UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549

                                 FORM 10-Q


[X] Quarterly Report pursuant to Section 13 or 15 (d) of the Securities 
    Exchange Act of 1934

               For the Quarterly Period Ended March 31, 1997

                                    or

[ ] Transition Report pursuant to Section 13 or 15 (d) of the Securities
    Exchange Act of 1934

        For the transition period from             to             


                         Commission File #0-16790


                    Inland's Monthly Income Fund, L.P.
          (Exact name of registrant as specified in its charter)


          Delaware                              #36-3525989
(State or other jurisdiction        (I.R.S. Employer Identification Number)
 of incorporation or organization)


2901 Butterfield Road, Oak Brook, Illinois                 60521
(Address of principal executive office)                   (Zip code)


     Registrant's telephone number, including area code:  630-218-8000


                                  N/A                    
              (Former name, former address and former fiscal
                    year, if changed since last report)


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






                                    -1-



                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                                Balance Sheets

                     March 31, 1997 and December 31, 1996
                                  (unaudited)

                                    Assets
                                    ------

                                                       1997          1996
Current assets:                                        ----          ----
  Cash and cash equivalents (Note 1).............. $   390,087       357,749
  Accounts and rents receivable...................      62,641        69,819
  Mortgage interest receivable....................      63,291        70,259
  Current portion of mortgage loans receivable....      78,757        77,430
  Current portion of deferred rent receivable.....      12,503        12,503
  Other assets....................................       1,727         4,013
                                                   ------------  ------------
    Total current assets..........................     609,006       591,773
                                                   ------------  ------------
Investment properties (including acquisition
    fees paid to Affiliates of $1,738,621)
    (Notes 1 and 3):
  Land............................................   2,697,394     2,697,394
  Buildings and improvements......................  15,592,680    15,592,680
  Tenant improvements.............................     749,447       749,447
                                                   ------------  ------------
                                                    19,039,521    19,039,521
  Less accumulated depreciation...................   4,626,413     4,496,365
                                                   ------------  ------------
    Net investment properties.....................  14,413,108    14,543,156
                                                   ------------  ------------
Other assets:
  Mortgage loans receivable, less current portion.   8,474,075     8,494,670
  Deferred loan fees (net of accumulated
    amortization of $23,918 and $22,761 at
    March 31, 1997 and December 31, 1996,
    respectively) (Note 1)........................      22,370        23,527
  Deferred leasing fees (including $219,451
    paid to Affiliates) (net of accumulated
    amortization of $174,484 and $169,227 at
    March 31, 1997 and December 31, 1996,
    respectively) (Note 1)........................     169,903       175,160
  Deferred rent receivable, less current portion
    (Notes 1 and 2)...............................     429,826       448,027
                                                   ------------  ------------
    Total other assets............................   9,096,174     9,141,384
                                                   ------------  ------------
Total assets...................................... $24,118,288    24,276,313
                                                   ============  ============



                See accompanying notes to financial statements.


                                    -2-



                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                                Balance Sheets
                                  (continued)

                     March 31, 1997 and December 31, 1996
                                  (unaudited)

                       Liabilities and Partners' Capital
                       ---------------------------------
                                                       1997          1996
Current liabilities:                                   ----          ----
  Accounts payable and accrued expenses........... $    43,667        22,211
  Accrued real estate taxes.......................      74,553        59,114
  Distributions payable (Note 4)..................     198,824       198,790
  Due to Affiliates (Note 3)......................      20,157         2,752
  Deposits held for others........................     127,156        99,250
  Current portion of long-term debt...............      37,722        36,817
  Current portion of deferred gain on sale of
    investment property...........................      22,666        20,799
                                                   ------------  ------------
    Total current liabilities.....................     524,745       439,733

