# 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 September 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
Exchange Act).     Yes [   ]    No [X]

---

# TABLE OF CONTENTS

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

# PART I  FINANCIAL INFORMATION

|        |  |                                                                                                              |  |      
|------- |  | ------------------------------------------------------------------------------------------------------------ |  | -----
|Item 1. |  | Consolidated Financial Statements (Unaudited)                                                               
|       
|        |  | Consolidated Balance Sheets as of September 30, 2004 and December 31, 2003                                   |  | 4    
|       
|        |  | Consolidated Statement of Partners' Equity as of September 30, 2004                                          |  | 4    
|       
|        |  | Consolidated Statements of Operations for the Three and 
      Nine Months Ended September 30, 2004 and 2003 |  | 5    
|       
|        |  | Consolidated Statements of Cash Flows for the 
      Nine Months Ended September 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                   |  | 20-32
|       
|Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk                                                   |  | 33   
|       
|Item 4. |  | Controls and Procedures                                                                                      |  | 33   
|       

# PART II  OTHER INFORMATION

|            |  |  |  |      
|----------- |  |  |  | -----
|Items 1 - 6 |  |  |  | 34-36
|           
|Signatures  |  |  |  | 37   

2

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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

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

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

`As of               As of
                                                                  September 30,       December 31,
                                                                       2004               2003
                                                                ------------------  -----------------
                                                                   (UNAUDITED)
ASSETS
Cash and equivalents                                           $           242,266 $          125,342
Cash and equivalents - restricted                                          375,021            245,599
Accounts receivable, net                                                    57,385            132,859
Land, buildings and amenities, net                                      38,978,599         40,446,437
Other assets                                                             1,168,069          1,203,286
                                                                ------------------  -----------------

      TOTAL ASSETS                                             $        40,821,340 $       42,153,523
                                                                ==================  =================

LIABILITIES AND PARTNERS' EQUITY
Mortgages and notes payable                                    $        30,248,106 $       31,872,038
Accounts payable and accrued expenses                                      893,778            615,661
Accounts payable - affiliate                                             1,102,521            206,789
Security deposits                                                          242,409            239,429
Other liabilities                                                          943,709            541,677
                                                                ------------------  -----------------

      TOTAL LIABILITIES                                                 33,430,523         33,475,594

COMMITMENTS AND CONTINGENCIES (Note 10)

PARTNERS' EQUITY                                                         7,390,817          8,677,929
                                                                ------------------  -----------------

TOTAL LIABILITIES AND PARTNERS' EQUITY                         $        40,821,340 $       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                               (1,274,241)            (12,871)         (1,287,112)
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 SEPTEMBER 30, 2004                $        7,647,599 $          (256,782)$         7,390,817
                                               =================  ==================  ==================`

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

4

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

`Three Months Ended              Nine Months Ended
                                                               September 30,                  September 30,
                                                       -----------------------------  -----------------------------
                                                            2004           2003           2004            2003
                                                       --------------  -------------  -------------  --------------
REVENUES
Rental income                                         $     2,733,715 $    2,693,946 $    8,004,665 $     8,150,947
Tenant reimbursements                                             408            255          1,203           2,390
                                                       --------------  -------------  -------------  --------------

     TOTAL REVENUES                                         2,734,123      2,694,201      8,005,868       8,153,337
                                                       --------------  -------------  -------------  --------------

EXPENSES
Operating expenses                                            918,190        780,352      2,435,113       2,276,971
Operating expenses - affiliated                               399,414        371,770      1,196,791       1,153,281
Management fees                                               139,907        136,652        406,825         414,067
Real estate taxes                                             186,599        235,377        409,640         852,732
Professional and administrative expenses                      200,250        149,667        730,655         579,203
Professional and administrative expenses - affiliated         115,560         92,880        325,398         295,550
Depreciation and amortization                                 663,382        656,821      1,990,038       1,958,424
                                                       --------------  -------------  -------------  --------------

     TOTAL OPERATING EXPENSES                               2,623,302      2,423,519      7,494,460       7,530,228
                                                       --------------  -------------  -------------  --------------

OPERATING INCOME                                              110,821        270,682        511,408         623,109

Interest and other income                                       3,197          4,582         18,409          17,306
Interest expense                                             (589,287)      (631,524)    (1,784,755)     (1,888,403)
Loss on disposal of assets                                     (5,428)            --         (9,890)       (103,506)
                                                       --------------  -------------  -------------  --------------

Loss before minority interest                                (480,697)      (356,260)    (1,264,828)     (1,351,494)
Minority interest income                                        8,675          7,674         22,284          22,753
                                                       --------------  -------------  -------------  --------------

Net loss                                              $      (489,372)$     (363,934)$   (1,287,112)$    (1,374,247)
                                                       ==============  =============  =============  ==============

Net loss allocated to the limited partners            $      (484,478)$     (360,295)$   (1,274,241)$    (1,360,505)
                                                       ==============  =============  =============  ==============

