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           June 30, 1998
                               --------------------------------------- 
                                  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 - June 30, 1998 (unaudited)
             and December 31, 1997
             Consolidated Statements of Operations - Three Months and
             Six Months Ended June 30, 1998 and 1997 (unaudited)
             Consolidated Statements of Cash Flows - Six Months Ended
             June 30, 1998 and 1997 (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  June  30, 1998, Registrant  had  cash  of
$173,129.   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  June 30, 1998, Registrant had  restricted
cash  of  $1,710,571 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  Inn,  if  Capital  Bank
executes  upon its $1,800,000 judgment with respect to the Registrant,
it  is  expected to have significant adverse impact on the  Registrant
since  there is insufficient available cash to pay the judgment.   Any
such  execution  could  result in a forced sale  of  the  Registrant's
remaining  properties.  However, the Registrant has in the  past  been
able  to  obtain  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
1999.  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

                     Due  to the relatively recent rehabilitations  of
the   properties,  any  capital  expenditures  needed  are   generally
replacement  items  and  are funded out of  cash  from  operations  or
replacement  reserves, if any.  The Registrant is  not  aware  of  any
factors,  which would cause historical capital 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  second quarter of  1998,  Registrant
incurred a net loss of $691,705 ($33.25 per limited partnership  unit)
compared  to  a  net loss of $976,562 ($46.95 per limited  partnership
unit)  for the same period in 1997.  For the first six months of 1998,
the  Registrant incurred a net loss of $1,297,451 ($62.37 per  limited
partnership  unit)  compared to a net loss of $1,652,234  ($79.43  per
limited partnership unit) for the same period in 1997.

                     Rental income increased $4,364 from $1,114,734 in
the  second quarter of 1997 to $1,119,098 in the same period  in  1998
and increased $68,086 from $2,191,969 for the first six months of 1997
to  $2,260,055  in  the same period on 1998.  The increase  in  rental
income for both the second quarter and the first six months of 1998 as
compared  to the same periods in 1997 is the result of an increase  in
residential rental income at both Tindeco Wharf and Washington  Square
due  to an increase in the average rental rates partially offset by  a
decrease in rental income of the commercial space at Factor's Walk due
to a decrease in the average rental rates of the commercial space.

                     Hotel  income increased $91,710 from $343,453  in
the  second quarter of 1997 to $435,163 in the same period in 1998 and
increased $173,082 from $641,091 for the first six months of  1997  to
$814,173  for  the same period in 1998.  The increase in hotel  income
for  both  the  second quarter and the first six  months  of  1998  as
compared to the same periods in 1997 is the result of increases in the
average room rates for the second quarter ($105.96 to $134.16) and for
the first six months ($104.22 to $129.67).

                    Expense for rental operations decreased by $10,293
from  $471,329 in the second quarter of 1997 to $461,036 in  the  same
period  in  1998 and increased $6,155 from $898,182 for the first  six
months  of  1997  to  $892,027 for the same period  in  1998.   Rental
operations  expense decreased from the second quarter of 1997  to  the
same  period  in  1998  due  to a decrease at  Tindeco  Wharf  due  to
operational efficiencies achieved at the property partially offset  by
an  overall increase in rental operations expense at Washington Square
due to the increase in the average occupancy.

                     Hotel operations expense decreased $170,579  from
$543,603 in the second quarter of 1997 to $373,024 in the same  period
in  1998 and decreased $159,265 from $815,522 for the first six months
of  1997  to  $656,257 for the same period in 1998.  The  decrease  in
hotel operations expense was due to a misclassification of payments on
a  note  payable  where the payments should have  been  classified  as
administrative  expenses.  The misapplication  was  corrected  in  the
second quarter of 1997.

                    Interest expense decreased $7,275 from $955,401 in
the second quarter of 1997 to $948,126 in the same period in 1998, and
increased $45,175 from $1,850,856 for the first six months of 1997  to
$1,896,031 for the same period in 1998.  The increase from  the  first
six  months  of 1997 to the same period in 1998 due to an increase  in
the  principal  balance upon which interest is calculated  at  Tindeco
Wharf.

                      Losses  incurred  during  the  quarter  at   the
Registrant's three properties amounted to $563,000, compared to a loss
of  approximately $888,000 for the same period in 1997.  For the first
six  months  of 1998, the Registrant's three properties  recognized  a
loss  of $1,041,000 compared to approximately $1,433,000 for the  same
period in 1997.

