<PAGE>   1
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C.  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, 1995
                                       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 number  0-18444
                      -------------------------------------------------------

                Yager/Kuester Public Fund Limited Partnership
-----------------------------------------------------------------------------
           (Exact name of registrant as specified in its charter)


             North Carolina                            56-1560476
 ---------------------------------------  ------------------------------------
    (State or other jurisdiction of       (I.R.S. Employer Identification No.)
     incorporation or organization)

12201 Steele Creek Road, P.O. Box 412080
      Charlotte, North Carolina                          28241
----------------------------------------  ------------------------------------
   (Address of principal offices)                      (Zip Code)

Registrant's telephone number, including area code: (704) 588-4074
                                                    --------------------------
Securities registered pursuant to Section 12(b) of the Act:


<TABLE>
<CAPTION>
                                          Name of Each Exchange on
    Title of Each Class                        Which Registered
--------------------------------      ----------------------------------------
<S>                                   <C>
        None
--------------------------------      ----------------------------------------

</TABLE>

         Securities registered pursuant to Section 12(g) of the Act:
                          Limited Partnership Units
-------------------------------------------------------------------------------
                              (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.   [ ]

State the aggregate market value of the voting stock held by nonaffiliates of
the registrant.  The aggregate market value shall be computed by reference to
the price at which the stock was sold, or the average bid and asked prices of
such stock, as of a specified date within 60 days prior to the date of filing.
Not Applicable.


Documents Incorporated By Reference

     Exhibits (4) and (10.1) of Part IV, required by Item 601 of Regulation
S-K, are incorporated by reference from the prospectus of the registrant, dated
December 1, 1987, Registration Number 33-07056-A (hereinafter "Prospectus").

     This document contains 39 pages.  The Exhibit Index is located on page 22.

                                      1


<PAGE>   2


                                     PART I

     Item 1.  Business.  The registrant is a North Carolina limited partnership
formed in July 1986 (hereinafter referred to as the "Partnership").  The
Partnership engaged in a "blind pool offering," the proceeds of which were used
to purchase income-producing real property.  During the year ended December 31,
1988, the Partnership received the minimum investment required to remove
subscribers' funds from escrow.  The Partnership's offering terminated with a
total subscription of $3,195,000 from investor limited partners.  The net
proceeds were used to purchase the properties described in Item 2 below, to pay
the expenses of the offering and to fund the working capital account.  The
funds not required for those purposes, totalling $84,273, were returned to
investors.

     The sole business of the Partnership is the operation of commercial office
buildings purchased with the proceeds of the public offering.  (See Item 2
below for a description of the properties.)  During the year ended December 31,
1995, the occupancy of the United Carolina Bank Building was maintained at 100%
and the EastPark Executive Center facilities were maintained at 95% occupancy.
The lease terms with the major tenants at such properties are summarized below.

             (i)  EastPark Executive Center, Charlotte, NC - the General
        Services Administrator ("GSA") has a lease term for a ten (10) year
        period ending on October 31, 2004, at a rental rate of $14.15 per
        square foot.  GSA may, at its election, terminate the lease after eight
        (8) years.  The GSA leased premises include approximately 32,000 square
        feet.  The Partnership will, however, incur significant leasehold
        improvements expense of approximately $1,000,000 for the GSA space.
        Such improvements are currently scheduled to be completed sometime in
        June 1996.  Upon completion of the improvements, the GSA lease will
        account for approximately 78% of the rental income related to the
        EastPark Executive Center.

             (ii) United Carolina Bank Building, Greenville, SC - Metropolitan
        Life Insurance Company ("Metlife") is in the second year of a five year
        lease renewal.  The rental rate is $14.00 per square foot during the
        first three years of the renewal term and escalates to $14.25 per
        square foot during the last two years of the renewal term.  In lieu of
        granting an upfit allowance, Metlife was allowed a rent concession of
        $6,250 per month for the first twelve (12) months of the renewal term;
        the concession terminated July 31, 1995.  Metlife and United Carolina
        Bank ("UCB"), account for 68% and 21%, respectively, of the rental
        income related to the United Carolina Bank Building.  The UCB lease
        (which currently provides for a $14.06 per square foot rental rate)
        will expire on July 31, 1999.

     The General Partners believe that, after engaging in significant (but
unsuccessful) efforts to sell the Properties on acceptable terms in 1995, it is
in the best interests of the Partnership to focus in 1996 on (i) completing the
GSA upfit project at the EastPark Executive Center and (ii) securing a
refinancing of the UCB Building debt.  See Item 7 below for a discussion of
refinancing matters.

     The Partnership has no employees of its own; management of the
Partnership's property is performed by Kuester Properties, Inc., an affiliate
of FSK Limited Partnership.  Administration of the Partnership is performed by
the General Partners.  (See Items 10 and 13 below.)

     Item 2.  Properties.  On June 23, 1989, the Partnership purchased the
EastPark Executive Center, an office complex comprised of two buildings located
in Charlotte, North Carolina with net leasable area of 45,300 square feet, for
a purchase price of $3,155,138 of which $1,500,000 was provided by a first
mortgage loan bearing interest at 10.5% per annum and having a term of 10
years.  The lender, United of Omaha Life Insurance Company ("United Omaha"), is
not affiliated with the Partnership.

     On November 30, 1989, the Partnership acquired the United Carolina Bank
Building, a three-story office building in Greenville, South Carolina with net
leasable area of 39,138 square feet, for a purchase price of $4,202,544 of
which $3,110,000 was provided by a first mortgage loan from United Omaha,
bearing interest at 9.625% per annum and having a term of 7 years.

     In connection with the office building purchases, $26,312 of acquisition
costs were capitalized.

     No further purchases of real property are projected and no funds are
available for that purpose.


                                      2
<PAGE>   3

     Item 3.  Legal Proceedings.  The Partnership is not involved in any legal
proceedings and was not so involved during the year ended December 31, 1995.

     Item 4.  Submission of Matters to a Vote of Security Holders.  Not
applicable.

