UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

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

                  For the Quarterly Period Ended September 30, 1998

                         Commission File Number 0-15669

                          ML-LEE ACQUISITION FUND, L.P.
             (Exact name of registrant as specified in its Charter)

         Delaware                                  13-3426817
(State or other jurisdiction           (IRS Employer Identification No.)
of incorporation or organization)

                             World Financial Center
                            South Tower - 14th Floor
                          New York, New York 10080-6123
              (Address of principal executive offices and zip code)

       Registrant's telephone number, including area code:(212) 236-6562

        Securities registered pursuant to Section 12(b) of the Act: None

     Name of each  exchange  on  which  registered:  Not  Applicable  Securities
registered pursuant to Section 12(g) of the Act:

                      Units of Limited Partnership Interest
                                (Title of class)

     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 ___.

     Aggregate  market value of voting  securities held by  non-affiliates:  Not
Applicable.


<PAGE>
                          ML-LEE ACQUISITION FUND, L.P.

                                TABLE OF CONTENTS


                         PART I - FINANCIAL INFORMATION

                                                                     
Item 1.  Financial Statements

Statements of Assets, Liabilities and Partners' Capital
  as of September 30, 1998 and December 31, 1997                          

Statements of Operations - For the Three and Nine Months Ended
  September 30, 1998 and 1997                                           

Statements of Changes in Net Assets - For the Nine Months Ended
  September 30, 1998 and 1997                                             

Statements of Cash Flows - For the Nine Months Ended
  September 30, 1998 and 1997                                            

Statement of Changes in Partners' Capital - September 30, 1998         

Schedule of Investments - September 30, 1998                   

Notes to Financial Statements                                        

Supplemental Schedule of Realized Gains and Losses - Schedule 1    

Supplemental Schedule of Unrealized Appreciation and
  Depreciation - Schedule 2                                       

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations                               


                           PART II - OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K                           

<PAGE>
<TABLE>
<CAPTION>
                          ML-LEE ACQUISITION FUND, L.P.
             STATEMENTS OF ASSETS, LIABILITIES AND PARTNERS' CAPITAL
                             (DOLLARS IN THOUSANDS)
                                  

<S>                                                                     <C>                 <C>
                                                                         (Unaudited)
                                                                      September 30, 1998   December 31, 1997
                                                                         -----------       -----------------

ASSETS:
Investments - Notes 2, 8, 9
Portfolio Investments at fair value
    Managed Companies (cost $0 at September 30, 1998
      and $53,480 at December 30, 1997)                                  $        --             $    35,227
    Non-Managed Companies (cost $0 at September 30, 1998
      and $720 at December 31, 1997)                                              --                      26
    Temporary Investments, at amortized cost (cost $3,946
      at September 30, 1998 and $18,062 at December 31, 1997)                   3,947                 18,125
Cash                                                                              10                       1
Prepaid Loan Fees - Notes 2, 4                                                    --                     384
Prepaid Expenses                                                                  --                       6
Receivable for Investment Sold (Net of Allowance for
  Uncollectable Proceeds) - Note 8                                                13                   3,926
                                                                         -----------             -----------
TOTAL ASSETS                                                             $     3,970             $    57,695
                                                                         ===========             ===========

LIABILITIES AND PARTNERS' CAPITAL:

Liabilities
    Legal and Professional Fees Payable                                  $        47             $       110
    Reimbursable Administrative Expenses Payable                                 137                     116
    Independent General Partner Expenses Payable                                  23                      23
                                                                         -----------             -----------
Total Liabilities                                                                207                     249
                                                                         -----------             -----------
Partners' Capital - Note 2
    Managing General Partner                                                     380                     918
    Limited Partners (487,489 Units)                                           3,383                  56,528
                                                                         -----------             -----------
Total Partners' Capital                                                        3,763                  57,446
                                                                         -----------             -----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL                                  $     3,970             $    57,695
                                                                         ===========             ===========


</TABLE>

                            See the Accompanying Notes to Financial Statements.


<PAGE>
<TABLE>
<CAPTION>
                          ML-LEE ACQUISITION FUND, L.P.
                            STATEMENTS OF OPERATIONS
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)

<S>                                                        <C>             <C>           <C>             <C>    
                                                            For the Three Months Ended       For the Nine Months Ended
                                                              ----------    ----------    -------------   ------------
                                                            September 30,  September 30,  September 30,   September 30,
                                                                 1998         1997              1998          1997
                                                              ----------    ----------    -------------   ------------
INVESTMENT INCOME - Notes 2, 8, 10:
Interest and Discount                                         $      104    $      447       $      543    $    1,136
Dividend & Other Income                                               --         6,000                1         6,006
                                                              ----------    ----------       ----------    ----------
    TOTAL INCOME                                                     104         6,447              544         7,142
                                                              ----------    ----------       ----------    ----------
EXPENSES:
Investment Advisory Fee - Note 5                                      --           300              600           894
Fund Administration Fee - Note 6                                      75            75              225           225
Uncollectable Receivable Expense - Note 8                             --            --            1,000            --
Loan Fees - Notes 2, 4                                                --           175              403           524
Independent General Partners' Fees and Expenses - Note 7              33            42              112           213
Legal and Professional Fees                                           29           217               29           865
Reimbursable Administrative Expenses - Note 6                        137           141              428           402
Insurance Expense                                                     --             3                7             7
                                                              ----------    ----------       ----------    ----------
    TOTAL EXPENSES                                                   274           953            2,804         3,130
                                                              ----------    ----------       ----------    ----------
NET INVESTMENT INCOME (LOSS)                                        (170)        5,494           (2,260)        4,012
NET REALIZED GAIN (LOSS) ON INVESTMENTS -
     NOTE 8 AND SCHEDULE 1                                       (16,652)           --           (9,557)        5,795
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)
     ON INVESTMENTS - NOTE 9 AND SCHEDULE 2
        Publicly Traded Securities                                    --         5,797          (18,959)        3,070
        Nonpublic Securities                                      16,652            --           37,906            --
                                                              ----------    ----------       ----------    ----------
             Subtotal                                             16,652         5,797           18,947         3,070
                                                              ----------    ----------       ----------    ----------
NET INCREASE (DECREASE) IN NET ASSETS
   RESULTING FROM OPERATIONS                                  $     (170)   $   11,291       $    7,130    $   12,877
                                                              ==========    ==========       ==========    ==========

                         See the Accompanying Notes to Financial Statements.