Net loss per limited partnership interest             $        (12.46)$        (9.26)$       (32.77)$        (34.98)
                                                       ==============  =============  =============  ==============

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

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

`Nine Months Ended
                                                                              September 30,
                                                                  --------------------------------------
                                                                        2004                 2003
                                                                  -----------------    -----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                       $         (1,287,112)$         (1,374,247)
Adjustments to reconcile net loss to net cash provided by
  operating activities:
    Loss on disposal of assets                                                9,890              103,506
    Depreciation and amortization                                         2,032,523            1,997,315
    Minority interest income                                                 22,284               22,753
    Changes in assets and liabilities:
      Cash and equivalents - restricted                                    (129,422)            (145,287)
      Accounts receivable                                                    75,474               (6,821)
      Other assets                                                           17,456              (70,271)
      Accounts payable and accrued expenses                               1,173,849              377,301
      Security deposits                                                       2,980                6,961
      Other liabilities                                                     402,032              678,789
                                                                  -----------------    -----------------

     Net cash provided by operating activities                            2,319,954            1,589,999
                                                                  -----------------    -----------------

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to land, buildings and amenities                                 (532,090)            (682,582)
Investment in joint ventures by minority partners, net                      (47,008)             (52,633)
                                                                  -----------------    -----------------

     Net cash used in investing activities                                 (579,098)            (735,215)
                                                                  -----------------    -----------------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from note payable                                                   19,216                   --
Principal payments on mortgages and notes payable                        (1,643,148)          (1,535,404)
                                                                  -----------------    -----------------

     Net cash used in financing activities                               (1,623,932)          (1,535,404)
                                                                  -----------------    -----------------

     Net increase (decrease) in cash and equivalents                        116,924             (680,620)

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

CASH AND EQUIVALENTS, end of period                            $            242,266 $            378,194
                                                                  =================    =================

Interest paid on a cash basis                                  $          1,767,610 $          1,872,569
                                                                  =================    =================`

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

6

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# 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 nine months ended
September 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 $738,000 and $713,000 as
of September 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

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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 September 30,
2004, the estimated settlement value of these noncontrolling interests is approximately
$555,000. 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 September 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 September 30, 2004, approximately $165,000 of our
overnight investment was included in cash and equivalents.

8

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# 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

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# Note 7  Mortgages
and Notes Payable

Mortgages and notes payable consist
of the following:

`September 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.                           $       10,716,252 $        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.                                    5,693,790           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.                                       5,360,405           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.                            2,927,021           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.                                        1,919,901           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.                            1,933,067           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.                            1,279,934           1,362,237

Note payable to a bank, bearing interest at the bank's Prime Rate,
payable monthly, due October 1, 2005.  On September 30, 2004, the
interest rate was 4.50%.                                                       400,000             400,000

Note payable to a finance company, payable in monthly installments,
bearing interest at 8.50%, due July 15, 2006.                                   17,736                  --
                                                                     -----------------  ------------------

                                                                    $       30,248,106 $        31,872,038
                                                                     =================  ==================`

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

As of September 30, 2004, the fair
value of long-term debt is approximately $31,975,000, based on the borrowing rates
currently available to us for mortgages with similar terms and average maturities.

10

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# 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 nine months ended September 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.

`Nine Months Ended
                                                                             September 30,
                                                                ----------------------------------------
                                                                       2004                 2003
                                                                -------------------  -------------------

Property management fees                                       $            406,825 $            414,067
                                                                -------------------  -------------------

Property management                                                         783,117              791,923
Leasing                                                                     104,174              122,351
Administrative - operating                                                  287,969              229,787
Other                                                                        21,531                9,220
                                                                -------------------  -------------------

     Total operating expenses - affiliated                                1,196,791            1,153,281
                                                                -------------------  -------------------

Professional and administrative expenses - affiliated                       325,398              295,550
                                                                -------------------  -------------------

Repair and maintenance fees                                                  23,563               35,307
Leasing commissions                                                          10,990               12,878
                                                                -------------------  -------------------

     Total related party transactions capitalized                            34,553               48,185
                                                                -------------------  -------------------

Total related party transactions                               $          1,963,567 $          1,911,083
                                                                ===================  ===================`

11

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During the nine months ended
September 30, 2004 and 2003, we were charged $23,709 and $22,232, 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 September 24, 2004, a tenant
leased approximately 8,300 square feet of Plainview Point Office Center Phase III. The
lease agreement calls for tenant finish, estimated to cost approximately $101,000. The
tenant finish cost is expected to be funded by additional financing and cash reserves.
Through September 30, 2004, approximately $7,000 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 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 for the settlement of this action in our financial
statements.

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

12

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Partnerships, a declaratory judgment
and injunctive relief. No amounts have been accrued for the settlement of 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 Buchanan litigation. This agreed upon settlement includes
releases for all of the parties for all of the claims asserted in the Buchanan litigation
and the Bohm litigation. 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 $723,500
of this payment.

