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
                  March 31, 1998

     [  ]         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 1-10553
                             -----------------------


                          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 amounts)


<TABLE>
<CAPTION>




                                                                                  March 31,     December 31,
                                                                                    1998            1997
                                                                               -------------------------------
<S>                                                                             <C>              <C>       
Assets

Equipment held for operating lease, at cost                                     $    40,920      $   50,707
Less accumulated depreciation                                                       (29,802)        (38,170)
                                                                               -------------------------------
                                                                                     11,118          12,537
Equipment held for sale                                                                 364             788
     Net equipment                                                                   11,482          13,325

Cash and cash equivalents                                                             4,692             556
Restricted cash                                                                          --             395
Accounts receivable, less allowance for doubtful
    accounts of $69 in 1998 and $1,146 in 1997                                        1,255           1,626
Investments in unconsolidated special-purpose entities                                1,193           2,680
Prepaid expenses and other assets                                                        34              49

      Total assets                                                              $    18,656      $   18,631
                                                                               ===============================


Liabilities and partners' capital


Liabilities:

Accounts payable and accrued expenses                                           $       382      $      365
Due to affiliates                                                                       108             195
Lessee deposits and reserve for repairs                                               1,144           1,846
Notes payable                                                                            --           2,500
                                                                               -------------------------------
    Total liabilities                                                                 1,634           4,906
                                                                               -------------------------------

Partners' capital:
Limited partners (7,381,805 depositary units as of
    December 31, 1997 and 1996)                                                      17,022          13,725
General Partner                                                                          --              --
                                                                               -------------------------------
    Total partners' capital                                                          17,022          13,725
                                                                               -------------------------------

      Total liabilities and partners' capital                                   $    18,656      $   18,631
                                                                               ===============================

</TABLE>














                       See accompanying notes to financial
                                  statements.



<PAGE>




                          PLM EQUIPMENT GROWTH FUND II
                             A Limited Partnership
                              STATEMENTS OF INCOME
                      For the Three Months Ended March 31,
        (in thousands of dollars, except weighted-average unit amounts)

<TABLE>
<CAPTION>


                                                                           1998            1997
                                                                      -------------------------------

<S>                                                                     <C>              <C>       
Revenues

Lease revenue                                                           $   1,876        $    3,038
Interest and other income                                                      72                81
Net gain on disposition of equipment                                        4,245               168
                                                                      --------------------------------
    Total revenues                                                          6,193             3,287

Expenses

Depreciation and amortization                                                 714             1,223
Repairs and maintenance                                                       445               376
Interest expense                                                               47               233
Insurance expense                                                              22                30
Management fees to affiliate                                                   98               128
General and administrative expenses to affiliates                             123               214
Other general and administrative expenses                                     258               252
(Recovery of) provision for bad debt                                          (88 )             326
                                                                      --------------------------------
    Total expenses                                                          1,619             2,782

Equity in net loss of unconsolidated special-
    purpose entities                                                         (112 )            (116)
                                                                      --------------------------------

      Net income                                                        $   4,462        $      389
                                                                      ================================

Partners' share of net income

Limited partners                                                        $   4,404        $      255
General Partner                                                                58               134
                                                                      --------------------------------

      Total                                                             $   4,462        $      389
                                                                      ================================

Net income per weighted-average depositary unit
   (7,381,805 units as of March 31, 1998 and 1997)                     $     0.60        $     0.03
                                                                      ================================

Cash distribution                                                       $   1,165        $    1,942
                                                                      ================================

Cash distribution per weighted-average depositary unit                 $     0.15        $     0.25
                                                                      ================================

</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, 1996
                  to March 31, 1998 (in thousands of dollars)

<TABLE>
<CAPTION>


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

<S>                                                          <C>                  <C>                 <C>       
Partners' capital (deficit) as of December 31, 1996          $   17,434           $    (188 )         $   17,246

Net income                                                          2,196                 499                2,695

Cash distribution                                                  (5,905 )              (311 )             (6,216)

Partners' capital as of December 31, 1997                          13,725                  --               13,725

Net income                                                          4,404                  58                4,462

Cash distribution                                                  (1,107 )               (58 )             (1,165)
                                                             --------------------------------------------------------

Partners' capital as of March 31, 1998                         $   17,022           $      --           $   17,022
                                                             ========================================================

</TABLE>




































                       See accompanying notes to financial
                                  statements.

