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 fiscal quarter ended June 30, 1997

     [  ]         Transition Report Pursuant to Section 13 or 15(d) of the 
                  Securities Exchange Act of 1934
                  For the transition period from              to


                         Commission file number 33-32258
                             -----------------------


                          PLM EQUIPMENT GROWTH FUND II
             (Exact name of registrant as specified in its charter)


        California                                        94-3041013
(State or other jurisdiction of                         (I.R.S. Employer
 incorporation or organization)                        Identification No.)

One Market, Steuart Street Tower
  Suite 800, San Francisco, CA                             94105-1301
    (Address of principal                                   (Zip code)
     executive offices)


        Registrant's telephone number, including area code (415) 974-1399
                             -----------------------


    Indicate  by check mark  whether  the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ______



<PAGE>



                          PLM EQUIPMENT GROWTH FUND II
                             (A Limited Partnership)
                                 BALANCE SHEETS
                (in thousands of dollars, except per unit amount)

<TABLE>
<CAPTION>


                                                                                June 30,           December 31,
                                                                                  1997                 1996
                                                                              ------------------------------------
   Assets:

   <S>                                                                        <C>                  <C>        
   Equipment held for operating lease, at cost                                $   64,744           $    82,856
   Less accumulated depreciation                                                 (49,099 )             (62,114 )
                                                                              ------------------------------------
                                                                                  15,645                20,742
   Equipment held for sale                                                         1,047                     -
                                                                              ------------------------------------
     Net equipment                                                                16,692                20,742

   Cash and cash equivalents                                                       3,455                 7,962
   Restricted cash                                                                   295                   295
   Investment in unconsolidated special-purpose entity                               772                 1,665
   Accounts receivable, net of allowance for doubtful accounts
         of $1,098 in 1997 and $882 in 1996                                        2,618                 1,765
   Deferred charges, net of accumulated amortization
         of $232 in 1997 and $197 in 1996                                            118                   157
   Prepaid expenses and other assets                                                 974                 1,009
                                                                              ------------------------------------

   Total assets                                                               $   24,924           $    33,595
                                                                              ====================================

   Liabilities and partners' capital:

   Liabilities:
   Accounts payable and accrued expenses                                      $      432           $       412
   Due to affiliates                                                                 130                   110
   Lessee deposits and reserve for repairs                                         2,890                 2,827
   Notes payable                                                                   7,500                13,000
                                                                              ------------------------------------
       Total liabilities                                                          10,952                16,349
                                                                              ------------------------------------

   Partners' capital  (deficit):
   Limited partners (7,381,805 depositary units, including
         1,150 depositary units held in the Treasury
         as of June 30, 1997 and December 31, 1996)                               14,077                17,434
   General Partner                                                                  (105 )                (188 )
                                                                              ------------------------------------
       Total partners' capital                                                    13,972                17,246
                                                                              ------------------------------------

   Total liabilities and partners' capital                                    $   24,924           $    33,595
                                                                              ====================================


</TABLE>









                       See accompanying notes to financial
                                  statements.


<PAGE>



                          PLM EQUIPMENT GROWTH FUND II
                             (A Limited Partnership)
                            STATEMENTS OF OPERATIONS
         (in thousands of dollars, except weighted-average unit amounts)

<TABLE>
<CAPTION>



                                                        For the Three Months                For the Six Months
                                                           Ended June 30,                     Ended June 30,
                                                         1997          1996                1997            1996
                                                      --------------------------------------------------------------
   <S>                                                <C>               <C>             <C>             <C>        
   Revenues:

   Lease revenue                                      $   2,468         3,200           $   5,506       $  6,381   
   Interest and other income                                 63            69                 144            142
   Net gain on disposition of equipment                     859            53               1,027            167
                                                      --------------------------------------------------------------
       Total revenues                                     3,390         3,322               6,677          6,690
                                                      --------------------------------------------------------------

   Expenses:

