# UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

# FORM 10-Q

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

For the quarterly period ended June 30, 2004

OR

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

Commission File Number 0-14695

NTS-PROPERTIES VI,
A MARYLAND LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)

|Maryland                        | 61-1066060                          
|------------------------------- | ------------------------------------
|(State or other jurisdiction of | (I.R.S. Employer Identification No.)
|incorporation or organization)  |                                     

10172 Linn Station Road, Louisville, Kentucky 40223(Address of principal executive offices)

(502) 426-4800(Registrants telephone number, including area code)

(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 [   ]

Indicate by check mark whether registrant is an accelerated filer (as defined in Rule 12b-2 of the
Securities Exchange Act).     Yes [   ]    No [X]

---

# TABLE OF CONTENTS

| |  |  |  |      
| |  |  |  | -----
| |  |  |  | Pages

# PART I  FINANCIAL INFORMATION

|        |  |                                                                                                       |  |      
|------- |  | ----------------------------------------------------------------------------------------------------- |  | -----
|Item 1. |  | Consolidated Financial Statements (Unaudited)                                                        
|       
|        |  | Consolidated Balance Sheets as of June 30, 2004 and December 31, 2003                                 |  | 4    
|       
|        |  | Consolidated Statement of Partners' Equity as of June 30, 2004                                        |  | 4    
|       
|        |  | Consolidated Statements of Operations for the Three and Six Months
      Ended June 30, 2004 and 2003 |  | 5    
|       
|        |  | Consolidated Statements of Cash Flows for the Six Months
      Ended June 30, 2004 and 2003           |  | 6    
|       
|        |  | Notes to Consolidated Financial Statements                                                            |  | 7-19 
|       
|Item 2. |  | Management's Discussion and Analysis of Financial
     Condition and Results of Operations            |  | 20-30
|       
|Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk                                            |  | 31   
|       
|Item 4. |  | Controls and Procedures                                                                               |  | 31   
|       

# PART II  OTHER INFORMATION

|            |  |  |  |      
|----------- |  |  |  | -----
|Items 1 - 6 |  |  |  | 32-33
|           
|Signatures  |  |  |  | 34   

2

---

Some of the statements included in
this quarterly report on Form 10-Q, particularly those included in Part I, Item 2 
Managements Discussion and Analysis of Financial Condition and Results of Operations
(MD&A), may be considered forward-looking statements because
the statements relate to matters which have not yet occurred. For example, phrases such as
we anticipate, believe or expect indicate that it is
possible that the event anticipated, believed or expected may not occur. If these events
do not occur, the result which we expected also may, or may not, occur in a different
manner, which may be more or less favorable to us. We do not undertake any obligation to
update these forward-looking statements.

Any forward-looking statements
included in MD&A, or elsewhere in this report, reflect our general partners best
judgment based on known factors, but involve risks and uncertainties. Actual results could
differ materially from those anticipated in any forward-looking statements as a result of
a number of factors, including but not limited to those described in our filings with the
Securities and Exchange Commission, particularly our annual report on Form 10-K for the
year ended December 31, 2003. Any forward-looking information provided by us pursuant to
the safe harbor established by the Private Securities Litigation Reform Act of 1995 should
be evaluated in the context of these factors.

3

---

# PART I  FINANCIAL
INFORMATION Item 1  Consolidated Financial Statements

# NTS-PROPERTIES VI,
A MARYLAND LIMITED PARTNERSHIP CONSOLIDATED BALANCE SHEETS

`As of               As of
                                                                     June 30,         December 31,
                                                                       2004               2003
                                                                ------------------  -----------------
                                                                   (UNAUDITED)
ASSETS
Cash and equivalents                                           $           371,697 $          125,342
Cash and equivalents - restricted                                          332,619            245,599
Accounts receivable, net                                                    73,660            132,859
Land, buildings and amenities, net                                      39,581,225         40,446,437
Other assets                                                             1,202,802          1,203,286
                                                                ------------------  -----------------

      TOTAL ASSETS                                             $        41,562,003 $       42,153,523
                                                                ==================  =================

LIABILITIES AND PARTNERS' EQUITY
Mortgages and notes payable                                    $        30,805,726 $       31,872,038
Accounts payable and accrued expenses                                      762,707            615,661
Accounts payable - affiliate                                             1,104,202            206,789
Security deposits                                                          250,005            239,429
Other liabilities                                                          759,174            541,677
                                                                ------------------  -----------------

      TOTAL LIABILITIES                                                 33,681,814         33,475,594

COMMITMENTS AND CONTINGENCIES (Note 10)

PARTNERS' EQUITY                                                         7,880,189          8,677,929
                                                                ------------------  -----------------

TOTAL LIABILITIES AND PARTNERS' EQUITY                         $        41,562,003 $       42,153,523
                                                                ==================  =================`

# NTS-PROPERTIES VI,
A MARYLAND LIMITED PARTNERSHIP CONSOLIDATED STATEMENT OF PARTNERS EQUITY(UNAUDITED)

`Limited            General
                                                   Partners            Partner              Total
                                               -----------------  ------------------  ------------------
PARTNERS' EQUITY/(DEFICIT)
Capital contributions, net of offering costs  $       40,518,631 $               100 $        40,518,731
Net loss - prior years                               (16,941,339)           (122,734)        (17,064,073)
Net loss - current year                                 (789,763)             (7,977)           (797,740)
Cash distributions declared to date                  (12,006,384)           (121,277)        (12,127,661)
Repurchase of limited partnership interests           (2,649,068)                 --          (2,649,068)
                                               -----------------  ------------------  ------------------

BALANCES ON JUNE 30, 2004                     $        8,132,077 $          (251,888)$         7,880,189
                                               =================  ==================  ==================`

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

4

---

# NTS-PROPERTIES VI,
A MARYLAND LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF OPERATIONS  (UNAUDITED)

`Three Months Ended              Six Months Ended
                                                                 June 30,                       June 30,
                                                       -----------------------------  -----------------------------
                                                            2004           2003           2004            2003
                                                       --------------  -------------  -------------  --------------
REVENUES
Rental income                                         $     2,656,678 $    2,710,814 $    5,270,950 $     5,457,001
Tenant reimbursements                                             408            255            795           2,135
                                                       --------------  -------------  -------------  --------------

     TOTAL REVENUES                                         2,657,086      2,711,069      5,271,745       5,459,136
                                                       --------------  -------------  -------------  --------------

EXPENSES
Operating expenses                                            748,959        819,531      1,516,922       1,496,620
Operating expenses - affiliated                               384,241        390,711        797,377         781,511
Management fees                                               134,196        135,578        266,917         277,415
Real estate taxes                                              97,253        393,210        223,041         617,355
Professional and administrative expenses                      190,656        219,322        530,406         429,535
Professional and administrative expenses - affiliated         110,918        107,778        209,838         202,670
Depreciation and amortization                                 663,889        653,824      1,326,656       1,301,603
                                                       --------------  -------------  -------------  --------------

     TOTAL OPERATING EXPENSES                               2,330,112      2,719,954      4,871,157       5,106,709
                                                       --------------  -------------  -------------  --------------

OPERATING INCOME (LOSS)                                       326,974         (8,885)       400,588         352,427

Interest and other income                                      12,885          5,095         15,211          12,723
Interest expense                                             (595,587)      (621,159)    (1,195,468)     (1,256,879)
Loss on disposal of assets                                     (4,358)       (95,311)        (4,462)       (103,506)
                                                       --------------  -------------  -------------  --------------

Loss before minority interest                                (260,086)      (720,260)      (784,131)       (995,235)
Minority interest income                                        8,193          6,336         13,609          15,079
                                                       --------------  -------------  -------------  --------------

Net loss                                              $      (268,279)$     (726,596)$     (797,740)$    (1,010,314)
                                                       ==============  =============  =============  ==============

Net loss allocated to the limited partners            $      (265,596)$     (719,330)$     (789,763)$    (1,000,211)
                                                       ==============  =============  =============  ==============

Net loss per limited partnership interest             $         (6.83)$       (18.50)$       (20.31)$        (25.72)
                                                       ==============  =============  =============  ==============

Weighted average number of limited partnership
interests                                                      38,889         38,889         38,889          38,889
                                                       ==============  =============  =============  ==============`