  

<PAGE>




                          PLM EQUIPMENT GROWTH FUND II
                             A Limited Partnership
 STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, (in thousands of
                                    dollars)

<TABLE>
<CAPTION>



                                                                                      1998                  1997
                                                                                ---------------------------------------
<S>                                                                               <C>                    <C>       
Operating activities
Net income                                                                        $    4,462             $      389
Adjustments to reconcile net income to net cash provided
    by operating activities:
  Net gain on disposition of equipment                                                (4,245 )                 (168 )
  Depreciation and amortization                                                          714                  1,223
  Equity in net loss from unconsolidated special-purpose entities                        112                    116
  Changes in operating assets and liabilities:
    Restricted cash                                                                      395                     --
    Accounts receivable, net                                                             396                   (196 )
    Prepaid expenses and other assets                                                     15                     16
    Accounts payable and accrued expenses                                                 17                     47
    Due to affiliates                                                                    (87 )                    2
    Lessee deposits and reserve for repairs                                             (702 )                  183
                                                                                ---------------------------------------
      Net cash provided by operating activities                                        1,077                  1,612
                                                                                ---------------------------------------

Investing activities
Proceeds from disposition of equipment                                                 5,349                    544
Liquidation distributions from unconsolidated special-purpose entities                 1,425                     --
Additional investments in unconsolidated special-purpose entities                        (50 )                  (62 )
                                                                                ---------------------------------------
      Net cash provided by investing activities                                        6,724                    482
                                                                                ---------------------------------------

Financing activities
Principal payments on notes payable                                                   (2,500 )               (2,500 )
Cash distribution paid to limited partners                                            (1,107 )               (1,845 )
Cash distribution paid to General Partner                                                (58 )                  (97 )
                                                                                ---------------------------------------
      Net cash used in financing activities                                           (3,665 )               (4,442 )
                                                                                ---------------------------------------

Net increase (decrease) in cash and cash equivalents                                   4,136                 (2,348 )

Cash and cash equivalents at beginning of period                                         556                  7,962
                                                                                ---------------------------------------

      Cash and cash equivalents at end of period                                  $    4,692             $    5,614
                                                                                =======================================

Supplemental information
Interest paid                                                                     $       47             $      232
                                                                                =======================================
Sale proceeds included in accounts receivable                                     $       25             $       --
                                                                                =======================================

</TABLE>









                       See accompanying notes to financial
                                  statements.



<PAGE>




                          PLM EQUIPMENT GROWTH FUND II
                              A Limited Partnership
                          NOTES TO FINANCIAL STATEMENTS
                                 March 31, 1998

1.   Opinion of Management

     In the opinion of the  management  of PLM  Financial  Services,  Inc.  (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 March 31, 1998 and December 31, 1997, the
     statements  of income for the three  months  ended March 31, 1998 and 1997,
     the statements of changes in partners' capital for the period from December
     31, 1996 to March 31, 1998,  and the statements of cash flows for the three
     months  ended March 31, 1998 and 1997.  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,  1997,  on file at the  Securities  and
     Exchange Commission.

2.   Cash Distribution

     Cash distributions are recorded when paid and totaled $1.2 million and $1.9
     million for the three months  ended March 31, 1998 and 1997,  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 $0 million and $1.6  million for the three  months  ended March
     31,  1998 and 1997,  respectively,  were  deemed to be a return of capital.
     Cash distributions related to the results from the first quarter of 1998 of
     $1.3 million,  are payable  during May 1998. In addition,  the  Partnership
     made a special distribution of $5.0 million during May 1998.