   Depreciation and amortization                          1,150         1,458               2,373          2,925
   Repairs and maintenance                                  429           573                 805            963
   Interest expense                                         193           483                 426            971
   Insurance expense                                         43            24                  73             65
   Management fees to affiliate                             128           172                 256            321
   General and administrative expenses
         to affiliates                                      158           224                 372            418
   Other general and administrative expenses                240           205                 492            495
   (Recovery of) provision for bad debt                     (98 )         194                 228            225
                                                      --------------------------------------------------------------
       Total expenses                                     2,243         3,333               5,025          6,383
                                                      --------------------------------------------------------------

   Equity in net loss of unconsolidated
         special-purpose entities                          (925 )         (22 )            (1,041 )         (424 )
                                                      --------------------------------------------------------------

   Net income (loss)                                  $     222           (33 )         $     611       $   (117 ) 
                                                      ==============================================================

   Partners' share of net income (loss):

   Limited partners                                   $      79          (166 )         $     334       $   (435 )  
   General Partner                                          143           133                 277            318
                                                      --------------------------------------------------------------

   Total                                              $     222           (33 )         $     611       $   (117 )  
                                                      ==============================================================

   Net   income  (loss) per  weighted-average  
   depositary  unit  (7,381,805  and
   7,387,671 units, including 1,150 units 
   held in the Treasury, as of June
   30, 1997 and
   1996, respectively)                                $    0.01         (0.02 )         $    0.05       $  (0.06 ) 
                                                      ==============================================================

   Cash distributions                                 $   1,942         1,943           $   3,885       $  5,070    
                                                      ==============================================================
   Cash distributions per weighted-average
         depositary unit                              $    0.25          0.25           $    0.50       $   0.65  
                                                      ==============================================================

</TABLE>


                       See accompanying notes to financial
                                  statements.


<PAGE>



                          PLM EQUIPMENT GROWTH FUND II
                             (A Limited Partnership)
                 STATEMENTS OF CHANGES IN PARTNERS' CAPITAL For
               the period from December 31, 1995 to June 30, 1997
                            (in thousands of dollars)
<TABLE>
<CAPTION>


                                                                  Limited             General
                                                                  Partners            Partner             Total
                                                                ---------------------------------------------------

   <S>                                                          <C>                 <C>               <C>           
   Partners' capital (deficit) as of December 31, 1995          $   18,658          $    (462 )       $    18,196   

   Net income                                                        7,464                722               8,186

   Cash distributions                                               (8,509 )             (448 )            (8,957 )

   Repurchase of depositary units                                     (179 )                -                (179 )
                                                                ---------------------------------------------------

   Partners' capital (deficit) as of December  31, 1996             17,434               (188 )            17,246

   Net income                                                          334                277                 611

   Cash distributions                                               (3,691 )             (194 )            (3,885 )
                                                                ---------------------------------------------------

   Partners' capital (deficit) as of June 30, 1997              $   14,077          $    (105 )       $    13,972  
                                                                ===================================================

</TABLE>































                       See accompanying notes to financial
                                  statements.




<PAGE>



                          PLM EQUIPMENT GROWTH FUND II
                             (A Limited Partnership)
                            STATEMENTS OF CASH FLOWS
                            (in thousands of dollars)


<TABLE>
<CAPTION>

                                                                                           For the Six Months
                                                                                             Ended June 30,
                                                                                       1997                 1996
                                                                                   -----------------------------------
   <S>                                                                             <C>                 <C>             
   Operating activities:

   Net income (loss)                                                               $      611          $       (117 )  
   Adjustments to reconcile net income (loss) to net cash provided
         by operating activities:
     Net gain on disposition of equipment                                              (1,027 )                (167 )
     Depreciation and amortization                                                      2,373                 2,925
     Equity in net loss of unconsolidated special-purpose entities                      1,041                   424
     Changes in operating assets and liabilities:
       Restricted cash                                                                      -                   133
       Accounts receivable, net                                                          (853 )                 342
       Prepaid expenses and other assets                                                   35                    35
       Accounts payable and accrued expenses                                                6                   (26 )
       Due to affiliates                                                                   20                  (152 )
       Lessee deposits and reserve for repairs                                             63                  (277 )
                                                                                   -----------------------------------
           Net cash provided by operating activities                                    2,269                 3,120
                                                                                   -----------------------------------