                                    PART II

     Item 5.  Market for the Partnership's Common Equity and Related
Stockholder Matters.  There is no established public trading market for the
Partnership's securities.  The Partnership has 535 limited partners.  Cash
distributions made to the limited partners during the past years are set out in
the Statements of Cash Flow included in the Financial Statements included in
Part II, Item 8 of this Report.

     Item 6.  Selected Financial Data.
<TABLE>
<CAPTION>
                                                At or For
                                        Year Ended December 31,
                                        -----------------------

                            1995        1994          1993           1992        1991
                         ----------  ----------  -------------  -------------  ----------
<S>                      <C>         <C>            <C>            <C>         <C>
Summary of Operations
  Rental income          $1,172,935  $1,114,741     $1,067,859     $1,042,672  $1,092,848
  Net income (loss)          29,787      17,865        (15,330)       (49,816)    (37,032)
  Net income (loss)
    per limited
    partnership unit           4.63        2.77          (2.38)         (7.74)      (5.75)
Summary of Financial
Position:
  Total assets           $7,214,881  $6,951,442     $7,037,438     $7,107,578  $7,156,456
  Long-term debt, less
    current maturities    1,288,754   4,220,469      4,330,390      4,363,603   4,471,530
  Distribution per
    limited partner-
    ship unit                -           -                -              -          12.51
  Number of limited
    partnership units         6,370       6,370          6,370          6,370       6,370
</TABLE>

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

     Liquidity and Capital Resources

     During the year ended December 31, 1995, the Partnership continued to fund
working capital requirements.  The working capital deficiency increased from
($105,301) at December 31, 1994 to ($3,229,255) at December 31, 1995.  The
decrease in the working capital is primarily a result of the reclassification
of the loan on the United Carolina Bank building to current liabilities from
long-term debt.  The reclassification of the loan is due to the balloon payment
of approximately $2,817,000 that is due in December, 1996.  The lender, United
of Omaha Life Insurance Company, has indicated its willingness to agree to a
loan refinancing upon satisfaction of certain terms and conditions.  The
General Partners intend to finalize the definitive terms of such refinancing in
the near future.

     An increase in current liabilities can also be attributed to an additional
$750,000 line-of-credit note payable by the Partnership for the EastPark       
Executive Center GSA upfit, of which $219,783 was outstanding at December 31,  
1995.  This note is due on May 10, 1996.  The General Partners intend to       
increase the amount of such loan to $1,000,000 to cover substantially all of   
the GSA upfit costs and to obtain a loan term extension.                       

                                      3
                                                                               
                                                                               

<PAGE>   4
                                                                               
     The cumulative unpaid priority return to the unit holders increased from
$1,438,481 at December 31, 1994 to $1,681,265 at December 31, 1995.  This
increase resulted from no distributions being made to partners during the year
and the pro rata share due partners pursuant to the Limited Partnership
Agreement.  Based on current and projected commercial real estate market
conditions, the General Partners believe that it is reasonably unlikely that a
sale of the Partnership properties would produce net sale proceeds sufficient
to pay the priority return.  Furthermore, the General Partners believe that it
is reasonably unlikely that the Partnership's operating income or any
refinancing of Partnership debt would generate sufficient funds to pay the
priority return.

     During the year ended December 31, 1995, the Partnership had net income of
$29,787 compared to the net income (loss) of $17,865 and ($15,330) in 1994 and
1993, respectively.  Rental income, operating expenses, and interest expense
for the years ended December 31, 1995 and 1994 resulted exclusively from the
operations of the Partnership's commercial real estate properties.  The
EastPark Executive Center buildings, purchased June 23, 1989, were 88% leased
at December 31, 1994 and were 95% leased at December 31, 1995.  The United
Carolina Bank Building, purchased November 30, 1989, was 100% leased at
December 31, 1994 and 1995.  In March 1996, the Partnership renewed a lease
with a tenant in the United Carolina Bank Building for a term of five years.
The new lease resulted in a reduction in space leased and rental paid by the
tenant, and, accordingly, the occupancy rate for the United Carolina Bank
Building will be reduced to 96% on or about April 1, 1996.

     The rent concessions granted by the Partnership as a result of contract
renewal with a major tenant at the UCB Building decreased cash flow from rental
income by $43,750 during 1995.  Rental concessions are being amortized over the
life of the lease in order to recognize rental revenue evenly.  The Partnership
does not anticipate granting any additional rent concessions during 1996 at
either property.

     The Partnership entered into a Loan Extension and Modification Agreement
dated as of May 12, 1993 with Internet Services Corporation, a North Carolina
corporation (formerly International Network Services Corporation) owned equally
by three trusts, the beneficial interests of which inure respectively to the
benefit of the three children of Dexter Yager, the sole General Partner of DRY
Limited Partnership, which limited partnership is one of the two general
partners of the Partnership.  Pursuant to the Agreement, the Partnership agreed
to pay Internet $91,275 over a five-year period, with annual principal payments
of $18,255 each, together with interest at the rate equal to the prime rate of
NationsBank of North Carolina N.A., determined on an annual basis, plus two
percent (2.0%).

     See Item 13 (Certain Relationships and Related Transactions) for a
discussion regarding leasing commissions paid to Kuester Properties, Inc., a
General Partner of the Partnership.

     In the event that funds derived from operations are insufficient to meet
the Partnership's working capital needs, the General Partners have agreed to
fund the shortfall.

     Results of Operations

     Comparison of 1995 results with 1994.

     Operating results increased slightly from an operating income of $438,454
during the year ended December 31, 1994 to an operating income of $444,916 for
the comparable year 1995.  Operating income expressed as a percentage of rental
income decreased from 39.3% for the year ended December 31, 1994 to 37.9% for
the comparable year 1995.  While the overall occupancy rate for 1995 was
comparable to 1994, rental income nevertheless increased by approximately
$58,000.  This increase of rental income in 1995 can be attributed to having a
full year of the increased rental rates that were negotiated during the second
half of 1994.  Operating expenses were higher overall in 1995 by approximately
$51,000.  Increased professional fees, relating to the potential sale of the
properties, comprised the greatest increase in the expenses.  The remaining
expense increase can be attributed to increased repairs, maintenance,
depreciation and amortization.  Nonoperating income and expenses for the year
ended December 31, 1995 decreased 1.3% from the comparable year 1994.

