UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, DC.  20549

                            FORM 10-Q

(Mark One)

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

For the quarterly period ended        September 30, 2000
                               ----------------------------------

                               or

[   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)  OF  THE
SECURITIES EXCHANGE ACT OF 1934

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

Commission file number               0-14645
                      -------------------------------------------

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

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

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

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

                              N/A
-----------------------------------------------------------------
 (Former name, former address and former fiscal year, if changed
                       since last report)

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
                                          -----       -----
<PAGE>

                 PART I - FINANCIAL INFORMATION

Item 1.   Financial Statements.

        Consolidated Balance Sheets - September 30, 2000
        (unaudited) and December 31, 1999
        Consolidated Statements of Operations - Three Months and
        Nine Months Ended September 30, 2000 and 1999
        (unaudited)
        Consolidated Statements of Cash Flows - Nine Months
        Ended September 30, 2000 and 1999 (unaudited)
        Notes to Consolidated Financial Statements (unaudited)

Item 2.   Management's Discussion and Analysis of
          Financial Condition and Results of Operations.

          (1)  Liquidity

              As  of  September 30, 2000, Registrant had cash  of
$63,842. Cash generated from operations is used primarily to fund
operating expenses and debt service.  If cash flow proves  to  be
insufficient,  the  Registrant will  attempt  to  negotiate  loan
modifications with the various lenders in order to remain current
on   all  obligations.   The  Registrant  is  not  aware  of  any
additional sources of liquidity.

              As of September 30, 2000, Registrant had restricted
cash of $2,537,245 consisting primarily of funds held as security
deposits,   replacement  reserves  and  escrows  for  taxes   and
insurance.   As  a  consequence of the restrictions  as  to  use,
Registrant does not deem these funds to be a source of liquidity.

               In   recent  years  the  Registrant  has  realized
significant  losses, including the foreclosure of  one  property,
due to the properties' inability to generate sufficient cash flow
to pay their operating expenses and debt service.  At the present
time,  the  two  remaining  properties  are  able  to  pay  their
operating expenses and debt service but it is unlikely  that  any
cash  will be available to the Registrant to pay its general  and
administrative expenses. Washington Square was foreclosed upon by
the  mortgagor on March 22, 2001 by recordation of a deed in lieu
of foreclosure.  In the legal proceeding involving Morrison Clark
Inn,  if  Capital  Bank  executes its  $1,800,000  judgment  with
respect  to  the Registrant, it is expected to have a significant
adverse  impact  on  the Registrant since there  is  insufficient
available  cash  to pay the judgment.  Any such  execution  could
result in a forced sale of the Registrant's remaining properties.
See Part II. Item 1.  Legal Proceedings.

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

          (2)  Capital Resources

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

          (3)  Results of Operations

               During  the  third  quarter  of  2000,  Registrant
incurred  a  net loss of $803,467 ($38.63 per limited partnership
unit)  compared  to  a net loss of $839,352 ($40.35  per  limited
partnership  unit) for the same period in 1999.   For  the  first
nine  months  of  2000, the Registrant incurred  a  net  loss  of
$1,926,509  ($92.61 per limited partnership unit) compared  to  a
net loss of $2,312,044 ($111.15 per limited partnership unit) for
the same period in 1999.

              Rental income increased $103,243 from $1,306,971 in
the  third  quarter of 1999 to $1,410,214 in the same  period  of
2000  and  for  the  first  nine months increased  $368,726  from
$3,721,934  of  1999 to $4,090,660 in the same  period  of  2000.
Rental  income increased at Tindeco Wharf due to an  increase  in
average  rental  rates of both residential and commercial  units.
The  increase  in rental income at The River Street  Inn/Factor's
Walk is due to an increase in average occupancy.

              Hotel income increased $1,466 from $288,117 in  the
third  quarter  of 1999 to $289,583 in the same period  in  2000.
The increase in hotel income is due to an increase in the average
room rates ($113.41 to $121.74) combined with an increase in  the
average occupancy (58% to 59%).

              Hotel income decreased $111,732 from $1,081,476 for
the first nine months of 1999 to $969,744 for the same period  in
2000.   The decrease in hotel income is due to a decrease in  the
average  occupancy  (69%  to  59%)  while  average  rental  rates
increased ($123.25 to $124.16).