   Investing activities:

   Proceeds from disposition of equipment                                               2,739                   709
   (Additional investments in) distributions from unconsolidated special-
         purpose entities                                                                (148 )                 179
   Reimbursements of (payments for) capital improvements                                   18                    (6 )
                                                                                   -----------------------------------
       Net cash provided by investing activities                                        2,609                   882
                                                                                   -----------------------------------

   Financing activities:

   Principal payments on notes payable                                                 (5,500 )                   -
   Cash distributions paid to limited partners                                         (3,691 )              (4,817 )
   Cash distributions paid to General Partner                                            (194 )                (253 )
   Repurchase of depositary units                                                           -                  (179 )
                                                                                   -----------------------------------
       Net cash used in financing activities                                           (9,385 )              (5,249 )
                                                                                   -----------------------------------

   Net decrease in cash and cash equivalents                                           (4,507 )              (1,247 )

   Cash and cash equivalents at beginning of period                                     7,962                 6,427
                                                                                   -----------------------------------

   Cash and cash equivalents at end of period                                      $    3,455          $      5,180  
                                                                                   ===================================

   Supplemental information:

   Interest paid                                                                   $      426          $        971   
                                                                                   ===================================

</TABLE>


                       See accompanying notes to financial
                                  statements.



<PAGE>



                          PLM EQUIPMENT GROWTH FUND II
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                  June 30, 1997

1.   Opinion of Management

     In the opinion of the  management of PLM Financial  Services,  Inc. (FSI or
     the General  Partner),  the  accompanying  unaudited  financial  statements
     contain all adjustments necessary, consisting primarily of normal recurring
     accruals,  to present fairly the financial position of PLM Equipment Growth
     Fund II (the  Partnership)  as of June 30, 1997 and December 31, 1996,  the
     statements of  operations  for the three and six months ended June 30, 1997
     and 1996,  the  statements  of changes in partners'  capital for the period
     from December 31, 1995 to June 30, 1997,  and the  statements of cash flows
     for the six months ended June 30, 1997 and 1996.  Certain  information  and
     footnote  disclosures normally included in financial statements prepared in
     accordance  with  generally  accepted   accounting   principles  have  been
     condensed  or  omitted  from the  accompanying  financial  statements.  For
     further  information,  reference should be made to the financial statements
     and notes thereto included in the Partnership's  Annual Report on Form 10-K
     for the  year  ended  December  31,  1996,  on file at the  Securities  and
     Exchange Commission.

2.   Reclassifications

     Certain amounts in the 1996 financial  statements have been reclassified to
conform to the 1997 presentation.

3.   Repurchase of Depositary Units

     Pursuant to the  Partnership  repurchase  plan as of December 28, 1992, the
     Partnership agreed to repurchase up to 200,000 depositary units. As of June
     30, 1997, the Partnership had cumulatively  repurchased  117,800 depositary
     units for $0.8 million.  The General  Partner may  repurchase the remaining
     units in the future.

4.   Cash Distribution

     Cash distributions are recorded when paid and totaled $3.9 million and $5.1
     million for the six months ended June 30, 1997 and 1996, respectively,  and
     $1.9  million and $1.9 million for the three months ended June 30, 1997 and
     1996, respectively. Cash distributions to limited partners in excess of net
     income are considered to represent a return of capital.  Cash distributions
     to limited  partners of $3.4  million  and $4.8  million for the six months
     ended June 30, 1997 and 1996,  respectively,  were deemed to be a return of
     capital.

5.   Investment in Unconsolidated Special-Purpose Entity

     The net  investment  in an  unconsolidated  special  purpose  entity (USPE)
     consisted of the following  jointly-owned equipment (and related assets and
     liabilities) (in thousands):
<TABLE>
<CAPTION>

                                                          June 30,           December 31,
                                                            1997                 1996
                                                     ----------------------------------------

   <S>                                                   <C>                  <C>       
   50% interest in a trust owning a Boeing
      737-200A aircraft                                  $     772            $    1,665
                                                      =======================================

</TABLE>


     This aircraft was off lease as of June 30, 1997 and December 31, 1996.