                    In the second quarter of 1998, Registrant incurred
a loss of $376,000 at Tindeco Wharf including $288,000 of depreciation
and amortization expense, compared to a loss of $436,000 in the second
quarter  of  1997, including $288,000 of depreciation and amortization
expense  and,  for the first six months of 1998, incurred  a  loss  of
$693,000  including $565,000 of depreciation and amortization expense,
compared  to a loss of $806,000 for the same period in 1997, including
$565,000 of depreciation and amortization expense.  The decreased loss
from  the second quarter and the first six months of 1997 to the  same
periods  in  1998  is the result of an increase in residential  rental
income due to an increase in the average rental rates combined with an
increase in interest income due to higher cash balances maintained  by
the  property  and an overall decrease in operating  expenses  due  to
operational efficiencies obtained at the property, a decrease in legal
fees  partially offset by an increase in interest expense.  Legal fees
decreased  due  to fees incurred in the first six months  of  1997  in
connection  with a review of the underlying loan documents.   Interest
expense  increased  due to an increase in the principal  balance  upon
which interest is calculated at Tindeco Wharf.

                    In the second quarter of 1998, Registrant incurred
a  loss  of  $197,000  at The River Street Inn  including  $93,000  of
depreciation expense, compared to a loss of $460,000 including $93,000
of  depreciation expense in the second quarter of 1997.  The decreased
loss from the second quarter of 1997 to the same period in 1998 is the
result  of  an  increase in hotel income combined with a  decrease  in
administrative  expenses  partially offset by  a  decrease  in  rental
income  relating to the commercial space.  Hotel income increased  due
to  an  increase  in  the  average room rates  ($105.96  to  $134.16).
Administrative  expense  decreased  due  to  a  misclassification   of
payments  on  a  note  payable where the  payments  should  have  been
classified  as  administrative expenses.   The  misclassification  was
corrected in the second quarter of 1997.  Rental income decreased  due
to a decrease in the average rental rates of the commercial space.

                     For  the  first  six months of  1998,  Registrant
incurred a loss of $367,000 at The River Street Inn including $185,000
of  depreciation expense, compared to a loss of $632,000 for the  same
period  in  1997,  including  $185,000 of depreciation  expense.   The
decrease  in  the loss from the first six months of 1997 to  the  same
period  in 1998 is the result of an increase in hotel income  combined
with  a  decrease  in administrative expenses partially  offset  by  a
decrease  in  rental income relating to the commercial  space.   Hotel
income increased due to an increase in the average room rates ($104.22
to   $129.67).    Administrative   expense   decreased   due   to    a
misclassification  of payments on a note payable  where  the  payments
should   have   been  classified  as  administrative  expenses.    The
misclassification was corrected in the second quarter of 1997.  Rental
income decreased due to a decrease in the average rental rates of  the
commercial space.

                      In   the  second  quarter  of  1998,  Registrant
recognized  income of $10,000 at Washington Square, including  $29,000
of  depreciation  expense, compared to a income  of  $8,000  including
$27,000 of depreciation expense in the second quarter of 1997 and, for
the  first  six months of 1998, recognized income of $19,000 including
$57,000 of depreciation expense, compared to income of $5,000 for  the
same  period in 1997, including $55,000 of depreciation expense.   The
decrease in the loss from the second quarter and the first six  months
of  1997  to the same periods in 1998 is due to an increase in  rental
income due to an increase in the average rental rates partially offset
by  an  overall  increase  in rental operations  expense  due  to  the
increase in the average occupancy.
<PAGE>

                   DIVERSIFIED HISTORIC INVESTORS II
                 (a Pennsylvania limited partnership)
                                   
                      CONSOLIDATED BALANCE SHEETS
                                   
                                   
                                Assets

                                         June 30, 1998         December 31, 1997
                                          (Unaudited)
Rental properties, at cost:                                          
Land                                      $   934,582             $   934,582
Buildings and improvements                 39,801,960              39,666,989
Furniture and fixtures                      2,894,295               2,866,600
                                           ----------              ----------
                                           43,630,837              43,468,171
Less - Accumulated depreciation           (20,321,224)            (19,522,725)
                                           ----------              ----------
                                           23,309,613              23,945,446
                                                                     
Cash and cash equivalents                     173,129                  71,023
Restricted cash                             1,710,571               1,293,871
Accounts and notes receivable                  63,116                  48,911
Other assets (net of amortization of                           
$335,066 and $288,791 at June 30, 1998
and December 31, 1997, respectively)        1,590,521               1,784,502
                                           ----------              ----------
       Total                              $26,846,950             $27,143,753
                                           ==========              ==========
                   Liabilities and Partners' Equity