</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                                                     ML-LEE ACQUISITION FUND, L.P.
                                                  STATEMENTS OF CHANGES IN NET ASSETS
                                                         (DOLLARS IN THOUSANDS)
                                                             (UNAUDITED)

<S>                                                                           <C>            <C>  
                                                                                          For the Nine Months Ended
                                                                                      -------------       -------------
                                                                                      September 30,       September 30, 
                                                                                           1998                1997
                                                                                      -------------       -------------
FROM OPERATIONS:

     Net Investment Income (Loss)                                                       $   (2,260)         $    4,012

     Net Realized Gain (Loss) on Investments                                                (9,557)              5,795 

     Net Change in Unrealized Appreciation (Depreciation) on Investments                    18,947               3,070
                                                                                        ----------          ----------

     Net Increase in Net Assets Resulting from Operations                                    7,130              12,877

     Cash Distributions to Partners                                                        (60,813)            (15,117)
                                                                                        ----------          ----------

     Total Decrease                                                                        (53,683)             (2,240)

NET ASSETS:

     Beginning of Period                                                                    57,446              97,388
                                                                                        ----------          ----------

     End of Period                                                                      $    3,763          $   95,148
                                                                                        ==========          ==========




                         See the Accompanying Notes to Financial Statements.

</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                          ML-LEE ACQUISITION FUND, L.P.
                            STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
                                  (UNAUDITED)

<S>                                                                             <C>                   <C>   

                                                                                           For the Nine Months Ended
                                                                                        ----------       -------------
                                                                                       September 30,     September 30,
                                                                                           1998               1997
                                                                                        ----------       -------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
CASH FLOWS FROM OPERATING ACTIVITIES:
  Interest, Dividends and Discount Income                                               $      606         $    1,141
  Investment Advisory Fee                                                                     (600)              (894)
  Fund Administration Fee                                                                     (225)              (225)
  Legal and Professional Fees                                                                  (94)              (815)
  Loan Fees and Expenses                                                                       (17)               (53)
  Independent General Partners' Fees and Expenses                                             (112)              (191)
  (Purchase) Sale of Temporary Investments, Net                                             14,116             (4,793)
  Reimbursable Administrative Expenses                                                        (408)              (365)
  Proceeds from Sale of Portfolio Company Investments                                       47,556             21,303
                                                                                        ----------         ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES                                                   60,822             15,108
                                                                                        ----------         ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Cash Distributions to Partners                                                           (60,813)           (15,117)
                                                                                        ----------         ----------
NET CASH APPLIED TO FINANCING ACTIVITIES                                                   (60,813)           (15,117)
                                                                                        ----------         ----------
  Net Increase (Decrease) in Cash                                                                9                 (9)
  Cash at Beginning of Period                                                                    1                 10
                                                                                        ----------         ----------
CASH AT END OF PERIOD                                                                   $       10         $        1
                                                                                        ==========         ==========

RECONCILIATION OF NET INVESTMENT INCOME (LOSS) TO
NET CASH PROVIDED BY OPERATING ACTIVITIES

Net Investment Income (Loss)                                                            $   (2,260)       $    4,012
                                                                                        ----------        ----------
ADJUSTMENTS TO RECONCILE NET INVESTMENT INCOME (LOSS)
   TO NET CASH PROVIDED BY OPERATING ACTIVITIES
  Decrease in Investments                                                                   68,340            10,790
  (Increase) Decrease in Receivable for Investments Sold
  (Net of Allowance for Uncollectable Proceeds)                                              3,888               (75)
  (Increase) Decrease in Accrued Interest,
  Dividend and Discount Receivables                                                             62            (6,000)
  Decrease in Prepaid Expenses                                                                 391               478
  Increase in Independent General Partner Fees Payable                                          --                22
  Increase in Reimbursable Administrative Expenses Payable                                      21                38
  Increase (Decrease) in Legal and Professional Fees Payable                                   (63)               48
  Net Realized Gain (Loss) on Investments                                                   (9,557)            5,795
                                                                                        ----------        ----------
TOTAL ADJUSTMENTS                                                                           63,082            11,096
                                                                                        ----------        ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES                                               $   60,822        $   15,108
                                                                                        ==========        ==========
</TABLE>

See the Accompanying Notes to Financial Statements.

<PAGE>
<TABLE>
<CAPTION>
                          ML-LEE ACQUISITION FUND, L.P.
                    STATEMENT OF CHANGES IN PARTNERS' CAPITAL
                              (DOLLARS IN THOUSANDS)
                                  (UNAUDITED)

<S>                                                                      <C>                <C>                <C>
                                                                                    Managing
                                                                                     General           Limited
                                                                                     Partner           Partners             Total
                                                                                   ------------      ------------      ------------

For the Nine Months Ended September 30, 1998
Partners' Capital at January 1, 1998                                               $        918      $     56,528      $     57,446
Allocation of Net Investment Loss                                                           (23)           (2,237)           (2,260)
Allocation of Net Realized Loss on Investments                                              (96)           (9,461)           (9,557)
Allocation of Net Change in Unrealized Appreciation                                         189            18,758            18,947
Cash Distributions to Partners                                                             (608)          (60,205)          (60,813)
                                                                                   ------------      ------------      ------------
Partners' Capital at September 30, 1998                                            $        380      $      3,383      $      3,763
                                                                                   ============      ============      ============

</TABLE>
               See the Accompanying Notes to Financial Statements.

<PAGE>
<TABLE>
<CAPTION>
                                                  ML-LEE ACQUISITION FUND, L.P.
                                                   SCHEDULE OF INVESTMENTS
                                                      SEPTEMBER 30, 1998
                                                    (DOLLARS IN THOUSANDS)
                                                        
                                                                                                                 Fair       % Of
                                                                                    Investment      Investment  Value       Total
Shares/Warrants     Investment                                                         Date           Cost(a)   (Note 2) Investments
<S>                 <C>                                                             <C>              <C>        <C>     <C>
 
                    TEMPORARY INVESTMENTS

                    COMMERCIAL PAPER

$  3,950            General Electric Co., 5.30% due 10/7/98                             9/30/98       $  3,946  $ 3,947      100.00%
                                                                                                      ------------------------------
                    TOTAL TEMPORARY INVESTMENTS                                                          3,946    3,947      100.00
                                                                                                      ------------------------------
                    TOTAL INVESTMENT PORTFOLIO                                                        $  3,946  $ 3,947      100.00%
                                                                                                      ==============================





(a) Represents original cost and excludes accretion of discount of $1 for Temporary Investments.