<PAGE>


                          PLM EQUIPMENT GROWTH FUND II
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                  June 30, 1997


6.   Transactions with General Partner and Affiliates

     Partnership  management  fees of $0.1 million and $0.1 million were payable
     as of June 30, 1997 and December 31, 1996, respectively.

     The Partnership's proportional share of the affiliated expenses incurred by
     the  USPE  during  1997 and  1996 is  listed  in the  following  table  (in
     thousands):
<TABLE>
<CAPTION>

                                                       For the Three Months               For the Six Months
                                                          Ended June 30,                    Ended June 30,
                                                          1997         1996              1997            1996
                                                     -------------------------------------------------------------

     <S>                                             <C>            <C>               <C>             <C>      
     Data processing and administrative
        expenses                                     $       3      $      45         $       3       $      68
     Management fees                                         -             (3 )               -              22

</TABLE>


7.    Equipment

     Components of owned equipment are as follows (in thousands):
<TABLE>
<CAPTION>

                                                  June 30,          December 31,
                                                   1997                 1996
                                              --------------------------------------
   <S>                                          <C>                  <C>       
   Aircraft                                     $   18,826           $   32,860
   Trailers                                         18,268               21,173
   Rail equipment                                   18,155               18,183
   Marine containers                                 9,495               10,640
                                               ------------------------------------
                                                    64,744               82,856
   Less accumulated depreciation                   (49,099 )            (62,114 )
                                               ------------------------------------
                                               ------------------------------------
                                                    15,645               20,742
   Equipment held for sale                           1,047                    -
                                               ------------------------------------
     Net equipment                              $   16,692           $   20,742
                                               ====================================

</TABLE>


     Equipment  held  for  sale  is  stated  at the  lower  of  the  equipment's
     depreciated  cost or fair  value  less  costs to sell and is  subject  to a
     pending  contract of sale. As of June 30, 1997, an aircraft with a net book
     value of $1.0 million is currently on lease and subject to a pending  sale.
     This aircraft was reclassified to equipment held for sale.

     As of June 30,  1997,  all  equipment  was either on lease or  operating in
     PLM-affiliated short-term trailer rental facilities,  except for 172 marine
     containers and 3 railcars. With the exception of 71 marine containers and 3
     railcars,  all equipment was either on lease or operating in PLM-affiliated
     short-term trailer rental facilities as of December 31, 1996. The aggregate
     carrying value of off-lease  equipment was $0.4 million and $0.2 million as
     of June 30, 1997 and December 31, 1996, respectively.

     During the six months ended June 30, 1997, the Partnership sold or disposed
     of  an  aircraft,  marine  containers,  trailers,  and  railcars,  with  an
     aggregate net book value of $1.7 million, for proceeds of $2.7 million. For
     the six months ended June 30,  1996,  the  Partnership  sold or disposed of
     marine containers, trailers, and railcars, with an aggregate net book value
     of $0.5 million, for proceeds of $0.7 million.



<PAGE>


                          PLM EQUIPMENT GROWTH FUND II
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                  June 30, 1997

8.   Notes Payable

     In the first six months of 1997,  the  Partnership  prepaid $5.5 million of
     the  outstanding  notes  payable,  representing  a portion of the principal
     payment due March 31, 1999.























                     (This space intentionally left blank.)



<PAGE>


ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS

(I)  RESULTS OF OPERATIONS

Comparison of the Partnership's Operating Results for the Three Months Ended 
June 30, 1997 and 1996

(A)  Owned Equipment Operations

Lease  revenues less direct  expenses  (defined as repair and  maintenance,  and
asset-specific  insurance  expenses)  on owned  equipment  decreased  during the
second  quarter of 1997,  compared to the same  quarter of 1996.  The  following
table presents lease revenues less direct  expenses by owned  equipment type (in
thousands):
<TABLE>
<CAPTION>


                                                                            For the Three Months
                                                                               Ended June 30,
                                                                            1997             1996
                                                                         ----------------------------
   <S>                                                                   <C>             <C>      
   Rail equipment                                                        $    875        $     765
   Aircraft                                                                   577              601
   Trailers                                                                   483              899
   Marine containers                                                           85              346

