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, 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 - March 31, 1998 (unaudited)
             and December 31, 1997
             Consolidated Statements of Operations - Three Months
             Ended March 31, 1998 and 1997 (unaudited)
             Consolidated Statements of Cash Flows - Three Months
             Ended March 31, 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  March 31, 1998, Registrant  had  cash  of
$160,682.   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, 1998, Registrant had restricted
cash  of  $1,582,263 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 1998.  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,  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  1998,  Registrant
incurred a net loss of $605,746 ($29.12 per limited partnership  unit)
compared  to  a  net loss of $675,672 ($32.48 per limited  partnership
unit) for the same period in 1997.

                      Rental   and  hotel  income  combined  increased
$145,094 from $1,374,873 in the first quarter of 1997 to $1,519,967 in
the  same period in 1998.  This increase resulted from an increase  of
$64,000  in rental income and an increase of $81,000 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, an increase at Washington  Square  due  to  an
increase in the average occupancy (90% to 96%) partially offset  by  a
decrease in rental income of the commercial space at Factor's Walk due
to  a  decrease in the average occupancy (97% to 86%).   Hotel  income
increased  due  to an increase in the average room rates  ($102.47  to
$125.17) and an increase in average occupancy (70% to 72%).

                    Interest income increased from $3,525 in the first
quarter of 1997 to $8,235 in the same period in 1998.  The increase is
the result of additional cash held in interest bearing accounts in the
first quarter of 1998 as compared to the same period in 1997.

                     Expense for rental operations increased by $4,138
from  $426,853 in the first quarter of 1997 to $430,991  in  the  same
period  in  1998.  Rental operations expense increased  at  Washington
Square  due to the increase in the average occupancy partially  offset
by  a  decrease  at  Tindeco  Wharf due  to  operational  efficiencies
achieved at the property.  Hotel operations expense increased  $11,314
from  $271,919 in the first quarter of 1997 to $283,233  in  the  same
period  in 1998.  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.

                     Interest expense increased $52,450 from  $895,455
in  the first quarter of 1997 to $947,905 in the same period in  1998.
Interest expense increased due to an increase in the principal balance
upon which interest is calculated at Factor's Walk.

                      Losses  incurred  during  the  quarter  at   the
Registrant's three properties amounted to $478,000, compared to a loss
of approximately $545,000 for the same period in 1997.

                     In the first quarter of 1998, Registrant incurred
a loss of $317,000 at Tindeco Wharf including $288,000 of depreciation
and  amortization expense, compared to a loss of $370,000 in the first
quarter  of  1997,  including $288,000 of depreciation  expense.   The
decreased loss from the first quarter of 1997 to the first quarter  of
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.

                     In the first quarter of 1998, Registrant incurred
a  loss  of $170,000 at The River Street Inn (Factor's Walk) including
$93,000  of  depreciation expense, compared  to  a  loss  of  $172,000
including  $92,000  of depreciation expense in the  first  quarter  of
1997.   The decreased loss from the first quarter of 1997 to the  same
period in 1998 is the result of an increase in hotel  income partially
offset by a decrease in rental income, an increase in interest expense
and  an  increase  in  certain operating expenses  (rooms,  wages  and
salaries, and administrative expenses) due to the increase in  average
occupancy.   Hotel income increased due to an increase in the  average
occupancy  (70%  to  72%) and an increase in the  average  room  rates
($102.47  to  $125.17).  Rental income decreased due to a decrease  in
the  average occupancy of the commercial space (97% to 86%) due to the
loss  of  a tenant.  Interest expense increased due to an increase  in
the principal balance upon which interest is accrued.

                      In   the   first  quarter  of  1998,  Registrant
recognized income of $9,000 at Washington Square, including $29,000 of
depreciation  expense, compared to a loss of $3,000 including  $28,000
of depreciation expense in the first quarter of 1997.  The change form
loss to income producing status from the first quarter of 1997 to  the
same  period in 1998 is due to an increase in rental income due to  an
increase  in  the average rental rates and an increase in the  average
occupancy  (90%  to  96%) 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

                                          March 31, 1998       December 31, 1997
                                            (Unaudited)
Rental properties, at cost:                                          
Land                                       $   934,582             $   934,582
Buildings and improvements                  39,738,790              39,666,989
Furniture and fixtures                       2,866,600               2,866,600
                                            ----------              ---------- 
                                            43,539,972              43,468,171
Less - Accumulated depreciation            (19,911,248)            (19,522,725)
                                            ----------              ----------
                                            23,628,724              23,945,446
                                                                       
