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

                                 FORM 10-Q


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

             For the Quarterly Period Ended September 30, 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                 60523
(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

                   September 30, 1997 and December 31, 1996
                                  (unaudited)

                                    Assets
                                    ------

                                                       1997          1996
Current assets:                                        ----          ----
  Cash and cash equivalents (Note 1).............. $   240,237       357,749
  Accounts and rents receivable...................      41,494        69,819
  Mortgage interest receivable....................      73,382        70,259
  Current portion of mortgage loans receivable....      83,281        77,430
  Current portion of deferred rent receivable.....      11,222        12,503
  Other assets....................................      10,363         4,013
                                                   ------------  ------------
    Total current assets..........................     459,979       591,773
                                                   ------------  ------------
Investment properties (including acquisition fees
    paid to Affiliates of $1,736,163 and
    $1,738,621 at September 30, 1997 and December
    31, 1996, respectively) (Note 1):
  Land............................................   2,672,620     2,697,394
  Buildings and improvements......................  15,619,180    15,592,680
  Tenant improvements.............................     749,447       749,447
                                                   ------------  ------------
                                                    19,041,247    19,039,521
  Less accumulated depreciation...................   4,886,508     4,496,365
                                                   ------------  ------------
    Net investment properties.....................  14,154,739    14,543,156
                                                   ------------  ------------
Other assets:
  Mortgage loans receivable, less current portion.   7,959,690     8,494,670
  Mortgage loans in substantive foreclosure
   (Note 4).......................................     472,507          -
  Deferred loan fees (net of accumulated
    amortization of $26,233 and $22,761 at
    September 30, 1997 and December 31, 1996,
    respectively) (Note 1)........................      20,055        23,527
  Deferred leasing fees (including $219,451
    paid to Affiliates) (net of accumulated
    amortization of $184,999 and $169,227 at
    September 30, 1997 and December 31, 1996,
    respectively) (Note 1)........................     159,388       175,160
  Deferred rent receivable, less current portion
    (Notes 1 and 2)...............................     435,016       448,027
                                                   ------------  ------------
    Total other assets............................   9,046,656     9,141,384
                                                   ------------  ------------
Total assets...................................... $23,661,374    24,276,313
                                                   ============  ============

                See accompanying notes to financial statements.


                                    -2-


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

                                Balance Sheets
                                  (continued)

                   September 30, 1997 and December 31, 1996
                                  (unaudited)

                       Liabilities and Partners' Capital
                       ---------------------------------
                                                       1997          1996
Current liabilities:                                   ----          ----
  Accounts payable and accrued expenses........... $    18,122        22,211
  Accrued real estate taxes.......................      45,644        59,114
  Distributions payable (Note 5)..................     192,411       198,790
  Due to Affiliates (Note 3)......................      12,402         2,752
  Deposits held for others........................      74,243        99,250
  Current portion of long-term debt...............      39,599        36,817
  Current portion of deferred gain on sale of
    investment property...........................      22,666        20,799
                                                   ------------  ------------
    Total current liabilities.....................     405,087       439,733

Deferred loan fees (Note 1).......................      62,771        69,264
Long-term debt, less current portion..............   1,499,721     1,529,779
Deferred gain on sale of investment property,
  less current portion............................   2,487,220     2,506,086
                                                   ------------  ------------
  Total liabilities...............................   4,454,799     4,544,862
                                                   ------------  ------------
Partners' capital (Notes 1 and 5):
  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.........................  13,844,511    12,542,734
    Cumulative distributions...................... (23,051,138)  (21,224,485)
                                                   ------------  ------------
                                                    19,242,818    19,767,694
                                                   ------------  ------------
    Total Partners' capital.......................  19,206,575    19,731,451
                                                   ------------  ------------
Total liabilities and Partners' capital........... $23,661,374    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 and nine months ended September 30, 1997 and 1996
                                  (unaudited)