On December 5, 2003, the General
Partners, certain of their affiliates and the class of plaintiffs in the Buchanan
litigation jointly filed a Stipulation and Agreement of Settlement (the Settlement
Agreement) with the Superior Court. The Settlement Agreement sets forth 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 Buchanan litigation
should be dismissed with prejudice.

On March 2, 2004, we, along with all
defendants, filed a Motion to Dismiss the Bohm litigation. After the Motion to Dismiss was
fully briefed, the settlement agreement in the Buchanan litigation received final court
approval. The Circuit Court of Jefferson County, Kentucky, instructed the plaintiffs in
the Bohm litigation to file an amended complaint in light of the approved settlement of
the Buchanan litigation. The plaintiffs in the Bohm litigation filed a corrected Second
Amended Complaint on August 11, 2004. We, along with all defendants, filed a Motion to
Strike the corrected Second Amended Complaint. A hearing on this motion is scheduled for
January 14, 2005. 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
Buchanan litigation, 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 transferring, selling or otherwise
disposing of (other than by operation of law) their interests until the earlier of the
closing

13

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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 Bohm litigation.

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.

Under an indemnification agreement
with our general partner, we are responsible for the costs of defending any litigation.
For the nine months ended September 30, 2004 and 2003, our share of the legal costs for
the Buchanan and Bohm litigations was approximately $174,000 and $217,000, 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 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 NTS Realty. The merger is subject to, among other things,
approval by a majority of the limited partner interests in each partnership. For the nine
months ended September 30, 2004 and 2003, our share of the legal and professional fees for
the proposed merger was approximately $469,000 and $110,000, respectively, which was
included in our professional and administrative expenses.

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 the
Partnerships 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. NTS
Realty filed Amendment No. 1 on June 18, 2004, Amendment No. 2 on August 13, 2004 and
Amendment No. 3 on September 30, 2004.

On October 25, 2004 and October 27,
2004, NTS Realty filed Amendment No. 4 and Amendment No. 5, respectively, to its
registration statement on Form S-4, which includes a joint consent solicitation
statement/prospectus, with the Securities and Exchange Commission to seek approval of the
merger of the Partnerships into NTS Realty. The general partners of the Partnerships
agreed to pursue a merger of the Partnerships in the Stipulation and Agreement of
Settlement that was jointly filed by the general partners, along with certain of their
affiliates, with the class of plaintiffs

14

---

in the action originally captioned Buchanan, et
al. v. NTS-Properties Associates, et al. (Case No. C 01-05090).

On October 27, 2004, the Securities and
Exchange Commission signed an order declaring NTS Realtys registration statement to
be effective and the Partnerships began mailing the joint consent solicitation
statement/prospectus to their respective limited partners.

# 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.

`Three Months Ended September 30, 2004
                                               ---------------------------------------------------------
                                                   Apartment
                                                  Communities         Commercial            Total
                                               -----------------  ------------------  ------------------
Rental income                                 $        2,537,550 $           196,165 $         2,733,715
Tenant reimbursements                                         --                 408                 408
                                               -----------------  ------------------  ------------------

     Total revenues                                    2,537,550             196,573           2,734,123
                                               -----------------  ------------------  ------------------

Operating expenses and operating expenses -
  affiliated                                           1,224,549              93,055           1,317,604
Management fees                                          126,019              13,888             139,907
Real estate taxes                                        175,049              11,550             186,599
Depreciation and amortization                            589,219              53,740             642,959
                                               -----------------  ------------------  ------------------

     Total operating expenses                          2,114,836             172,233           2,287,069
                                               -----------------  ------------------  ------------------

Operating income                                         422,714              24,340             447,054

Interest and other income                                  2,025                  61               2,086
Interest expense                                        (410,904)                 (1)           (410,905)
Loss on disposal of assets                                (5,428)                 --              (5,428)
                                               -----------------  ------------------  ------------------

Net income                                    $            8,407 $            24,400 $            32,807
                                               =================  ==================  ==================`

15

---

`Three Months Ended September 30, 2003
                                               ---------------------------------------------------------
                                                   Apartment
                                                  Communities         Commercial            Total
                                               -----------------  ------------------  ------------------
Rental income                                 $        2,569,027 $           124,919 $         2,693,946
Tenant reimbursements                                         --                 255                 255
                                               -----------------  ------------------  ------------------

     Total revenues                                    2,569,027             125,174           2,694,201
                                               -----------------  ------------------  ------------------

Operating expenses and operating expenses -
  affiliated                                           1,078,923              73,199           1,152,122
Management fees                                          129,067               7,585             136,652
Real estate taxes                                        228,867               6,510             235,377
Depreciation and amortization                            581,407              53,047             634,454
                                               -----------------  ------------------  ------------------

     Total operating expenses                          2,018,264             140,341           2,158,605
                                               -----------------  ------------------  ------------------