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

5

---

# NTS-PROPERTIES VI,
A MARYLAND LIMITED PARTNERSHIP  CONSOLIDATED STATEMENTS OF CASH FLOWS  (UNAUDITED)

`Six Months Ended
                                                                                 June 30,
                                                                  --------------------------------------
                                                                        2004                 2003
                                                                  -----------------    -----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                       $           (797,740)$         (1,010,314)
Adjustments to reconcile net loss to net cash provided by
  operating activities:
    Loss on disposal of assets                                                4,462              103,506
    Depreciation and amortization                                         1,354,325            1,327,499
    Minority interest income                                                 13,609               15,079
    Changes in assets and liabilities:
      Cash and equivalents - restricted                                     (87,020)            (101,056)
      Accounts receivable                                                    59,199               (3,581)
      Other assets                                                           (8,144)              13,489
      Accounts payable and accrued expenses                               1,044,459              264,498
      Security deposits                                                      10,576                7,050
      Other liabilities                                                     217,497              418,493
                                                                  -----------------    -----------------

     Net cash provided by operating activities                            1,811,223            1,034,663
                                                                  -----------------    -----------------

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to land, buildings and amenities                                 (465,906)            (377,053)
Investment in joint ventures by minority partners, net                      (32,650)             (29,068)
                                                                  -----------------    -----------------

     Net cash used in investing activities                                 (498,556)            (406,121)
                                                                  -----------------    -----------------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from note payable                                                   19,216                   --
Principal payments on mortgages and notes payable                        (1,085,528)          (1,021,074)
                                                                  -----------------    -----------------

     Net cash used in financing activities                               (1,066,312)          (1,021,074)
                                                                  -----------------    -----------------

     Net increase (decrease) in cash and equivalents                        246,355             (392,532)

CASH AND EQUIVALENTS, beginning of period                                   125,342            1,058,814
                                                                  -----------------    -----------------

CASH AND EQUIVALENTS, end of period                            $            371,697 $            666,282
                                                                  =================    =================

Interest paid on a cash basis                                  $          1,174,316 $          1,254,715
                                                                  =================    =================`

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

6

---

# NTS-PROPERTIES VI,
A MARYLAND LIMITED PARTNERSHIP  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (UNAUDITED)

The unaudited consolidated financial
statements included herein should be read in conjunction with NTS-Properties VIs
2003 annual report on Form 10-K as filed with the Securities and Exchange Commission on
March 26, 2004. In the opinion of our general partner, all adjustments, consisting only of
normal recurring accruals, necessary for a fair presentation have been made to the
accompanying consolidated financial statements for the three and six months ended June 30,
2004 and 2003. The results of operations for the interim periods are not necessarily
indicative of the results that may be expected for the full year or any other interim
period. As used in this quarterly report on Form 10-Q the terms we,
us or our, as the context requires, may refer to NTS-Properties VI
or its interests in its properties and joint ventures.

# Note 1 
Consolidation Policy

The consolidated financial statements
include the accounts of all wholly-owned properties and majority-owned joint ventures.
Intercompany transactions and balances have been eliminated.

Other assets include minority
interest in our joint venture properties totaling approximately $732,000 and $713,000 as
of June 30, 2004 and December 31, 2003, respectively. These amounts have been derived
primarily from distributions of the joint ventures in excess of the respective minority
partners historical investment in the joint ventures used for financial reporting
purposes. This amount will be realized upon the sale of the respective joint venture
property or dissolution of the respective joint venture. The underlying assets of the
joint ventures are assessed for asset impairment on a periodic basis.

Minority Interest

In May 2003, the Financial Accounting
Standards Board (FASB) issued Statement No. 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity (SFAS
150). SFAS 150 establishes standards for classifying and measuring as liabilities
certain financial instruments that embody obligations of the issuer and have
characteristics of both liabilities and equity. SFAS 150 was effective for all financial
instruments created or modified after May 31, 2003, and otherwise was effective at the
beginning of the first interim period beginning after June 15, 2003. On November 7, 2003,
FASB Staff Position No. FAS 150-3 was issued, which deferred for an indefinite period the
classification and measurement provisions, but not the disclosure provisions of SFAS 150.

7

---

We consolidate certain properties
that are also owned by affiliated parties that have noncontrolling interests. In certain
cases, the applicable joint venture agreement provides for a contractual termination date
of the agreement based on certain specified events. SFAS 150 describes this type of
arrangement as a limited-life subsidiary. SFAS 150 requires the disclosure of
the estimated settlement value of these noncontrolling interests. As of June 30, 2004, the
estimated settlement value of these noncontrolling interests is approximately $552,000.
This settlement value is based on estimated third party consideration paid to the joint
venture upon disposition of each property and is net of all other assets and liabilities
including any yield maintenance that would have been due on that date had the mortgage
encumbering the properties been prepaid on June 30, 2004. Due to the inherent risks and
uncertainties related to the operations and sale of real estate assets, among other
things, the amount of any potential distribution to the noncontrolling interests is likely
to change.

# Note 2  Use of Estimates in the
Preparation of Financial Statements

The preparation of financial
statements in accordance with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

# Note 3 
Concentration of Credit Risk

We own and operate, either wholly or
through a joint venture, five apartment communities  Park Place Apartments Phases I
and III, in Lexington, Kentucky, Willow Lake Apartments, in Indianapolis, Indiana and
Sabal Park and Golf Brook Apartments, in Orlando, Florida. We also own and operate,
through a joint venture, a commercial rental property  Plainview Point Office Center
Phase III, in Louisville, Kentucky. Substantially all of the commercial propertys
tenants are local businesses or are businesses which have operations in the Louisville
area.

Our financial instruments that are
exposed to concentrations of credit risk consist of cash and equivalents. We maintain our
cash accounts primarily with banks located in Kentucky. Cash balances are insured by the
FDIC up to $100,000 per bank account. We may at times, in certain accounts, have deposits
in excess of $100,000.

# Note 4  Cash and
Equivalents

We have a cash management program
which provides for the overnight investment of excess cash balances. Under an agreement
with a bank, excess cash is invested in a repurchase agreement for U.S. government or
agency securities each night. As of June 30, 2004, approximately $168,000 of our overnight
investment was included in cash and equivalents.

8

---

# Note 5  Cash and
Equivalents  Restricted

Cash and equivalents 
restricted represents funds received for apartment community security deposits and funds
which have been escrowed with mortgage companies for property taxes and insurance in
accordance with the loan agreements.

# Note 6  Basis of
Property and Depreciation

Land, buildings and amenities are
stated at cost. Costs directly associated with the acquisition, development and
construction of a project are capitalized. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets which are 5-30 years
for land improvements, 5-30 years for buildings and improvements, 5-30 years for amenities
and the applicable lease term for tenant improvements. The aggregate cost of our
properties for federal tax purposes is approximately $76,553,000.

Statement of Financial Accounting
Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, specifies circumstances in which certain long-lived assets must
be reviewed for impairment. If the carrying amount of an asset exceeds the sum of its
expected future cash flows, the assets carrying value must be written down to fair
value. There were no impairment losses during any of the periods presented.

9

---

# Note 7  Mortgages
and Notes Payable

Mortgages and notes payable consist
of the following:

`June 30,          December 31,
                                                                           2004                2003
                                                                     -----------------  ------------------
Mortgage payable with an insurance company, payable in monthly
installments, bearing interest at 7.74%, due October 15, 2012, secured
by certain land, buildings and amenities.                           $       10,813,563 $        11,004,713

Mortgage payable with an insurance company, payable in monthly
installments, bearing interest at 7.32%, due October 15, 2012, secured
by certain land, buildings and amenities.                                    5,821,259           6,070,365

Mortgage payable with an insurance company, payable in monthly
installments, bearing interest at 7.57%, due May 15, 2009, secured by
certain land, buildings and amenities.                                       5,592,388           6,044,431

Mortgage payable with an insurance company, payable in monthly
installments, bearing interest at 8.375%, due December 1, 2010,
secured by certain land, buildings and amenities.                            2,947,996           2,988,656

Mortgage payable with an insurance company, payable in monthly
installments, bearing interest at 7.38%, due December 5, 2012,
secured by certain land and building.                                        1,961,812           2,043,356

Mortgage payable with an insurance company, payable in monthly
installments, bearing interest at 6.93%, due December 5, 2012,
secured by certain land, buildings and amenities.                            1,941,617           1,958,280

Mortgage payable with an insurance company, payable in monthly
installments, bearing interest at 7.38%, due December 5, 2012,
secured by certain land, buildings and amenities.                            1,307,875           1,362,237

Note payable to a bank, bearing interest at the Prime Rate, payable in
monthly installments, due October 1, 2004.  On June 30, 2004, the
interest rate was 4.00%.                                                       400,000             400,000

Note payable to a finance company, payable in monthly installments,
bearing interest at 8.50%, due July 15, 2006.                                   19,216                  --
                                                                     -----------------  ------------------

                                                                    $       30,805,726 $        31,872,038
                                                                     =================  ==================`

Our mortgages may be prepaid but are
generally subject to a yield-maintenance premium.

