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           March 31, 1999
                               ---------------------------------------
                                  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.)

          1609 Walnut Street, Philadelphia, PA  19103
----------------------------------------------------------------------
(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 - March 31, 1999 (unaudited)
             and December 31, 1998
             Consolidated Statements of Operations - Three Months
             Ended March 31, 1999 and 1998 (unaudited)
             Consolidated Statements of Cash Flows - Three Months
             Ended March 31, 1999 and 1998 (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  March 31, 1999, Registrant  had  cash  of
$94,634.   Cash  generated from operations is used primarily  to  fund
operating  expenses  and  debt service.  If cash  flow  proves  to  be
insufficient,   the   Registrant  will  attempt  to   negotiate   loan
modifications with the various lenders in order to remain  current  on
all obligations and to defer administrative costs.  The Registrant  is
not aware of any additional sources of liquidity.

                     As  of  March 31, 1999, Registrant had restricted
cash  of  $1,617,388 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,  all
three  remaining  properties are able to pay their operating  expenses
and debt service but it is unlikely that any cash will be available to
the Registrant to pay its general and administrative expenses.  In the
legal  proceeding involving Morrison Clark, if Capital  Bank  executes
its   judgment  against  the  Registrant,  it  is  expected  to   have
significant   adverse  impact  on  the  Registrant  since   there   is
insufficient  available cash to pay the judgment.  Any such  execution
could   result  in  a  forced  sale  of  the  Registrant's   remaining
properties.   However, the Registrant has in the  past  been  able  to
obtain forebearance on execution for several years upon payment  of  a
$20,000 fee to the judgment creditor and believes it may be able to do
so  when the current forebearance period ends in July 2000.  See  Part
II. Item 1.  Legal Proceedings.

                     It  is the Registrant's intention to continue  to
hold  the  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,  other  than the above, 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  first  quarter of  1999,  Registrant
incurred a net loss of $829,685 ($39.89 per limited partnership  unit)
compared  to  a  net loss of $605,746 ($29.12 per limited  partnership
unit) for the same period in 1998.

                    Rental and hotel income combined increased $54,055
from $1,519,967 in the first quarter of 1998 to $1,574,022 in the same
period in 1999.  This increase resulted from an increase of $49,706 in
rental income and an increase of $4,349 in hotel income.  The increase
in  rental  income is the result of an increase in residential  rental
income at Tindeco Wharf due to an increase in the average rental rates
partially  offset  by both a decrease of rental income  at  Washington
Square due to a decrease in the average occupancy (96% to 95%)  and  a
decrease in rental income of the commercial space at Factor's Walk due
to  a  decrease in the average occupancy (86% to 64%).   Hotel  income
increased  due  to  an  increase in average  occupancy  (72%  to  76%)
partially  offset by a decrease in the average room rates ($125.17  to
$121.60).

                    Interest income decreased from $8,235 in the first
quarter of 1998 to $4,277 in the same period in 1999.  The decrease is
the result of a decrease in the cash balances held in interest bearing
accounts  in the first quarter of 1999 as compared to the same  period
in 1998.

                      Expense  for  rental  operations  increased   by
$103,615 from $430,991 in the first quarter of 1998 to $534,606 in the
same  period in 1999.  The increase in rental operations is due to  an
increase  in maintenance expense at both Tindeco Wharf and  Washington
Square  and  an increase in management fees and legal fees at  Tindeco
Wharf.  The increase in maintenance expense at Tindeco Wharf is due to
planned renovations at the property. Management fees expense increased
due  to the increase in rental income and legal fees increased due  to
negotiations  with the previous management company.  The  increase  at
Washington Square is due to a higher turnover of apartment units.

                     Hotel  operations expense increased $78,095  from
$283,233  in the first quarter of 1998 to $361,328 in the same  period
of  1999.   The  increase in hotel operations expense was  due  to  an
increase in certain operating expenses (rooms, wages and salaries, and
administrative expenses) due to the increase in average occupancy  and
an  increase  in  maintenance expense due to various building  repairs
performed in the first quarter of 1999.

                     Interest expense increased $72,853 from  $947,905
in the first quarter of 1998 to $1,020,758 in the same period in 1999.
Interest expense increased due to an increase in the principal balance
upon  which interest is calculated at both Tindeco Wharf and  Factor's
Walk.