Unearned income (Note 1)..........................     136,134        69,264
Long-term debt, less current portion..............   1,520,002     1,529,779
Deferred gain on sale of investment property,
  less current portion............................   2,498,553     2,506,086
                                                   ------------  ------------
  Total liabilities...............................   4,679,434     4,544,862
                                                   ------------  ------------
Partners' capital (Notes 1, 3 and 4):
  General Partner:
    Capital contribution..........................         500           500
    Supplemental Capital Contributions............   2,095,863     2,095,863
    Supplemental capital distributions to
      Limited Partners............................  (2,095,863)   (2,095,863)
    Cumulative net loss...........................     (36,743)      (36,743)
                                                   ------------  ------------
                                                       (36,243)      (36,243)
  Limited Partners:                                ------------  ------------
    Units of $500. Authorized 60,000 Units,
      59,286 Units outstanding (net of offering
      costs of $3,289,242, of which $388,902 was
      paid to Affiliates).........................  26,353,582    26,353,582
    Supplemental Capital Contributions from
      General Partner.............................   2,095,863     2,095,863
    Cumulative net income.........................  12,903,087    12,542,734
    Cumulative distributions...................... (21,877,435)  (21,224,485)
                                                   ------------  ------------
                                                    19,475,097    19,767,694
                                                   ------------  ------------
    Total Partners' capital.......................  19,438,854    19,731,451
                                                   ------------  ------------
Total liabilities and Partners' capital........... $24,118,288    24,276,313
                                                   ============  ============

                See accompanying notes to financial statements.


                                    -3-



                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                           Statements of Operations

              For the three months ended March 31, 1997 and 1996
                                  (unaudited)



                                                       1997          1996
Income:                                                ----          ----
  Rental income (Notes 1 and 2)................... $   475,176       490,310
  Additional rental income........................      10,897        19,627
  Interest income.................................     189,212       191,945 
  Other income....................................       1,325          -
                                                   ------------  ------------
                                                       676,610       701,882
                                                   ------------  ------------
Expenses:
  Professional services to Affiliates.............       3,736         3,591
  Professional services to non-affiliates.........      25,615        28,850
  General and administrative expenses to
    Affiliates....................................      11,572        11,828
  General and administrative expenses to
    non-affiliates................................      16,659        13,565
  Property operating expenses to Affiliates.......       8,104         7,367
  Property operating expenses to non-affiliates...      81,733        45,823
  Interest expense to non-affiliates..............      38,042        38,870
  Depreciation....................................     130,048       130,118
  Amortization....................................       6,414         6,415
                                                   ------------  ------------
                                                       321,923       286,427
                                                   ------------  ------------
Operating income..................................     354,687       415,455
Gain on sale of investment property...............       5,666         5,200
                                                   ------------  ------------
Net income........................................ $   360,353       420,655
                                                   ============  ============

Net income allocated to:
  General Partner.................................        -             -
  Limited Partners................................     360,353       420,655
                                                   ------------  ------------
Net income........................................ $   360,353       420,655
                                                   ============  ============

Net income allocated to Limited Partners per
  weighted average of Limited Partnership Units
  of 59,286....................................... $      6.08          7.10
                                                   ============  ============




                See accompanying notes to financial statements.


                                    -4-



                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                           Statements of Cash Flows

              For the three months ended March 31, 1997 and 1996
                                  (unaudited)


                                                       1997          1996
                                                       ----          ----
Cash flows from operating activities:
  Net income...................................... $   360,353       420,655
  Adjustments to reconcile net income to net cash
      provided by operating activities:
    Gain on sale of investment property...........      (5,666)       (5,200)
    Depreciation..................................     130,048       130,118
    Amortization..................................       6,414         6,415
    Changes in assets and liabilities:
      Accounts and rents receivable...............       7,178       (11,308)
      Mortgage interest receivable................       6,968        (1,603)
      Other current assets........................       2,286         2,057
      Deferred rent receivable....................      18,201        (1,065)
      Accounts payable and accrued expenses.......      21,456        24,710
      Accrued real estate taxes...................      15,439        14,490
      Due to Affiliates...........................      17,405         8,479
      Unearned income.............................      66,870        (2,164)
                                                   ------------  ------------
Net cash provided by operating activities.........     646,952       585,584
                                                   ------------  ------------
Cash flows from investing activities:
  Principal payments received on mortgage
    loans receivable..............................      19,268        16,917
                                                   ------------  ------------
Net cash provided by investing activities.........      19,268        16,917
                                                   ------------  ------------
Cash flows from financing activities:
  Cash distributions..............................    (652,916)     (584,096)
  Deposits held for others........................      27,906        16,573
  Principal payments of long-term debt............      (8,872)       (8,051)
                                                   ------------  ------------
Net cash used in financing activities.............    (633,882)     (575,574)
                                                   ------------  ------------
Net increase in cash and cash equivalents.........      32,338        26,927
Cash and cash equivalents at beginning of period..     357,749       440,767
                                                   ------------  ------------
Cash and cash equivalents at end of period........ $   390,087       467,694
                                                   ============  ============