10

---

As of June 30, 2004, the fair value
of long-term debt is approximately $31,861,000, based on the borrowing rates currently
available to us for mortgages with similar terms and average maturities.

On May 24, 2004, we obtained a note
payable from a finance company in the amount of $19,216. The note bears interest at 8.5%
and the maturity date is July 15, 2006. The note was obtained to purchase four maintenance
golf carts, two for Golf Brook Apartments and two for Sabal Park Apartments.

# Note 8  Accounts
Payable  Affiliate

Accounts payable  affiliate
includes amounts owed to NTS Development Company for reimbursement of salary and overhead
expenses.

NTS Development Company has agreed to
defer, until March 31, 2005, amounts owed to them by us as of December 31, 2003 and those
amounts accruing from January 1, 2004 through March 31, 2005, other than as permitted by
our cash flows. There can be no assurances that NTS Development Company will continue to
defer amounts due them past March 31, 2005.

# Note 9  Related
Party Transactions

Pursuant to an agreement with us, NTS
Development Company, an affiliate of our General Partner, receives property management
fees on a monthly basis. The monthly fees are equal to 5% of the gross revenues from our
apartment communities and 6% of the gross revenues from our commercial property. Also
pursuant to an agreement, NTS Development Company receives a repair and maintenance fee
equal to 5.9% of costs incurred which relates to capital improvements and major repair and
renovation projects. These repair and maintenance fees are capitalized as part of land,
buildings and amenities.

We were charged the following amounts
from NTS Development Company for the six months ended June 30, 2004 and 2003. These
charges include items which have been expensed as operating expenses  affiliated or
professional and administrative expenses  affiliated and items which have been
capitalized as other assets or as land, buildings and amenities.

11

---

`Six Months Ended
                                                                                June 30,
                                                                ----------------------------------------
                                                                       2004                 2003
                                                                -------------------  -------------------

Property management fees                                       $            266,917 $            277,415
                                                                -------------------  -------------------

Property management                                                         522,446              533,440
Leasing                                                                      68,711               86,071
Administrative - operating                                                  195,600              155,602
Other                                                                        10,620                6,398
                                                                -------------------  -------------------

     Total operating expenses - affiliated                                  797,377              781,511
                                                                -------------------  -------------------

Professional and administrative expenses - affiliated                       209,838              202,670
                                                                -------------------  -------------------

Repair and maintenance fees                                                  22,556               18,334
Leasing commissions                                                           4,538               12,069
                                                                -------------------  -------------------

     Total related party transactions capitalized                            27,094               30,403
                                                                -------------------  -------------------

Total related party transactions                               $          1,301,226 $          1,291,999
                                                                ===================  ===================`

During the six months ended June 30,
2004 and 2003, we were charged $14,013 and $14,822, respectively, for property maintenance
fees from an affiliate of NTS Development Company.

# Note 10 
Commitments and Contingencies

As an owner of real estate, we are
subject to various environmental laws of federal, state and local governments. Our
compliance with existing laws has not had a material adverse effect on our financial
condition or results of operations. However, we cannot predict the impact of new or
changed laws or regulations on our current properties or on properties that we may acquire
in the future.

On April 16, 2004, a tenant leased
approximately 11,000 square feet of Plainview Point Office Center Phase III. The lease
agreement calls for tenant finish, estimated to cost approximately $411,000. The tenant
finish cost will be funded by loan proceeds from a note payable obtained October 1, 2003
(see Note 7 Mortgages and Note Payable for further discussion on our loans)
and cash reserves. Through June 30, 2004, approximately $401,000 of the tenant finish cost
has been incurred.

Litigation

On December 12, 2001, three
individuals filed an action in the Superior Court of the State of California for the
County of Contra Costa (the Superior Court) originally captioned Buchanan, et
al. v. NTS-Properties Associates, et al.(Case No. C 01-05090) against the general
partners (the General Partners) of NTS-Properties III, NTS-Properties IV,
NTS-Properties V, NTS-Properties

12

---

VI and NTS-Properties VII, Ltd. (the
Partnerships), as well as several individuals and entities affiliated with us.
The action purported to bring claims on behalf of a class of limited partners. These
claims were based on, among other things, tender offers made by the Partnerships and an
affiliate of the General Partners, as well as the operation of the Partnerships by the
General Partners. The plaintiffs alleged, among other things, that the prices at which
limited partnership interests were purchased in these tender offers were too low. The
plaintiffs sought monetary damages and equitable relief, including an order directing the
disposition of the properties owned by the Partnerships and the distribution of the
proceeds. No amounts have been accrued as a liability for this action in our financial
statements. Under an indemnification agreement with our general partner, we are
responsible for the costs of defending any such action.

On February 27, 2003, two individuals
filed a class and derivative action in the Circuit Court of Jefferson County, Kentucky
captioned Bohm, et al. v. J.D. Nichols, et al.(Case No. 03-CI-01740) against certain of
the General Partners and several individuals and entities affiliated with us. The
complaint was amended to include the general partner of NTS-Properties III and the general
partner of NTS-Properties Plus Ltd., which is no longer in existence. In the amended
complaint, the plaintiffs purport to bring claims on behalf of a class of limited partners
and derivatively on behalf of us and the Partnerships based on alleged overpayment of
fees, prohibited investments, improper failures to make distributions, purchases of
limited partnerships interests at insufficient prices and other violations of the limited
partnership agreements. The plaintiffs are seeking, among other things, compensatory and
punitive damages in an unspecified amount, an accounting, the appointment of a receiver or
liquidating trustee, the entry of an order of dissolution against the Partnerships, a
declaratory judgment and injunctive relief. No amounts have been accrued as a liability
for this action in our financial statements. Our general partner and legal counsel believe
that this action is without merit and are vigorously defending it.

On June 20, 2003, the General
Partners reached an agreement in principle with the representatives of the class of
plaintiffs to settle the Buchananlitigation. This agreed upon settlement includes
releases for all of the parties for all of the claims asserted in the Buchananlitigation
and the Bohmlitigation. As part of the agreed upon settlement, the General Partners
agreed to pursue a merger of the Partnerships and other real estate entities affiliated
with the General Partners into a newly-formed entity named NTS Realty Holdings Limited
Partnership (NTS Realty). NTS Development Company agreed to pay the
Partnerships $1,500,000 on the closing date of the merger. We expect to receive $723,000
of this payment.

On December 5, 2003, the General
Partners, certain of their affiliates and the class of plaintiffs in the Buchananlitigation jointly filed a Stipulation and Agreement of Settlement (the Settlement
Agreement) with the Superior Court. The Settlement Agreement sets forth in writing
the terms of the agreed upon settlement the parties reached on June 20, 2003. On February
26, 2004, the Superior Court preliminarily approved the Settlement Agreement as within the
range of reasonableness and that it is fair, just and adequate to the class of plaintiffs.
The Superior Court scheduled a hearing to finally determine whether the Settlement
Agreement is in the best interests of the class of plaintiffs and whether the Buchananlitigation should be dismissed with prejudice.

13

---

On March 2, 2004, we, along with all
defendants, filed a Motion to Dismiss the Bohmlitigation. After the Motion to Dismiss was
fully briefed, the settlement agreement in the Buchananlitigation received final court
approval. The Circuit Court of Jefferson County, Kentucky, instructed the plaintiffs in
the Bohmlitigation to file an amended complaint in light of the approved settlement of
the Buchananlitigation. The plaintiffs in the Bohmlitigation filed a corrected Second
Amended Complaint on August 11, 2004. Our general partner believes that the claims
asserted in the corrected Second Amended Complaint have no merit.

On May 6, 2004, the Superior Court
granted its final approval of the Settlement Agreement. At the final hearing, any member
of the class of plaintiffs was given the opportunity to object to the final approval of
the Settlement Agreement, the entry of a final judgment dismissing with prejudice the
Buchananlitigation, or an application of an award for attorneys fees and expenses
to plaintiffs counsel. The Superior Courts order provides, among other things,
that: (1) the Settlement Agreement, and all transactions contemplated thereby, including
the proposed merger of the Partnerships into NTS Realty, are fair, reasonable and
adequate, and in the best interests of the class of plaintiffs; (2) the plaintiffs
complaint and each and every cause of action and claim set forth therein is dismissed with
prejudice; (3) each class member is barred from (a) transferring, selling or otherwise
disposing of (other than by operation of law) their interests until the earlier of the
closing date of the merger, the termination of the settlement or June 30, 2004; and (4)
each class member who requested to be excluded from the settlement released their claims
in the Bohmlitigation.