3.   Transactions with General Partner and Affiliates

     Partnership  management  fees of $0.1 million and $0.2 million were payable
     as of March 31, 1998 and December 31, 1997, respectively.

     The   Partnership's   proportional   share  of  the  data   processing  and
     administrative  expenses  incurred by the  unconsolidated  special  purpose
     entities  (USPEs)  was $5,000 and $0 for the three  months  ended March 31,
     1998 and 1997, respectively.

4.   Equipment

     Owned  equipment held for operating lease is stated at cost. The components
     of owned equipment held for operating lease are as follows (in thousands of
     dollars):
<TABLE>
<CAPTION>

                                                March 31,          December 31,
                                                  1998                 1997
                                            -------------------------------------
<S>                                            <C>                   <C>        
Rail equipment                                 $    17,345           $    17,401
Trailers                                            15,780                17,144
Marine containers                                    7,795                 8,308
Aircraft                                                --                 7,854
                                            ----------------------------------------
                                                    40,920                50,707
Less accumulated depreciation                      (29,802)              (38,170)
                                                    11,118                12,537
Equipment held for sale                                364                   788
      Net equipment                            $    11,482           $    13,325
                                            ========================================
</TABLE>




 

<PAGE>



                          PLM EQUIPMENT GROWTH FUND II
                              A Limited Partnership
                          NOTES TO FINANCIAL STATEMENTS
                                 March 31, 1998

4.   Equipment (continued)

     As of March 31,  1998,  all  equipment  was either on lease or operating in
     PLM-affiliated short-term trailer rental facilities,  except for 147 marine
     containers and 2 railcars with an aggregate net book value of $0.3 million.
     As of December 31, 1997,  all equipment was either on lease or operating in
     PLM-affiliated short-term trailer rental facilities,  except for 168 marine
     containers and 3 railcars with an aggregate net book value of $0.4 million.

     During the quarter ended March 31, 1998, the  Partnership  sold or disposed
     an aircraft,  marine containers,  trailers, and railcars, with an aggregate
     net book value of $1.1  million,  for  proceeds  of $5.3  million.  For the
     quarter ended March 31, 1997,  the  Partnership  sold or disposed of marine
     containers,  trailers,  and a railcar,  with an aggregate net book value of
     $0.4 million, for proceeds of $0.5 million.

5.   Investments in Unconsolidated Special-Purpose Entities

     The net investments in USPE included the following  jointly-owned equipment
     (and related assets and liabilities) (in thousands of dollars):

<TABLE>
<CAPTION>

                                                                        March 31,        December 31,
                                                                          1998              1997
                                                                   ---------------------------------------


<S>                                                                     <C>                <C>     
23% interest in a Boeing 727-200 aircraft                               $     --           $  1,445
50% interest in a Boeing 727-200 aircraft                                  1,193              1,235
                                                                    ---------------------------------------
      Net investments                                                   $  1,193           $  2,680
                                                                    =======================================
</TABLE>

     During the three months ended March 31,  1998,  the General  Partner sold a
     Boeing 727-200 aircraft in which the Partnership  owned a 23% interest,  at
     approximately  its net book value.  The  Partnership  received  liquidating
     distributions  of $1.4 million  from this USPE during the first  quarter of
     1998.  The  Partnership's  50%  investment  in a  commercial  aircraft  was
     off-lease at March 31, 1998 and December 31, 1997.

6.   Notes Payable

     During the first quarter of 1998, the Partnership  prepaid the $2.5 million
     remaining outstanding notes payable.