Operating income (loss)                                  550,763             (15,167)            535,596

Interest and other income                                  1,738                  96               1,834
Interest expense                                        (217,316)                 --            (217,316)
                                               -----------------  ------------------  ------------------

Net income (loss)                             $          335,185 $           (15,071)$           320,114
                                               =================  ==================  ==================`

`Nine Months Ended September 30, 2004
                                               ---------------------------------------------------------
                                                   Apartment
                                                  Communities         Commercial            Total
                                               -----------------  ------------------  ------------------
Rental income                                 $        7,488,417 $           516,248 $         8,004,665
Tenant reimbursements                                         --               1,203               1,203
                                               -----------------  ------------------  ------------------

     Total revenues                                    7,488,417             517,451           8,005,868
                                               -----------------  ------------------  ------------------

Operating expenses and operating expenses -
  affiliated                                           3,373,180             258,724           3,631,904
Management fees                                          376,079              30,746             406,825
Real estate taxes                                        364,887              44,753             409,640
Depreciation and amortization                          1,762,896             161,987           1,924,883
                                               -----------------  ------------------  ------------------

     Total operating expenses                          5,877,042             496,210           6,373,252
                                               -----------------  ------------------  ------------------

Operating income                                       1,611,375              21,241           1,632,616

Interest and other income                                 13,714                 327              14,041
Interest expense                                      (1,239,465)                 (1)         (1,239,466)
Loss on disposal of assets                                (7,984)             (1,906)             (9,890)
                                               -----------------  ------------------  ------------------

Net income                                    $          377,640 $            19,661 $           397,301
                                               =================  ==================  ==================`

16

---

`Nine Months Ended September 30, 2003
                                               ---------------------------------------------------------
                                                   Apartment
                                                  Communities         Commercial            Total
                                               -----------------  ------------------  ------------------
Rental income                                 $        7,769,900 $           381,047 $         8,150,947
Tenant reimbursements                                         --               2,390               2,390
                                               -----------------  ------------------  ------------------

     Total revenues                                    7,769,900             383,437           8,153,337
                                               -----------------  ------------------  ------------------

Operating expenses and operating expenses -
  affiliated                                           3,202,512             227,740           3,430,252
Management fees                                          390,415              23,652             414,067
Real estate taxes                                        833,202              19,530             852,732
Depreciation and amortization                          1,738,190             153,134           1,891,324
                                               -----------------  ------------------  ------------------

     Total operating expenses                          6,164,319             424,056           6,588,375
                                               -----------------  ------------------  ------------------

Operating income (loss)                                1,605,581             (40,619)          1,564,962

Interest and other income                                  9,861                 368              10,229
Interest expense                                        (653,520)                 --            (653,520)
Loss on disposal of assets                              (103,506)                 --            (103,506)
                                               -----------------  ------------------  ------------------

Net income (loss)                             $          858,416 $           (40,251)$           818,165
                                               =================  ==================  ==================`

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 nine months ended September 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
                                                                          September 30,
                                                             ----------------------------------------
                                                                    2004                 2003
                                                             -------------------  -------------------
DEPRECIATION AND AMORTIZATION
Total depreciation and amortization for reportable segments $            642,959 $            634,454
Depreciation and amortization for Partnership                             20,423               22,367
                                                             -------------------  -------------------

     Total depreciation and amortization                    $            663,382 $            656,821
                                                             ===================  ===================

INTEREST AND OTHER INCOME
Total interest and other income for reportable segments     $              2,086 $              1,834
Interest and other income for Partnership                                  1,111                2,748
                                                             -------------------  -------------------

     Total interest and other income                        $              3,197 $              4,582
                                                             ===================  ===================

INTEREST EXPENSE
Total interest expense for reportable segments              $           (410,905)$           (217,316)
Interest expense for Partnership                                        (178,382)            (414,208)
                                                             -------------------  -------------------

     Total interest expense                                 $           (589,287)$           (631,524)
                                                             ===================  ===================

NET INCOME (LOSS)
Total net income for reportable segments                    $             32,807 $            320,114
Less minority interest for Partnership                                     8,675                7,674
Plus net loss for Partnership (1)                                       (513,504)            (676,374)
                                                             -------------------  -------------------

     Total net loss                                         $           (489,372)$           (363,934)
                                                             ===================  ===================`

|(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

---

`Nine Months Ended
                                                                          September 30,
                                                             ----------------------------------------
                                                                    2004                 2003
                                                             -------------------  -------------------
DEPRECIATION AND AMORTIZATION
Total depreciation and amortization for reportable segments $          1,924,883 $          1,891,324
Depreciation and amortization for Partnership                             65,155               67,100
                                                             -------------------  -------------------

     Total depreciation and amortization                    $          1,990,038 $          1,958,424
                                                             ===================  ===================