On June 11, 2004, Joseph Bohm and
David Duval, class members who objected to the Settlement Agreement but were overruled by
the Superior Court, filed an appeal in the Court of Appeals of the State of California,
first Appellate District. Our general partner believes that this appeal has no merit and
intends to defend it and the decision of the Superior Court.

For the six months ended June 30,
2004 and 2003, our share of the legal costs for the Buchananand Bohmlitigations was
approximately $137,000 and $158,000, respectively, which was included in our professional
and administrative expenses.

We do not believe there is any other
litigation threatened against us other than routine litigation arising out of the ordinary
course of business, some of which is expected to be covered by insurance, none of which is
expected to have a material effect on our consolidated financial position or results of
operations, except as discussed herein.

Proposed Merger

As part of the Settlement Agreement,
our general partner and the general partners of the four public partnerships affiliated
with us, have agreed to pursue a merger of the partnerships and several other affiliated
real estate entities into a newly formed limited partnership known as NTS Realty. The
merger is subject to, among other things, approval by a majority of the limited partner
interests in each partnership. We may not seek the approval of the limited partners until
a filing made by NTS Realty with the Securities and Exchange Commission is declared
effective. For the six months

14

---

ended June 30, 2004 and 2003, our
share of the legal and professional fees for the proposed merger was approximately
$313,000 and $85,000, respectively.

On February 4, 2004, NTS Realty filed
a joint consent solicitation statement/prospectus on Form S-4 with the Securities and
Exchange Commission. The solicitation statement/prospectus presents the merger of
NTS-Properties III; NTS-Properties IV; NTS-Properties V; NTS-Properties VI; and
NTS-Properties VII, Ltd. with NTS Realty. Concurrent with the merger, ORIG, LLC, a
Kentucky limited liability company, which is affiliated with our general partner, will
contribute substantially all its real estate assets and all of its liabilities to NTS
Realty.

On June 24, 2004 and August 13, 2004,
NTS Realty filed first and second amendments, respectively, to Form S-4 with the
Securities and Exchange Commission. Both amendments are in response to comments made by
the Securities and Exchange Commission.

# Note 11  Segment
Reporting

Our reportable operating segments
include Apartment Community and Commercial Real Estate Operations. The apartment community
operations represent our ownership and operating results relative to the apartment
complexes known as Willow Lake, Park Place Phase I, Park Place Phase III, Sabal Park and
Golf Brook. The commercial operations represent our ownership and operating results
relative to suburban commercial office space known as Plainview Point Office Center Phase
III.

The financial information of the
operating segments has been prepared using a management approach, which is consistent with
the basis and manner in which our management internally reports financial information for
the purposes of assisting in making internal operating decisions. Our management evaluated
performance based on stand-alone operating segment net income. Professional and
administrative expenses, interest and other income, depreciation, interest expense and
minority interest income recorded at the Partnership level have not been allocated to the
segments.

15

---

`Three Months Ended June 30, 2004
                                               ---------------------------------------------------------
                                                   Apartment
                                                  Communities         Commercial            Total
                                               -----------------  ------------------  ------------------
Rental income                                 $        2,474,184 $           182,494 $         2,656,678
Tenant reimbursements                                         --                 408                 408
                                               -----------------  ------------------  ------------------

     Total revenues                                    2,474,184             182,902           2,657,086
                                               -----------------  ------------------  ------------------

Operating expenses and operating expenses -
  affiliated                                           1,045,216              87,984           1,133,200
Management fees                                          125,714               8,482             134,196
Real estate taxes                                         85,703              11,550              97,253
Depreciation and amortization                            587,298              54,225             641,523
                                               -----------------  ------------------  ------------------

     Total operating expenses                          1,843,931             162,241           2,006,172
                                               -----------------  ------------------  ------------------

Operating income                                         630,253              20,661             650,914

Interest and other income                                 11,232                 115              11,347
Interest expense                                        (204,841)                 --            (204,841)
Loss on disposal of assets                                (2,452)             (1,906)             (4,358)
                                               -----------------  ------------------  ------------------

Net income                                    $          434,192 $            18,870 $           453,062
                                               =================  ==================  ==================`

`Three Months Ended June 30, 2003
                                               ---------------------------------------------------------
                                                   Apartment
                                                  Communities         Commercial            Total
                                               -----------------  ------------------  ------------------
Rental income                                 $        2,583,149 $           127,665 $         2,710,814
Tenant reimbursements                                         --                 255                 255
                                               -----------------  ------------------  ------------------

     Total revenues                                    2,583,149             127,920           2,711,069
                                               -----------------  ------------------  ------------------

Operating expenses and operating expenses -
  affiliated                                           1,131,469              78,773           1,210,242
Management fees                                          127,749               7,829             135,578
Real estate taxes                                        386,700               6,510             393,210
Depreciation and amortization                            578,503              52,955             631,458
                                               -----------------  ------------------  ------------------

     Total operating expenses                          2,224,421             146,067           2,370,488
                                               -----------------  ------------------  ------------------

Operating income (loss)                                  358,728             (18,147)            340,581

Interest and other income                                  3,184                 159               3,343
Interest expense                                        (215,710)                 --            (215,710)
Loss on disposal of assets                               (95,311)                 --             (95,311)
                                               -----------------  ------------------  ------------------

Net income (loss)                             $           50,891 $           (17,988)$            32,903
                                               =================  ==================  ==================`

16

---

`Six Months Ended June 30, 2004
                                               ---------------------------------------------------------
                                                   Apartment
                                                  Communities         Commercial            Total
                                               -----------------  ------------------  ------------------
Rental income                                 $        4,950,867 $           320,083 $         5,270,950
Tenant reimbursements                                         --                 795                 795
                                               -----------------  ------------------  ------------------

     Total revenues                                    4,950,867             320,878           5,271,745
                                               -----------------  ------------------  ------------------

Operating expenses and operating expenses -
  affiliated                                           2,148,630             165,669           2,314,299
Management fees                                          250,059              16,858             266,917
Real estate taxes                                        189,838              33,203             223,041
Depreciation and amortization                          1,173,676             108,247           1,281,923
                                               -----------------  ------------------  ------------------

     Total operating expenses                          3,762,203             323,977           4,086,180
                                               -----------------  ------------------  ------------------

Operating income (loss)                                1,188,664              (3,099)          1,185,565

Interest and other income                                 11,688                 266              11,954
Interest expense                                        (410,988)                 --            (410,988)
Loss on disposal of assets                                (2,556)             (1,906)             (4,462)
                                               -----------------  ------------------  ------------------

Net income (loss)                             $          786,808 $            (4,739)$           782,069
                                               =================  ==================  ==================`

`Six Months Ended June 30, 2003
                                               ---------------------------------------------------------
                                                   Apartment
                                                  Communities         Commercial            Total
                                               -----------------  ------------------  ------------------
Rental income                                 $        5,200,873 $           256,128 $         5,457,001
Tenant reimbursements                                         --               2,135               2,135
                                               -----------------  ------------------  ------------------

     Total revenues                                    5,200,873             258,263           5,459,136
                                               -----------------  ------------------  ------------------

Operating expenses and operating expenses -
  affiliated                                           2,123,592             154,539           2,278,131
Management fees                                          261,348              16,067             277,415
Real estate taxes                                        604,335              13,020             617,355
Depreciation and amortization                          1,156,783             100,087           1,256,870
                                               -----------------  ------------------  ------------------

     Total operating expenses                          4,146,058             283,713           4,429,771
                                               -----------------  ------------------  ------------------

Operating income (loss)                                1,054,815             (25,450)          1,029,365

Interest and other income                                  8,124                 271               8,395
Interest expense                                        (436,204)                 --            (436,204)
Loss on disposal of assets                              (103,506)                 --            (103,506)
                                               -----------------  ------------------  ------------------

Net income (loss)                             $          523,229 $           (25,179)$           498,050
                                               =================  ==================  ==================`

17

---

A reconciliation of the totals
reported for the operating segments to the applicable line items in the consolidated
financial statements for the three and six months ended June 30, 2004 and 2003, is
necessary given amounts recorded at the Partnership level and not allocated to the
operating properties for internal reporting purposes.