     Comparison of 1994 results with 1993.

     Operating results increased from an operating income of $415,658 during
the year ended December 31, 1993 to an operating income of $438,454 for the
comparable year 1994.  Operating income expressed as a percentage of rental
income increased from 38.9% for the year ended December 31, 1993 to 39.3% for
the comparable year 1994.  While the overall

                                      4

<PAGE>   5

occupancy rate was down slightly in 1994, the increase in rental rates due to
the renewals of leases more than offset the occupancy change, resulting in an
overall increase in rental income of approximately $47,000.  Operating expenses
were higher overall in 1994 by approximately $24,000.  While certain expenses
decreased or remained relatively consistent in 1994, contract labor and
amortization expense relating to deferred leasing commissions increased.  These
expenses can be directly correlated to the increase in rental revenue. 
Property taxes also increased between the years due to an appealed amount from
prior years being paid in 1994.  Nonoperating income and expenses for the year
ended December 31, 1994 decreased 2.4% from the comparable year 1993.

     Item 8.  Financial Statements and Supplementary Data.  The financial
statements are attached hereto.


                                      5

<PAGE>   6




                          INDEPENDENT AUDITOR'S REPORT


To the Partners
Yager/Kuester Public Fund
  Limited Partnership
Charlotte, North Carolina

We have audited the accompanying balance sheets of Yager/Kuester Public Fund
Limited Partnership as of December 31, 1995 and 1994, and the related
statements of operations, partners' equity and cash flows for each of the three
years in the period ended December 31, 1995.  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 Yager/Kuester Public Fund
Limited Partnership as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.

As discussed in Notes 1 and 3 to the financial statements, the Partnership
changed its method of accounting for investment securities in 1994.


/s/ McGladrey & Pullen LLP

Charlotte, North Carolina
February 1, 1996


                                      6

<PAGE>   7

YAGER/KUESTER PUBLIC FUND
LIMITED PARTNERSHIP

BALANCE SHEETS
December 31, 1995 and 1994
<TABLE>
<CAPTION>
ASSETS                                                                      1995             1994
-----------------------------------------------------------------------------------------------------
<S>                                                                       <C>              <C>
Current Assets                                                          
   Cash and cash equivalents (Note 2)                                     $  139,930       $  107,906
   Accounts receivable, tenant (Note 9)                                       37,565           45,604
   Prepaid expenses                                                            1,100              223
                                                                          ---------------------------
            Total current assets                                             178,595          153,733
                                                                          ---------------------------
Investments and Noncurrent Receivables                                  
   Securities available for sale (Notes 3 and 4)                             135,050          105,255
   Properties on operating leases and properties held for               
     lease, net (Notes 5 and 6)                                            6,774,759        6,580,839
   Accrued rent receivable                                                    57,283           26,038
                                                                          ---------------------------
                                                                           6,967,092        6,712,132
                                                                          ---------------------------

Other Assets                                                            
   Deferred charges, net of accumulated                                 
     amortization 1995 $35,919; 1994 $29,977                                  10,180           16,123
   Deferred leasing commissions, net of accumulated                     
     amortization  1995 $18,721;  1994 $6,494                                 59,014           69,454
                                                                          ---------------------------
                                                                              69,194           85,577
                                                                          ---------------------------
                                                                          $7,214,881       $6,951,442
                                                                          ===========================
LIABILITIES AND PARTNERS' EQUITY                                        
                                                                        
Current Liabilities                                                     
   Note payable, bank (Note 6)                                            $  219,783       $      --
   Current maturities of long-term debt (Note 6)                           2,931,715          109,921
   Accounts payable                                                          128,472           12,879
   Accrued expenses                                                          127,880          136,234
                                                                          ---------------------------
            Total current liabilities                                      3,407,850          259,034
                                                                          ---------------------------
Long-Term Debt, less current maturities (Note 6)                           1,288,754        4,220,469
                                                                          ---------------------------
Commitment and Contingency (Notes 7 and 10)                             
Partners' Equity                                                        
   General partners                                                            1,795            1,497
   Limited partners (Note 7)                                               2,505,236        2,475,747
   Unrealized gain (loss) on investment securities (Note 4)                   11,246           (5,305)
                                                                          ---------------------------
                                                                           2,518,277        2,471,939
                                                                          ---------------------------
                                                                          $7,214,881       $6,951,442
                                                                          ===========================
</TABLE>

See Notes to Financial Statements.

                                      7

<PAGE>   8

YAGER/KUESTER PUBLIC FUND
LIMITED PARTNERSHIP

STATEMENTS OF OPERATIONS
Years Ended December 31, 1995, 1994 and 1993
<TABLE>
<CAPTION>

                                                                          1995               1994             1993
----------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                <C>              <C>
Rental income (Notes 5 and 9)                                           $1,172,935         $1,114,741       $1,067,859
                                                                        ----------------------------------------------
Operating expenses:
   Contract labor                                                           40,307             33,690           26,240
   Depreciation and amortization                                           179,987            173,606          166,596
   Repairs and maintenance                                                 133,822            125,585          122,698
   Management fees (Note 8)                                                 50,981             50,471           55,810
   Utilities                                                               149,027            154,259          155,392
   Professional fees                                                        57,331             22,696           24,762
   Property taxes                                                           88,046             92,677           80,943
   Miscellaneous                                                            28,518             23,303           19,760
                                                                        ----------------------------------------------
                                                                           728,019            676,287          652,201
                                                                        ----------------------------------------------
            Operating income                                               444,916            438,454          415,658
                                                                        ----------------------------------------------
Nonoperating income (expense):
   Interest income                                                             724              4,360            1,312
   Interest expense                                                       (422,066)          (432,683)        (437,865)
   Other                                                                     6,213              7,734            5,565
                                                                        ----------------------------------------------
                                                                          (415,129)          (420,589)        (430,988)
                                                                        ----------------------------------------------
            Net income (loss)                                               29,787             17,865          (15,330)
Deduct net income (loss) applicable to limited
   partners (per limited partner unit) 1995 $4.63;
    1994 $2.77; 1993 $(2.38)                                                29,489             17,685          (15,176)
                                                                        ----------------------------------------------
            Net income (loss) applicable to
            general partners (per limited
            partner unit) 1995 $.05 1994 $.03;
            1993 $(.03)                                                 $      298         $      180       $     (154)
                                                                        ===============================================

</TABLE>
See Notes to Financial Statements.