INTEREST AND OTHER INCOME
Total interest and other income for reportable segments     $             14,041 $             10,229
Interest and other income for Partnership                                  4,368                7,077
                                                             -------------------  -------------------

     Total interest and other income                        $             18,409 $             17,306
                                                             ===================  ===================

INTEREST EXPENSE
Total interest expense for reportable segments              $         (1,239,466)$           (653,520)
Interest expense for Partnership                                        (545,289)          (1,234,883)
                                                             -------------------  -------------------

     Total interest expense                                 $         (1,784,755)$         (1,888,403)
                                                             ===================  ===================

NET INCOME (LOSS)
Total net income for reportable segments                    $            397,301 $            818,165
Less minority interest for Partnership                                    22,284               22,753
Plus net loss for Partnership (1)                                     (1,662,129)          (2,169,659)
                                                             -------------------  -------------------

     Total net loss                                         $         (1,287,112)$         (1,374,247)
                                                             ===================  ===================`

|(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

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# 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 expenses, 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 $12,000, for the nine months ended September 30, 2004, and
cash collected for rent was approximately equal to rental income for the nine months ended
September 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 September 30,
2004, the estimated settlement value of these noncontrolling interests is approximately
$555,000. 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 September 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 nine months ended September 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 September 30, 2004
                                            -----------------------------------------------------------------------
                                                 Apartment
                                                 Communities       Commercial       Partnership         Total
                                            -----------------------------------------------------------------------
Net revenues                                  $      2,537,550 $         196,573 $             -- $       2,734,123
Operating expenses and operating
  expenses - affiliated                              1,224,549            93,055               --         1,317,604
Depreciation and amortization                          589,219            53,740           20,423           663,382
Interest expense                                      (410,904)               (1)        (178,382)         (589,287)
Net income (loss)                                        8,407            24,400         (522,179)         (489,372)`

`Three Months Ended September 30, 2003
                                            -----------------------------------------------------------------------
                                                    Apartment
                                                   Communities     Commercial       Partnership         Total
                                            -----------------------------------------------------------------------
Net revenues                                  $      2,569,027 $         125,174 $             -- $       2,694,201
Operating expenses and operating
  expenses - affiliated                              1,078,923            73,199               --         1,152,122
Depreciation and amortization                          581,407            53,047           22,367           656,821
Interest expense                                      (217,316)               --         (414,208)         (631,524)
Net income (loss)                                      335,185           (15,071)        (684,048)         (363,934)`

`Nine Months Ended September 30, 2004
                                            -----------------------------------------------------------------------
                                                    Apartment
                                                   Communities     Commercial       Partnership         Total
                                            -----------------------------------------------------------------------
Net revenues                                  $      7,488,417 $         517,451 $             -- $       8,005,868
Operating expenses and operating
  expenses - affiliated                              3,373,180           258,724               --         3,631,904
Depreciation and amortization                        1,762,896           161,987           65,155         1,990,038
Interest expense                                    (1,239,465)               (1)        (545,289)       (1,784,755)
Net income (loss)                                      377,640            19,661       (1,684,413)       (1,287,112)`

`Nine Months Ended September 30, 2003
                                            -----------------------------------------------------------------------
                                                    Apartment
                                                   Communities     Commercial       Partnership         Total
                                            -----------------------------------------------------------------------
Net revenues                                  $      7,769,900 $         383,437 $             -- $       8,153,337
Operating expenses and operating
  expenses - affiliated                              3,202,512           227,740               --         3,430,252
Depreciation and amortization                        1,738,190           153,134           67,100         1,958,424
Interest expense                                      (653,520)               --       (1,234,883)       (1,888,403)
Net income (loss)                                      858,416           (40,251)      (2,192,412)       (1,374,247)`

During the nine months ended
September 30, 2004, our operating results have been negatively impacted by the expenses
related to our proposed merger. Apartment community 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

23

---

offset by an increased tax 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 nine
months ended September 30, 2004 and 2003 were as follows:

`Three Months Ended              Nine Months Ended
                                                               September 30,                  September 30,
                                                       -----------------------------  -----------------------------
                                                            2004           2003           2004            2003
                                                       --------------  -------------  -------------  --------------
Wholly-Owned Properties
Sabal Park Apartments                                 $       500,657 $      445,023 $    1,451,993 $     1,431,544
Park Place Apartments Phase I                                 390,510        441,816      1,179,509       1,296,312
Willow Lake Apartments                                        514,345        535,401      1,544,645       1,670,225
Park Place Apartments Phase III                               385,893        381,071      1,139,145       1,145,328

Joint Venture Properties
(Ownership % on September 30, 2004)
Golf Brook Apartments (96.03%)                        $       746,145 $      765,716 $    2,173,125 $     2,226,491
Plainview Point Office Center Phase III (95.04%)              196,573        125,174        517,451         383,437`

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 which has had low occupancy for
an extended period of time. Plainview Point Office Center Phase III has leased
approximately 8,300 square feet to a tenant who is expected to move in November 1, 2004.
This will bring the building occupancy to 91%.