`Three Months Ended
                                                                             June 30,
                                                             ----------------------------------------
                                                                    2004                 2003
                                                             -------------------  -------------------
DEPRECIATION AND AMORTIZATION
Total depreciation and amortization for reportable segments $            641,523 $            631,458
Depreciation and amortization for Partnership                             22,366               22,366
                                                             -------------------  -------------------

     Total depreciation and amortization                    $            663,889 $            653,824
                                                             ===================  ===================

INTEREST AND OTHER INCOME
Total interest and other income for reportable segments     $             11,347 $              3,343
Interest and other income for Partnership                                  1,538                1,752
                                                             -------------------  -------------------

     Total interest and other income                        $             12,885 $              5,095
                                                             ===================  ===================

INTEREST EXPENSE
Total interest expense for reportable segments              $           (204,841)$           (215,710)
Interest expense for Partnership                                        (390,746)            (405,449)
                                                             -------------------  -------------------

     Total interest expense                                 $           (595,587)$           (621,159)
                                                             ===================  ===================

NET INCOME (LOSS)
Total net income for reportable segments                    $            453,062 $             32,903
Less minority interest for Partnership                                     8,193                6,336
Plus net loss for Partnership (1)                                       (713,148)            (753,163)
                                                             -------------------  -------------------

     Total net loss                                         $           (268,279)$           (726,596)
                                                             ===================  ===================`

|(1) | The Partnerships net loss is primarily composed of professional and
          administrative costs born by the Partnership and also includes interest and
          other income, interest expense, depreciation and minority interest recorded at
          the partnership level and not allocated to the operating segments. The
          professional and administrative costs include the tax and public company
          reporting and compliance costs associated with a public limited partnership.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

18

---

`Six Months Ended
                                                                             June 30,
                                                             ----------------------------------------
                                                                    2004                 2003
                                                             -------------------  -------------------
DEPRECIATION AND AMORTIZATION
Total depreciation and amortization for reportable segments $          1,281,923 $          1,256,870
Depreciation and amortization for Partnership                             44,733               44,733
                                                             -------------------  -------------------

     Total depreciation and amortization                    $          1,326,656 $          1,301,603
                                                             ===================  ===================

INTEREST AND OTHER INCOME
Total interest and other income for reportable segments     $             11,954 $              8,395
Interest and other income for Partnership                                  3,257                4,328
                                                             -------------------  -------------------

     Total interest and other income                        $             15,211 $             12,723
                                                             ===================  ===================

INTEREST EXPENSE
Total interest expense for reportable segments              $           (410,988)$           (436,204)
Interest expense for Partnership                                        (784,480)            (820,675)
                                                             -------------------  -------------------

     Total interest expense                                 $         (1,195,468)$         (1,256,879)
                                                             ===================  ===================

NET INCOME (LOSS)
Total net income for reportable segments                    $            782,069 $            498,050
Less minority interest for Partnership                                    13,609               15,079
Plus net loss for Partnership (1)                                     (1,566,200)          (1,493,285)
                                                             -------------------  -------------------

     Total net loss                                         $           (797,740)$         (1,010,314)
                                                             ===================  ===================`

|(1) | The Partnerships net loss is primarily composed of professional and
          administrative costs born by the Partnership and also includes interest and
          other income, interest expense, depreciation and minority interest recorded at
          the partnership level and not allocated to the operating segments. The
          professional and administrative costs include the tax and public company
          reporting and compliance costs associated with a public limited partnership.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

19

---

# Item 2 
Managements Discussion and Analysis of Financial Condition and Results of Operations

Managements Discussion and
Analysis of Financial Condition and Results of Operations should be read in conjunction
with the Consolidated Financial Statements in Item 1 and the cautionary statements below.

# Critical Accounting
Policies

General

A critical accounting policy is one
that would materially affect our operations or financial condition, and requires
management to make estimates or judgments in certain circumstances. These judgments often
result from the need to make estimates about the effect of matters that are inherently
uncertain. Critical accounting policies discussed in this section are not to be confused
with accounting principles and methods disclosed in accordance with U.S. generally
accepted accounting principles (GAAP). GAAP requires information in financial
statements about accounting principles, methods used and disclosures pertaining to
significant estimates. The following disclosure discusses judgments known to management
pertaining to trends, events or uncertainties known which were taken into consideration
upon the application of those policies and the likelihood that materially different
amounts would be reported upon taking into consideration different conditions and
assumptions.

Impairment and Valuation

Statement of Financial Accounting
Standards (SFAS) No. 144 Accounting for the Impairment or Disposal of
Long-Lived Assets, specifies circumstances in which certain long-lived assets must
be reviewed for impairment. If the carrying amount of an asset exceeds the sum of its
expected future cash flows, the assets carrying value must be written down to fair
value. In determining the value of an investment property and whether the investment
property is impaired, management considers several factors such as projected rental and
vacancy rates, property operating expenses, capital expenditures and interest rates. The
capitalization rate used to determine property valuation is based on the market in which
the investment property is located, length of leases, tenant financial strength, the
economy in general, demographics, environment, property location, visibility, age and
physical condition among others. All of these factors are considered by management in
determining the value of any particular investment property. The value of any particular
investment property is sensitive to the actual results of any of these factors, either
individually or taken as a whole. If the actual results differ from managements
judgment, the valuation could be negatively or positively affected.

20

---

Recognition of Rental
Income

Our apartment communities have
operating leases with apartment residents with terms generally of twelve months or less.
We recognize rental revenue related to these leases on an accrual basis when due from
residents. In accordance with our standard lease terms, rental payments are generally due
on a monthly basis.

Our commercial property leases are
accounted for as operating leases. We accrue minimum rents on a straight-line basis over
the terms of their respective leases. We structure our leases to allow us to recover a
significant portion of our property operating, real estate taxes and repairs and
maintenance expenses from our commercial tenants. Property operating expenses typically
include utility, insurance, security, janitorial, landscaping and other administrative
expenses. We accrue reimbursements from tenants for recoverable portions of all these
expenses as revenue in the period the applicable expenditures are incurred. We also
receive estimated payments for these reimbursements from substantially all our tenants
throughout the year. We do this to reduce the risk of loss on uncollectible accounts once
we perform the final year-end billings for recoverable expenditures. We recognize the
difference between estimated recoveries and the final billed amounts in the subsequent
year and we believe these differences were not material in any period presented.

Under GAAP, we are required to
recognize rental income based on the effective monthly rent for each lease. The effective
monthly rent is equal to the average monthly rent during the term of the lease, not the
stated rent for any particular month. The process, known as straight-lining or
stepping rent generally has the effect of increasing rental revenues during
the early phases of a lease and decreasing rental revenues in the latter phases of a
lease. Due to the impact of straight- lining, cash collected for rent exceeded
rental income by approximately $8,000, for the six months ended June 30, 2004, and rental
income exceeded cash collected for rent by approximately $100 for the six months ended
June 30, 2003. If rental income calculated on a straight-line basis exceeds the cash rent
due under the lease, the difference is recorded as an increase in deferred rent receivable
and included as a component of accounts receivable on the relevant balance sheet. If the
cash rent due under the lease exceeds rental income calculated on a straight-line basis,
the difference is recorded as a decrease in deferred rent receivable and is recorded as a
decrease of accounts receivable on the relevant balance sheet. We defer recognition of
contingent rental income, such as percentage or excess rent, until the specified target
that triggers the contingent rental income is achieved. We periodically review the
collectability of outstanding receivables. Allowances are generally taken for tenants with
outstanding balances due for a period greater than ninety days and for tenants with
potentially uncollectible outstanding balances due for a period less than ninety days.

Recognition of Lease
Termination Income

We recognize lease termination income
upon receipt of the income. We accrue lease termination income if there is a signed
termination agreement, all of the conditions of the agreement have been met and the tenant
is no longer occupying the property.

21

---

Cost Capitalization and
Depreciation Policies

We review all expenditures and
capitalize any item exceeding $1,000 deemed to be an upgrade or a tenant improvement with
an expected useful life greater than one year. Land, buildings and amenities are stated at
cost. Depreciation expense is computed using the straight-line method over the estimated
useful lives of the assets. Buildings and improvements have estimated useful lives between
5-30 years, land improvements have estimated useful lives of between 5-30 years, and
amenities have estimated useful lives between 5-30 years.