                                      8

<PAGE>   9

YAGER/KUESTER PUBLIC FUND
LIMITED PARTNERSHIP

STATEMENTS OF PARTNERS' EQUITY
Years Ended December 31, 1995, 1994 and 1993
<TABLE>
<CAPTION>
                                                                                         Net unrealized
                                                                                         Gain (Loss) on
                                                                                           Securities
                                                          General        Limited            Available
                                                          Partners       Partners           For Sale          Total
----------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>          <C>                   <C>           <C>
Balance, December 31, 1992                                 $1,471       $2,473,238            $   --        $2,474,709
   Net loss                                                  (154)         (15,176)               --           (15,330)
                                                           -----------------------------------------------------------
Balance, December 31, 1993                                  1,317        2,458,062                --         2,459,379
   Net income                                                 180           17,685                --            17,865
   January 1, 1994 adoption of FASB
     Statement No. 115 (Note 3)                               --               --               1,811            1,811
   Change in fair market value on
     securities available for sale
     (Note 4)                                                 --               --              (7,116)          (7,116)
                                                           -----------------------------------------------------------
Balance, December 31, 1994                                  1,497        2,475,747             (5,305)       2,471,939
   Net income                                                 298           29,489                --            29,787
   Change in fair market value on
     securities available for sale
     (Note 4)                                                 --               --              16,551           16,551
                                                           -----------------------------------------------------------
Balance, December 31, 1995                                 $1,795       $2,505,236            $11,246       $2,518,277
                                                           ===========================================================

</TABLE>
See Notes to Financial Statements.


                                      9


<PAGE>   10

YAGER/KUESTER PUBLIC FUND
LIMITED PARTNERSHIP

STATEMENTS OF CASH FLOWS
Years Ended December 31, 1995, 1994 and 1993
<TABLE>
<CAPTION>

                                                                             1995              1994             1993
-----------------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>                <C>              <C>
Cash Flows From Operating Activities
   Net income (loss)                                                     $  29,787          $  17,865        $ (15,330)
   Adjustments to reconcile net income (loss) to
     net cash provided by operating activities:
     Depreciation                                                          162,035            161,169          160,653
     Amortization                                                           17,952             12,437            5,943
     Net realized losses on sale of securities
       available for sale                                                    3,940                --               --
     Changes in assets and liabilities:
       (Increase) decrease in accounts
         receivable, tenant and accrued rent
         receivable                                                        (23,206)           (37,353)           5,586
       Increase (decrease) in:
         Accounts payable and accrued
           expenses                                                        107,238              2,664           14,274
         Other prepaids and accruals, net                                     (877)             1,691             (244)
                                                                         ---------------------------------------------
           Net cash provided by operating
           activities                                                      296,869            158,473          170,882
                                                                         ---------------------------------------------
Cash Flows From Investing Activities
   Purchase of marketable equity securities                                    --                 --           (29,558)
   Purchase of securities available for sale                              (193,803)           (29,570)             --
   Proceeds from sale of securities available for sale                     176,620                --               --
   Purchase of investment property                                        (355,955)           (34,989)          (4,285)
   Disbursements for deferred leasing
     commissions                                                            (1,569)           (75,948)             --
                                                                         ---------------------------------------------
           Net cash used in investing activities                          (374,707)          (140,507)         (33,843)
                                                                         ---------------------------------------------
Cash Flows Used In Financing Activities
   Principal payments on long-term borrowings                             (109,921)          (101,219)         (64,083)
   Proceeds from note payable                                              219,783                --               --
           Net cash provided by (used in)
            financing activities                                           109,862           (101,219)         (64,083)
                                                                         ---------------------------------------------
           Net increase (decrease) in cash and
           cash equivalents                                                 32,024            (83,253)          72,956
Cash and cash equivalents:
   Beginning                                                               107,906            191,159          118,203
                                                                         ---------------------------------------------
   Ending                                                                $ 139,930          $ 107,906        $ 191,159
                                                                         =============================================
</TABLE>

                                      10

<PAGE>   11

YAGER/KUESTER PUBLIC FUND
LIMITED PARTNERSHIP

STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>

                                                                            1995              1994              1993
----------------------------------------------------------------------------------------------------------------------
<S>                                                                       <C>                <C>              <C>
Supplemental Schedule of Noncash Investing
   Information
   Cash payment for interest                                              $423,197           $433,719         $440,132
Supplemental Schedule of Noncash Investing
   Activities
   Marketable equity securities transferred to
     securities available for sale                                             --              80,990              --
Net unrealized gain (loss) on securities available
   for sale                                                                 16,551             (5,305)             --


</TABLE>
See Notes to Financial Statements.


                                      11
<PAGE>   12

YAGER/KUESTER PUBLIC FUND
 LIMITED PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS


NOTE 1.   NATURE OF BUSINESS AND ORGANIZATION, PARTNERSHIP AGREEMENT AND
          SIGNIFICANT ACCOUNTING POLICIES 

Nature of business and organization:  The Partnership is a North Carolina
limited partnership formed in July 1986.  The purpose of the Partnership is to
acquire, operate, hold for investment and sell property.  Properties currently
held are located in Charlotte, North Carolina and Greenville, South Carolina.

The general partners of the Partnership are DRY Limited Partnership, a North
Carolina limited partnership in which Dexter R. Yager, Sr. is the general
partner and FSK Limited Partnership, a North Carolina limited partnership in
which Faison S. Kuester, Jr. is the general partner.