                     Depreciation  and amortization expense  increased
$19,473 from $422,319 in the first quarter of 1998 to $441,792 in  the
same  period in 1999 due to the depreciation of fixed asset  additions
in 1998 at Tindeco Wharf.

                      Losses  incurred  during  the  quarter  at   the
Registrant's three properties amounted to $699,000, compared to a loss
of approximately $478,000 for the same period in 1998.

                     In the first quarter of 1999, Registrant incurred
a loss of $432,000 at Tindeco Wharf including $306,000 of depreciation
and  amortization expense, compared to a loss of $317,000 in the first
quarter  of  1998,  including $288,000 of depreciation  expense.   The
increased loss from the first quarter of 1998 to the first quarter  of
1999  is  the  result  of  an increase in interest,  management  fees,
maintenance,  depreciation and legal expense and  a  decrease  in  the
interest  income partially offset by an increase in rental income  due
to  an increase in the average rental rates.  The increase in interest
expense  is  due  to  the  increase in principal  balance  upon  which
interest is calculated.  The increase in management fees is due to the
increase in rental income.  The increase in maintenance expense is due
to  planned  renovations  at  the  property  including  roof  repairs,
appliance  replacement, and painting.  Depreciation expense  increased
due  to  the depreciation of fixed asset additions in 1998.   Interest
income decreased due to a decrease in the cash balances which generate
the  interest  income.  Legal fees increased due to negotiations  with
the previous management company in connection with the termination  of
their management contract.

                     In the first quarter of 1999, Registrant incurred
a  loss  of $255,000 at The River Street Inn (Factor's Walk) including
$92,000  of  depreciation expense, compared  to  a  loss  of  $170,000
including  $93,000  of depreciation expense in the  first  quarter  of
1998.   The increased loss from the first quarter of 1998 to the  same
period  in  1999  is  the result of a decrease  in  commercial  rental
income, an increase in maintenance expense, interest expense and hotel
operating  expenses  (rooms,  wages and salaries,  and  administrative
expenses)  partially  offset by an increase in hotel  income.   Rental
income  decreased  due to a decrease in the average occupancy  of  the
commercial  space  (86%  to  64%)  due  to  the  loss  of  a   tenant.
Maintenance  expense increased due to an increase in general  building
repairs and increases in electrical, mechanical, fire protection,  and
heating/air  conditioning  repairs made  to  the  property.   Interest
expense  increased  due to an increase in the principal  balance  upon
which interest is accrued.  Hotel operating expenses increased due  to
the increase in the average occupancy.  Hotel income increased due  to
an  increase in the average occupancy (72% to 76%) partially offset by
a decrease in the average room rates ($125.17 to $121.60).

                     In the first quarter of 1999, Registrant incurred
a   loss  of  $12,000  at  Washington  Square,  including  $30,000  of
depreciation  expense, compared to income of $9,000 including  $29,000
of depreciation expense in the first quarter of 1998.  The change from
income  recognized in the first quarter of 1998 to a loss incurred  in
the  first  quarter  of  1999 is due to a decrease  in  rental  income
combined  with  an increase in maintenance expense.  The  decrease  in
rental  income is due to a decrease in the average occupancy  (96%  to
95%) of the residential apartment units and the loss of one commercial
tenant.  The increase in maintenance expense is due to an increase  in
the  apartment  preparation expense caused by  a  higher  turnover  of
apartment units.
<PAGE>

                   DIVERSIFIED HISTORIC INVESTORS II
                 (a Pennsylvania limited partnership)

                      CONSOLIDATED BALANCE SHEETS


                                Assets

                                       March 31, 1999        December 31, 1998
                                         (Unaudited)
Rental properties, at cost:
Land                                     $   934,582             $   934,582
Buildings and improvements                40,542,742              40,542,742
Furniture and fixtures                     3,129,456               3,026,576
                                          ----------              ----------
                                          44,606,780              44,503,900
Less - Accumulated depreciation          (21,648,386)            (21,218,232)
                                          ----------              ----------
                                          22,958,394              23,285,668

Cash and cash equivalents                     94,634                 219,254
Restricted cash                            1,617,388               1,095,373
Accounts and notes receivable                 96,031                  71,582
Other assets (net of amortization of
$363,418 and $351,780 at March  31, 1999
and December 31, 1998, respectively)       1,674,560               1,831,411
                                          ----------              ----------
       Total                             $26,441,007             $26,503,288
                                          ==========              ==========
                   Liabilities and Partners' Equity

