<PAGE>
 
                                   FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
 

(Mark One)
[x]  Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the quarterly period ended September 30, 1996
                                           ------------------

[ ]  Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from ___________ to __________

                       Commission File Number:  0-15714

                       JONES CABLE INCOME FUND 1-C, LTD.
--------------------------------------------------------------------------------
               Exact name of registrant as specified in charter

Colorado                                                              84-1010419
--------------------------------------------------------------------------------
State of organization                                      I.R.S. employer I.D.#

   9697 East Mineral Avenue, P.O. Box 3309, Englewood, Colorado  80155-3309
   ------------------------------------------------------------------------
                     Address of principal executive office

                                (303) 792-3111
                        ------------------------------
                         Registrant's telephone number

Indicate by check mark whether the registrant (l) has filed all reports required
to be filed by Section l3 or l5(d) of the Securities Exchange Act of l934 during
the preceding l2 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes    X                                                       No  _______
     -----                                                                
<PAGE>
 
                       JONES CABLE INCOME FUND 1-C, LTD.
                       ---------------------------------
                            (A Limited Partnership)

                     UNAUDITED CONSOLIDATED BALANCE SHEETS
                     -------------------------------------

<TABLE>
<CAPTION>
                                                                           September 30,        December 31,
              ASSETS                                                           1996                1995
              ------                                                       -------------       -------------
<S>                                                                        <C>                 <C>
CASH                                                                       $    321,486          $    880,728

TRADE RECEIVABLES, less allowance for
  doubtful receivables of $71,503 and $65,022
  at September 30, 1996 and December 31, 1995,
  respectively                                                                  510,767               524,740

INVESTMENT IN CABLE TELEVISION PROPERTIES:
  Property, plant and equipment, at cost                                     65,589,937            62,220,451
  Less- accumulated depreciation                                            (32,347,635)          (29,056,927)
                                                                           ------------          ------------

                                                                             33,242,302            33,163,524

  Franchise costs and other intangible assets, net of
    accumulated amortization of $38,090,992 and $35,608,812
    at September 30, 1996 and December 31, 1995, respectively                13,407,278            15,889,458
                                                                           ------------          ------------

     Total investment in cable television
         properties                                                          46,649,580            49,052,982

DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES                                 382,060               385,587
                                                                           ------------          ------------

         Total assets                                                      $ 47,863,893          $ 50,844,037
                                                                           ============          ============
</TABLE>

     The accompanying notes to unaudited consolidated financial statements
     are an integral part of these unaudited consolidated balance sheets.

                                       2
<PAGE>
 
                       JONES CABLE INCOME FUND 1-C, LTD.
                       ---------------------------------
                            (A Limited Partnership)

                     UNAUDITED CONSOLIDATED BALANCE SHEETS
                     -------------------------------------

<TABLE>
<CAPTION>
                                                                       September 30,            December 31,
      LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)                          1996                     1995
      -------------------------------------------                      -------------            -------------
<S>                                                                    <C>                      <C>
LIABILITIES:
  Debt                                                                 $ 43,060,394               $ 43,104,090
  Accounts payable - General Partner                                              -                    109,893
  Trade accounts payable and accrued liabilities                          1,020,853                  1,564,715
  Subscriber prepayments                                                    254,750                    265,446
                                                                       ------------               ------------

     Total liabilities                                                   44,335,997                 45,044,144
                                                                       ------------               ------------

MINORITY INTEREST IN JOINT VENTURE                                        1,444,486                  2,348,059
                                                                       ------------               ------------

PARTNERS' CAPITAL (DEFICIT):
  General Partner-
    Contributed capital                                                       1,000                      1,000
    Accumulated deficit                                                    (221,181)                  (207,497)
    Distributions                                                          (113,443)                  (113,443)
                                                                       ------------               ------------

                                                                           (333,624)                  (319,940)
                                                                       ------------               ------------

  Limited Partners-
    Net contributed capital (85,059 units
      outstanding at September 30, 1996 and
      December 31, 1995)                                                 34,909,262                 34,909,262
    Accumulated deficit                                                 (20,124,582)               (18,769,842)
    Distributions                                                       (12,367,646)               (12,367,646)
                                                                       ------------               ------------

                                                                          2,417,034                  3,771,774
                                                                       ------------               ------------

     Total liabilities and partners' capital (deficit)                 $ 47,863,893               $ 50,844,037
                                                                       ============               ============
</TABLE>

     The accompanying notes to unaudited consolidated financial statements
     are an integral part of these unaudited consolidated balance sheets.
                                        

                                       3
<PAGE>
 
                       JONES CABLE INCOME FUND 1-C, LTD.
                       ---------------------------------
                            (A Limited Partnership)

                UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                -----------------------------------------------

<TABLE>
<CAPTION>
                                                     For the Three Months Ended             For the Nine Months Ended
                                                           September 30,                          September 30,
                                                    ----------------------------           ---------------------------
                                                         1996           1995                   1996          1995
                                                      ----------     ----------             -----------   ------------
 <S>                                                <C>              <C>                    <C>           <C>
  REVENUES                                            $6,200,872     $5,823,421             $18,318,617   $17,027,038