Cash paid for interest............................ $    38,114        38,935
                                                   ============  ============



                See accompanying notes to financial statements.


                                    -5-



                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements

                                March 31, 1997
                                  (unaudited)


Readers of this  Quarterly  Report  should  refer  to the Partnership's audited
financial statements for the  fiscal  year  ended  December 31, 1996, which are
included  in  the  Partnership's  1996   Annual  Report,  as  certain  footnote
disclosures which would substantially duplicate those contained in such audited
financial statements have been omitted from this Report.

(1) Organization and Basis of Accounting

Inland's Monthly Income Fund, L.P. (the "Partnership"), was formed on March 26,
1987 pursuant to  the  Delaware  Revised  Uniform  Limited  Partnership Act, to
invest in improved residential,  retail,  industrial and other income producing
properties.  On August 3, 1987, the Partnership commenced an Offering of 50,000
(subject to an  increase  up  to  60,000)  Limited  Partnership Units ("Units")
pursuant to a Registration  Statement  under  the  Securities  Act of 1933. The
Offering terminated on August 3, 1988, with total sales of 59,999 Units at $500
per Unit, resulting in  gross  offering  proceeds of $29,999,500, not including
the General Partner's contribution of $500.   All of the holders of these Units
were admitted to the Partnership.   The  Partnership has repurchased a total of
713  Units  for  $356,676  from  various  Limited  Partners  through  the  Unit
Repurchase Program.  There are no  funds  remaining for the repurchase of Units
through this program.  The  Limited  Partners  of  the Partnership share in the
benefits  of  ownership  of  the  Partnership's  real  property  investments in
proportion to  the  number  of  Units  held.    Inland  Real  Estate Investment
Corporation is the General Partner.

The preparation of financial  statements  in conformity with generally accepted
accounting principals requires  management  to  make  estimates and assumptions
that affect the reported amounts  of  assets and liabilities and disclosures of
contingent assets and liabilities at  the  date of the financial statements and
the reported amounts  of  revenues  and  expenses  during the reporting period.
Actual results could differ from these estimates.

The Partnership adopted  Statement  of  Financial  Accounting Standards No. 121
"Accounting for the Impairment of  Long-Lived  Assets and for Long-Lived Assets
to be Disposed of" ("SFAS 121") as required in the first quarter of 1996.  SFAS
121 requires that the Partnership record  an impairment loss on its property to
be held for investment whenever  its  carrying  value cannot be fully recovered
through estimated undiscounted  future  cash  flows  from  their operations and
sale.  The  amount  of  the  impairment  loss  to  be  recognized  would be the
difference between the property's  carrying  value and the property's estimated
fair value.    The  adoption  of  SFAS  121  did  not  have  any  effect on the
Partnership's financial position, results of operations or liquidity.   

Offering costs have been offset against the Limited Partners' capital accounts.




                                    -6-



                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)

                                March 31, 1997
                                  (unaudited)


Depreciation expense  is  computed  using  the  straight-line  method  over the
following estimated useful lives:
                                                   Years
                                                   -----
        Buildings and improvements................ 30 to 40
        Furniture and fixtures.................... 5 to 12
        Tenant improvements....................... lease term

Maintenance  and  repair  expenses  are  charged  to  operations  as  incurred.
Significant improvements are capitalized  and  depreciated over their estimated
useful lives.

The Partnership  considers  all  highly  liquid  investments  purchased  with a
maturity of three months or less to be cash equivalents and are carried at cost
which approximates market.

Deferred leasing fees are amortized on  a  straight-line basis over the term of
the related lease.  Deferred loan  fees  are amortized on a straight-line basis
over the term of the related loan.