</TABLE>

See the Accompanying Notes to Financial Statements.

<PAGE>

                      ML-LEE ACQUISITION FUND, L.P.
                      NOTES TO FINANCIAL STATEMENTS
                           SEPTEMBER 30, 1998
                              (UNAUDITED)

1.  Organization and Purpose

     ML-Lee  Acquisition  Fund, L.P. (the "Fund") was formed and the Certificate
of Limited  Partnership  was filed under the Delaware  Revised  Uniform  Limited
Partnership Act on April 1, 1987. The Fund's operations commenced on October 19,
1987.

     The Managing General Partner,  subject to the supervision of the Individual
General  Partners,  is  responsible  for  overseeing  and  monitoring the Fund's
investments.  Mezzanine Investments, L.P. (the "Managing General Partner"), is a
limited  partnership  in which  ML  Mezzanine  Inc.,  an  indirect  wholly-owned
subsidiary of Merrill Lynch & Co., Inc., is the general  partner,  and Thomas H.
Lee Advisers I (the "Investment Adviser"), an affiliate of Thomas H. Lee, is the
limited partner.  The Individual General Partners are Vernon R. Alden, Joseph L.
Bower and Stanley H. Feldberg (the "Independent General Partners") and Thomas H.
Lee.

     The Fund  elected to operate as a business  development  company  under the
Investment Company Act of 1940. Its primary investment  objective was to provide
current income and long-term  capital  appreciation  by investing in "Mezzanine"
securities  consisting  primarily  of  Subordinated  Debt  and  Preferred  Stock
combined  with an equity  participation  issued  in  connection  with  leveraged
acquisitions  or  other  leveraged  transactions.

     The term of the Fund expired on June 15, 1998 resulting in the  dissolution
of the Fund.  The Fund has an  additional  five years to liquidate its remaining
investments.  As of September  30, 1998,  the Fund has sold all of its remaining
investments in Portfolio  Companies.  The last security held by the Fund is a $1
million  (principal  amount)  Promissory  Note related to the sale of the Fund's
interest  in  BeefAmerica  Inc.  (see  Note  8).  The Fund no  longer  generates
sufficient  cash to pay  current  obligations;  however  the Fund has  available
approximately  $3.9 million of cash reserves to cover future expenses  including
all  expenses  related  to  the  winding  up  of  the  Fund's  affairs  such  as
administrative and custodial  expenses,  and audit and tax preparation fees. Any
remaining  cash  reserves  in  excess  of  amounts  required  to pay the  Fund's
obligations  prior  to its  termination  (as  discussed  in  Note  12)  will  be
distributed  as  soon as  practicable  as a final  liquidating  distribution  to
Limited Partners.

2.  Significant Accounting Policies

Basis of Accounting

     For financial  reporting  purposes,  the records of the Fund are maintained
using the  accrual  method of  accounting.  For  Federal  income  tax  reporting
purposes,   the  results  of  operations  are  adjusted  to  reflect   statutory
requirements arising from book to tax differences.

Valuation of Investments

     Securities for which market  quotations were readily  available were valued
by reference to such market quotation,  using the last trade price (if reported)
or the  last  bid  price  for the  period.  For  securities  without  a  readily
ascertainable  market value  (including  securities  restricted as to resale for
which a corresponding  publicly traded class exists), fair value was determined,
on a quarterly  basis,  in good faith by the  Managing  General  Partner and the
Investment  Adviser with final approval from the Individual  General Partners of
the Fund. For privately issued securities in which the Fund typically  invested,
the fair value of an investment  was its original cost plus accrued value in the
case of original issue  discount or deferred pay  securities.  Such  investments
were revalued if there was an objective basis for doing so at a different price.
Investments  were  written  down in value if the  Managing  General  Partner and
Investment  Adviser believe adverse credit  developments of a significant nature
required a write-down of such  securities.  Investments were written up in value
only if there has been an  arms'-length  third party  transaction to justify the
increased  valuation.  Although  the  Managing  General  Partner and  Investment
Adviser  used  their  best  judgment  in  estimating  the  fair  value  of these
investments,  there  were  inherent  limitations  in any  estimation  technique.
Therefore,  the  fair  value  estimates  presented  herein  are not  necessarily
indicative of the amount which the Fund could realize in a current transaction.
<PAGE>
     Temporary  Investments  with  maturities of less than 60 days are stated at
amortized cost, which approximates market.

     The  information   presented  herein  is  based  on  pertinent  information
available to the Managing General Partner and Investment Adviser as of September
30, 1998.  Although the Managing General Partner and Investment  Adviser are not
aware of any factors not disclosed  herein that would  significantly  affect the
estimated  fair  value  amounts,  such  amounts  have not  been  comprehensively
revalued since that time.

Investment Transactions

     The Fund recorded investment  transactions on the date on which it obtained
an  enforceable  right to demand the  securities or payment  therefor.  The Fund
recorded Temporary Investment transactions on the trade date.

     Realized  gains and losses on  investments  are  determined on the basis of
specific identification for accounting and tax purposes.

Loan Facility and Advisory Fees

     Loan  Facility and Advisory  Fees have been fully  amortized as of June 30,
1998.

Partners' Capital

     Partners' Capital represents the Fund's equity divided in proportion to the
Partners'  Capital  Contributions.   Profits  and  losses,  when  realized,  are
allocated  in  accordance  with  the  provisions  of the  Partnership  Agreement
summarized in Note 3.

3. Allocation of Profits and Losses

     Pursuant  to  the  Partnership   Agreement,   all  profits  from  Temporary
Investments  generally are  allocated 99% to the Limited  Partners and 1% to the
Managing  General Partner.  Profits from Mezzanine  Investments are, in general,
allocated as follows:

    first, if the capital  accounts of any partners have negative  balances,  to
    such  partners in  proportion  to the  negative  balances  in their  capital
    accounts until the balances of all such capital accounts equal zero,

    second,  99% to the Limited  Partners and 1% to the Managing General Partner
    until the sum allocated to the Limited  Partners  equals any previous losses
    allocated  together with a cumulative  Priority Return of 10% on the average
    daily  balance of Mezzanine  securities,  and any  outstanding  Compensatory
    Payments,

    third,  69% to the Limited  Partners and 31% to the Managing General Partner
    until the Managing  General  Partner has  received 21% of the total  profits
    allocated,

    thereafter,  79% to the Limited  Partners and 21% to the  Managing  General
    Partner.