Partnership agreement:  Under the terms of the partnership agreement, all
taxable income, tax losses and cash distributions from operations are to be
allocated 99% to the limited partners and 1% to the general partners until the
limited partners receive a return of their initial capital contributions and a
"Priority Return".  The Priority Return is a sum equal to 8% per annum
cumulative, but not compounded, (prorated for any partial year) of the adjusted
capital contributions of the limited partners, calculated from the last day of
the calendar quarter in which each limited partner is admitted to the
Partnership to the date of payment.  Thereafter, taxable income, tax losses and
cash distributions from operations will be allocated 75% to the limited
partners and 25% to the general partners.

Upon the sale or refinancing of any future partnership properties, the
partnership agreement specifies certain allocations of net proceeds and taxable
gain or loss from the transaction.

A summary of the Partnership's significant accounting policies follows:

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

Cash and cash equivalents:  For purposes of reporting the statements of cash
flows, the Partnership includes all cash accounts, which are not subject to
withdrawal restrictions or penalties, and all highly liquid debt instruments
purchased with an original maturity of three months or less as cash and cash
equivalents on the accompanying balance sheets.  At various times throughout
the year, the Partnership may have cash balances at financial institutions
which exceed federally-insured amounts.

Investments:  Properties on operating leases and properties held for lease are
stated at the lower of cost less accumulated depreciation or fair market value.
Depreciation is computed by the straight-line method over 40 years for
buildings and over 15 years for building improvements.

Investment in marketable equity securities, securities available for sale and
accounting change:  Prior to January 1, 1994, the Partnership had investments
in marketable equity securities. Marketable equity securities consisted of
mutual funds and corporate equity securities.


                                      12

<PAGE>   13

YAGER/KUESTER PUBLIC FUND
 LIMITED PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 1.   NATURE OF BUSINESS AND ORGANIZATION, PARTNERSHIP AGREEMENT AND
          SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


The Partnership adopted the provisions of FASB Statement No. 115, Accounting
for Certain Investments in Debt and Equity Securities, as of January 1, 1994.
Statement No. 115 requires that management determine the appropriate
classification of securities at the date of adoption, and thereafter at the
date individual investment securities are acquired, and that the
appropriateness of such classification be reassessed at each balance sheet
date.  Since the Partnership neither buys securities in anticipation of
short-term fluctuations in market prices or can commit to holding debt
securities to their maturities, the investment in debt and marketable equity
securities have been classified as available for sale in accordance with
Statement No. 115.  Available for sale securities are stated at fair value, and
unrealized holding gains and losses are reported as a separate component of
partners' equity.

Prior to the adoption of Statement No. 115, the Partnership stated its
marketable equity securities at the lower of their aggregate cost or market,
with unrealized losses charged to a separate component of partners' equity.
Under both the newly adopted accounting standard and the Partnership's former
accounting practices, dividends on marketable equity securities are recognized
and included in income when declared.  Realized gains and losses, including
losses from declines in value of specific securities determined by management
to be other-than-temporary, are included in income.  Realized gains and losses
are determined on the basis of the specific securities sold.

Note 3 to the financial statements provides further information about the
effect of adopting Statement No. 115.

Deferred charges:  Deferred charges are related to prepaid fees which are
amortized over the length of the related loans, 7 to 10 years, on a
straight-line basis.

Deferred leasing commissions:  Deferred leasing commissions related to
obtaining specific leases are amortized using the straight-line method over the
noncancelable lease terms which range from three to eight years.

Revenue recognition:  Rental revenue is recognized evenly over the term of the
lease.  In connection with negotiating and obtaining leases, the Partnership's
management may at times grant concessions, such as free rent for a specific
number of months during the lease.  These costs are amortized over the life of
the lease.

Disclosures about the fair value of financial instruments: Financial Accounting
Standards Board Statement No. 107, Disclosures About Fair Value of Financial
Instruments, requires disclosure of fair value information about financial
instruments, whether or not recognized in the balance sheet, for which it is
practicable to estimate that value.  Statement 107 excludes certain financial
instruments and all nonfinancial instruments from its disclosure requirements.
At December 31, 1995 the carrying values of the Partnership's financial
instruments, including accounts receivable which are due on demand and the
mortgage payable which bears interest at market rates, approximate their fair
values.

Income taxes:  Under current income tax laws, income or loss of the Partnership
is included in the income tax returns of the partners.  Accordingly, the
Partnership will make no provision for federal or state income taxes.


                                      13

<PAGE>   14

YAGER/KUESTER PUBLIC FUND
 LIMITED PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 2.  WORKING CAPITAL RESERVE

Per the Partnership Agreement, a minimum cash and cash equivalents reserve of
$94,500 must be maintained to fund any expenditures that the cash flow
generated from properties on operating leases is insufficient to meet.  At
December 31, 1995 and 1994, the Partnership exceeded the minimum requirement by
$45,430 and $13,406, respectively.

NOTE 3.  ACCOUNTING CHANGE

As discussed in Note 1, the Partnership adopted FASB Statement No. 115 as of
January 1, 1994.  In accordance with Statement No. 115, the 1993 comparative
financial statements have not been restated for the change in accounting
principle.  There was no effect to net income in 1994 for adopting Statement
No. 115. The January 1, 1994 balance of partners' equity was increased by
$1,811 to recognize the net unrealized holding gain on securities at that date.

NOTE 4.  SECURITIES AVAILABLE FOR SALE

The following is a summary of the Partnership's securities available for sale
as of December 31, 1995 and 1994:

<TABLE>
<CAPTION>
                                                                Gross              Gross
                                                              Unrealized        Unrealized
                                               Cost             Gains              Losses       Fair Value
                                             -------------------------------------------------------------
                                                                          1995
                                             -------------------------------------------------------------
<S>                                          <C>               <C>                 <C>            <C>
Securities available for sale:              
   Common stock                              $108,800          $11,100             $  --          $119,900
   Corporate bonds and notes                   15,004              146                --            15,150
                                             -------------------------------------------------------------
                                             $123,804          $11,246             $  --          $135,050
                                             =============================================================
                                                                          1994
                                             -------------------------------------------------------------
Securities available for sale:              
   Common stock                              $ 25,000          $ 1,125             $  --          $ 26,125
   Mutual fund                                 85,560              --               6,430           79,130
                                             -------------------------------------------------------------
                                             $110,560          $ 1,125             $6,430         $105,255
                                             =============================================================

</TABLE>
As of December 31, 1995, the Partnership did not have trading or held to
maturity securities.