Minority Interest

In May 2003, the Financial Accounting
Standards Board (FASB) issued Statement No. 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity
(SFAS 150). SFAS 150 establishes standards for classifying and measuring as
liabilities certain financial instruments that embody obligations of the issuer and have
characteristics of both liabilities and equity. SFAS 150 was effective for all financial
instruments created or modified after May 31, 2003, and otherwise was effective at the
beginning of the first interim period beginning after June 15, 2003. On November 7, 2003,
FASB Staff Position No. FAS 150-3 was issued, which deferred for an indefinite period the
classification and measurement provisions, but not the disclosure provisions of SFAS 150.

We consolidate certain properties
that are also owned by affiliated parties that have noncontrolling interests. In certain
cases, the applicable joint venture agreement provides for a contractual termination date
of the agreement based on certain specified events. SFAS 150 describes this type of
arrangement as a limited-life subsidiary. SFAS 150 requires the disclosure of
the estimated settlement value of these noncontrolling interests. As of June 30, 2004, the
estimated settlement value of these noncontrolling interests is approximately $552,000.
This settlement value is based on estimated third party consideration paid to the joint
venture upon disposition of each property and is net of all other assets and liabilities
including any yield maintenance that would have been due on that date had the mortgage
encumbering the properties been prepaid on June 30, 2004. Due to the inherent risks and
uncertainties related to the operations and sale of real estate assets, among other
things, the amount of any potential distribution to the noncontrolling interests is likely
to change.

# Results of Operations

The following tables include our
selected summarized operating data for the three and six months ended June 30, 2004 and
2003. This data is presented to provide assistance in identifying trends in our operating
results and other factors affecting our business. This data should be read in conjunction
with our consolidated financial statements, including the notes thereto, in Part I, Item 1
of this report.

22

---

`Three Months Ended June 30, 2004
                                              ----------------------------------------------------------------------
                                                  Apartment
                                                 Communities       Commercial       Partnership            Total
                                              ----------------------------------------------------------------------
Net revenues                                  $    2,474,184   $      182,902    $           --     $     2,657,086
Operating expenses and operating
  expenses - affiliated                            1,045,216           87,984                --           1,133,200
Depreciation and amortization                        587,298           54,225            22,366             663,889
Interest expense                                     204,841               --           390,746             595,587
Net income (loss)                                    434,192           18,870          (721,341)           (268,279)



                                                               Three Months Ended June 30, 2003
                                              ----------------------------------------------------------------------
                                                  Apartment
                                                 Communities       Commercial       Partnership            Total
                                              ----------------------------------------------------------------------
Net revenues                                  $    2,583,149   $      127,920    $           --     $     2,711,069
Operating expenses and operating
  expenses - affiliated                            1,131,469           78,773                --           1,210,242
Depreciation and amortization                        578,503           52,955            22,366             653,824
Interest expense                                     215,710               --           405,449             621,159
Net income (loss)                                     50,891          (17,988)         (759,499)           (726,596)



                                                                Six Months Ended June 30, 2004
                                              ----------------------------------------------------------------------
                                                  Apartment
                                                 Communities       Commercial       Partnership            Total
                                              ----------------------------------------------------------------------
Net revenues                                  $    4,950,867   $      320,878    $           --     $     5,271,745
Operating expenses and operating
  expenses - affiliated                            2,148,630          165,669                --           2,314,299
Depreciation and amortization                      1,173,676          108,247            44,733           1,326,656
Interest expense                                     410,988               --           784,480           1,195,468
Net income (loss)                                    786,808           (4,739)       (1,579,809)           (797,740)



                                                                Six Months Ended June 30, 2003
                                              ----------------------------------------------------------------------
                                                  Apartment
                                                 Communities       Commercial       Partnership            Total
                                              ----------------------------------------------------------------------
Net revenues                                  $    5,200,873   $      258,263    $           --     $     5,459,136
Operating expenses and operating
  expenses - affiliated                            2,123,592          154,539                --           2,278,131
Depreciation and amortization                      1,156,783          100,087            44,733           1,301,603
Interest expense                                     436,204               --           820,675           1,256,879
Net income (loss)                                    523,229          (25,179)       (1,508,364)         (1,010,314)`

During the six months ended June 30,
2004, our operating results have been negatively impacted by the expenses related to our
proposed merger. Residential net revenues have decreased due to a decrease in average rent
per unit. Commercial net revenues have increased slightly as a result of higher average
occupancy. Operating expense and operating expenses  affiliated have not changed
significantly. Real estate taxes have decreased due to decreased tax assessments at Willow
Lake Apartments and Park Place Apartments Phase I, which were partially offset by an
increased tax

23

---

assessment at Plainview Point Office
Center Phase III and by additional Plainview Point Office Center Phase III property tax
that was contested in 2003, but overruled in 2004. Depreciation and interest expense have
remained fairly constant.

Rental income and tenant
reimbursements generated by our properties and joint ventures for the three and six months
ended June 30, 2004 and 2003 were as follows:

`Three Months Ended              Six Months Ended
                                                                 June 30,                       June 30,
                                                       -----------------------------  -----------------------------
                                                            2004           2003           2004            2003
                                                       --------------  -------------  -------------  --------------
Wholly-Owned Properties
Sabal Park Apartments                                 $       471,669 $      492,594 $      951,336 $       986,521
Park Place Apartments Phase I                                 391,558        423,627        788,999         854,496
Willow Lake Apartments                                        525,882        573,342      1,030,300       1,134,824
Park Place Apartments Phase III                               374,878        376,704        753,252         764,258

Joint Venture Properties
(Ownership % on June 30, 2004)
Golf Brook Apartments (96.03%)                        $       710,197 $      716,882 $    1,426,980 $     1,460,774
Plainview Point Office Center Phase III (95.04%)              182,902        127,920        320,878         258,263`

We believe the changes in rental
income and tenant reimbursements from period to period are temporary effects of each
propertys specific mix of lease maturities and are not indicative of any known
trend, except for Plainview Point Office Center Phase III where we expect there will be a
protracted period extending beyond 2004 for the property to become fully leased again.

The occupancy levels at our
properties and joint ventures as of June 30, 2004 and 2003 were as follows:

`June 30,
                                                               -----------------------------------------
                                                                      2004                   2003
                                                               ------------------     ------------------
Wholly-Owned Properties
Sabal Park Apartments                                                 98%                    91%
Park Place Apartments Phase I                                         84%                    90%
Willow Lake Apartments                                                89%                    86%
Park Place Apartments Phase III                                       93%                    93%

Joint Venture Properties
(Ownership % on June 30, 2004)
Golf Brook Apartments (96.03%)                                        99%                    92%
Plainview Point Office Center Phase III (95.04%)                      78%                    48%`

We believe the changes in occupancy
on June 30 from year to year are temporary effects of each propertys specific mix of
lease maturities and are not indicative of any known trend, except for Plainview Point
Office Center Phase III where we expect there will be a protracted period extending beyond
2004 for the property to become fully leased again.

24

---

The average occupancy levels at our
properties and joint ventures for the three and six months ended June 30, 2004 and 2003
were as follows:

`Three Months Ended                    Six Months Ended
                                                                  June 30,                             June 30,
                                                       -------------------------------     --------------------------------
                                                           2004              2003              2004               2003
                                                       -------------     -------------     -------------      -------------
Wholly-Owned Properties
Sabal Park Apartments                                       96%               94%               95%                95%
Park Place Apartments Phase I                               81%               89%               80%                87%
Willow Lake Apartments                                      87%               87%               86%                86%
Park Place Apartments Phase III                             90%               93%               91%                94%

Joint Venture Properties
(Ownership % on June 30, 2004)
Golf Brook Apartments (96.03%)                              96%               91%               93%                91%
Plainview Point Office Center Phase III (95.04%)            76%               49%               66%                49%`

We believe the changes in average
occupancy from period to period are temporary effects of each propertys specific mix
of lease maturities and are not indicative of any known trend, except for Plainview Point
Office Center Phase III where we expect there will be a protracted period extending beyond
2004 for the property to become fully leased again.

In an effort to continue to improve
occupancy at our apartment communities, we have an on-site leasing staff, who are
employees of NTS Development Company, at each of the apartment communities. The staff
handles all on-site visits from potential tenants, coordinates local advertising with NTS
Development Companys marketing staff, makes visits to local companies to promote
fully furnished apartments, and negotiates lease renewals with current residents.

The leasing and renewal negotiations
for our commercial property are handled by leasing agents, who are employees of NTS
Development Company, located in Louisville, Kentucky. The leasing agents are located in
the same city as the commercial property. All advertising for the commercial property is
coordinated by NTS Development Companys marketing staff located in Louisville,
Kentucky.

The following discussion relating to
changes in our results of operations includes only material line items within our
Statements of Operations or line items for which there was a material change between the
three and six months ending June 30, 2004 and 2003.

