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, 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 - September 30, 1999 (unaudited) and
        December 31, 1998
        Consolidated Statements of Operations - Three Months and Nine
        Months Ended September 30, 1999 and 1998 (unaudited)
        Consolidated Statements of Cash Flows - Nine Months Ended September
        30, 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  September  30,  1999, Registrant   had   cash  of
$20,884.   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,  1999, Registrant  had restricted cash
of $1,333,865 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 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.  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 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 1999,  Registrant  incurred  a
net  loss  of $839,352   ($40.35  per  limited  partnership unit)  compared
to a net  loss  of  $796,560 ($38.29 per limited partnership unit) for the
same  period  in  1998.  For the  first  nine months of 1999, the Registrant
incurred a net loss   of  $2,312,044  ($111.15  per  limited partnership unit)
compared to a net  loss  of $2,048,836  ($98.50  per limited  partnership
unit) for the same period in 1998.

             Rental income increased $110,565 from  $1,196,406 in the third
quarter of 1998 to $1,306,971 in the same period of 1999.  The increase in
rental income is the result of an increase  at  Tindeco  Wharf  and  Washington
Square partially offset by a decrease at  the River  Street  Inn.  The increase
in  rental income  at  both Tindeco Wharf and Washington Square  is  due to
increases in  the  average rental  rates. The increase in rental  income
at Washington Square is due to an increase in average  rental  rates. The
decrease  at  The River Street Inn is due to a decrease in  the average
occupancy  (86%  to  64%)   of   the commercial  space  due to  the  loss
of  one commercial tenant.

             Rental income increased $265,473 from $3,456,461 for the first
nine months  of 1998  to  $3,721,934 in the  same  period  of 1999.   The
ncrease in rental income is  the result  of  an  increase  at  Tindeco  Wharf
partially   offset  by  decreases   at   both Washington  Square and the River
Street  Inn.  The  increase  in  rental income  at  Tindeco Wharf  is  due to
an increase in the  average rental  rates. The decrease in rental  income at
Washington Square is due to a decrease in the average occupancy (97% to 95%).
The decrease at The River Street Inn is due to  a decrease  in  the average
occupancy  for  the first  nine  months  (86%  to  64%)  of   the commercial
space  due to  the  loss  of  one commercial tenant.

              Hotel  income decreased $70,231 from $358,348 in the third
quarter of 1998 to $288,117  in  the  same period  in  1999  and decreased
$91,045  from $1,172,521  for  the first  nine months of 1998 to $1,081,476
for the  same  period in 1999.  The  decrease  in hotel  income for both the
third quarter  and the first nine months of 1999 as compared  to the  same
periods in 1998 is the  result  of decreases in the average room rates for the
third  quarter ($130.32 to $120.66)  and  for the  first  nine months ($129.86
to  $125.66) combined with decreases in the average occupancy for the third
quarter (67% to 58%) and for the first nine months (73% to  69%). The decreases
are the result of a more active than usual hurricane season.

              Expense for rental operations increased by $98,581 from $480,025
in  the third quarter of 1998 to $578,606 in the same period  in  1999 and
increased $249,315  from $1,372,052 for the first nine months of  1998 to
$1,621,367 for the same period  in  1999.  Rental operations expense increased
from the third quarter and the first nine months of 1998 to the same periods
in 1999 due  to  an increase  in maintenance expense  at  Tindeco Wharf  due
to  planned  renovations  at  the property and at Washington Square due to an
increase in the apartment preparation expense as a result of an increase in
the turnover of apartment units.

                Hotel operations expense decreased $107,239 from $395,416 in
the third quarter  of  1998  to $288,177  in  the  same period  in  1999 and
decreased $146,473  from $1,051,673 for the first nine months of  1998 to
$905,200 for the same period in 1999.  The decrease in hotel operations
expense  at  the River  Street  Inn  was due  to the overall decrease in the
hotel occupancy  partially offset by an increase in maintenance expense.
Maintenance expense increased due to general building repairs such as painting,
elevator and heating and air conditioning repairs.

               Interest   expense   increased $62,959  from $1,015,130 in the
third quarter of  1998 to $1,078,089 in the same period in 1999 and increased
$260,573 from $2,865,986 for   the  first  nine  months of 1998 to $3,126,559
for the same period in 1999.   The increase from the third quarter and the
first nine  months of 1998 to the same  periods in 1999 is due to an increase
in the principal balance upon which interest is calculated  at both Tindeco
Wharf and The River Street Inn.