Cash and cash equivalents                      160,682                  71,023
Restricted cash                              1,582,263               1,293,871
Accounts and notes receivable                   36,638                  48,911
Other   assets  (net  of  amortization   of                           
$322,589  and $288,791 at March  31,  1998                           
and December 31, 1997, respectively)                                 
                                             1,593,615               1,784,502
                                            ----------              ---------- 
       Total                               $27,001,922             $27,143,753
                                            ==========              ==========

                   Liabilities and Partners' Equity

Liabilities:
Debt obligations                           $32,637,768             $32,712,165
Accounts payable:                                                    
       Trade                                 2,646,901               2,565,803
       Related parties                       1,328,703                 345,603
Interest payable                             9,994,345               9,576,402
Accrued liabilities                          1,312,719               2,260,486
Tenant security deposits                       246,625                 242,687
                                            ----------              ---------- 
       Total liabilities                    48,167,061              47,703,146
                                            ----------              ----------
Partners' equity                           (21,165,139)            (20,559,393)
                                            ----------              ---------- 
       Total                               $27,001,922             $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 Ended March 31, 1998 and 1997
                              (Unaudited)


                                       Three months               Three months
                                          Ended                      ended
                                         March 31,                  March 31,
                                           1998                       1997
Revenues:                                                                  
Rental income                           $ 1,140,957                $ 1,077,235
Hotel income                                379,010                    297,638
Interest income                               8,235                      3,525
                                          ---------                  --------- 
       Total revenues                     1,528,202                  1,378,398
                                          ---------                  --------- 
Costs and expenses:                                                        
Rental operations                           430,991                    426,853
Hotel operations                            283,233                    271,919
General and administrative                   49,500                     49,500
Interest                                    947,905                    895,455
Depreciation and amortization               422,319                    410,343
                                          ---------                  ---------
       Total costs and expenses           2,133,948                  2,054,070
                                          ---------                  ---------
Net loss                               ($   605,746)              ($   675,672)
                                          =========                  ========= 
Net loss per limited partnership unit  ($     29.12)              ($     32.48)
                                          =========                  =========

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, 1998 and 1997
                              (Unaudited)

                                                         Three months ended
                                                              March 31,
                                                         1998          1997
Cash flows from operating activities:                                         
 Net loss                                            ($ 605,746)   ($ 675,672)
 Adjustments to reconcile net loss to net cash                                
provided by operating activities:
Depreciation and amortization                           422,319       410,343
Changes in assets and liabilities:                                          
 Increase in restricted cash                           (288,392)     (295,920)
 Decrease (increase) in accounts receivable              12,273          (933)
 Decrease in other assets                               157,091        98,686
 Increase in accounts payable - trade                    81,098       150,437
 Increase in accounts payable -   related parties       983,100         7,112
 Increase in interest payable                           417,943       470,075
 (Decrease) increase in accrued liabilities            (947,767)       38,848
 Increase in tenant security deposits                     3,938         7,799
                                                        -------       -------
 Net cash provided by operating activities              235,857       210,775
                                                        -------       -------
Cash flows from investing activities:                                         
 Capital expenditures                                   (71,801)      (40,819)
                                                        -------       ------- 
Net cash used in investing activities                   (71,801)      (40,819)
                                                        -------       ------- 
Cash flows from financing activities:                                         
 Principal payments                                     (74,397)      (99,766)
                                                        -------       -------  
 Net cash used in financing activities                  (74,397)      (99,766)
                                                        -------       -------
Increase in cash and cash equivalents                    89,659        70,190
                                                                              
Cash and cash equivalents at beginning of period         71,023        79,567
                                                        -------       -------
Cash and cash equivalents at end of period            $ 160,682     $ 149,757
                                                        =======       =======

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, 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 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,  1998.  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, 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:  May 29, 1998               DIVERSIFIED HISTORIC INVESTORS II
       ------------
                                  By: Dover Historic Advisors, General Partner
                                         
                                      By: EPK, Inc., Partner
                                                  
                                          By: /s/ Spencer Wertheimer
                                              -----------------------
                                              SPENCER WERTHEIMER,
                                              President and Treasurer