Rental Income and Tenant
Reimbursements

Rental income and tenant
reimbursements did not change significantly between the three months ended June 30, 2004
and 2003. There are no offsetting material changes.

25

---

Rental income and tenant
reimbursements were approximately $5,272,000 and $5,459,000 for the six months ended June
30, 2004 and 2003, respectively. The decrease of $187,000, or 3%, is primarily the result
of a decrease in average income per unit at Willow Lake Apartments, Sabal Park Apartments
and Golf Brook Apartments and decreased average occupancy at Park Place Apartments Phase
I. The decrease was partially offset by an increase in average occupancy at Plainview
Point Office Center Phase III.

Operating Expenses and
Operating Expenses  Affiliated

Operating expenses for the three
months ended June 30, 2004 and 2003 were approximately $749,000 and $820,000,
respectively. The decrease of $71,000, or 9%, is primarily due to a decrease in repairs
and maintenance costs at Sabal Park Apartments and Park Place Apartments Phase I, a
decrease in bad debt expense at Sabal Park Apartments and a decrease in exterior
landscaping costs at Park Place Apartments Phase I and III for ice storm cleanup. The
decrease is partially offset by an increase in insurance expense at Sabal Park Apartments
and Golf Brook Apartments.

Operating expenses did not change
significantly between the six months ended June 30, 2004 and 2003. There are no offsetting
material changes.

Our operating expenses 
affiliated did not change significantly between the three and six months ended June 30,
2004 and 2003. There were no offsetting material changes.

Operating expenses  affiliated
are for the services performed by employees of NTS Development Company, an affiliate of
our General Partner. These employee services include property management, leasing,
maintenance, security and other services necessary to manage and operate our business.

Real Estate Taxes

Real estate taxes were approximately
$97,000 and $223,000 for the three and six months ended June 30, 2004, as compared to
approximately $393,000 and $617,000 for the three and six months ended June 30, 2003. The
decrease of $296,000, or 75%, and $394,000, or 64%, for the three and six months ended
June 30, 2004 is primarily due to decreased tax assessments at Willow Lake Apartments and
Park Place Apartments Phase I. The decrease was partially offset by an increased tax
assessment at Plainview Point Office Center Phase III. The decrease for the six months
ended June 30, 2004 as compared to 2003 was also partially offset by additional Plainview
Point Office Center Phase III property tax that was contested in 2003, but overruled in
2004.

26

---

Professional and
Administrative Expenses and Professional and Administrative Expenses Affiliated

Professional and administrative
expenses were approximately $191,000 and $530,000 for the three and six months ended June
30, 2004, as compared to approximately $219,000 and $430,000 for the three and six months
ended June 30, 2003. The decrease of $28,000, or 13%, for the three months ended June 30,
2004 is primarily the result of decreased legal and professional fees related to
litigation filed by limited partners. The decrease is partially offset by increased costs
in relation to our proposed merger. The increase of $100,000, or 23%, for the six months
ended June 30, 2004 is primarily the result of increased costs in relation to our proposed
merger. See Item 1  Note 10 for information regarding our proposed merger.

Our professional and administrative
expenses  affiliated did not change significantly between the three and six months
ended June 30, 2004 and 2003. There were no offsetting material changes.

Professional and administrative
expenses  affiliated are for the services performed by employees of NTS Development
Company, an affiliate of our General Partner. These employee services include legal,
financial and other services necessary to manage and operate our business.

Depreciation and
Amortization Expense

Our depreciation and amortization
expenses did not change significantly between the three and six months ended June 30, 2004
and 2003. There were no offsetting material changes.

Interest Expense

Our interest expense did not change
significantly between the three and six months ended June 30, 2004 and 2003. There were no
offsetting material changes.

Loss on Disposal of Assets

Loss on disposal of assets was
approximately $4,000 and $4,000 for the three and six months ended June 30, 2004, as
compared to approximately $95,000 and $104,000 for the three and six months ended June 30,
2003. The decrease of $91,000, or 96%, and $100,000, or 96%, for the three and six months
ended June 30, 2004 is primarily due to retirements made in 2003 at Willow Lake Apartments
and at Sabal Park Apartments before the assets were fully depreciated.

27

---

# Liquidity and Capital
Resources

The following table sets forth the
cash provided by or used in operating activities, investing activities and financing
activities for the six months ended June 30, 2004 and 2003.

Cash flows provided by (used in):

`Six Months Ended
                                                                                  June 30,
                                                                  -----------------------------------------
                                                                         2004                  2003
                                                                  ------------------    -------------------
Operating activities                                           $           1,811,223 $            1,034,663
Investing activities                                                        (498,556)              (406,121)
Financing activities                                                      (1,066,312)            (1,021,074)
                                                                  ------------------    -------------------

     Net increase (decrease) in cash and equivalents           $             246,355 $             (392,532)
                                                                  ==================    ===================`

Net cash provided by operating
activities increased from approximately $1,035,000 for the six months ended June 30, 2003
to approximately $1,811,000 for the six months ended June 30, 2004. The increase was
primarily driven by the change in accounts payable. The increased accounts payable
includes amounts due for professional services related to our litigation filed by limited
partners and our proposed merger.

Net cash used in investing activities
increased from approximately $406,000 for the six months ended June 30, 2003 to
approximately $499,000 for the six months ended June 30, 2004. The increase in net cash
used was primarily due to increased additions to land, buildings and amenities primarily
at Plainview Point Office Center Phase III.

Net cash used in financing activities
increased from approximately $1,021,000 for the six months ended June 30, 2003 to
approximately $1,066,000 for the six months ended June 30, 2004. The increase was
primarily the result of increased principal payments made in 2004, partially offset by a
note payable in the amount of $19,216 obtained during the second quarter of 2004 for the
purchase of four golf carts. See Item 1  Note 7 for information regarding our
mortgages and notes payable.

Due to the fact that no distributions
were made during the six months ended June 30, 2004 or 2003, the table which presents that
portion of the distributions that represents a return of capital in accordance with GAAP
has been omitted.

Future Liquidity

Our future liquidity depends
significantly on our properties occupancy remaining at a level which provides for
debt payments and adequate working capital, currently and in the future. If occupancy were
to fall below that level and remain at or below that level for a significant period of
time, our ability to make payments due under our debt agreements and to continue paying
daily operational costs would be greatly impaired. In addition, we may be required to
obtain financing in connection with the capital improvements and leasing costs described
below.

28

---

NTS Development Company has agreed to
defer, until March 31, 2005, amounts owed to them by us as of December 31, 2003 and those
amounts accruing from January 1, 2004 through March 31, 2005, other than as permitted by
our cash flows. There can be no assurances that NTS Development Company will continue to
defer amounts due them past March 31, 2005. If these amounts are not deferred, such action
could have a material adverse effect on our liquidity and financial condition. Payment of
such deferred amounts would be dependent upon available operating cash flow or funding
from potential third-party resources in the form of loans or advances.

The primary source of future
liquidity is expected to be cash from operations. It is anticipated that the cash flow
from operations will be sufficient to meet our day to day working capital needs. Cash
reserves (which are unrestricted cash and equivalents as shown on our balance sheet) were
$371,697 on June 30, 2004.

The demand on future liquidity is
anticipated to increase as a result of the replacement of the roofs at both Willow Lake
Apartments (26 buildings) and Park Place Apartments Phase I (23 buildings) all of which
were installed using shingles produced by a single manufacturer. The shingles appear to
contain defects which may cause roofs to fail. As the shingle manufacturer has declared
bankruptcy, we do not expect to be able to recover any of the costs of the roof
replacements in the event of any such failures. We do not have sufficient working capital
to make all of the roof replacements at one time. As of June 30, 2004, eight buildings at
Willow Lake Apartments have had roofs replaced while no roofs have been replaced at Park
Place Apartments Phase I. The total cost of replacing all of the remaining roofs is
estimated to be $820,000 ($20,000 per building).

The demand on future liquidity is
also anticipated to increase as we continue our efforts in the leasing of Plainview Point
Office Center Phase III. One tenant which occupied 16,895 square feet, or 27%, of the
building, vacated its space on November 30, 2001. As a result of this vacancy, there will
likely be a protracted period extending beyond 2004 for the property to become fully
leased again. On April 16, 2004, a tenant leased approximately 11,000 square feet of
Plainview Point Office Center Phase III. The lease agreement calls for tenant finish,
estimated to cost approximately $411,000. The tenant finish cost will be funded by loan
proceeds from a note payable obtained October 1, 2003 and cash reserves. Through June 30,
2004, approximately $401,000 of the tenant finish cost has been incurred. It is estimated
that an additional $54,000 will be needed for tenant finish costs in order to return the
building to full occupancy.