    Losses will be allocated in reverse  order of profits  previously  allocated
and  thereafter  99% to the  Limited  Partners  and 1% to the  Managing  General
Partner.

4.  Leverage

     The Fund's Credit  Facility,  which provided the Fund with a maximum credit
facility of $140 million was due to expire on July 31, 1998, however, the credit
agreement was amended to instead  expire at June 30, 1998.  All fees incurred in
connection  with the credit  agreement have been fully  amortized as of June 30,
1998.  Such  amortization  amounted to $384,079 during the six months ended June
30, 1998.

     The Fund paid Unused Commitment Fees of 1/2 of 1% per annum during the nine
months ended September 30, 1998 of $18,854.

<PAGE>
5.  Investment Advisory Fee

     The  expiration  of the  Fund's  term on June  15,  1998,  has  caused  the
Management Agreement between the Investment Adviser and the Fund to expire. As a
result, the Investment Adviser is no longer receiving  compensation for services
rendered effective July 1, 1998,  however,  the Investment Adviser has agreed to
provide  investment  advisory  services  to  the  Fund  as  needed  until  final
liquidation.

     The  Investment  Adviser  provided for the  identification,  management and
liquidation of investments for the Fund. As compensation  for services  rendered
to the Fund, the Investment  Adviser received a quarterly fee at the annual rate
of $1.2 million. During 1998, the Fund paid $600,000 in Investment Advisory Fees
to Thomas H. Lee Advisers I.  Such fees have ceased as of July 1, 1998.


6.  Fund Administration Fees & Expenses

     ML Fund Administrators Inc. (the "Fund Administrator") (an affiliate of the
Managing General Partner) performs the operational and  administrative  services
necessary  for the  management  of the  Fund.  The  Fund  Administration  Fee is
calculated at an annual fee of $300,000 plus out-of-pocket  expenses incurred by
the Fund Administrator,  as described below. The Fund Administration Fee is paid
quarterly,  in advance.  For the nine months ended  September 30, 1998 and 1997,
the Fund paid $225,000, respectively, in Fund Administration Fees.

     In accordance with the Partnership  Agreement,  the Fund  Administrator  is
being  reimbursed  by the  Fund for 100% of  administrative  expenses  incurred.
Actual  out-of-pocket  expenses  ("reimbursable  expenses") primarily consist of
printing,  audits, tax preparation and custodian fees. For the nine months ended
September  30,  1998 and  1997,  reimbursable  expenses  totalled  $428,046  and
$402,544,  respectively. 

     Although the Fund's term expired on June 15, 1998,  the Fund  Administrator
continues  to  earn  a  fee  and  continues  to  perform  all   operational  and
administrative  services  required by the Fund until the Fund is terminated  and
all such administrative functions are no longer required.

7. Independent General Partners' Fees

     As  compensation  for  services  rendered  to the  Fund,  each of the three
Independent   General   Partners   receives   $40,000   annually  in   quarterly
installments,  $1,000 for each  meeting of the  General  Partners  attended  and
$1,000 for each committee  meeting attended ($500 if a committee meeting is held
on the same day as a meeting of the General Partners) plus reimbursement for any
legal and  out-of-pocket  expenses.  Compensation  for the  Independent  General
Partners is reviewed annually by the Individual General Partners.

     For the nine months ended  September  30, 1998 and 1997,  the Fund incurred
$111,621 and $212,890,  respectively,  in Independent General Partners' Fees and
Expenses.

8.  Investment Transactions

     As of September 30, 1998, the Fund has sold all of its remaining  Portfolio
Company Investments.

     On January  6, 1998 the Fund and  affiliates  of the Thomas H. Lee  Company
(the "Lee  Affiliates"),  together with the Fund,  the ("Selling  Stockholders")
sold  their  remaining  holdings  of  common  stock  in  Stanley  Furniture  Co.
("Stanley").  The  common  stock of each of the  Selling  Stockholders  was sold
pursuant  to a Form S-3  Registration  Statement,  which was filed by Stanley on
December  22,  1997  and  declared  effective  by the  Securities  and  Exchange
Commission on December 23, 1997. In connection  with the sale, the Fund sold its
remaining  400,719  shares of common  stock and  received  net proceeds of $10.8
million or $27 per share. On February 12, 1998, the Independent General Partners
established  a reserve  of $1.65  million  from  these  proceeds  to pay  future
expenses of the Fund.  Net  Distributable  Capital  Proceeds  from the sale,  as
defined in the  Partnership  Agreement,  of $9.2 million or $18.63 per Unit were
distributed to Limited Partners of record as of January 6, 1998.
<PAGE>
     On  February  28,  1998,  Signature  Brands  USA  and  Sunbeam  Corporation
("Sunbeam")  executed a definitive  merger  agreement  whereby Sunbeam agreed to
acquire all the  outstanding  shares of  Signature  Brands USA Common  Stock for
approximately  $250  million  ($8.25 per share) by means of a tender  offer (the
"Tender Offer"),  and assume all the debt of Signature  Brands USA.  Pursuant to
the Tender  Offer,  the Fund  tendered  all its shares of  Signature  Brands USA
Common  Stock  and  received   proceeds  of  approximately   $13  million.   Net
Distributable  Capital Proceeds of $26.19 per Unit were distributed on April 23,
1998,  to the  Fund's  Limited  Partners  of  record  as of April 2,  1998,  the
expiration date of this Tender Offer.

     On March 3, 1998,  the Fund sold its remaining  investment in  BeefAmerica,
consisting of 14,000 shares Sr.  Preferred Stock and 10,000 shares Jr. Preferred
Stock (the  "Securities"),  for $1 million to Lajara II LLC, a limited Liability
Company owned by the Management of BeefAmerica  Operating Company.  The proceeds
consisted of a $1 million  Promissory  Note payable to the Fund.  The Securities
have  been  pledged  to  secure  the  obligation  of  Lajara  II,  LLC under the
Promissory  Note and the Fund  recognized a loss of $23 million.  The  operating
performance at BeefAmerica  has continued to deteriorate and on October 8, 1998,
the  company  filed for  bankruptcy  protection  under  Chapter 11 of the United
States Bankruptcy Code (see Note 14).  As a result, the
Fund does not expect to collect any  additional  proceeds and has fully reserved
against the $1 million Promissory Note.