</TABLE>

Rail equipment: Railcar lease revenues and direct expenses were $1.1 million and
$0.2 million,  respectively,  for the second  quarter of 1997,  compared to $1.2
million and $0.4 million,  respectively,  during the same quarter of 1996. Lease
revenue  decreased  due to the sale of 42 railcars  at the end of 1996.  Railcar
expenses  decreased due to running  repairs  required on certain of the railcars
during 1996, which were not needed during 1997, and the smaller fleet in 1997.

Aircraft:  Aircraft  lease  revenues and direct  expenses  were $0.6 million and
$10,000,  respectively, for the second quarter of 1997, compared to $0.6 million
and $9,000, respectively, during the same quarter of 1996. Aircraft contribution
decreased slightly in the second quarter of 1997, compared to the same period in
1996, due to the sale of an aircraft,  which was partially offset by an increase
in the lease rate for another aircraft.

Trailers:  Trailer lease revenues and direct expenses were $0.7 million and $0.2
million,  respectively, for the second quarter of 1997, compared to $1.0 million
and $0.1 million,  respectively,  during the same quarter of 1996.  The decrease
was  primarily  due to the sale of 102 trailers in the first quarter of 1997. In
addition,   the  trailer  fleet  is  experiencing   lower   utilization  in  the
PLM-affiliated short-term rental yards.

Marine  containers:  Marine  container lease revenues were $0.1 million and $0.3
million during the second quarter of 1997 and 1996, respectively.  The number of
marine  containers  owned by the  Partnership  has been  declining over the past
twelve months due to sales and dispositions.  The result of this declining fleet
has been a decrease in marine container revenues.

(B)  Indirect Expenses Related to Owned Equipment Operations

Total indirect expenses of $1.8 million for the second quarter of 1997 decreased
from $2.7 million for the same period in 1996.  The  variances  are explained as
follows:

     (1) A $0.3 million decrease in depreciation  and amortization  expense from
1996 levels reflects the effect of asset sales in 1996 and 1997.

     (2) A $0.3  million  decrease in interest  expense was due to a decrease in
the level of outstanding debt during the second quarter of 1997 when compared to
the same period in 1996. In 1997,  the  Partnership  prepaid $5.5 million of the
outstanding  notes payable,  representing a portion of the principal payment due
March  31,  1999.  In  1996,  the  Partnership  prepaid  $14.0  million  of  the
outstanding  notes  payable,  representing  the principal  payment due March 31,
1998, and a portion of the principal payment due March 31, 1999.

     (3) A $0.3  million  decrease  in bad debt  expense  reflects  the  General
Partner's  evaluation  of the  collectibility  of  receivables  due from certain
lessees.

(C)  Net Gain on Disposition of Owned Equipment

Net gain on disposition of equipment for the second quarter of 1997 totaled $0.9
million, and resulted from the disposal or sale of an aircraft, trailers, marine
containers,  and railcars, with an aggregate net book value of $1.3 million, for
aggregate  proceeds  of $2.2  million.  For the same  period  in 1996,  the $0.1
million net gain on disposition of equipment  resulted from the sale or disposal
of the trailers,  marine  containers,  and railcars,  with an aggregate net book
value of $0.4 million, for proceeds of $0.5 million.

(D)  Equity in Net Income (Loss) of Unconsolidated Special-Purpose Entities

Equity in net income (loss) of unconsolidated  special-purpose  entities (USPEs)
represents  net income  (loss)  generated  from the  operation of  jointly-owned
assets accounted for under the equity method (in thousands).