             Rental operations expense increased by $419,148 from
$578,606  in  the third quarter of 1999 to $997,754 in  the  same
period  in  2000 and increased $530,029 from $1,621,367  for  the
first  nine months of 1999 to $2,151,396 for the same  period  in
2000.  Rental operations expense increased due to an increase  in
maintenance  expense at Tindeco Wharf due to planned  maintenance
at  the  property, partially offset by a decrease in  maintenance
expense at Washington Square due to a decrease in the turnover of
apartment units as a result of an increase in average occupancy.

              Hotel  operations expense increased  $323,661  from
$288,177  in  the third quarter of 1999 to $611,838 in  the  same
period in 2000 and increased $250,965 from $905,200 for the first
nine  months of 1999 to $1,156,165 for the same period  in  2000.
The  increase  in  hotel operations expense at the  River  Street
Inn/Factor's  Walk  was due to the overall  increase  in  general
building repairs such as painting, elevator and heating  and  air
conditioning repairs.

              Interest expense decreased $248,873 from $1,078,089
in  the  third quarter of 1999 to $829,216 in the same period  in
2000  and  decreased $487,572 from $3,126,559 for the first  nine
months  of  1999 to $2,638,987 for the same period in 2000.   The
decrease is due to a decrease in the principal balance upon which
interest  is  calculated Tindeco Wharf,  partially  offset  by  a
increase  in  interest expense at The River  Street  Inn/Factor's
Walk due to advances made by the first mortgage holder.

               Losses   incurred  during  the  quarter   at   the
Registrant's   three  properties  were  approximately   $660,000,
compared to a loss of approximately $710,000 for the same  period
in  1999.   For  the first nine months of 2000, the  Registrant's
three  properties  incurred  a loss of  approximately  $1,505,000
compared to approximately $1,927,000 for the same period in 1999.

              In the third quarter of 2000, Registrant recognized
a  net  income of $11,000 at Tindeco Wharf including $312,000  of
depreciation  and amortization expense, compared  to  a  loss  of
$398,000,  including  $306,000 of depreciation  and  amortization
expense  in the third quarter of 1999.  The recognized gain  from
the  third  quarter of 1999 to the same period  in  2000  is  the
result  of  an  increase in rental income due to an  increase  in
average  rental  rates, partially offset by an increase  in  real
estate tax expense due to the timing of the expense recognition.

              For  the  first  nine  months of  2000,  Registrant
incurred  a loss of $400,000 at Tindeco Wharf including  $911,000
of  depreciation and amortization expense, compared to a loss  of
$1,220,000  for  the same period in 1999, including  $919,000  of
depreciation and amortization expense.  The decrease in the  loss
from the first nine months of 1999 to the same period in 2000  is
the  result  of  an  increase in rental income  combined  with  a
decrease in interest expense, partially offset by an increase  in
maintenance expense.  The increase in rental income is due to  an
increase in the average rental rates of both the residential  and
commercial units. Interest expense decreased due to a decrease in
the   principal  balance  upon  which  interest  is   calculated.
Maintenance expense increased due to planned maintenance  at  the
property including roof repairs, electrical and plumbing repairs,
and painting.

              In the third quarter of 2000, Registrant incurred a
loss  of $687,000 at The River Street Inn/Factor's Walk including
$92,000  of depreciation expense, compared to a loss of  $302,000
including $92,000 of depreciation expense in the third quarter of
1999.   The increased loss from the third quarter of 1999 to  the
same  period  in 2000 is the result of an increase in maintenance
and   interest  expense  combined  with  an  increase  in   hotel
operations  expense  including  utilities,  wages  and  salaries,
partially  offset  by  an increase in hotel income.   Maintenance
expense  increased  due  to  general building  repairs  including
painting  and elevator and heating and air conditioning  repairs.
Interest  expense  increased due to an increase  in  the  average
principal  balances of the notes upon which interest  is  accrued
due  to advances made by the first mortgage holder.  Hotel income
increased  due to an increase in the average room rates  ($113.41
to  $121.74)  combined with an increase in the average  occupancy
(58% to 59%).

              For  the  first  nine  months of  2000,  Registrant
incurred  a  loss of $1,093,000 at The River Street  Inn/Factor's
Walk  including $297,000 of depreciation expense, compared  to  a
loss  of $680,000 for the same period in 1999, including $275,000
of depreciation expense.  The increase in the loss from the first
nine months of 1999 to the same period in 2000 is the result of a
decrease in hotel income combined with an increase in maintenance
and  interest expense, partially offset by an increase in  rental
income.   Hotel income decreased due to a decrease in the average
occupancy  (69%  to  59%)  while average rental  rates  increased
($123.25  to  $124.16).  Maintenance  expense  increased  due  to
general  building  repairs including painting  and  elevator  and
heating and air conditioning repairs.  Interest expense increased
due  to  an increase in the principal balance upon which interest
is accrued due to advances made by the first mortgage holder. The
increase  in  rental  income is due to  an  increase  in  average
occupancy (64% to 74%) of the commercial space.