               Losses  incurred during the quarter at the Registrant's three
properties amounted to $710,000, compared to a loss of approximately $627,000
for the same period in 1998.  For the first nine months of 1999, the
Registrant's  three properties  recognized  a loss  of $1,927,000 compared to
approximately $1,668,000 for the same period in 1998.

              In  the third quarter of  1999, Registrant  incurred a loss  of
$398,000 at Tindeco Wharf including $306,000 of depreciation and amortization
expense, compared  to a loss of $330,000 in the  third quarter of 1998,
including  $288,000   of depreciation  and amortization  expense  and, for the
first nine months of 1999, Registrant incurred  a  loss  of $1,220,000  at
Tindeco Wharf including $919,000 of depreciation  and amortization expense,
compared to a loss of $1,023,000 for the same period in 1998, including
$863,000  of   depreciation and amortization  expense.  The increase  in  the
loss  from  the third quarter and first  nine months of 1998 to the same
periods in 1999 is the  result of an increase in maintenance and interest
expense  partially  offset  by an increase in rental income.   Maintenance
expense  increased due to planned renovations at the property including roof
repairs, electrical and plumbing repairs, and painting. Interest expense
increased  due  to an  increase  in the principal  balance  upon which
interest  is  calculated  at  Tindeco Wharf.  The increase in rental income
is  due to an increase in the average rental rates of both the residential
and commercial units

              In  the third quarter of  1999, Registrant incurred a loss of
$302,000 at The River   Street  Inn  including   $92,000   of depreciation
expense, compared to a  loss  of $285,000 including $93,000 of depreciation
expense  in the third quarter of  1998.   The increased loss from the third
quarter of 1998 to  the same period in 1999 is the result of an increase in
maintenance  and  interest expense combined with a decrease in hotel and
rental  income partially offset by a decrease in hotel operations expense
including utilities,  wages and salaries.   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
to fund the building  repairs.  Hotel  income decreased  due to a decrease
in  the  average room rates ($130.32 to $120.66) combined with a decrease in
the average occupancy (67%  to 58%)   due  to  a  more  active  than   usual
hurricane season.  Rental income decreased due to a decrease in the average
occupancy of the  commercial space (86% to 64%) due  to  a loss   of   one
commercial  tenant.    Hotel operations  expense  decreased  due  to   the
decrease in the average occupancy.

              For  the  first nine months  of 1999,  Registrant incurred a
loss of $680,000 at The River Street Inn including $276,000 of depreciation
expense, compared to a  loss  of $652,000   for  the  same  period in 1998,
including  $278,000 of depreciation  expense.  The increase in the loss from
the first nine months of 1998 to the same period in 1999  is the result of a
decrease in rental income and hotel  income  combined with an  increase  in
maintenance   and  interest   expense.    The decrease  in  rental  income
is due to a decrease in average occupancy (86% to 64%) of the commercial
space due to the loss of  one commercial tenant. Hotel income decreased due
to  a  decrease  in  the average  room  rates ($129.86 to $125.66) and the
average occupancy  (73% to 69%) due to a more  active than usual hurricane
season.  The increase in maintenance   expense  is  due   to   general
building repairs (such as painting, 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 to fund the building repairs.

              In  the third quarter of  1999, Registrant incurred a loss of
$10,000  at Washington   Square,  including $30,000 of depreciation expense,
compared to a  loss  of $12,000  including  $29,000  of  depreciation expense
in the third quarter of  1998.   The decrease in the loss from the third
quarter of  1998  to  1999 is due to an  increase  in rental  income  due to
an  increase  in  the average rental rates partially offset  by  an increase
in maintenance expense.  Maintenance expense increased due to an increase in
apartment preparation expense as a result  of an increase in the turnover of
apartment units.

              In  the  first nine  months  of 1999, Registrant incurred a loss
of  $27,000 at  Washington Square, including $90,000 of depreciation expense,
compared to  income  of $7,000 for the same period of 1998, including $86,000
depreciation expense.  The  decrease from income in the first nine months of
1998 to  a loss for the same period in 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
(97%  to 95%). The increase in maintenance expense  is due to an increase in
apartment preparation expense  caused  by  a  higher  turnover   of apartment
units.
<PAGE>

                     DIVERSIFIED HISTORIC INVESTORS II
                   (a Pennsylvania limited partnership)

                     CONSOLIDATED BALANCE SHEETS


                                    Assets

                               September 30, 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              3,140,203            3,026,576
                                   ----------           ----------
                                   44,617,527           44,503,900
Less -  Accumulated depreciation  (22,508,693)         (21,218,232)
                                   ----------           ----------
                                   22,108,834           23,285,668