<TABLE>
<CAPTION>
                                                                            For the Three Months
                                                                               Ended June 30,
                                                                            1997             1996
                                                                         ----------------------------
   <S>                                                                   <C>              <C>         
   Aircraft                                                              $   (925 )       $     49    
   Mobile offshore drilling unit                                                -              (71 )


</TABLE>

Aircraft:  As of June 30, 1997 and 1996, the Partnership  owned a 50% investment
in an entity that owns a commercial  aircraft.  Revenues and expenses  were $0.0
and $0.9 million, respectively, for the second quarter of 1997, compared to $0.2
million  and $0.1  million,  respectively,  for the  same  period  in 1996.  The
Partnership's  share of revenues  decreased due to the off-lease  status of this
aircraft during the second quarter of 1997,  compared to its on-lease status for
the second quarter of 1996. The Partnership's share of expenses increased in the
second  quarter  of 1997  due to the  repairs  required  to  meet  airworthiness
requirements.   This  increase  was  partially  offset  by  a  decrease  in  the
Partnership's  share of bad debt expenses.  In 1996,  the General  Partner fully
reserved the uncollected  outstanding receivables from an aircraft's lessee that
encountered financial difficulties.

Mobile offshore  drilling unit: As of June 30, 1996, the Partnership owned a 55%
investment in an entity that owns a mobile offshore drilling unit (rig). The rig
was sold in the third quarter of 1996.

(E)  Net Income (Loss)

As a result of the foregoing,  the Partnership's net income was $0.2 million for
the second  quarter of 1997,  compared to a net loss of $33,000  during the same
period of 1996.  The  Partnership's  ability to operate  and  liquidate  assets,
secure leases,  and re-lease those assets whose leases expire is subject to many
factors, and the Partnership's  performance in the second quarter of 1997 is not
necessarily  indicative of future  periods.  In the second  quarter of 1997, the
Partnership   distributed  $1.8  million  to  the  unitholders,   or  $0.25  per
weighted-average depositary unit.

Comparison of the Partnership's Operating Results for the Six Months Ended 
June 30, 1997 and 1996

(A)  Owned Equipment Operations

Lease  revenues less direct  expenses  (defined as repair and  maintenance,  and
asset-specific  insurance  expenses) on owned equipment decreased during the six
months ended June 30, 1997,  compared to the same period of 1996.  The following
table presents lease revenues less direct  expenses by owned  equipment type (in
thousands):

<TABLE>
<CAPTION>

                                                                             For the Six Months
                                                                               Ended June 30,
                                                                            1997             1996
                                                                         ----------------------------
   <S>                                                                   <C>             <C>         
   Rail equipment                                                        $  1,800        $   1,707   
   Trailers                                                                 1,277            1,784
   Aircraft                                                                 1,197            1,191
   Marine containers                                                          384              699

</TABLE>

Rail equipment: Railcar lease revenues and direct expenses were $2.3 million and
$0.5 million,  respectively, for the six months ended June 30, 1997, compared to
$2.4  million and $0.7  million,  respectively,  during the same period of 1996.
Lease  revenues  decreased  due to the sale of 42  railcars  at the end of 1996.
Railcar  expenses  decreased due to running  repairs  required on certain of the
railcars  during 1996,  which were not needed during 1997, and the smaller fleet
as a result of the sale of the 42 cars.

Trailers:  Trailer lease revenues and direct expenses were $1.6 million and $0.3
million,  respectively, for the six months ended June 30, 1997, compared to $2.1
million and $0.3  million,  respectively,  during the same  period of 1996.  The
decrease  in net  contribution  was due to the sale of 102  trailers  in the six
months ended June 30, 1997. In addition, the trailer fleet is experiencing lower
utilization in the PLM-affiliated short-term rental yards.

Aircraft:  Aircraft  lease  revenues and direct  expenses  were $1.2 million and
$19,000,  respectively, for the six months ended June 30, 1997, compared to $1.2
million and $0.0 million, respectively, during the same period of 1996. Aircraft
contribution  increased slightly in the six months ended June 30, 1997, compared
to the  same  period  in  1996,  due to an  increase  in the  lease  rate for an
aircraft,  which was  partially  offset by the sale of another  aircraft  in the
second quarter of 1997.

Marine  containers:  Marine  container lease revenues were $0.4 million and $0.7
million  for the six months  ended  June 30,  1997 and 1996,  respectively.  The
number of marine containers owned by the Partnership has been declining over the
past twelve months due to sales and  dispositions.  The result of this declining
fleet has been a decrease in marine container revenue.