     On May 27, 1998,  Playtex  Products  Inc.  ("Playtex"),  completed a public
offering  in the  international  markets of  approximately  4 million  shares of
Common Stock at a net price of $13.215 per share (the  "Playtex  Offering").  Of
the 4 million shares offered,  approximately  3.9 million shares were offered by
affiliates  of the Thomas H. Lee  Company,  including  the Fund.  As part of the
Playtex Offering, the Fund sold its remaining investment in Playtex,  consisting
of approximately  1.4 million shares of Common Stock. The Fund received proceeds
of  $18.5  million  and  recognized  a gain on the sale of  approximately  $15.3
million. Net Distributable  Proceeds of $37.74 per Unit were distributed on July
21, 1998, to Limited Partners of record as of May 27, 1998.

     On April 7, 1998,  pursuant to Rule 144 of the  Securities Act of 1933, the
Fund sold its investment of 25,500 shares of TLC Beatrice International Holdings
Common  Stock for $1.3  million or $51.25 per share.  During May 1998,  the Fund
sold its  investment  in SWO  Holdings,  consisting  of  250,000  shares  of SWO
Holdings Common Stock, 1,430 shares of Homeland Holdings Common Stock, and 1,506
Homeland Holdings Common Stock Purchase Warrants and received aggregate proceeds
of $11,102.  The Fund also sold 567 Cole National Common Stock Purchase Warrants
during May 1998, and received proceeds of $15,593. Additionally, on May 4, 1998,
the Fund sold 2,067 Common Stock Purchase  Warrants of Magellan  Health Services
for $5,168. The sale of these Portfolio Company investments have generated total
proceeds to the Fund of $1.34 million and were  distributed to Limited  Partners
on July 21, 1998.
  
     On July 9, 1998,  pursuant to a purchase and sale agreement,  the Fund sold
its  remaining  Warrants  to  purchase  Common and  Preferred  Stock of Chadwick
Miller, (which includes all payment-in-kind securities) and received proceeds of
$100.  The Fund  recognized a loss of $16.5  million on the  transaction  in the
third quarter 1998. The Fund had previously recorded $16.5 million in unrealized
depreciation on this  investment,  all of which was reversed at the time of this
sale.

9.  Unrealized Appreciation and Depreciation of Investments

     For the nine  months  ended  September  30,  1998,  the Fund  recorded  net
unrealized  appreciation  of $18.9  million,  all of which was a reversal of net
unrealized depreciation for investments sold.

    For additional  information,  please refer to the  Supplemental  Schedule of
Unrealized Appreciation and Depreciation - Schedule 2.

10. Litigation

     On April 10,  1998,  the  parties  to Seidel v.  Thomas H. Lee,  et al, No.
93-494 (JJF), a putative  class action brought on behalf of limited  partners of
the Fund,  filed with United States District Court for the District of Delaware,
a Stipulation of Settlement preliminarily settling the action.

     The  settlement,  which was  approved by the Court at a hearing on July 16,
1998,  provides for dismissal with prejudice of all claims against the Fund, the
Fund's  Investment  Adviser and certain of its  affiliates,  the Fund's Managing
General  Partner  and  certain of its  affiliates,  and the  Fund's  Independent
General Partners.  Defendants,  other than the Fund, have agreed to provide cash
of $2.5 million and certain other  considerations  to settle the claims asserted
in this action.  The settlement became effective on August 24, 1998.  Defendants
continue to deny all liability in this action.

     The Fund  had  previously  advanced  legal  expenses  incurred  by  certain
defendants and has included such expenses in Legal and Professional  Fees in the
Financial Statements.
<PAGE>

11. Related Party Transactions

     Certain of the Mezzanine Investments and Bridge Investments which were made
by the Fund involved co-investments with entities affiliated with the Investment
Adviser.  Such  co-investments are generally  prohibited absent exemptive relief
from the Securities and Exchange Commission (the  "Commission").  As a result of
these   affiliations   and  the  Fund's   expectation   of   engaging   in  such
co-investments,  the Fund sought an exemptive order from the Commission allowing
such  co-investment,  which was received on September  23, 1987.  An  additional
exemptive order allowing  co-investment  with ML-Lee  Acquisition  Fund II, L.P.
("Fund  II")  and  ML-Lee  Acquisition  Fund  (Retirement   Accounts)  II,  L.P.
("Retirement  Fund") was received from the  Commission on September 1, 1989. The
Fund's investments in Managed Companies, and in certain cases its investments in
Non-Managed Companies, typically involved the entry by the Fund and other equity
security  holders into  stockholders'  agreements.  While the provisions of such
stockholders'   agreements  have  varied,  such  agreements  may  have  included
provisions  as to corporate  governance,  registration  rights,  rights of first
offer or first  refusal,  rights to  participate in sales of securities to third
parties,  rights of majority  stockholders  to compel  minority  stockholders to
participate in sales of securities to third parties,  transfer  restrictions and
preemptive rights.

     Thomas H. Lee  Company,  a sole  proprietorship  owned by Thomas H. Lee, an
Individual  General  Partner  of the Fund  and an  affiliate  of the  Investment
Adviser,  have  typically  performed  certain  management  services  for Managed
Companies and have received  management  fees in connection  therewith,  usually
pursuant to written agreements with such companies. In addition,  certain of the
Portfolio  Companies  have had  contractual or other  relationships  pursuant to
which they do business with one another.

     Merrill  Lynch,  Pierce,  Fenner  &  Smith  Incorporated  ("MLPF&S")  is an
affiliate of the Managing General Partner. MLPF&S and certain of its affiliates,
in the ordinary  course of their  business,  have  performed  various  financial
services for various  portfolio  companies of the Fund,  which may have included
investment banking services,  broker/dealer  services and economic  forecasting,
and have  received in  consideration  therewith  various fees,  commissions  and
reimbursements.  Furthermore,  MLPF&S and its affiliates or investment companies
advised by affiliates of MLPF&S may have purchased or sold securities  issued by
portfolio  companies of the Fund in connection  with their  ordinary  investment
operations.