The demands on liquidity as discussed
above will be managed by our general partner using cash provided by operations, cash
reserves, deferral of amounts owed to NTS Development Company, and existing or additional
financing secured by our properties. Typically, these capital improvements and leasing
costs require use of existing financing or additional financing. There can be no guarantee
that such funds will be available at which time our general partner will manage the demand
on liquidity according to our best interest.

29

---

Leases at Plainview Point Office
Center Phase III provide for tenants to contribute toward the payment of common area
maintenance expenses, insurance, utilities and real estate taxes. These lease provisions,
along with the fact that residential leases are generally for a period of one year, should
protect our operations from the impact of inflation and changing prices.

We had no other material commitments
for renovations or capital expenditures as of June 30, 2004.

# Proposed Merger

As part of the Settlement Agreement, our
general partner and the general partners of the four public partnerships affiliated with
us, have agreed to pursue a merger of the partnerships and several other affiliated real
estate entities into a newly formed limited partnership known as NTS Realty Holdings
Limited Partnership (NTS Realty). The merger is subject to, among other
things, approval by a majority of the limited partner interests in each partnership. We
may not seek the approval of the limited partners until a filing made by NTS Realty with
the Securities and Exchange Commission is declared effective. For the six months ended
June 30, 2004 and 2003, our share of the legal and professional fees for the proposed
merger was approximately $313,000 and $85,000, respectively.

On February 4, 2004, NTS Realty filed
a joint consent solicitation statement/prospectus on Form S-4 with the Securities and
Exchange Commission. The solicitation statement/prospectus presents the merger of
NTS-Properties III; NTS-Properties IV; NTS-Properties V; NTS-Properties VI; and
NTS-Properties VII, Ltd. with NTS Realty. Concurrent with the merger, ORIG, LLC, a
Kentucky limited liability company, which is affiliated with our general partner, will
contribute substantially all its real estate assets and all of its liabilities to NTS
Realty.

On June 24, 2004 and August 13, 2004,
NTS Realty filed first and second amendments, respectively, to Form S-4 with the
Securities and Exchange Commission. Both amendments are in response to comments made by
the Securities and Exchange Commission.

# Website Information

Our website address is
www.ntsdevelopment.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K and amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act are available and may be accessed
free of charge through the About NTS section of our website as soon as
reasonably practicable after we electronically file this material with, or furnish it to,
the SEC. Our website and the information contained therein or connected thereto are not
incorporated into this quarterly report on Form 10-Q.

30

---

# Item 3 
Quantitative and Qualitative Disclosures About Market Risk

Our primary market risk exposure with
regard to financial instruments is changes in interest rates. All of our debt bears
interest at a fixed rate with the exception of a note payable of $400,000 that bears
interest at the Prime Rate. A hypothetical 100 basis point increase in interest rates
would not significantly increase annual interest expense on the variable rate note. A
hypothetical 100 basis point increase in interest rates would result in an approximate
$1,337,000 decrease in the fair value of debt.

# Item 4  Controls
and Procedures

Our General Partner, with the
participation of the Chief Executive Officer and Chief Financial Officer, has evaluated
the effectiveness of our disclosure controls and procedures as of June 30, 2004. Based on
that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that
our disclosure controls and procedures were effective as of June 30, 2004. There were no
material changes in our internal controls over financial reporting during the six months
ended June 30, 2004.

31

---

# PART II  OTHER INFORMATION

# Item 1  Legal Proceedings

On May 6, 2004, the Superior Court of
the State of California for the County of Contra Costa granted its final approval of the
Stipulation and Agreement of Settlement (the Settlement Agreement) jointly
filed by the general partners (the General Partners) of NTS-Properties III,
NTS-Properties IV, NTS-Properties V, NTS-Properties VI and NTS-Properties VII, Ltd. (the
Partnerships), along with certain of their affiliates, with the class of
plaintiffs in the action originally captioned Buchanan, et al. v. NTS-Properties
Associates, et al.(Case No. C 01-05090) on December 5, 2003. At the final hearing, any
member of the class of plaintiffs was given the opportunity to object to the final
approval of the Settlement Agreement, the entry of a final judgment dismissing with
prejudice the Buchananlitigation, or an application of an award for attorneys fees
and expenses to plaintiffs counsel. The Superior Courts order provides, among
other things, that: (1) the Settlement Agreement, and all transactions contemplated
thereby, including the proposed merger of the Partnerships into NTS Realty Holdings
Limited Partnership, are fair, reasonable and adequate, and in the best interests of the
class of plaintiffs; (2) the plaintiffs complaint and each and every cause of action
and claim set forth therein is dismissed with prejudice; (3) each class member is barred
from (a) transferring, selling or otherwise disposing of (other than by operation of law)
their interests until the earlier of the closing date of the merger, the termination of
the settlement or June 30, 2004; and (4) each class member who requested to be excluded
from the settlement released their claims in the Bohmlitigation.

On June 11, 2004, Joseph Bohm and
David Duval, class members who objected to the Settlement Agreement but were overruled by
the Superior Court, filed an appeal in the Court of Appeals of the State of California,
first Appellate District.

Items 2 through 5 are omitted because these items are inapplicable or the answers to the items are negative.

# Item 6  Exhibits and Reports on Form 8-K

Exhibit No.

|   |                                                                                                                                |   
|-- | ------------------------------------------------------------------------------------------------------------------------------ | --
|3  | Amended and Restated Agreement and Certificate
of Limited Partnership of NTS-Properties VI,
a Maryland limited partnership.    | * 
|  
|3a | First Amendment to Amended and Restated
Agreement of Limited Partnership of
NTS-Properties VI, a Maryland limited partnership. | **

32

---

|     |                                                                                                                                                                                                                                                   |     
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|10   | Property Management Agreement and Construction 
Agreement between NTS Development Company and 
NTS-Properties VI, a Maryland limited partnership.                                                                                                 | *   
|    
|14   | Code of Ethics.                                                                                                                                                                                                                                   | *** 
|    
|31.1 | Certification of Chief Executive Officer Pursuant to
Rule 13a-14(a) and Rule 15d-14(a) of the Securities
Exchange Act, as amended.                                                                                                                | ****
|    
|31.2 | Certification of Chief Financial Officer Pursuant to
Rule 13a-14(a) and Rule 15d-14(a) of the Securities
Exchange Act, as amended.                                                                                                                | ****
|    
|32.1 | Certification of Chief Executive Officer Pursuant to
18 U.S.C. 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.                                                                                                        | ****
|    
|32.2 | Certification of Chief Financial Officer Pursuant to
18 U.S.C. 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.                                                                                                        | ****
|    
|*    | Incorporated by reference to documents filed with the Securities and Exchange
Commission in connection with the filing of the Registration Statements on Form S-11
on March 22, 1985 (effective June 25, 1985) under Commission File No. 2-96583.
|    
|**   | Incorporated by reference to Form 10-K filed with the Securities and Exchange
Commission for the fiscal year ended December 31, 1987 under Commission
File No. 0-14695.                                                                          
|    
|***  | See www.ntsdevelopment.com for our code of ethics.                                                                                                                                                                                               
|    
|**** | Attached as an exhibit with this Form 10-Q.                                                                                                                                                                                                      

Reports on Form 8-K

We filed a Form 8-K on June 24, 2004,
to announce that NTS Realty Holdings Limited Partnership filed an amendment to Form S-4
with the Securities and Exchange Commission on June 18, 2004. The original Form S-4 was
filed on February 4, 2004.

We filed a Form 8-K on August 13,
2004, to announce that NTS Realty Holdings Limited Partnership filed a second amendment to
Form S-4 with the Securities and Exchange Commission on August 13, 2004. The original Form
S-4 was filed on February 4, 2004.

33

---

SIGNATURES

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

|NTS-PROPERTIES VI,
A MARYLAND LIMITED PARTNERSHIP
|-------------------------------------------------
|
|                                                 
|By:                                              
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 

|/s/ Brian F. Lavin                                
|--------------------------------------------------
|                                                  
|Brian F. Lavin                                    
|President of NTS Capital Corporation              
|                                                  
|                                                  
|/s/ Gregory A. Wells                              
|                                                  
|Gregory A. Wells                                  
|Chief Financial Officer of NTS Capital Corporation
|                                                  
|                                                  
|Date: August 16, 2004                             

34