              In the third quarter of 2000, Registrant recognized
income  of  $16,000  at Washington Square, including  $31,000  of
depreciation  expense, compared to a loss  of  $10,000  including
$30,000  of  depreciation expense in the third quarter  of  1999.
The  change  is  due to an increase in rental income  due  to  an
increase in average occupancy for the third quarter (92% to 94%).

              In  the  first  nine  months  of  2000,  Registrant
incurred  a  loss  of  $12,000  at Washington  Square,  including
$93,000  of  depreciation expense, compared to a loss of  $27,000
for  the  same  period  of 1999, including  $90,000  depreciation
expense. The decrease in the loss is due to an increase in rental
income  combined with a decrease in maintenance expense.   Rental
income increased due to an increase in average occupancy (92%  to
93%).   Maintenance expense decreased due to a  decrease  in  the
turnover of apartment units as a result of an increase in average
occupancy.   Washington  Square  was  foreclosed  upon   by   the
mortgagor on March 22, 2001 by recordation of a deed in  lieu  of
foreclosure.

<PAGE>

                DIVERSIFIED HISTORIC INVESTORS II
              (a Pennsylvania limited partnership)

                   CONSOLIDATED BALANCE SHEETS


                             Assets

                               September 30,    December 31,
                                   2000             1999
                                   ----             ----
                                (Unaudited)
Rental properties, at cost:
 Land                          $   934,582      $   934,582
 Buildings and improvements     41,140,801       41,139,001
 Furniture and fixtures          3,324,505        3,324,505
                               -----------      -----------
                                45,399,888       45,398,088
Less-accumulated depreciation  (24,268,690)     (22,962,044)
                               -----------      -----------
                                21,131,198       22,436,044
Cash and cash equivalents           63,842           38,110
Restricted cash                  2,537,245        1,508,524
Accounts and notes receivable      138,500          133,272
Other assets (net of
 amortization of $432,562 and
 $398,407)                       1,782,314        1,764,850
                               -----------      -----------
     Total                     $25,653,099      $25,880,800
                               ===========      ===========

                Liabilities and Partners' Equity

Liabilities:
Debt obligations               $33,538,022      $33,306,221
Accounts payable:
 Trade                           3,500,924        3,241,235
 Related parties                 3,160,155        2,963,434
Interest payable                13,365,035       12,453,362
Accrued liabilities              1,576,176        1,499,221
Tenant security deposits           271,908          249,938
                               -----------      -----------
     Total liabilities          55,412,220       53,713,411
Partners' deficit              (29,759,121)     (27,832,611)
                               -----------      -----------
     Total                     $25,653,099      $25,880,800
                               ===========      ===========

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

<PAGE>

                DIVERSIFIED HISTORIC INVESTORS II
              (a Pennsylvania limited partnership)

              CONSOLIDATED STATEMENTS OF OPERATIONS
                           (Unaudited)

                           Three months              Nine months
                        ended September 30,      ended September 30,
                         2000        1999         2000         1999
Revenues:                ----        ----         ----         ----
 Rental income       $1,410,214  $1,306,971   $4,090,660   $3,721,934
 Hotel income           289,583     288,117      969,744    1,081,476
 Interest income          1,327       1,724        6,957       11,548
                     ----------  ----------   ----------   ----------
  Total revenues      1,701,124   1,596,812    5,067,361    4,814,958
                     ----------  ----------   ----------   ----------
Costs and expenses:
 Rental operations      555,776     578,606    1,709,418    1,621,367
 Hotel operations       611,838     288,177    1,156,165      905,200
 General and
  administrative         49,500      49,500      148,500      148,500
 Interest               829,216   1,078,089    2,638,987    3,126,559
 Depreciation and
  amortization          458,261     441,792    1,340,800    1,325,376
                     ----------  ----------   ----------   ----------
  Total costs and
   expenses           2,504,591   2,436,164    6,993,870    7,127,002
                     ----------  ----------   ----------   ----------
Net loss            ($  803,467)($  839,352) ($1,926,509) ($2,312,044)
                     ==========  ==========   ==========   ==========
Net loss per
 limited
 partnership unit   ($    38.63)($    40.35) ($    92.61) ($   111.15)
                     ==========  ==========   ==========   ==========