(B)  Indirect Expenses Related to Owned Equipment Operations

Total  indirect  expenses of $4.1 million for the six months ended June 30, 1997
decreased  from $5.4  million for the same  period of 1996.  The  variances  are
explained as follows:

     (1) A $0.6 million decrease in depreciation  and amortization  expense from
1996 levels reflects the effect of asset sales in 1996 and 1997.

     (2) A $0.5  million  decrease in interest  expense was due to a decrease in
the level of  outstanding  debt  during  the six  months  ended  June 30,  1997,
compared to the same  period in 1996.  In 1997,  the  Partnership  prepaid  $5.5
million  of  the  outstanding  notes  payable,  representing  a  portion  of the
principal  payment due March 31, 1999. In 1996,  the  Partnership  prepaid $14.0
million of the outstanding notes payable, representing the principal payment due
March 31, 1998, and a portion of the principal payment due March 31, 1999.

     (3) A $0.1 million decrease in administrative expenses from 1996 levels was
due to  reduced  office  expenses  and  professional  services  required  by the
Partnership.

     (4) A $0.1 million  decrease in management fees to affiliates  reflects the
lower levels of lease revenues in 1997, compared to 1996.

(C)  Net Gain on Disposition of Owned Equipment

Net gain on  disposition  of  equipment  for the six months  ended June 30, 1997
totaled $1.0  million,  and  resulted  from the sale or disposal of an aircraft,
marine containers,  trailers, and railcars,  with an aggregate net book value of
$1.7 million,  for aggregate proceeds of $2.7 million.  For the six months ended
June 30, 1996, the $0.2 million net gain on  disposition  of equipment  resulted
from the sale or disposal of marine containers,  trailers, and railcars, with an
aggregate  net book  value  of $0.5  million,  for  aggregate  proceeds  of $0.7
million.



<PAGE>


(D)  Equity in Net Income (Loss) of Unconsolidated Special-Purpose Entities

Equity  in  net  income  (loss)  of  unconsolidated   special-purpose   entities
represents  net income  (loss)  generated  from the  operation of  jointly-owned
assets accounted for under the equity method (in thousands).

<TABLE>
<CAPTION>

                                                                            For the Six Months
                                                                              Ended June 30,
                                                                          1997               1996
                                                                       ------------------------------
   <S>                                                                 <C>                <C>       
   Aircraft                                                            $ (1,041 )         $   (312 )
   Mobile offshore drilling unit                                              -               (112 )

</TABLE>

Aircraft:  As of June 30, 1997 and 1996, the Partnership  owned a 50% investment
in an entity that owns a commercial  aircraft.  Revenues and expenses  were $0.0
and $1.0 million, respectively, for the six months ended June 30, 1997, compared
to $0.2 million and $0.5 million, respectively, for the same period in 1996. The
Partnership's  share of revenues  decreased due to the off-lease  status of this
aircraft  during the six months ended June 30, 1997;  this  aircraft had been on
lease for the entire six months ended June 30, 1996. The Partnership's  share of
expenses  increased  due to the repairs  required in 1997 to meet  airworthiness
requirements.  This increase was offset by a decrease in the Partnership's share
of  bad  debt  expenses.  In  1996,  the  General  Partner  fully  reserved  the
uncollected  outstanding  receivables from an aircraft's lessee that encountered
financial difficulties.

Mobile offshore  drilling unit: As of June 30, 1996, the Partnership owned a 55%
investment in an entity that owns a mobile offshore drilling unit (rig). The rig
was sold in the third quarter of 1996.

(E)  Net Income (Loss)

As a result of the foregoing,  the Partnership's net income was $0.6 million for
the six  months  ended June 30,  1997,  compared  to a net loss of $0.1  million
during  the same  period of 1996.  The  Partnership's  ability  to  operate  and
liquidate assets,  secure leases,  and re-lease those assets whose leases expire
is subject to many  factors,  and the  Partnership's  performance  in the second
quarter 1997 is not necessarily  indicative of future periods. In the six months
ended  June  30,  1997,  the  Partnership   distributed   $3.7  million  to  the
unitholders, or $0.50 per weighted-average depositary unit.