<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 
March 31, 1998 and 1997

(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 first
quarter of 1998 when compared to the same quarter of 1997.  The following  table
presents  lease  revenues  less  direct  expenses  by owned  equipment  type (in
thousands of dollars):

<TABLE>
<CAPTION>


                                                                           For the Three Months
                                                                              Ended March 31,
                                                                          1998               1997
                                                                      -------------------------------
<S>                                                                     <C>               <C>      
Rail equipment                                                          $    772          $     925
Trailers                                                                     532                795
Marine containers                                                             97                301
Aircraft                                                                      15                620

</TABLE>

Rail equipment: Railcar lease revenues and direct expenses were $1.1 million and
$0.3  million,  respectively,  for the first  quarter of 1998,  compared to $1.2
million and $0.3 million, respectively, during the same quarter of 1997. Railcar
contribution  decreased  in the  first  quarter  of 1998,  compared  to the same
quarter of 1997, due to the sale of railcars in 1998 and 1997.

Trailers:  Trailer lease revenues and direct expenses were $0.7 million and $0.2
million,  respectively,  for the first quarter of 1998, compared to $0.9 million
and $0.1 million,  respectively,  during the same quarter of 1997.  The decrease
was primarily due to the sale of trailers in 1998 and 1997.

Marine  containers:  Marine  container lease revenues were $0.1 million and $0.3
million during the first quarter of 1998 and 1997,  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.

Aircraft:  Aircraft lease revenues and direct expenses were $33,000 and $18,000,
respectively,  for the first  quarter  of 1998,  compared  to $0.6  million  and
$10,000,  respectively,  during the same quarter of 1997. Aircraft  contribution
decreased  in the first  quarter of 1998,  compared to the same quarter of 1997,
due to the sale of three aircraft in 1998 and 1997.

(b) Indirect Expenses Related to Owned Equipment Operations

Total indirect  expenses of $1.2 million for the first quarter of 1998 decreased
from $2.4 million for the same quarter in 1997.  The  variances are explained as
follows:

     (i) A $0.5 million decrease in depreciation  and amortization  expense from
1997 levels reflects the effect of asset sales in 1998 and 1997.

     (ii) A $0.2 million  decrease in interest  expense is due to lower  average
debt  outstanding  during the first  quarter of 1998 when  compared  to the same
quarter in 1997.

     (iii)  The  $0.4  million  decrease  in bad debt  expense  is due to a $0.1
million  decrease in reserve for a certain lessee resulting from the application
of  security  deposits  against  uncollected  outstanding  receivable,  and  the
collection of $0.3 million in outstanding  receivables from certain lessees that
were reserved for as bad debts in 1997.

     (iv) A $0.1 million  decrease in  administrative  expenses from 1997 levels
due to reduced professional services required by the Partnership.



<PAGE>



(c) Net Gain on Disposition of Owned Equipment

Net gain on  disposition of equipment for the first quarter of 1998 totaled $4.2
million, and resulted from the disposal or sale of an aircraft, trailers, marine
containers,  and railcars, with an aggregate net book value of $1.1 million, for
aggregate  proceeds  of $5.3  million.  For the same  quarter in 1997,  the $0.2
million net gain on disposition of equipment  resulted from the sale or disposal
of the trailers,  marine containers,  and a railcar,  with an aggregate net book
value of $0.4 million, for aggregate proceeds of $0.5 million.

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

Equity in net loss of unconsolidated special-purpose entities (USPEs) represents
net loss  generated  from the operation of  jointly-owned  assets  accounted for
under the equity method (see Note 5 to the financial statements).

As of March 31, 1998 and 1997, the Partnership owned a 50% interest in an entity
which owns a commercial  aircraft that was off lease during the first quarter of
1998 and 1997.  Expenses  were $0.1  million  for the first  quarter of 1998 and
1997.   During  the  first  quarter  of  1998,  the  General  Partner  sold  for
approximately  its book value the Partnership's 23% investment in an entity that
owned an aircraft.

(e)      Net Income

As a result of the foregoing,  the Partnership's net income was $4.5 million for
the first  quarter of 1998,  compared to net income of $0.4  million  during the
first  quarter of 1997.  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 first quarter of 1998
is not necessarily  indicative of future periods.  In the first quarter of 1998,
the Partnership  distributed $1.1 million to the limited partners,  or $0.15 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  limited  partnership  agreement.  As  of  March  31,  1998,  the
Partnership has no outstanding indebtedness. The Partnership relies on operating
cash flow to meet its operating  obligations and make cash  distributions to the
limited partners.

