1996 and 1995,  the total cost of property and  accumulated
     depreciation are as follows:

                                                  1996                1995
       Land                                   $ 1,759,000        $ 1,759,000
       Buildings and improvements               8,399,698          8,399,698
                                              -----------        -----------

       Total                                   10,158,698         10,158,698
       Less accumulated depreciation           (5,853,319)        (5,418,826)
                                              -----------         ----------

       Property, net                          $ 4,305,379         $ 4,739,872
                                              ===========         ===========

4.   ALLOCATION OF PROFITS AND LOSSES

     Under the Agreement of Limited Partnership,  the general partners are to be
     allocated 1% of the net profits or losses from  operations  and the limited
     partners are to be allocated  the balance of the net profits or losses from
     operations  in  proportion  to their  limited  partnership  interests.  The
     general  partners  are also  entitled to receive a  percentage,  based on a
     predetermined  formula,  of any  cash  distribution  from the  sale,  other
     disposition, or refinancing of the project.

     In addition, general  partners  are  entitled  to  receive an incentive  
     management  fee for supervising the operations of the Partnership.  The 
     fee is to be paid in an amount equal to 9% per annum of the cash available 
     for distribution on a cumulative basis.

<PAGE>

INDEPENDENT AUDITORS' REPORT
To the Partners of
DSI Realty Income Fund VI:

We have  audited  the  financial  statements  of DSI Realty  Income Fund VI (the
"Partnership") as of December 31, 1996 and 1995, and for each of the three years
in the period ended  December 31, 1996, and have issued our report thereon dated
January  31,  1997;  such report is included  elsewhere  in this Form 10-K.  Our
audits also included the financial statements schedule of DSI Realty Income Fund
VI, listed in Item 14. This financial  statement  schedule is the responsibility
of the  Partnership's  management. Our  responsibility is to express an opinion
based on our audits. In our opinion,  such financial statements  schedule,  when
considered  in  relation  to the basic  financial  statements  taken as a whole,
presents fairly in all material respects, the information set forth therein.


January 31, 1997

<PAGE>

DSI REALTY INCOME FUND VI
(A California Real Estate Limited Partnership)

REAL ESTATE AND ACCUMULATED DEPRECIATION
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>

                                                    Costs Capitalized
                                 Initial Cost to      Subsequent to    Gross Amount at Which Carried
                                   Partnership         Acquisition           at Close of Period
                               -------------------  -----------------  -----------------------------
                                        Buildings                               Buildings                         Date  
                                           and       Improve- Carrying             and                    Accum.   of   Date
Description       Encumbrances   Land  Improvements    ments   Costs     Land   Improvements   Total     Deprec.  Const. Acq. Life

MINI-U-STORAGE
<S>                   <C>     <C>       <C>         <C>            <C>         <C>        <C>         <C>         <C>   <C>   <C>

Vallejo, CA           None    $258,000  $1,320,789   $22,238         $258,000  $1,340,732  $1,598,732 $1,007,533 11/81 06/81 20 Yrs
Santa Rosa, CA II     None     190,000     759,346     1,220          190,000     760,566     950,566    543,104  08/81 08/81 20 Yrs
Avada, CO             None     305,000   1,759,608    35,242          305,000   1,797,145   2,102,145  1,245,866  12/83 06/82 20 Yrs
Las Vegas, NV         None     247,000   1,111,359    13,948          247,000   1,125,307   1,372,307    792,923  11/83 07/82 20 Yrs
Santa Rosa, CA III    None     157,000     802,078    10,359          157,000     812,437     969,437    573,665  10/83 12/82 20 Yrs
Federal Heights, CO   None     260,000   1,013,994     4,926          260,000   1,018,920   1,278,920    675,221  10/83 03/83 20 Yrs
Colorado Springs, CO  None     342,000   1,518,487    26,104          342,000   1,544,591   1,886,591  1,015,007  03/84 04/83 20 Yrs
                              --------  ----------   -------         --------  ----------  ---------- ----------
                            $1,759,000  $8,285,661  $114,037       $1,759,000  $8,399,698 $10,158,698 $5,853,319
                            ==========  ==========  ========       ==========  ========== =========== ==========
</TABLE>

                                                     Real Estate     Accumulated
                                                        at Cost     Depreciation

               Balance at January 1, 1994             $10,088,575     $4,569,540
                 Additions                                 27,159        414,792
                                                      -----------     ----------
               Balance at December 31, 1994            10,115,734      4,984,332
                 Additions                                 42,964        434,494
                                                      -----------     ----------
               Balance at December 31, 1995            10,158,698      5,418,826
                 Additions                                               434,493
                                                      -----------     ----------
               Balance at December 31, 1996           $10,158,698     $5,853,319
                                                      ===========     ==========

The total cost at the end of the  period for  Federal  income tax  purposes  was
approximately $10,250,000.
<PAGE>

                                     EXHIBIT 2


                                 March 28, 1997

                      ANNUAL REPORT TO LIMITED PARTNERS OF

                            DSI REALTY INCOME FUND VI

Dear Limited Partner:

     This report  contains the  Partnership's  balance sheets as of December 31,
1996 and 1995, and the related statements of income, changes in partners' equity
and cash flows for each of the three years in the period ended December 31, 1996
accompanied by an  independent  auditors'  report.  The  Partnership  owns seven
mini-storage   facilities,   including  two  in  Santa  Rosa,  California.   The
Partnership's properties were each purchased for all cash and funded solely from
subscriptions  for  limited  partnership  interests  without the use of mortgage
financing.

     Your attention is directed to the section entitled Management's  Discussion
and Analysis of Financial  Condition and Results of  Operations  for the General
Partners'  discussion and analysis of the financial statements and operations of
the Partnership.

     Average  occupancy levels for each of the  Partnership's six properties for
the years ended December 31, 1996 and December 31, 1995 were as follows:

Location of Property               Average Occupancy          Average Occupancy
                                   Levels for the             Levels for the
                                   Year Ended                 Year Ended
                                   Dec. 31, 1996              Dec. 31, 1995

Vallejo, California                   85%                        80%

Santa Rosa, California
both stages)                          85%                        91%

Arvada, California                    80%                        83%

Las Vegas, Nevada                     84%                        89%

Federal Heights, Colorado             87%                        86%

Colorado Springs, Colorado            88%                        82%

     We will keep you informed of the activities of DSI Realty Income Fund VI as
they develop.  If you have any questions,  please contact us at your convenience
at (562) 424-2655.  If you would like a copy of the Partnership's  Annual Report
on Form 10-K for the year  ended  December  31,  1996,  which was filed with the
Securities and Exchange Commission (which report includes the enclosed Financial
Statements), we will forward a copy of the report to you upon written request.

                                               Very truly yours,

                                               DSI REALTY INCOME FUND VI
                                               By:  DSI Properties, Inc.



                                               By_______________________________
                                                     ROBERT J. CONWAY, President