(II) FINANCIAL CONDITION -- CAPITAL RESOURCES AND LIQUIDITY

The General Partner purchased the Partnership's initial equipment portfolio with
capital raised from its initial equity offering and permanent debt financing. No
further  capital  contributions  from original  partners are permitted under the
terms of the  Partnership's  limited  partnership  agreement.  The Partnership's
total outstanding indebtedness, currently $7.5 million, can only be increased up
to a maximum of $35.0  million,  subject to specific  covenants  in the existing
debt  agreement.  The  Partnership  relies  on  operating  cash flow to meet its
operating  obligations,  maintain working capital  reserves,  and, to the extent
funds are available, make cash distributions to partners.

In the first six months of 1997, the  Partnership  used $5.5 million in proceeds
from the sale of assets and other cash on hand to prepay the  remaining  portion
of the fourth annual $9.0 million  principal  installment  of the loan due March
31, 1999 and a portion of the final annual $9.0 million principal installment of
the loan due March 31, 2000. In 1996, the  Partnership  prepaid the third annual
$9.0  million  installment  of the loan due March 31,  1998 and a portion of the
fourth annual $9.0 million installment due March 31, 1999.

For the six months ended June 30, 1997,  the  Partnership  generated  sufficient
operating  cash (net cash provided by operating  activities  plus  distributions
from  the   unconsolidated   special-purpose   entity)  to  meet  its  operating
obligations,  but used  undistributed  available  cash  from  prior  periods  of
approximately $1.8 million to maintain the current level of distributions  ($3.9
million) to the partners.

The cash distributions to be paid in August 1997 was reduced from an annual rate
of 5% to an annual rate of 3% to more closely  reflect  current and expected net
cash  flows  from  operations.  Continued  weak  market  conditions  in  certain
equipment sectors and equipment sales have reduced overall lease revenues in the
Partnership  to the  extent  that  reductions  in  distribution  levels  are now
necessary.  In  addition,  with the  Partnership  expected  to enter the  active
liquidation phase in the near future,  the size of the  Partnership's  remaining
equipment  portfolio and, in turn, the amount of net cash flows from  operations
will  continue  to become  progressively  smaller as assets  are sold.  Although
distribution  levels  will be  reduced,  significant  asset  sales may result in
potential special distributions to unitholders.

(III)    OUTLOOK FOR THE FUTURE

Since the  Partnership  is in its  holding or  passive  liquidation  phase,  the
General  Partner will be seeking to  selectively  re-lease or sell assets as the
existing leases expire.  Sale decisions will cause the operating  performance of
the  Partnership to decline over the remainder of its life. The General  Partner
anticipates  the  liquidation  of  Partnership  assets will be  completed by the
planned termination of the Partnership at the end of the year 2000.

The  Partnership  intends  to use cash  flow  from  operations  to  satisfy  its
operating  requirements,  pay loan principal on debt, and pay cash distributions
to the investors.

(IV) FORWARD-LOOKING INFORMATION

Except for historical  information contained herein, the discussion in this Form
10-Q contains  forward-looking  statements that involve risks and uncertainties,
such as statements of the Partnership's  plans,  objectives,  expectations,  and
intentions.  The cautionary  statements made in this Form 10-Q should be read as
being applicable to all related forward-looking  statements wherever they appear
in this Form 10-Q. The Partnership's actual results could differ materially from
those discussed here.













                     (This space intentionally left blank.)


<PAGE>


                          PART II -- OTHER INFORMATION



Item 6.  Exhibits and Reports on Form 8-K

              (a) Exhibits

                  Second  amendment to the second  amended and restated  limited
partnership agreement.

              (b) Reports on Form 8-K

                  None.


<PAGE>


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



                                      PLM EQUIPMENT GROWTH FUND II
                                      By: PLM Financial Services, Inc.
                                          General Partner




Date:  August 8, 1997                 By: /s/ Richard Brock
                                          -----------------
                                          Richard Brock
                                          Vice President and
                                          Corporate Controller