In the first quarter of 1998, the Partnership used $2.5 million in proceeds from
the sale of assets to prepay the outstanding debt.

For the quarter ended March 31, 1998, the Partnership  generated $1.1 million in
operating  cash (net cash provided by operating  activities  plus  distributions
from unconsolidated special-purpose entities) to meet its operating obligations,
but used  undistributed  available cash from prior periods of approximately $0.1
to  maintain  the level of  distributions  (total of $1.2  million  in the first
quarter of 1998) to the partners.

During the quarter  ended March 31, 1998,  the  Partnership  sold or disposed of
aircraft, marine containers,  trailers, and railcars, with an aggregate net book
value of $1.1 million, for proceeds of $5.3 million.

Equipment  sales have and will continue to reduce  overall lease revenues in the
Partnership  to the extent that further  reductions in  distribution  levels may
become necessary. In addition, with the Partnership in active liquidation phase,
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  may be  reduced,
significant  asset sales may result in potential  special  distributions  to the
partners.



<PAGE>



(III) YEAR 2000 COMPLIANCE

The General  Partner is currently  addressing  the Year 2000  computer  software
issue.  The General Partner is creating a timetable for carrying out any program
modifications that may be required. The General Partner does not anticipate that
the cost of these modifications allocable to the Partnership will be material.

(IV)  ACCOUNTING PRONOUNCEMENTS

In  June  1997,  the  Financial   Accounting  Standards  Board  issued  two  new
statements:  SFAS No. 130,  "Reporting  Comprehensive  Income,"  which  requires
enterprises to report,  by major  component and in total,  all changes in equity
from  nonowner  sources;  and SFAS No. 131,  "Disclosures  about  Segments of an
Enterprise  and  Related  Information,"  which  establishes  annual and  interim
reporting  standards  for a public  company's  operating  segments  and  related
disclosures about its products, services, geographic areas, and major customers.
Both statements are effective for the  Partnership's  fiscal year ended December
31, 1998, with earlier  application  permitted.  The effect of adoption of these
statements  will  be  limited  to the  form  and  content  of the  Partnership's
disclosures and will not impact the  Partnership's  results of operations,  cash
flow, or financial position.

(V)      OUTLOOK FOR THE FUTURE

Since the Partnership is in its orderly  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 scheduled termination
of the Partnership at the end of the year 2000.

Several factors may affect the Partnership's  operating  performance in 1998 and
beyond,  including  changes in the markets for the  Partnership's  equipment and
changes in the regulatory environment in which that equipment operates.

The Partnership's operation of a diversified equipment portfolio in a broad base
of markets is  intended  to reduce its  exposure  to  volatility  in  individual
equipment sectors.

The  ability  of the  Partnership  to  realize  acceptable  lease  rates  on its
equipment in the different equipment markets is contingent on many factors, such
as specific market conditions and economic activity, technological obsolescence,
and  government  or other  regulations.  The  unpredictability  of some of these
factors,  or of their occurrence,  makes it difficult for the General Partner to
clearly  define  trends or  influences  that may impact the  performance  of the
Partnership's  equipment.  The General  Partner  continuously  monitors both the
equipment  markets and the performance of the  Partnership's  equipment in these
markets.  The General Partner may make an evaluation to reduce the Partnership's
exposure to  equipment  markets in which it  determines  that it cannot  operate
equipment and achieve acceptable rates of return.

The  Partnership  intends  to use cash  flow  from  operations  to  satisfy  its
operating requirements and pay cash distributions to the investors.

(VI)     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.



<PAGE>



                           PART II - OTHER INFORMATION



Item 6.       Exhibits and Reports on Form 8-K

              (a)     Exhibits

                  None.

              (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:  May 12, 1998                    By:      /s/ Richard Brock
                                                -----------------
                                                Richard Brock
                                                Vice President and
                                                Corporate Controller


<PAGE>