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

`September 30,
                                                               -----------------------------------------
                                                                      2004                   2003
                                                               ------------------     ------------------
Wholly-Owned Properties
Sabal Park Apartments                                                 97%                    88%
Park Place Apartments Phase I                                         88%                    94%
Willow Lake Apartments                                                85%                    86%
Park Place Apartments Phase III                                       92%                    88%

Joint Venture Properties
(Ownership % on September 30, 2004)
Golf Brook Apartments (96.03%)                                        99%                    97%
Plainview Point Office Center Phase III (95.04%)                      78%                    52%`

We believe the changes in occupancy
on September 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 which has had low occupancy for an extended period of time.
Plainview Point Office Center Phase III has leased approximately 8,300 square feet to a
tenant who is expected to move in November 1, 2004. This will bring the building occupancy
to 91%.

24

---

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

`Three Months Ended                   Nine Months Ended
                                                                September 30,                       September 30,
                                                       -------------------------------     --------------------------------
                                                           2004              2003              2004               2003
                                                       -------------     -------------     -------------      -------------
Wholly-Owned Properties
Sabal Park Apartments                                       97%               88%               96%                93%
Park Place Apartments Phase I                               87%               94%               82%                89%
Willow Lake Apartments                                      86%               85%               86%                86%
Park Place Apartments Phase III                             92%               91%               91%                93%

Joint Venture Properties
(Ownership % on September 30, 2004)
Golf Brook Apartments (96.03%)                              98%               96%               95%                93%
Plainview Point Office Center Phase III (95.04%)            78%               50%               70%                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 there has been a protracted period for the property to
become sufficiently leased again. We have a signed agreement with a tenant to lease
approximately 8,300 square feet with an expected move in date of November 1, 2004. This
will bring Plainview Point Office Center Phase IIIs occupancy to 91%.

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 nine months ending September 30, 2004 and 2003.

25

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Rental Income and Tenant
Reimbursements

Rental income and tenant
reimbursements were approximately $2,734,000 and $8,006,000 for the three and nine months
ended September 30, 2004, as compared to approximately $2,694,000 and $8,153,000 for the
three and nine months ended September 30, 2003, respectively.

The decrease for the nine months
ended September 30, 2004 is not a significant change, however, there are significant
offsetting changes between our reporting segments. The decrease of approximately $147,000,
or 2%, for the nine month period is made up of a net decrease in apartment community
rental income as the result of decreased average rent per unit at Park Place Apartments
Phase I, Willow Lake Apartments and Golf Brook Apartments and decreased average occupancy
at Park Place Apartments Phase I, partially offset by increased average occupancy at Sabal
Park Apartments. The decrease is partially offset by an increase in commercial rental
income at Plainview Point Office Center Phase III as the result of increased average
occupancy.

The increase of approximately
$40,000, or 1%, for the three month period is not a significant change, however, there are
significant offsetting changes between our reporting segments. Commercial rental income
increased by approximately $70,000, which was offset by an approximately $30,000 decrease
in rental income at our apartment communities, all of which were driven by occupancy
changes.

Operating Expenses and
Operating Expenses  Affiliated

Operating expenses for the three
months ended September 30, 2004 and 2003 were approximately $918,000 and $780,000,
respectively. The increase of approximately $138,000, or 18% is primarily due to an
increase in 1) landscaping costs at Golf Brook Apartments and Sabal Park Apartments, 2)
repairs and maintenance costs at all of the underlying properties and 3) bad debt expense
at Park Place Apartments Phase III. The increase is partially offset by a decrease in bad
debt expense at Golf Brook Apartments, Sabal Park Apartments and Willow Lake Apartments.

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

Our operating expenses 
affiliated did not change significantly between the three and nine months ended September
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.

26

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Real Estate Taxes

Real estate taxes were approximately
$187,000 and $410,000 for the three and nine months ended September 30, 2004, as compared
to approximately $235,000 and $853,000 for three and nine months ended September 30, 2003.
The decrease of approximately $48,000, or 20%, and $443,000, or 52%, is primarily due to
decreased tax assessments at Willow Lake Apartments, Golf Brook Apartments and Sabal Park
Apartments. We received notice of increased tax assessments in 2003 and retained a
consultant to negotiate a reduction of the assessments. For 2003, we accrued property tax
expense according to the assessed rate not at the anticipated reduced rate. During the
first and third quarters of 2004, we received notices of the reduction of the assessments
and were able to adjust the periodic expense accordingly. We have not recorded a gain
contingency for any property tax over-payments refunded in 2004. The decrease was
partially offset by an increased tax assessment for our commercial property, Plainview
Point Office Center Phase III. Based on the recommendation of our consultant, we did not
try to appeal the increased tax assessment at Plainview Point Office Center Phase III. The
decrease for the nine months ended September 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.