Liabilities:
Debt obligations                          $32,613,731             $32,712,165
Accounts payable:                                                    
       Trade                                2,747,120               2,565,803
       Related parties                      1,375,101                 345,603
Interest payable                           10,377,088               9,576,402
Accrued liabilities                         1,337,553               2,260,486
Tenant security deposits                      253,201                 242,687
                                           ----------              ---------- 
       Total liabilities                   48,703,794              47,703,146
                                           ----------              ---------- 
Partners' equity                          (21,856,844)            (20,559,393)
                                           ----------              ---------- 
       Total                              $26,846,950             $27,143,753
                                           ==========              ==========

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 and Six Months Ended June 30, 1998 and 1997
                              (Unaudited)

                                Three months                  Six months
                               Ended June 30,              Ended June 30,
                             1998          1997          1998           1997
                            
Revenues:              
 Rental income            $1,119,098    $1,114,734    $2,260,055    $2,191,969
 Hotel income                435,163       343,453       814,173       641,091
 Interest income               8,180         7,501        16,415        11,026
                           ---------     ---------     ---------     ---------
   Total revenues          1,562,441     1,465,688     3,090,643     2,844,086
                           ---------     ---------     ---------     ---------
Costs and expenses:      
 Rental operations           461,036       471,329       892,027       898,182
 Hotel operations            373,024       543,603       656,257       815,522
 General and                                                     
   Administrative             49,500        49,500        99,000        99,000
 Interest                    948,126       955,401     1,896,031     1,850,856
 Depreciation and                                                
   Amortization              422,460       422,417       844,779       832,760
                           ---------     ---------     ---------     ---------
   Total costs and                                  
            Expenses       2,554,146     2,442,250     4,388,094     4,496,320
                           ---------     ---------     ---------     ---------
Net loss                 ($  691,705)  ($  976,562)  ($1,297,451)  ($1,652,234)
                           =========     =========     =========     =========
Net loss per limited  
 Partnership unit        ($    33.25)  ($    46.95)  ($    62.37)  ($    79.43)
                           =========     =========     =========     ========= 

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 Six Months Ended June 30, 1998 and 1997
                              (Unaudited)

                                                         Six months ended
                                                             June 30,
                                                      1998            1997

Cash flows from operating activities:                                         
 Net loss                                         ($1,297,451)    ($1,652,234)
 Adjustments to reconcile net loss to net cash 
   provided by operating activities:
Depreciation and amortization                         844,779         832,760
Changes in assets and liabilities:                                            
 (Increase) decrease in restricted cash              (416,700)        309,151
 (Increase) decrease in accounts receivable           (14,205)          4,586
 Decrease in other assets                             147,701         142,353
 Increase in accounts payable - trade                 181,317         252,398
 Increase in accounts payable - related parties     1,029,498         183,458
 Increase in interest payable                         800,686         859,867
 Decrease in accrued liabilities                     (922,933)        (64,316)
 Increase in tenant security deposits                  10,514           9,230
                                                    ---------       --------- 
 Net cash provided by operating activities            363,206         877,253
                                                    ---------       --------- 
Cash flows from investing activities:                                         
 Capital expenditures                                (162,666)       (105,370)
                                                    ---------       ---------  
Net cash used in investing activities                (162,666)       (105,370)
                                                    ---------       ---------
Cash flows from financing activities:                                         
 Principal payments                                   (98,434)       (641,590)
                                                    ---------       ---------
 Net cash used in financing activities                (98,434)       (641,590)
                                                    ---------       ---------
Increase in cash and cash equivalents                 102,106         130,293
                                                                              
Cash and cash equivalents at beginning of period       71,023          79,567
                                                    ---------       --------- 
Cash and cash equivalents at end of period         $  173,129      $  209,860
                                                    =========       =========

The accompanying notes are an integral part if 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, 1997.

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 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.  In return for  payment  of  $20,000,
Capital  Bank  has agreed to forebear from executing on  the  judgment
until July 6, 1999.

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 June 30, 1998.
<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:  August 20, 1998          DIVERSIFIED HISTORIC INVESTORS II
       ---------------
                                By: Dover Historic Advisors, General Partner
                                         
                                    By: EPK, Inc., Partner
                                                  
                                        By: /s/ Spencer Wertheimer
                                            ----------------------
                                            SPENCER WERTHEIMER
                                            President and Treasurer