Liabilities:
Debt obligations                         $32,784,397             $32,808,014
Accounts payable:
       Trade                               3,009,093               2,827,452
       Related parties                     1,576,911               1,521,734
Interest payable                          11,785,597              11,343,408
Accrued liabilities                        1,400,805               1,293,221
Tenant security deposits                     253,564                 249,134
                                          ----------              ----------
       Total liabilities                  50,810,367              50,042,963
                                          ----------              ----------
Partners' equity                         (24,369,360)            (23,539,675)
                                          ----------              ----------
       Total                             $26,441,007             $26,503,288
                                          ==========              ==========

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

                   DIVERSIFIED HISTORIC INVESTORS II
                 (a Pennsylvania limited partnership)

                 CONSOLIDATED STATEMENTS OF OPERATIONS
          For the Three Months Ended March 31, 1999 and 1998
                              (Unaudited)


                                     Three months                Three months
                                         Ended                       Ended
                                       March 31,                   March 31,
                                         1999                        1998
Revenues:
Rental income                         $1,190,663                  $1,140,957
Hotel income                             383,359                     379,010
Interest income                            4,277                       8,235
                                       ---------                   ---------
       Total revenues                  1,578,299                   1,528,202
                                       ---------                   ---------
Costs and expenses:
Rental operations                        534,606                     430,991
Hotel operations                         361,328                     283,233
General and administrative                49,500                      49,500
Interest                               1,020,758                     947,905
Depreciation and amortization            441,792                     422,319
                                       ---------                   ---------
       Total costs and expenses        2,407,984                   2,133,948
                                       ---------                   ---------
Net loss                             ($  829,685)                ($  605,746)
                                       =========                   =========
Net loss per limited partnership unit($    39.89)                ($    29.12)
                                       =========                   =========

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
          For the Three Months Ended March 31, 1999 and 1998
                              (Unaudited)

                                                         Three months ended
                                                             March 31,
                                                       1999            1998
Cash flows from operating activities:
 Net loss                                           ($829,685)      ($605,746)
 Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization                         441,792         422,319
Changes in assets and liabilities:
 Increase in restricted cash                         (522,015)       (288,392)
 (Increase) decrease in accounts receivable           (24,449)         12,273
 Decrease in other assets                             145,213         157,091
 Increase in accounts payable - trade                 181,641          81,098
 Increase in accounts payable -   related parties      55,177         983,100
 Increase in interest payable                         442,189         417,943
 Increase (decrease) in accrued liabilities           107,584        (947,767)
 Increase in tenant security deposits                   4,430           3,938
                                                      -------         -------
 Net cash provided by operating activities              1,877         235,857
                                                      -------         -------
Cash flows from investing activities:
 Capital expenditures                                (102,880)        (71,801)
                                                      -------         -------
Net cash used in investing activities                (102,880)        (71,801)
                                                      -------         -------
Cash flows from financing activities:
 Principal payments                                   (23,617)        (74,397)
                                                      -------         -------
 Net cash used in financing activities                (23,617)        (74,397)
                                                      -------         -------
(Decrease) increase in cash and cash equivalents     (124,620)         89,659

Cash and cash equivalents at beginning of period      219,254          71,023
                                                      -------         -------
Cash and cash equivalents at end of period           $ 94,634        $160,682
                                                      =======         =======

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 in Form 10-K of  the
Registrant, and notes thereto, for the year ended December 31, 1998.

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.

                      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 to forestall foreclosure on the property owned  by  it
by  a  lender.   In  addition, the lender filed a  claim  against  the
Registrant  on  its  guaranty of payment of both notes.   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.  In return for  payment  of  $20,000,
Capital  Bank  has agreed to forebear from executing on  the  judgment
until  July  6,  1999.  Although there have been no  discussions,  the
Registrant  anticipates that it will be able to extend the forbearance
agreement.  See Part I, Item 2(1).

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      Document
                   Number

                     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 March 31, 1999.
<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: September 17, 1999           DIVERSIFIED HISTORIC INVESTORS II
      ------------------
                                   By: Dover Historic Advisors, General Partner

                                       By: EPK, Inc., Partner

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