                                        Three months            Nine months
                                           ended                  ended
                                        September 30,          September 30,
                                        -------------          -------------
                                       1997       1996       1997       1996
Income:                                ----       ----       ----       ----
  Rental income (Notes 1 and 2).... $ 506,877    486,125  1,471,420  1,468,626
  Additional rental income.........    16,225      2,975     33,740     34,549
  Interest income..................   186,985    188,197    563,733    576,016
  Other income.....................      -          -         1,325       -
                                    ---------- ---------- ---------- ----------
                                      710,087    677,297  2,070,218  2,079,191
Expenses:                           ---------- ---------- ---------- ----------
  Professional services to
    Affiliates.....................     3,500      2,710     10,306      9,391
  Professional services to
    non-affiliates.................    (4,409)      -        28,515     27,305
  General and administrative
    expenses to Affiliates.........     9,539      8,911     27,156     26,381
  General and administrative
    expenses to non-affiliates.....     1,394      2,453     21,899     20,952
  Property operating expenses to
    Affiliates.....................     8,389      7,083     24,333     21,992
  Property operating expenses to
    non-affiliates.................    35,513    (36,926)   165,188     41,153
  Interest expense to
    non-affiliates.................    37,596     38,466    113,461    116,006
  Depreciation.....................   130,047    130,117    390,143    390,353
  Amortization.....................     6,414      6,414     19,244     19,243
                                    ---------- ---------- ---------- ----------
                                      227,983    159,228    800,245    672,776
                                    ---------- ---------- ---------- ----------
Operating income...................   482,104    518,069  1,269,973  1,406,415
Gain on sale of investment
  property.........................    20,471      5,200     31,804     15,599
                                    ---------- ---------- ---------- ----------
Net income......................... $ 502,575    523,269  1,301,777  1,422,014
                                    ========== ========== =========  ==========
Net income allocated to:
  General Partner..................      -          -          -          -
  Limited Partners.................   502,575    523,269  1,301,777  1,422,014
                                    ---------- ---------- ---------- ----------
Net income......................... $ 502,575    523,269  1,301,777  1,422,014
                                    ========== ========== =========  ==========

Net income per weighted average
  Limited Partner Units of 59,286.. $    8.48       8.83     21.96       23.99
                                    ========== ========== =========  ==========

                See accompanying notes to financial statements.


                                    -4-


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

                           Statements of Cash Flows

             For the nine months ended September 30, 1997 and 1996
                                  (unaudited)


                                                       1997          1996
                                                       ----          ----
Cash flows from operating activities:
  Net income...................................... $ 1,301,777     1,422,014
  Adjustments to reconcile net income to net cash
      provided by operating activities:
    Gain on sale of investment property...........     (31,804)      (15,599)
    Depreciation..................................     390,143       390,353
    Amortization..................................      19,244        19,243
    Changes in assets and liabilities:
      Accounts and rents receivable...............      28,325        (3,561)
      Mortgage interest receivable................      (3,123)       (4,763)
      Other current assets........................      (6,350)       (2,800)
      Deferred rent receivable....................      14,292        (2,854)
      Accounts payable and accrued expenses.......      (4,089)       (9,443)
      Accrued real estate taxes...................     (13,470)      (72,669)
      Due to Affiliates...........................       9,650        (8,816)
      Deferred loan fees..........................      (6,493)       (6,493)
                                                   ------------  ------------
Net cash provided by operating activities.........   1,698,102     1,704,612
                                                   ------------  ------------
Cash flows from investing activities:
  Proceeds from sale of investment property.......      39,579          -
  Principal payments received on mortgage
    loans receivable..............................      56,622        51,847
  Capital expenditures............................     (26,500)      (22,670)
                                                   ------------  ------------
Net cash provided by investing activities.........      69,701        29,177
                                                   ------------  ------------
Cash flows from financing activities:
  Cash distributions..............................  (1,833,032)   (1,764,014)
  Deposits held for others........................     (25,007)      (40,321)
  Principal payments of long-term debt............     (27,276)      (24,751)
                                                   ------------  ------------
Net cash used in financing activities.............  (1,885,315)   (1,829,086)
                                                   ------------  ------------
Net decrease in cash and cash equivalents.........    (117,512)      (95,297)
Cash and cash equivalents at beginning of period..     357,749       440,767
                                                   ------------  ------------
Cash and cash equivalents at end of period........ $   240,237       345,470
                                                   ============  ============

Supplemental disclosure of non-cash investing activities:

  Cash paid for interest.......................... $   113,683       116,207
                                                   ============  ============

                See accompanying notes to financial statements.


                                    -5-


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

                         Notes to Financial Statements

                              September 30, 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.

Statement of Financial Accounting Standards  No.  121 ("SFAS 121") requires the
Partnership to 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.    As of September 30, 1997, the
Partnership has not recognized any such impairment. 