A summary of investment earnings included in nonoperating income (expense) in
the accompanying Statements of Operations for the years ended December 31,
1995, 1994 and 1993 is as follows:

<TABLE>
<CAPTION>
                                                                             1995              1994             1993
                                                                           ------------------------------------------
<S>                                                                        <C>                 <C>              <C>
Realized gains on sale of securities available for sale                    $ 1,805             $  --            $  --
Realized (losses) on sale of securities available for sale                  (5,745)
                                                                           ------------------------------------------
                                                                           $(3,940)            $  --            $  --
                                                                           ========================================== 

</TABLE>

                                      14
<PAGE>   15

YAGER/KUESTER PUBLIC FUND
 LIMITED PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 4.     SECURITIES AVAILABLE FOR SALE (CONTINUED)

Proceeds from sales of securities available for sale during the years ended
December 31, 1995, 1994 and 1993 are as follows:

<TABLE>
<CAPTION>
                                                                            1995               1994             1993
                                                                          -------------------------------------------
<S>                                                                       <C>                  <C>              <C>
Proceeds from sales of securities available for sale                      $176,620             $  --            $  --
                                                                          ===========================================
</TABLE>


Dividend income included in nonoperating income (expense) in the accompanying
Statements of Operations totaled $7,778, $4,821 and $4,861 for the years ended
December 31, 1995, 1994 and 1993, respectively.

The changes in the net unrealized gain (loss) on securities available for sale
during the years ended December 31, 1995 and 1994 were $16,551 and $(5,305),
respectively, which have been included in the separate component of partners'
equity.

NOTE 5.  PROPERTIES ON OPERTING LEASES AND PROPERTIES HELD FOR LEASE

The Partnership leases office facilities under various lease agreements.  The
following schedule provides an analysis of the Partnership's investment in
properties held for lease by major classes as of December 31, 1995 and 1994,
respectively.

<TABLE>
<CAPTION>
                                                  1995              1994
                                               -----------------------------
<S>                                            <C>                <C>
Land                                           $1,168,953         $1,168,953
Building                                        6,188,729          6,188,729
Building improvements                             476,272            120,317
                                               -----------------------------
                                                7,833,954          7,477,999
Less accumulated depreciation                   1,059,195            897,160
                                               -----------------------------
                                               $6,774,759         $6,580,839
                                               =============================
</TABLE>

The following is a schedule by years of all minimum future rentals on
noncancelable operating leases as of December 31, 1995:


<TABLE>
<CAPTION>                                                        
Year Ending                                                      
December 31,                                                      Amount
----------------------------------------------------------------------------
<S>                                                              <C>
1996                                                             $1,081,880
1997                                                              1,072,125
1998                                                                964,067
1999                                                                735,760
2000                                                                450,778
Thereafter                                                          826,472
                                                                 ----------
                                                                 $5,131,082
                                                                 ==========
</TABLE>                                                         


                                      15
<PAGE>   16

YAGER/KUESTER PUBLIC FUND
 LIMITED PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 6.  NOTE PAYABLE, BANK, LONG-TERM DEBT AND PLEDGED ASSETS

The Partnership has a $750,000 line-of-credit with an outstanding balance of
$219,783 at December 31, 1995 which allows borrowings and repayments to be made
on a daily basis. Outstanding balances on the line-of-credit bear interest at a
variable rate tied to the bank's prime rate (prime rate was 8.5% at December
31, 1995).  The line-of-credit is unsecured and expires on May 10, 1996.  The
Partnership did not have a line-of-credit available to it at December 31, 1994.

Long-term debt and pledged assets consists of the following at December 31,
1995:

<TABLE>
<S>                                                                               <C>
Note payable to United of Omaha, due in monthly installments of $14,976,          
 including interest at 10.5%, through June 1999, with $1,115,064 due in           
 July 1999, collateralized by mortgage on land and building                       $1,297,832
Note payable to United of Omaha, due in monthly installments of $27,443,          
 including interest at 9.625%, through November 1996, with $2,817,027           
 due in December 1996, collateralized by mortgage on land and building             2,867,872
Note payable to Internet Services Corporation, related through common             
  ownership, due in five annual principal installments of $18,255, plus           
  interest at the prime rate (8.50% at December 31, 1995) of                      
  NationsBank of North Carolina, N.A., plus 2%, unsecured, due                    
  January 1998                                                                        54,765
                                                                                  ----------
                                                                                   4,220,469
Less current maturities                                                            2,931,715
                                                                                  ----------
                                                                                  $1,288,754
                                                                                  ==========

</TABLE>

Future maturities of long-term debt are as follows:

<TABLE>
<CAPTION>
Year Ending
December 31,                                                                        Amount
--------------------------------------------------------------------------------------------
<S>                                                                               <C>
1996                                                                              $2,931,715
1997                                                                                  68,868
1998                                                                                  74,445
1999                                                                               1,145,441
                                                                                  ----------
                                                                                  $4,220,469
                                                                                  ==========
</TABLE>

Interest expense to Internet Services Corporation, for the years ended December
31, 1995, 1994 and 1993 was $5,476, $5,842, and $8,048, respectively.

NOTE 7.  PRIORITY RETURN

The cumulative unpaid priority return to the limited partners is $1,681,265 and
$1,438,481 at December 31, 1995 and 1994, respectively.  There were no cash
distributions to the limited partners for the priority return for the years
ended December 31, 1995, 1994 and 1993.


                                      16

<PAGE>   17

YAGER/KUESTER PUBLIC FUND
 LIMITED PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 8.   MANAGEMENT AND ADMINISTRATION EXPENSES

Management expenses paid to a General Partner and to Internet Services
Corporation in connection with day-to-day operations of the Partnership
amounted to $50,981, $50,471, and $55,810 for the years ended December 31,
1995, 1994 and 1993, respectively.