Professional and
Administrative Expenses and Professional and Administrative Expenses Affiliated

Professional and administrative
expenses were approximately $200,000 and $731,000 for the three and nine months ended
September 30, 2004, as compared to approximately $150,000 and $579,000 for the three and
nine months ended September 30, 2003. The increase of approximately $50,000, or 33%, and
$152,000, or 26% is primarily the result of increased legal and professional fees related
to our proposed merger. The increase is partially offset by a decrease in legal and
professional fees related to litigation filed by limited partners. See Item 1  Note
10 for information regarding our proposed merger and litigation filed by limited partners.

Professional and administrative
expenses  affiliated were approximately $116,000 and $325,000 for the three and nine
months ended September 30, 2004, as compared to $93,000 and $296,000 for the three and
nine months ended September 30, 2003. The increase of approximately $23,000, or 25%, and
$29,000, or 10% is primarily the result of additional staff and annual salary increases.

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.

27

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Professional and administrative
expenses  affiliated consisted of approximately the following for the periods
presented:

`Nine Months Ended
                                                                          September 30,
                                                              -------------------------------------
                                                                     2004               2003
                                                              ------------------  -----------------
Finance                                                      $           110,000 $           85,000
Accounting                                                               115,000             99,000
Investor Relations                                                        49,000             57,000
Human Resources                                                           23,000             24,000
Overhead                                                                  28,000             31,000
                                                              ------------------  -----------------

Total                                                        $           325,000 $          296,000
                                                              ==================  =================`

Depreciation and
Amortization Expense

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

Interest Expense

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

Loss on Disposal of Assets

Loss on disposal of assets was
approximately $5,000 and $10,000 for the three and nine months ended September 30, 2004,
as compared to $0 and $104,000 for the three and nine months ended September 30, 2003. The
increase of approximately $5,000 for the three months ended September 30, 2004 is
primarily due to retirements made in 2004 for HVAC replacements at Sabal Park Apartments
before the assets were fully depreciated. The decrease of approximately $94,000, or 90%,
for the nine months ended September 30, 2004 is primarily due to retirements made in 2003
for stair bracket replacements, security system installation and clubhouse renovation at
Willow Lake apartments, partially offset by retirements made in 2004 for HVAC replacements
at Sabal Park Apartments and computer and HVAC replacement at Willow Lake Apartments
before the assets were fully depreciated.

28

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# 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 nine months ended September 30, 2004 and 2003.

Cash flows provided by (used in):

`Nine Months Ended
                                                                                September 30,
                                                                  -----------------------------------------
                                                                         2004                  2003
                                                                  ------------------    -------------------
Operating activities                                           $           2,319,954 $            1,589,999
Investing activities                                                        (579,098)              (735,215)
Financing activities                                                      (1,623,932)            (1,535,404)
                                                                  ------------------    -------------------

     Net increase (decrease) in cash and equivalents           $             116,924 $             (680,620)
                                                                  ==================    ===================`

Net cash provided by operating
activities increased from approximately $1,590,000 for the nine months ended September 30,
2003 to approximately $2,320,000 for the nine months ended September 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 proposed merger and
for affiliated payables related to our agreement with NTS Development Company (see Future
Liquidity in this same section).

Net cash used in investing activities
decreased from approximately $735,000 for the nine months ended September 30, 2003 to
approximately $579,000 for the nine months ended September 30, 2004. The decrease in net
cash used was primarily due to a decrease in capital expenditures at the apartment
communities. Additions were made in 2003 for clubhouse renovation, a paving project and
stair bracket replacements at Willow Lake Apartments. Additions made in 2004 were for roof
replacements at Willow Lake apartments, HVAC replacements and golf carts at Golf Brook
Apartments and Sabal Park Apartments and pool resurfacing at Golf Brook Apartments. The
decrease at the apartment communities is partially offset by an increase in capital
expenditures at our commercial property  Plainview Point Office Center Phase III.
2004 additions at Plainview Point Office Center Phase III included tenant finish and HVAC
replacement. 2003 additions at Plainview Point Office Center Phase III included tenant
finish only.

Net cash used in financing activities
increased from approximately $1,535,000 for the nine months ended September 30, 2003 to
approximately $1,624,000 for the nine months ended September 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.

29

---

Due to the fact that no distributions
were made during the nine months ended September 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.

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
$242,266 on September 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 September 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 approximately $846,000 ($30,000 per building for Willow
Lake Apartments and $13,300 per building for Park Place Apartments Phase I).

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, who occupied 16,895 square feet or 27%, of the
building, vacated its space on November 30, 2001. As a result of this vacancy there has
been a protracted period for the property to become fully leased again. On April 16, 2004
a tenant took occupancy of approximately 10,800 square of Plainview Point Office Center
Phase III, which

30

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brought the building up to 78%
occupancy at September 30, 2004. On September 24, 2004 a tenant leased approximately 8,300
square feet of Plainview Point Office Center Phase III with an expected move in date of
November 1, 2004. If this occurs, it will bring the building occupancy to 91% by the end of the year.
The lease agreement provides for tenant finish estimated to cost approximately $101,000.
Through September 30, 2004, approximately $7,000 of the total estimated cost has been
incurred.