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)

                              September 30, 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  $14,292  and an increase of $2,854
for 1997 and 1996, respectively, of  rental  income for the period of occupancy
for which stepped rent  increases  apply  and  $446,238 and $460,530 in related
deferred rent receivable  as  of  September  30,  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  nine months ended
September 30, 1997,  due  to  the  restructuring  of  a  lease at McHenry Plaza
Shopping Center.


                                    -7-


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

                         Notes to Financial Statements
                                  (continued)

                              September 30, 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 $12,402 and $2,752  was  unpaid  at  September  30, 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 and
paid property management fees of $24,333  and $21,992 for the nine months ended
September 30, 1997 and 1996, respectively.


(4) Mortgage Loans in Substantive Foreclosure

On June  27,  1997  and  July  1,  1997,  the  Partnership became mortgagee-in-
possession of  two  of  the  thirty-seven  mortgage  loans  receivable totaling
$236,530 and $235,977, respectively, representing approximately 6% of the total
mortgage loans receivable.  The properties are two of the thirty-eight six-unit
condominium buildings  comprising  the  Schaumburg  Terrace condominium complex
which were sold during 1994  and  1995.   The Partnership has begun foreclosure
proceedings to gain title to the properties at which time they will be marketed
for sale.


(5) Subsequent Events

During October 1997, the  Partnership  paid  a  distribution of $192,411 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 September  30,  1997,  the  Partnership  had  cash  and  cash equivalents of
$240,237. 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 sufficient cash
flow to meet 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 September 30, 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.








                                    -9-


Rental and additional income increased for the three months ended September 30,
1997, as compared to  the  three  months  ended  September  30, 1996, due to an
increase in occupancy at McHenry Plaza.    As of September 30, 1997, there were
two vacant spaces at McHenry Plaza for 6,030 square feet.

Interest income decreased for  the  three  and  nine months ended September 30,
1997, as compared to the three and nine months ended September 30, 1996, due to
a decrease in cash available to be used for short-term investments.

Professional services to Affiliates  increased  for  the  three and nine months
ended September 30,  1997,  as  compared  to  the  three  and nine months ended
September 30, 1996, due to an  increase  in accounting services required by the
Partnership.  Professional services  to  non-affiliates  increased for the nine
months ended September 30, 1997, as compared to the nine months ended September
30, 1996, due to an increase in accounting fees.

General and administrative expenses to  Affiliates  increased for the three and
nine months ended September 30, 1997, as  compared to the three and nine months
ended September 30, 1996,  due  to  an  increase  in postage. This increase was
partially  offset  by  decreases  in  data  processing  and  investor  services
expenses.  General and administrative  expenses to non-affiliates increased for
the three and nine months ended  September  30,  1997, as compared to the three
and nine months ended  September  30,  1996,  due  to increases in supplies and
printing expenses.

Property operating expenses  to  Affiliates  increased  for  the three and nine
months ended September 30, 1997, as compared to the three and nine months ended
September 30, 1996, due  to  improved  occupancy  and  an  increase in net rent
collections  at  McHenry  Plaza  resulting  in  higher  management  fees  paid.
Property operating expenses to non-affiliates  increased for the three and nine
months ended September 30, 1997, as compared to the three and nine months ended
September 30, 1996, due  to  the  increase  in  various  expense items, such as
utilities, supplies, insurance and  repair  and maintenance, relating to vacant
and retenanted spaces at McHenry  Plaza  Shopping  Center.  Also, in 1996, real
estate tax  reductions  relating  to  prior  years  for  the Schaumburg Terrace
Apartment complex  were  received  and  recorded  as  a  reduction  in property
operating expenses  to  non-affiliates  for  the  three  and  nine months ended
September 30, 1996, producing  an  abnormal  and non-recurring variance between
1996 and 1997 and makes the comparison illogical.

The gain on the sale  of  investment  property  recorded for the three and nine
months ended September  30,  1997  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
and the sale of .344 acre of land adjacent to the Hillside Living Center.













                                   -10-


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%   68%   89%
McHenry, Illinois

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

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

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

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

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



                          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















                                   -11-


                                  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: November 12, 1997


                                  /S/ PATRICIA A. CHALLENGER

                            By:   Patricia A. Challenger
                                  Senior Vice President
                            Date: November 12, 1997


                                  /S/ KELLY TUCEK

                            By:   Kelly Tucek
                                  Principal Financial Officer and
                                  Principal Accounting Officer
                            Date: November 12, 1997






















                                   -12-