NOTE 9.   MAJOR TENANTS

Rental income for the years ended December 31, 1995, 1994 and 1993,
respectively, included approximate rentals from the following major tenants
each of which accounted for 10% or more of the total rental income of the
Partnership for those years:

<TABLE>
<CAPTION>
                              Approximate Amount of Rental Income
                                    Year Ended December 31,
                           -------------------------------------------
                            1995               1994              1993
                           -------------------------------------------
<S>                        <C>                <C>              <C>
Tenant A                   $451,000           $347,000         $362,000
Tenant B                    306,000            310,000          335,000
Tenant C                    138,000            132,000          127,000
</TABLE>                   
                                         

Accounts receivable from each of the major tenants identified above were as
follows at December 31, 1995 and 1994, respectively:

<TABLE>
<CAPTION>
                                                     December 31,
                                               ------------------------
                                                1995             1994
                                               ------------------------
<S>                                            <C>              <C>
Tenant A                                       $37,565          $45,604
Tenant B                                            --               --
Tenant C                                            --               --
</TABLE>


NOTE 10.  COMMITMENT

As of December 31, 1995, the Partnership committed to a major tenant that
upfitting specified in the lease agreement will be completed during 1996.
Management estimates that the total cost of the upfitting will be approximately
$1,000,000.  At December 31, 1995, the partnership has incurred approximately
$350,000 in upfitting costs which are included in building improvements.














                                      17

<PAGE>   18


     Item 9.  Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.  Not applicable.


                                    PART III

     Item 10.  Directors and Executive Officers of the Partnership.  The
Partnership has no executive officers and directors.  The General Partners of
the partnership are DRY Limited Partnership, the sole General Partner of which
is Dexter R. Yager, Sr., and FSK Limited Partnership, the sole General Partner
of which is Faison S. Kuester, Jr.

     Following is a brief discussion of the background and experience of
Messrs. Kuester and Yager.

     Faison S. Kuester, Jr., 50, graduated from the University of North
Carolina at Chapel Hill with a Bachelor of Arts Degree in History in 1967.  He
is a resident of Charlotte, North Carolina.  After two years service in the
United States Army as a Second Lieutenant, Mr. Kuester joined Independence
Development Corporation in 1972 serving as a director of leasing and management
for a period of three years.  In 1974, Mr. Kuester formed his own company,
Kuester Realty and Management, in order to lease and manage commercial
properties in Charlotte, North Carolina and surrounding communities.  In
addition to leasing and managing various commercial properties, Kuester Realty
had developed two medical clinics in the Charlotte area.  In 1980, Kuester
Properties, Inc. ("KPI") was formed to specialize in on-site management of
apartment communities in the southeastern United States.  The following year
Cauble and Kuester Company, Inc. was organized to lease and manage commercial
properties in the metropolitan Atlanta area.  This partnership brought together
Cauble and Company, experienced mortgage lenders and leasing agents in the
Atlanta market, and Kuester Realty and Management.  Finally, in 1983, Kuester
Development Corporation was formed to allow the Kuester companies to engage in
selective real estate development projects in the southeastern United States.

     Through Kuester Development Corporation, a wholly-owned subsidiary of KPI,
Mr. Kuester has been directly involved with the development of several
commercial real estate properties in North and South Carolina and Georgia.
These include the First United National Bank Building in Wilmington, North
Carolina, two retail office showroom projects, two medical office buildings and
residential condominiums in Charlotte, North Carolina, an office building in
Savannah, Georgia, and an office building in Greenville, South Carolina.
Kuester Development Corporation also has developed over 700 apartment units
throughout Charlotte, North Carolina since 1983.  KPI is active in the
management of these units as well as managing other clients' multifamily
developments throughout the Carolinas.

     In 1989, Mr. Kuester, Jr. established Kuester Hospitality Corporation for
the purpose of acquiring and managing health care facilities.  In 1995, he
established Kuester HealthCare Services, Inc. ("KHCS") to offer various health
care services, including development and brokerage of health care facilities.
Two assisted living facilities totalling 100 beds are currently under KHCS
management.  KHCS is currently involved in the development of a 70-bed facility
with plans to begin construction in July, 1996.  KHCS will be the manager after
completion.

     KPI serves as property manager of the Partnership property.

     Dexter R. Yager, Sr., 56, is the President and founder of D&B Yager
Enterprises, Inc., Mr. Yager's Amway distributorship business.  Through D&B
Yager Enterprises, Inc., Mr. Yager has been an independent distributor for
Amway Corporation for over 30 years during which time he has achieved the
status of Crown Ambassador, which is the highest level attainable as an Amway
distributor.  The Amway Corporation is one of the largest manufacturers of home
care products in the world.  He is also a former member and past president of
the Amway Distributor Association Board of Directors.  Mr. Yager has many other
family-owned businesses and is responsible for the development of several
businesses, including the following:  Yager Personal Development, Inc., which
handles Mr. Yager's services as a speaker at Amway events, Yager Construction
Company, Inc., which is a general building contractor; and Dexter and Birdie
Yager Family Limited Partnership, which owns various real estate investments
and manages real estate for the Yager family.

     Mr. Yager has significant experience in real estate investment for his own
account.  Mr. Yager personally, and through partnerships in which he and his
wife own a majority interest, has made investments in raw land, office
buildings, a shopping center, and other commercial and residential real estate
having a market value in excess of $10,000,000.  He has made substantial
additional real estate investments through partnerships in which he does not
own a majority interest.

                                      18
                                      

<PAGE>   19


     Section 16(a) of the Securities Exchange Act of 1934 requires the
Partnership's general partners, officers and holders of more than 10% of the
Partnership's Partnership units to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of
Partnership units and any other equity securities of the Partnership.  To the
Partnership's knowledge, based solely upon review of the forms, reports and
certificates filed with the Partnership by such persons, all such Section 16(a)
filing requirements were complied with by such persons in 1995, except as
follows:

     Jerry R. Haynes - One Form 3 initial report of ownership was filed late.