     During the nine months  ending  September  30, 1998,  the Managing  General
Partner received cash  distributions in the amount of $420,366  representing its
1% interest in the Fund.

12. Reserves

     In February  1993,  the Fund  established a $15 million  reserve to provide
funds for follow-on  investments and to pay expenses.  On February 12, 1998, the
Independent  General Partners approved an additional reserve of $1.65 million to
fund anticipated cash shortfalls. This reserve was established from the proceeds
received from the sale of Stanley Furniture Common Stock in January 1998.

     Because  the  Fund no  longer  generates  sufficient  cash  to pay  current
obligations,  the  Fund  has  approximately  $3.9  million  available  of  these
remaining cash reserves to cover future expenses  including all expenses related
to the winding up of the Fund's  affairs such as  administrative  and  custodial
expenses,  and audit and tax  preparation  fees.  Any remaining cash reserves in
excess  of  amounts  required  to  pay  the  Fund's  obligations  prior  to  its
termination  will be distributed  as soon as practicable as a final  liquidating
distribution to Limited Partners.

13. Income Taxes (Statement of Financial Accounting Standards No. 109)

     No  provision  for income taxes has been made because all income and losses
are  allocated to the Fund's  partners for  inclusion  in their  respective  tax
returns.

     Pursuant  to the  Statement  of  Financial  Accounting  Standards  No.  109
Accounting for Income Taxes,  the Fund is required to disclose any difference in
the tax basis of the Fund's assets and liabilities  versus the amounts  reported
in the  financial  statements.  As of December  31,  1997,  the tax basis of the
Fund's assets are greater than the amounts reported in the financial  statements
by $4.9  million.  This  difference  is  primarily  attributable  to  unrealized
appreciation  and  depreciation  recorded  on  investments  which  has not  been
recognized for tax purposes.

14. Subsequent Events

     On October 8, 1998,  BeefAmerica  Operating  Company  filed for  Bankruptcy
under  Chapter  11 of the  United  States  Bankruptcy  Code.  Because  of  these
circumstances,  the Fund does not expect to collect on the $1 million  Promisory
Note from Lajara II LLC. The Fund has fully reserved against the Promisory Note.
(See Note 8)
<PAGE>
<TABLE>
<CAPTION>
                                                   SCHEDULE 1
                                         ML-LEE ACQUISITION FUND, L.P.
                                SUPPLEMENTAL SCHEDULE OF REALIZED GAINS AND LOSSES
                                      FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
                                             (DOLLARS IN THOUSANDS)
                                                  (UNAUDITED)

<S>                                          <C>                 <C>               <C>              <C>                 

 
                                                          Number of        Investment                      Realized
SECURITY                                               Shares/Principal        Cost      Net Proceeds     Gain/(Loss)
-----------------------------------                   -----------------     ---------    ------------     -----------
For the Three Months March 31, 1998

Stanley Furniture Company Inc. 
    Common Stock                                               400,719       $  5,021       $ 10,819       $   5,798


BeefAmerica Incorporated
  Jr. and Sr.Preferred Stock                                    24,000         24,000          1,000(a)     (23,000)
                                                                              -------       --------       --------- 

Total For the Three Months Ended March 31, 1998                                29,021         11,819        (17,202)
                                                                              -------       --------       -------- 
For the Three Months Ended June 30, 1998

Signature Brands USA
    Common Stock                                             1,563,053          4,552         12,895          8,343

Playtex Products Inc. 
    Common Stock                                             1,406,204          3,255         18,583         15,328

TLC Beatrice Int'l Holdings
    Common Stock                                                25,500             25          1,313          1,288

SWO Holdings Corp. 
    SWO Holdings Common Stock                                  250,000            250             -- (b)       (250)
    Homeland Holdings Corp. Common Stock                         1,430            440             11           (429)
    Homeland Holdings Corp. Purchase Warrants                    1,506             --             -- (b)         --


Magellan Health Services Inc. 
    Warrants                                                     2,067              4              5              1

Cole National Corp. 
    Warrants                                                     5,563             --             16             16
                                                                              -------       --------       --------   
Total for the Three Months Ended June 30, 1998                                  8,526         32,823         24,297
                                                                              -------       --------       --------              
For the Three Months Ended September 30, 1998

Chadwick Miller, Inc.
     Common Stock and Preferred Purchase Warrants                              16,652             -- (b)    (16,652)
                                                                              -------       --------       --------
Total for the Nine Months Ended September  30, 1998                            54,199         44,642         (9,557)   
                                                                              =======       ========       ========      


(a) Proceeds received in the form of a Promissory Note which has been fully reserved
    against at September 30, 1998.  See Note 8 to the Financial  Statements for further information.

(b) Proceeds are less than $1,000.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                                                  SCHEDULE 2
                                                        ML-LEE ACQUISITION FUND, L.P.
                                       SUPPLEMENTAL SCHEDULE OF UNREALIZED APPRECIATION AND DEPRECIATION
                                                       FOR THE PERIOD ENDED SEPTEMBER 30, 1998
                                                            (DOLLARS IN THOUSANDS)
                                                                  (UNAUDITED)

<S>                                          <C>                  <C>                  <C>                   <C>          
                                                Unrealized           Unrealized
                                               Appreciation         Appreciation            Total                 Total
                                              (Depreciation)       (Depreciation)         Unrealized            Unrealized
                                               For the Three        For the Nine         Appreciation          Appreciation
                                               Months Ended         Months Ended        (Depreciation) at     (Depreciation)
SECURITY                                    September 30, 1998    September 30, 1998    December 31, 1997   September 30, 1998
----------------------------------------    ------------------    ------------------    -----------------   ------------------
Reversal of Unrealized Appreciation
   (Depreciation) for Investments Sold

Chadwick-Miller, Inc.
  Common Stock Purchase Warrants  (2)                $   3,736           $    3,736           $   (3,736)           $       --
  Preferred Stock Purchase Warrants (2)                 12,916               12,916              (12,916)                   --

Stanley 
  Common Stock (1)                                          --               (6,149)               6,149                    --
 
BeefAmerica Incorporated
  Jr. and Sr.Preferred Stock  (2)                           --               21,000              (21,000)                   --

Signature Brands USA
  Common Stock (1)                                          --               (2,091)               2,091                    --

Playtex
  Common Stock (1)                                          --              (11,159)              11,159                    -- 

SWO Holdings Corporation  
  SWO Holdings Common Stock (2)                             --                 250                 (250)                    --
  Homeland Holdings Common Stock (1)                        --                 440                 (440)                    --     

Magellan Health Service
  Common Stock Warrants (2)                                 --                   4                   (4)                    --
                                                     ---------          ----------            ----------            ----------
Total Reversal of Unrealized Appreciation
  (Depreciation) for Investments Sold                $  16,652          $   18,947            $  (18,947)           $       --
                                                     =========          ==========            ==========            ==========



(1)  Publicly Traded Security
(2)  Non-public Security


                         See the Accompanying Notes to Financial Statements.