Rental income is recognized  on  a  straight-line  basis  over the term of each
lease.  The difference between rental  income earned on the straight-line basis
and the cash rent due under the  provisions of the lease agreements is recorded
as deferred rent receivable.

No provision for Federal income taxes  has  been made as the liability for such
taxes is that of the Partners rather than the Partnership.

In  the  opinion  of  management,  the  financial  statements  contain  all the
adjustments necessary, which  are  of  a  normal  recurring  nature, to present
fairly the  financial  position  and  results  of  operations  for  the periods
presented herein.  Results of interim periods are not necessarily indicative of
results to be expected for the year.


(2) Deferred Rent Receivable

Certain tenant leases contain provisions  providing for stepped rent increases.
Generally accepted accounting principles require that rental income be recorded
for the  period  of  occupancy  on  a  straight-line  basis.   The accompanying
financial statements include a decrease  of  $18,201  and an increase of $1,065
for 1997 and 1996, respectively, of  rental  income for the period of occupancy
for which stepped rent  increases  apply  and  $442,329 and $460,530 in related
deferred  rent  receivable  as  of  March  31,  1997  and  December  31,  1996,
respectively.  These amounts will  be  collected  over the terms of the related
leases as scheduled  rent  payments  are  made.    Deferred  rent receivable of
$16,341 was written off against rental  income for the three months ended March
31, 1997 due to modifications of a lease at McHenry Plaza Shopping Center.


                                    -7-



                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)

                                March 31, 1997
                                  (unaudited)


(3) Transactions with Affiliates

The General  Partner  and  its  Affiliates  are  entitled  to reimbursement for
salaries and expenses of employees  of  the  General Partner and its Affiliates
relating to the administration of the  Partnership.  Such costs are included in
professional services and general and administrative expenses to Affiliates, of
which $17,883 and $2,752 was unpaid  at  March  31, 1997 and December 31, 1996,
respectively.

An Affiliate of the General Partner  is entitled to receive Property Management
Fees for  management  and  leasing  services.    The  Partnership  has incurred
property management fees of $8,104 and  $7,367 for the three months ended March
31, 1997 and 1996, respectively, of which $2,274 was unpaid at March 31, 1997.


(4) Subsequent Events

During April 1997,  the  Partnership  paid  a  distribution  of $198,824 to the
Limited Partners.




























                                    -8-



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

Certain statements in this  "Management's  Discussion and Analysis of Financial
Condition and Results of Operations" and  elsewhere in this quarterly report on
Form 10-Q constitute of "forward-looking  statements" within the meaning of the
Federal Private Securities  Litigation  Reform  Act  of  1995.   These forward-
looking statements involve  known  and  unknown  risks, uncertainties and other
factors which  may  cause  the  Partnership's  actual  results,  performance or
achievements to be materially different from any future results, performance or
achievements expressed or implied  by  these forward-looking statements.  These
factors include,  among  other  things,  federal,  state  or local regulations;
adverse changes in general economic  or local conditions; inability of borrower
to meet financial  obligations;  uninsured  losses;  and potential conflicts of
interest between the  Partnership  and  its  Affiliates,  including the General
Partner.

Liquidity and Capital Resources

On August 3, 1987, the  Partnership  commenced an Offering of 50,000 (increased
to 60,000) Limited Partnership  Units  pursuant  to a Registration Statement on
Form S-11 under the Securities Act  of  1933. The Offering terminated on August
3, 1988, with a total of  59,999  Units  being  sold  to the public at $500 per
Unit, resulting  in  $29,999,500  gross  offering  proceeds,  not including the
General Partner, of which  $25,831,542  had  been invested in seven properties.
In addition, proceeds were used to repay advances from the General Partner, pay
offering and organization costs and make distributions to the Limited Partners.

At March 31, 1997, the Partnership  had  cash and cash equivalents of $390,087.
The Partnership intends to use such funds for distributions and working capital
requirements.