     Item 11.  Executive Compensation.  The Partnership does not employ any
executive officers or directors and no compensation is paid to any person for
performing services typically provided by such an officer or director.  Dexter
R. Yager, Sr. and Faison S. Kuester have policymaking functions with regard to
Partnership operations.  See Item 10 for the relationship of such persons to
the Partnership.  See Item 13 for a description of payments made to Kuester
Properties, Inc. for property management services and to Internet Services
Corporation, Inc. for bookkeeping and accounting services.

     Item 12.  Security Ownership of Certain Beneficial Owners and Management.
The General Partners initially contributed a total of $2,500 to the capital of
the Partnership, consisting of a $1,600 contribution from DRY Limited
Partnership and $900 from FSK Limited Partnership.  The General Partners own a
1% interest in all items of Partnership income, gain, loss, deductions or
credits including 1% of net cash from operations.  The General Partners also
own a residual 25% interest in net cash from a sale or refinancing of the
Partnership Property, subordinated to the receipt by the Limited Partners of
the return of their capital contributions and their priority return and to the
payment of any subordinated real estate commissions due to affiliates of the
General Partners.

     The General Partners do not own any Limited Partnership interest in the
Partnership.

     Item 13.  Certain Relationships and Related Transactions.  During the
fiscal year ended December 31, 1995, Kuester Properties, Inc. received
management fees of $45,981 for management of the Partnership property.
Internet Services Corporation, Inc. received $5,000 for providing
accounting/bookkeeping services.  See Item 7 for a description of a loan to the
Partnership by Internet Services Corporation, a corporation owned equally by
three trusts, the beneficial interests of which inure to the benefit of three
children of Dexter R.  Yager, Sr., the sole General Partner of DRY Limited
Partnership, which limited partnership is one of the two general partners of
the Partnership.  Janitorial services for the EastPark Executive Center are
provided by Marquis Cleaning Services, which is operated and owned by Dexter R.
Yager's nephew.

     The General Partners believe that the terms for the above mentioned
services are as favorable as those the Partnership might have obtained from
unaffiliated parties.

                                    PART IV

     Item 14.  Exhibits, Financial Statements Schedules and Reports on Form
8-K.

     (a)(1) The following financial statements of the Partnership are included
in Part II, Item 8 hereof.

     (i) Independent Auditor's Report
    (ii) Balance Sheets as of December 31, 1995 and 1994
   (iii) Statements of Operations for years ended
           December 31, 1995, 1994 and 1993
    (iv) Statements of Partners' Equity for years ended
           December 31, 1995, 1994 and 1993
     (v) Statements of Cash Flows for years ended December 31, 1995, 
           1994 and 1993
    (vi) Notes to Financial Statements

     (a)(2) All schedules have been omitted because they are
            inapplicable, not required, or the information is included
            elsewhere in the financial statements or notes thereto.

     (a)(3) Exhibits:

        (4) Instrument defining rights of securities holders -
            set forth in the Limited Partnership Agreement which is
            contained in the Prospectus incorporated herein by
            reference. 

                                      19


<PAGE>   20




              (10.1) Limited Partnership Agreement - contained in
                     Prospectus incorporated herein by reference.

              (10.2) Exclusive Leasing and Management Agreement dated October
                     1, 1994 (EastPark Executive Center).

              (10.3) Exclusive Leasing and Management Agreement
                     dated October 1, 1994 (United Carolina Bank Building).

                (23) Consent of Independent Auditor

                (27) Financial Data Schedule (for SEC use only)

              (b)  Reports on Form 8-K:  None.

              (c)  Exhibits:  The exhibits listed in Item
                   14(a)(3) above and not incorporated herein by reference are
                   filed with this Form 10-K.

              (d)  Financial Statement Schedules:  There are no
                   financial statement schedules included in this Form 10-K
                   report.

                                      20


<PAGE>   21


                                   SIGNATURES

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

                                 YAGER/KUESTER PUBLIC FUND
                                 LIMITED PARTNERSHIP


                            By:  FSK Limited Partnership


March 27, 1996              By:   /s/ Faison S. Kuester, Jr.
                                 ----------------------------------
                                 Faison S. Kuester, Jr.
                                 General Partner
                                 (Principal Executive Officer)


     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on March 27, 1996 by the following persons on
behalf of the Partnership and in the capacities and on the dates indicated.



/s/ Alison L. Hawk               /s/ Faison S. Kuester
------------------------------   ----------------------------------------
Alison L. Hawk, Controller       Faison S. Kuester, Jr., General
(Principal Accounting Officer)   Partner of FSK Limited Partnership,
                                 General Partner of the Partnership

Date  March 27, 1996             Date  March 27, 1996
      ------------------------         ----------------------------------


                                 /s/ Dexter R. Yager, Sr.
                                 ----------------------------------------
                                 Dexter R. Yager, Sr., General
                                 Partner of DRY Limited Partnership,
                                 General Partner of the Partnership

                                 Date  March 27, 1996
                                       ----------------------------------



                                      21


<PAGE>   22


                                 EXHIBIT INDEX

     The following documents are included in this Form 10-K as an Exhibit:


<TABLE>
<CAPTION>
         Designation
         Number Under
Exhibit  Item 601 of                                      Page
Number   Regulation S-K  Exhibit Description             Number
------   --------------  -------------------             ------
<S>      <C>             <C>                             <C>
1*                  (4)  Limited Partnership Agreement

2*               (10.1)  Limited Partnership Agreement
                         Exclusive Leasing and
                         Management Agreement dated
                         October 1, 1994 - (EastPark

3                (10.2)  Executive Center)                 23

4                (10.3)  Exclusive Leasing and             31
                         Management Agreement dated
                         October 1, 1994 - (United
                         Carolina Bank building)

5                  (23)  Consent of Independent Auditor    39

                   (27)  Financial Data Schedule (for 
                         SEC use only)
</TABLE>

*    Incorporated by reference to Exhibit A of the Partnership's Prospectus
     dated December 1, 1987, Registration Number 33-07056-A.


                                      22