</TABLE>


<PAGE>
Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations

Liquidity & Capital Resources

     The term of the Fund expired on June 15, 1998 resulting in the  dissolution
of the Fund.  The Fund has five  additional  years to  liquidate  its  remaining
investments.  As of July 1, 1998, the Fund no longer pays the Investment Adviser
an Investment Advisory Fee. 

     In February  1993,  the Fund  established a $15 million  reserve to provide
funds for follow-on  investments and to pay expenses.  On February 12, 1998, the
Independent  General Partners approved an additional reserve of $1.65 million to
fund  anticipated cash shortfalls of the Fund. This reserve was established from
the proceeds received from the sale of Stanley Furniture Common Stock in January
1998.

     The Fund no longer  generates  sufficient cash to pay current  obligations;
however the Fund has  available  approximately  $3.9 million of cash reserves to
cover future  expenses  including all expenses  related to the winding up of the
Fund's affairs such as administrative and custodial expenses,  and audit and tax
preparation  fees. Any proceeds received from the Promissory Note related to the
Fund's investment in BeefAmerica Inc. (see Note 8) as well as any remaining cash
reserves in excess of amounts  required to pay the Fund's  obligations  prior to
its  termination  will  be  distributed  as  soon  as  practicable  as  a  final
liquidating distribution to Limited Partners.
 
Investment in High-Yield Securities

     As of September 30, 1998,  the Fund has no remaining High Yield
Securities (as defined below) in its portfolio.

     The Fund originally  invested  primarily in subordinated debt and preferred
stock  securities  ("High-Yield  Securities"),  generally  linked with an equity
participation,  issued in conjunction with the mezzanine  financing of privately
structured,   friendly  leveraged  acquisitions,   recapitalizations  and  other
leveraged  financings.  High-Yield  Securities  are  debt and  preferred  equity
securities that are unrated or are rated by Standard & Poor's  Corporation as BB
or lower and by Moody's  Investor  Services,  Inc. as Ba or lower.  Risk of loss
upon default by the issuer is significantly  greater with High-Yield  Securities
than  with  investment  grade  securities  because  High-Yield   Securities  are
generally unsecured and are often subordinated to other creditors of the issuer.
Also,  these  issuers  usually  have high  levels of  indebtedness  and are more
sensitive  to adverse  economic  conditions,  such as  recession  or  increasing
interest rates, than investment grade issuers.

Results of Operations

Investment Income and Expenses

     For the nine months ended September 30, 1998, the Fund had a net investment
loss of $2,260,679 as compared to net  investment  income of $4,011,802  for the
same period in 1997.  The  increase in net  investment  loss for the nine months
ended Spetember 30, 1998,  represents a decrease in interest and dividend income
received by the Fund and an increase  in expenses  due to a reserve  established
for  uncollectable  proceeds  related  to the sale of the Fund's  investment  in
BeefAmerica  in the 1st  Quarter  1998.  (See  Notes  8 and 14 to the  financial
statements for further information.)

     For  the  three  months  ended  September  30,  1998,  the  Fund  had a net
investment  loss of $169,835 as compared to net investment  income of $5,492,518
for the same period in 1997.  The increase in net investment  loss  represents a
decrease  in  interest  and  discount  income  received  by the Fund,  which was
partially offset by a decrease in Investment  Advisory Fees, Legal Fees and Loan
Fee amortization during the three months ended September 30, 1998.
 
     As  compensation  for  services  rendered  to the  Fund,  each of the three
Independent   General   Partners   receives   $40,000   annually  in   quarterly
installments,  $1,000 for each  meeting of the  General  Partners  attended  and
$1,000 for each committee  meeting attended ($500 if a committee meeting is held
on the same day as a meeting of the General Partners) plus reimbursement for any
legal and  out-of-pocket  expenses.  Compensation  for the  Independent  General
Partners is reviewed annually by the Individual General Partners.
<PAGE>
     The  expiration  of the  Fund's  term on June  15,  1998,  has  caused  the
Management Agreement between the Investment Adviser and the Fund to expire. As a
result, the Investment Advisor is no longer receiving compensationn for services
rendered effective July 1, 1998,  however,  the Investment Adviser has agreed to
provide  investment  advisory  services  to  the  Fund  as  needed  until  final
liquidation.

     The  Investment  Adviser  provided for the  identification,  management and
liquidation of investments for the Fund. As compensation  for services  rendered
to the Fund, the Investment  Adviser received a quarterly fee at the annual rate
of $1.2 million. During 1998, the Fund paid $600,000 in Investment Advisory Fees
to Thomas H. Lee  Advisers  I. Such fees have  ceased on July 1,  1998.  For the
three and nine  months  ended  September  30,  1997,  the Fund  paid  Investment
Advisory Fees of $300,000 and $893,717, respectively.

     In accordance with the Partnership  Agreement,  the Fund  Administrator  is
being  reimbursed  by the  Fund for 100% of  administrative  expenses  incurred.
Actual  out-of-pocket  expenses  ("reimbursable  expenses") primarily consist of
printing,  audits, tax preparation and custodian fees. For the nine months ended
September  30,  1998 and  1997,  reimbursable  expenses  totalled  $428,046  and
$402,544,  respectively. 

     Although the Fund's term expired on June 15, 1998,  the Fund  Administrator
continues  to  earn  a  fee  and  continues  to  perform  all   operational  and
administrative  services  required by the Fund until the Fund is terminated  and
all such administrative functions are no longer required.