Cash and cash equivalents              20,884              219,254
Restricted cash                     1,333,865            1,095,373
Accounts and notes receivable         131,379               71,582
Other   assets    (net    of
amortization of $386,695 and
$351,780  at  September  30,
1999  and December 31, 1998,
respectively)                       1,828,068            1,831,411
                                   ----------           ----------
     Total                        $25,423,030          $26,503,288
                                   ==========           ==========
                      Liabilities and Partners' Equity

Liabilities:
Debt obligations                  $32,736,164          $32,808,014
Accounts payable:
     Trade                          3,178,848            2,827,452
     Related parties                1,601,435            1,521,734
Interest payable                   12,134,269           11,343,408
Accrued liabilities                 1,370,515            1,293,221
Tenant security deposits              253,518              249,134
                                   ----------           ----------
     Total liabilities             51,274,749           50,042,963
                                   ----------           ----------
Partners' equity                  (25,851,719)         (23,539,675)
                                   ----------           ----------
     Total                        $25,423,030          $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 and Nine Months Ended September 30, 1999 and 1998
                                  (Unaudited)

                          Three months              Nine months
                      Ended September 30,       Ended September 30,
                        1999     1998              1999      1998

Revenues:
 Rental income       $1,306,971  $1,196,406    $3,721,934   $3,456,461
 Hotel income           288,117     358,348     1,081,476    1,172,521
 Interest income          1,724      11,294        11,548       27,709
                      ---------   ---------     ---------    ---------
   Total revenues     1,596,812   1,566,048     4,814,958    4,656,691
                      ---------   ---------     ---------    ---------
Costs and expenses:
 Rental operations      578,606     480,025     1,621,367    1,372,052
 Hotel operations       288,177     395,416       905,200    1,051,673
 General and
  Administrative         49,500      49,500       148,500      148,500
 Interest             1,078,089   1,015,130     3,126,559    2,865,986
 Depreciation and
  Amortization          441,792     422,537     1,325,376    1,267,316
                      ---------   ---------     ---------    ---------
  Total costs and
        Expenses      2,436,164   2,362,608     7,127,002    6,705,527
                      ---------   ---------     ---------    ---------
Net loss            ($  839,352)($  796,560)  ($2,312,044) ($2,048,836)
                      =========   =========     =========    =========

Net loss per limited
 Partnership unit   ($    40.35)($    38.29)  ($   111.15) ($    98.50)
                      =========   =========     =========    =========

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 Nine Months Ended September 30, 1999 and 1998
                             (Unaudited)

                                          Nine months ended
                                           September  30,
                                             1999    1998

Cash flows from operating activities:
 Net loss                               ($2,312,044) ($2,048,836)
 Adjustments to reconcile net loss to
  net cash (used in) provided by
  operating activities:
Depreciation and amortization             1,325,376    1,267,316
Changes in assets and liabilities:
 (Increase) decrease in restricted cash    (238,492)      86,959
 (Increase) decrease in accounts            (59,797)       3,237
   receivable
 Increase in other assets                   (31,572)    (130,938)
 Increase in accounts payable - trade       351,396      307,629
 Increase in accounts payable -              79,701    1,009,994
  related parties
 Increase in interest payable               790,861    1,230,650
 Increase (decrease) in accrued              77,294     (943,286)
  liabilities
 Increase in tenant security deposits         4,384        9,614

 Net cash (used in) provided by           ---------    ---------
  operating activities                      (12,893)     792,339
                                          ---------    ---------
Cash flows from investing activities:
 Capital expenditures                      (113,627)    (603,789)
                                          ---------    ---------
Net cash used in investing activities      (113,627)    (603,789)
                                          ---------    ---------

Cash flows from financing activities:
 Principal payments                         (71,850)     (57,991)
                                          ---------    ---------
 Net cash used in financing activities      (71,850)     (57,991)
                                          ---------    ---------
(Decrease) increase in cash and cash       (198,370)     130,559
equivalents

Cash and cash equivalents at beginning      219,254       71,023
of period
                                          ---------   ----------
Cash and cash equivalents at end of      $   20,884  $   201,582
period                                    =========   ==========

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 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, 2000.

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, 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:  December 20, 1999       DIVERSIFIED HISTORIC INVESTORS II
       -----------------
                               By: Dover Historic Advisors, General Partner

                                   By: EPK, Inc., Partner

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