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

<PAGE>

                DIVERSIFIED HISTORIC INVESTORS II
              (a Pennsylvania limited partnership)

              CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (Unaudited)

                                             Nine months ended
                                              September  30,
                                             2000         1999
                                             ----         ----
Cash flows from operating activities:
 Net loss                               ($1,926,509) ($2,312,044)
 Adjustments to reconcile net loss to
  net cash used in operating
  activities:
Depreciation and amortization             1,340,800    1,325,376
Changes in assets and liabilities:
 Increase in restricted cash             (1,028,721)    (238,492)
 Increase in accounts receivable             (5,228)     (59,797)
 Increase in other assets                   (51,619)     (31,572)
 Increase in accounts payable - trade       259,689      351,396
 Increase in accounts payable -
  related parties                           196,721       79,701

 Increase in interest payable               911,673      790,861
 Increase in accrued liabilities             76,955       77,294
 Increase in tenant security deposits        21,970        4,384
                                         ----------   ----------
 Net cash used in operating activities     (204,269)     (12,893)
                                         ----------   ----------
Cash flows from investing activities:
 Capital expenditures                        (1,800)    (113,627)
                                         ----------   ----------
Net cash used in investing activities        (1,800)    (113,627)
                                         ----------   ----------
Cash flows from financing activities:
 Borrowings under debt obligations          279,602      179,388
 Principal payments under debt
  obligations                               (47,801)    (251,238)
                                         ----------   ----------
 Net cash provided by (used in)
  financing activities                      231,801      (71,850)
                                         ----------   ----------
Increase (decrease) in cash and cash
 equivalents                                 25,732     (198,370)
Cash and cash equivalents at beginning
 of period                                   38,110      219,254
                                         ----------   ----------
Cash and cash equivalents at end of
 period                                  $   63,842   $   20,884
                                         ==========   ==========

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

<PAGE>



                DIVERSIFIED HISTORIC INVESTORS II
              (a Pennsylvania limited partnership)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           (Unaudited)


NOTE 1 - BASIS OF PRESENTATION

The  unaudited  consolidated financial statements of  Diversified
Historic  Investors II (the "Registrant") and related notes  have
been  prepared  pursuant  to the rules  and  regulations  of  the
Securities   and   Exchange  Commission.   Accordingly,   certain
information   and  footnote  disclosures  normally  included   in
financial   statements  prepared  in  accordance  with  generally
accepted accounting principles have been omitted pursuant to such
rules  and  regulations.  The accompanying consolidated financial
statements  and related notes should be read in conjunction  with
the audited financial statements, and notes thereto, in Form 10-K
of the Registrant, for the year ended December 31, 1999.

The information furnished reflects, in the opinion of management,
all   adjustments,  consisting  of  normal  recurring   accruals,
necessary  for a fair presentation of the results of the  interim
periods presented.

NOTE 2 - SUBSEQUENT EVENT

Washington Square was foreclosed upon by the mortgagor  on  March
22, 2001 by recordation of a deed in lieu of foreclosure.

<PAGE>

                   PART II - OTHER INFORMATION

Item 1.   Legal Proceedings

           In May 1992, a Partnership 69% owned by the Registrant
filed  a  reorganization petition pursuant to Chapter 11  of  the
U.S.  Bankruptcy  Code  in order to forestall  foreclosure  by  a
lender  on  the  property owned by it.  In addition,  the  lender
filed  a  claim against the Registrant on its guaranty of payment
of  its  debt.  In February 1993, the lender, with permission  of
the  bankruptcy court, foreclosed on the property.   In  November
1993,  the  lender obtained a judgment in the matter  of  Capital
Bank, N.A. v. Diversified Historic Investors II in the amount  of
$1,800,000.  This judgement has not been executed by the lender.

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

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

Item 6.   Exhibits and Reports on Form 8-K

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

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

            21                  Subsidiaries of the  Registrant
                                are    listed   in   Item    2.
                                Properties   on   Form    10-K,
                                previously      filed       and
                                incorporated     herein      by
                                reference.

            (b) Reports on Form 8-K:

            No  reports were filed on Form 8-K during the quarter
            ended September 30, 2000.

<PAGE>

                                SIGNATURES

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

Date: October 23, 2001     DIVERSIFIED HISTORIC INVESTORS II
      ----------------
                           By: Dover Historic Advisors,
                               General Partner

                               By: EPK, Inc., Partner

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

<PAGE>