     For the nine months ended  September  30, 1998 and 1997,  the Fund incurred
$111,621 and $212,890,  respectively,  in Independent General Partners' Fees and
Expenses.  For the three months ended  September 30, 1998 and 1997,  Independent
General Partner's Fees and Expenses totalled $33,000 and $42,292, respectively.

     The Fund's Credit  Facility,  which provided the Fund with a maximum credit
facility of $140 million was due to expire on July 31, 1998, however, the credit
agreement was amended to instead  expire at June 30, 1998.  All fees incurred in
connection  with the credit  agreement have been fully  amortized as of June 30,
1998.  Such  amortization  amounted to $384,079 during the six months ended June
30, 1998.

     The Fund paid Unused Commitment Fees of 1/2 of 1% per annum during the nine
months ended September 30, 1998 of $18,854.

     Legal and  Professional  fees paid by the Fund  consist  primarily of legal
fees incurred in conjunction  with litigation.  Legal and Professional  Fees for
the nine months ended  September  30, 1998 and 1997 were  $29,148 and  $864,566,
respectively.  For the three months ended September 30, 1998 and 1997, Legal and
Professional Fees were $28,774 and $216,561,  respectively. The decrease in 1998
as compared to 1997 is attributable  to the decrease in legal expenses  incurred
and the settlement of litigation.

Net Assets
  
     The Fund's net assets decreased by $53,683,506 during the nine months ended
September 30, 1998, due to a net investment loss of $2,260,679,  realized losses
of $9,556,977 and cash  distributions of $60,813,036 which was partically offset
by net unrealized appreciation of $18,947,186

Unrealized Appreciation and Depreciation and Non-Accrual of Investments

     For the nine  months  ended  September  30,  1998,  the Fund  recorded  net
unrealized  appreciation  of $18.9  million,  all of which was a reversal of net
unrealized depreciation for investments sold.

    For additional  information,  please refer to the  Supplemental  Schedule of
Unrealized Appreciation and Depreciation - Schedule 2.

     The  information   presented  herein  is  based  on  pertinent  information
available to the Managing General Partner and Investment Adviser as of September
30, 1998.  Although the Managing General Partner and Investment  Adviser are not
aware of any factors not disclosed  herein that would  significantly  affect the
estimated  fair  value  amounts,  such  amounts  have not  been  comprehensively
revalued  since  that  time;  and the  current  estimated  fair  value  of these
investments may have changed significantly since that point in time.

     For additional  information,  please refer to the Supplemental  Schedule of
Unrealized Appreciation and Depreciation - Schedule 2.

Realized Gains and Losses

     The net  realized  loss on  investments  sold during the nine months  ended
September 30, 1998 was $9,556,977 compared to a net realized gains of $5,795,392
for the same period in 1997.

    For additional  information,  please refer to the  Supplemental  Schedule of
Realized Gains and Losses - Schedule 1.
<PAGE>

Cash Distributions

     Because all of the Fund's debt holdings were  previously  sold or redeemed,
remaining portfolio income expected to be received by the Fund is not sufficient
to cover the Fund's expenses.  As a result,  any income received will be used to
pay Fund expenses and will not be available for distribution.

     Should a Limited  Partner  decide to sell his Units,  any such sale will be
recorded  on the  books  and  records  of the  Fund  quarterly,  only  upon  the
satisfactory  completion and acceptance of the Fund's transfer documents.  There
can be no assurances  that such  transfer will be effected  before any specified
date. Additionally,  pursuant to the Partnership Agreement,  until a transfer is
recognized,  the Limited  Partner of record (i.e. the transferor) is entitled to
receive all the benefits and burdens of ownership of Units,  and any  transferee
has no rights to distributions  of sale proceeds  generated at any time prior to
the recognition of the transfer and assignment. Accordingly,  Distributable Cash
from  Investments for a quarter and  Distributable  Capital  Proceeds from sales
after  transfer or assignment  have been entered into,  but before such transfer
and  assignment is  recognized,  would be payable to the  transferor and not the
transferee.

<PAGE>
Part II - Other Information

Item 1. Legal Proceedings

     On April 10,  1998,  the  parties  to Seidel v.  Thomas H. Lee,  et al, No.
93-494 (JJF), a putative  class action brought on behalf of limited  partners of
the Fund,  filed with United States District Court for the District of Delaware,
a Stipulation of Settlement preliminarily settling the action.

     The  settlement,  which was  approved by the Court at a hearing on July 16,
1998,  provides for dismissal with prejudice of all claims against the Fund, the
Fund's  Investment  Adviser and certain of its  affiliates,  the Fund's Managing
General  Partner  and  certain of its  affiliates,  and the  Fund's  Independent
General Partners.  Defendants,  other than the Fund, have agreed to provide cash
of $2.5 million and certain other  considerations  to settle the claims asserted
in this action.  The settlement became effective on August 24, 1998.  Defendants
continue to deny all liability in this action.

     Items 2 - 5 are  herewith  omitted as the  response  to all items is either
none or not applicable.


Item 6.  Exhibits and Reports on Form 8-K

(a) Exhibits:

     Exhibit 27  - Financial Data Schedule for the third quarter ended
     September 30, 1998.

(b) Reports on form 8-K:           NONE
                                   

<PAGE>
                           SIGNATURES

    Pursuant  to the  requirements  of  Section  13 or 15(d)  of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the  undersigned,  thereunto  duly  authorized on this 12th day of
November, 1998.


                           ML-LEE ACQUISITION FUND, L.P.

                           By:  Mezzanine Investments, L.P.,
                           Managing General Partner

                           By:  ML Mezzanine Inc.,
                           its General Partner


Dated: November 12, 1998   /s/ Robert Remick
                           Robert Remick
                           Vice President and Treasurer
                           (Chief Financial Officer)

<PAGE>

                           SIGNATURES

   Pursuant  to the  requirements  of  Section  13 or  15(d)  of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the  undersigned,  thereunto  duly  authorized on this 12th day of
November, 1998.


                           ML-LEE ACQUISITION FUND, L.P.

                           By:  Mezzanine Investments, L.P.,
                                Managing General Partner

                           By:  ML Mezzanine Inc.,
                                its General Partner


Dated: November 12, 1998   _____________________________   
                           Robert Remick
                           Vice President and Treasurer
                           (Chief Financial Officer)