The properties owned by the  Partnership,  along  with the interest received on
the Schaumburg Terrace mortgage receivables, are generating cash flow in excess
of the 8% annualized distributions  to  the Limited Partners (paid monthly), in
addition to covering all  the  operating  expenses  of  the Partnership. To the
extent that the cash flow is  insufficient to meet the Partnership's needs, the
Partnership may rely  on  Supplemental  Capital  Contributions from the General
Partner, advances from  Affiliates  of  the  General  Partner, other short-term
financing, or may sell one or more of the properties.

Results of Operations

As of March 31, 1997, the  Partnership  owns six operating properties.  Five of
these properties were  leased  on  a  "triple-net"  basis  which means that all
expenses of the property are  passed  through  to  the tenant.  The Partnership
also owns a shopping center, McHenry  Plaza.  The leases of the shopping center
provide that the Partnership  be  responsible  for maintenance of the structure
and the parking lot and the  tenants  are required to reimburse the Partnership
for portions of insurance, real estate taxes and common area maintenance.

Overall, rental income and  additional  rental  income  decreased for the three
months ended March 31, 1997, as  compared  to  the three months ended March 31,
1996, primarily due to the write off  of deferred rent receivable relating to a
lease modification at McHenry Plaza Shopping Center.

Professional services to non-affiliates  decreased  for  the three months ended
March 31, 1997, as compared to  the  three  months ended March 31, 1996, due to
decreases  in  accounting  and  other  professional  services  required  by the
Partnership.


                                    -9-



General and administrative expenses  to  non-affiliates increased for the three
months ended March 31, 1997, as  compared  to  the three months ended March 31,
1996, due to increases in postage, supplies and printing expenses.

Property operating expenses to  non-affiliates  increased  for the three months
ended March 31, 1997, as compared to the three months ended March 31, 1996, due
to the increase  in  utilities,  insurance,  real  estate  taxes and repair and
maintenance in regards to new tenants at McHenry Plaza.

The gain on the sale of investment property is the result of deferred gain from
the Schaumburg Terrace condominium sales  being  recognized as cash is received
on  the  related  financing  extended  by  the  Partnership  to  the individual
purchasers.

The following is a list  of  approximate occupancy levels for the Partnership's
investment properties as of the end of each quarter during 1996 and 1997:

                                    1996                        1997
                          ------------------------    ------------------------
                            at    at    at    at        at    at    at    at
      Properties           03/31 06/30 09/30 12/31     03/31 06/30 09/30 12/31
      ----------           ----- ----- ----- -----     ----- ----- ----- -----
McHenry Plaza               62%   62%   62%   69%       72%*
McHenry, Illinois

Douglas Living &
Retirement Center          100%  100%  100%  100%      100%
Mattoon, Illinois

Hillside Living Center     100%  100%  100%  100%      100%
Yorkville, Illinois

Scandinavian Health Spa    100%  100%  100%  100%      100%
Westlake, Ohio

Rantoul Wal-Mart           100%  100%  100%  100%      100%
Rantoul, Illinois

Duncan Wal-Mart            100%  100%  100%  100%      100%
Duncan, Oklahoma

* As of the date of  this  report,  McHenry Plaza Shopping Center's approximate
  occupancy level has increased to 79%  from  the addition of three new tenants
  aggregating 4,021 square feet.


                          PART II - Other Information

Items 1 through 5 are omitted because  of the absence of conditions under which
they are required.

Item 6.  Exhibits and Reports on Form 8-K

     (a) Exhibits:

         (27) Financial Data Schedule

     (b) Reports on Form 8-K:

         None


                                   -10-



                                  SIGNATURES



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, thereunto duly authorized.



                            INLAND'S MONTHLY INCOME FUND, L.P.

                            By:   Inland Real Estate Investment Corporation
                                  General Partner


                                  /S/ ROBERT D. PARKS

                            By:   Robert D. Parks
                                  Chairman
                            Date: May 14, 1997


                                  /S/ PATRICIA A. CHALLENGER

                            By:   Patricia A. Challenger
                                  Senior Vice President
                            Date: May 14, 1997


                                  /S/ KELLY TUCEK

                            By:   Kelly Tucek
                                  Principal Financial Officer and
                                  Principal Accounting Officer
                            Date: May 14, 1997





















                                   -11-