Over the next 12 months we have
planned various building improvement and repair projects including: 1) exterior paint
projects and seal coating and re-striping of the parking lots at Park Place Apartments
Phases I and III; 2) security alarm replacement projects at Park Place Apartments Phase I
and Plainview Point Office Center Phase III; 3) exterior light fixture replacement project
and signage replacement at Willow Lake Apartments; 4) tenant finish and a front stair
replacement project at Plainview Point Office Center Phase III and 5) HVAC replacements at
Sabal Park Apartments and Golf Brook Apartments. The exterior painting of the buildings at
Park Place Apartments Phases I and III is estimated to cost approximately $78,000 and
$10,000, respectively. The seal coating and re-striping of the parking lots at Park Place
Apartments Phases I and III is estimated to cost $40,000 and $28,000, respectively. The
security alarm replacement at Park Place Apartments Phase I is estimated to cost
approximately $50,000 and at Plainview Point Officer Center Phase III it is estimated to
cost approximately $9,000. The exterior light fixture replacements and the signage
replacements at Willow Lake Apartments are estimated to cost approximately $27,000 and
$12,000, respectively. The tenant finish and the front stair replacement at Plainview
Point Office Center Phase III is estimated to cost $32,000 and $10,000, respectively. The
HVAC replacements at Sabal Park Apartments and Golf Brook Apartments are estimated to
costs approximately $20,000 and $23,000, respectively.

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.

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 September 30, 2004.

31

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# 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 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. For the nine months ended September 30, 2004 and 2003, our
share of the legal and professional fees for the proposed merger was approximately
$469,000 and $110,000, respectively, which was included in our professional and
administrative expenses.

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. NTS Realty filed Amendment No. 1 on June 18, 2004, Amendment No. 2 on August 13,
2004 and Amendment No. 3 on September 30, 2004.

On October 25, 2004 and October 27,
2004, NTS Realty filed Amendment No. 4 and Amendment No. 5, respectively, to its
registration statement on Form S-4, which includes a joint consent solicitation
statement/prospectus, with the Securities and Exchange Commission to seek approval of the
merger of NTS-Properties III, NTS-Properties IV, NTS-Properties V, NTS-Properties VI and
NTS-Properties VII, Ltd. (the Partnerships) into NTS Realty. The general
partners of the Partnerships agreed to pursue a merger of the Partnerships in the
Stipulation and Agreement of Settlement that was jointly filed by the general partners,
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 October 27, 2004, the Securities
and Exchange Commission signed an order declaring NTS Realtys registration statement
to be effective and the Partnerships began mailing the joint consent solicitation
statement/prospectus to their respective limited partners.

# 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.

32

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# 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
$1,284,000 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 September 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 September 30,
2004. There were no material changes in our internal controls over financial reporting
during the nine months ended September 30, 2004.

33

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# 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 Buchanan litigation, 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 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 Bohm litigation.

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.

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 for the
settlement of this action in our financial statements. Our general partner and legal
counsel believe that this action is without merit and are vigorously defending it.

34

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On March 2, 2004, we, along with all
defendants, filed a Motion to Dismiss the Bohm litigation. After the Motion to Dismiss was
fully briefed, the settlement agreement in the Buchanan litigation received final court
approval. The Circuit Court of Jefferson County, Kentucky, instructed the plaintiffs in
the Bohm litigation to file an amended complaint in light of the approved settlement of
the Buchanan litigation. The plaintiffs in the Bohm litigation filed a corrected Second
Amended Complaint on August 11, 2004. We, along with all defendants, filed a Motion to
Strike the corrected Second Amended Complaint. A hearing on this motion is scheduled for
January 14, 2005. Our general partner believes that the claims asserted in the corrected
Second Amended Complaint have no merit.

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

# Item 6  Exhibits

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.                    | **  
|    
|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.        | ****

35

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|     |                                                                                                                                                                                                                                                   |     
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|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 August 17,
2004, to inform investors of a mini-tender offer by CMG Partners, LLC to purchase their
interests in NTS-Properties VI for $440 per interest in cash. We also informed the
investors that we recommended a rejection of the offer and provided reasons for our
recommendation.

We filed a Form 8-K on October 29,
2004 to announce that on October 25, 2004 and October 27, 2004, NTS Realty Holdings
Limited Partnership (NTS Realty) filed Amendment No. 4 and Amendment No. 5,
respectively, to its registration statement on Form S-4. NTS Realty filed the original Form S-4 on February 4, 2004, Amendment No. 1
on June 18, 2004, Amendment No. 2 on August 13, 2004 and Amendment No. 3 on September 30,
2004.

36

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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: November 15, 2004                           

37