  COSTS AND EXPENSES:
    Operating expenses                                 3,409,393      3,080,335              10,166,199     9,340,225
    Management fees and allocated overhead
      from General Partner                               671,382        691,096               2,084,393     2,058,394
    Depreciation and amortization                      1,830,250      2,306,633               6,013,447     6,749,845
                                                      ----------     ----------             -----------   -----------

  OPERATING INCOME (LOSS)                                289,847       (254,643)                 54,578    (1,121,426)
                                                      ----------     ----------             -----------   -----------

  OTHER INCOME (EXPENSE):
    Interest expense                                    (771,773)      (783,925)             (2,331,270)   (2,559,041)
    Other, net                                           (12,119)       140,522                   4,695       162,424
                                                      ----------     ----------             -----------   -----------

       Total other income (expense)                     (783,892)      (643,403)             (2,326,575)   (2,396,617)
                                                      ----------     ----------             -----------   -----------

  CONSOLIDATED LOSS                                     (494,045)      (898,046)             (2,271,997)   (3,518,043)

  MINORITY INTEREST IN
    CONSOLIDATED LOSS                                    196,481        357,153                 903,573     1,399,126
                                                      ----------     ----------             -----------   -----------

  NET LOSS                                            $ (297,564)    $ (540,893)            $(1,368,424)  $(2,118,917)
                                                      ==========     ==========             ===========   ===========

  ALLOCATION OF NET LOSS:
    General Partner                                   $   (2,975)    $   (5,409)            $   (13,684)  $   (21,189)
                                                      ==========     ==========             ===========   ===========

    Limited Partners                                  $ (294,589)    $ (535,484)            $(1,354,740)  $(2,097,728)
                                                      ==========     ==========             ===========   ===========

  NET LOSS PER LIMITED
    PARTNERSHIP UNIT                                      $(3.46)        $(6.29)                $(15.93)      $(24.66)
                                                      ==========     ==========             ===========   ===========

  WEIGHTED AVERAGE NUMBER
    OF LIMITED PARTNERSHIP
    UNITS OUTSTANDING                                     85,059         85,059                  85,059        85,059
                                                      ==========     ==========             ===========   ===========
</TABLE>

     The accompanying notes to unaudited consolidated financial statements
            are an integral part of these consolidated statements.

                                       4
<PAGE>
 
                       JONES CABLE INCOME FUND 1-C, LTD.
                       ---------------------------------
                            (A Limited Partnership)

                UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                -----------------------------------------------

<TABLE>
<CAPTION>
                                                               For the Nine Months Ended
                                                                     September 30,
                                                              -----------------------------
                                                                  1996              1995
                                                              -------------    ------------
  <S>                                                         <C>              <C>
  CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                                   $(1,368,424)       $(2,118,917)
    Adjustments to reconcile net loss to net cash
      provided by operating activities:
        Depreciation and amortization                            6,013,447          6,749,845
        Minority interest in net loss                             (903,573)        (1,399,126)
        Amortization of interest rate protection contract                -             36,375
        Decrease in trade receivables                               13,973             11,891
        Increase in deposits, prepaid expenses and
           deferred charges                                       (237,032)          (143,986)
        Decrease in accounts payable, accrued liabilities
           and subscriber prepayments                             (554,558)          (241,791)
        Decrease in advances from General Partner                 (109,893)           (27,768)
                                                               -----------        -----------

       Net cash provided by operating activities                 2,853,940          2,866,523
                                                               -----------        -----------

  CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of property and equipment                          (3,369,486)        (3,266,236)
                                                               -----------        -----------

       Net cash used in investing activities                    (3,369,486)        (3,266,236)
                                                               -----------        -----------

  CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from borrowings                                       233,980            865,051
    Repayment of debt                                             (277,676)          (132,422)
                                                               -----------        -----------

       Net cash provided by (used in) financing activities         (43,696)           732,629
                                                               -----------        -----------

  Increase (decrease) in cash                                     (559,242)           332,916

  Cash, beginning of period                                        880,728            309,848
                                                               -----------        -----------

  Cash, end of period                                          $   321,486        $   642,764
                                                               ===========        ===========

  SUPPLEMENTAL CASH FLOW DISCLOSURE:
    Interest paid                                              $ 2,343,576        $ 2,700,010
                                                               ===========        ===========
</TABLE>

     The accompanying notes to unaudited consolidated financial statements
            are an integral part of these consolidated statements.

                                       5
<PAGE>
 
                       JONES CABLE INCOME FUND 1-C, LTD.
                       ---------------------------------
                            (A Limited Partnership)

             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
             ----------------------------------------------------

(1)    This Form 10-Q is being filed in conformity with the SEC requirements for
unaudited financial statements and does not contain all of the necessary
footnote disclosures required for a fair presentation of the Balance Sheets and
Statements of Operations and Cash Flows in conformity with generally accepted
accounting principles. However, in the opinion of management, this data includes
all adjustments, consisting only of normal recurring accruals, necessary to
present fairly the financial position of Jones Cable Income Fund 1-C, Ltd. (the
"Partnership") at September 30, 1996 and December 31, 1995, its Statements of
Operations for the three and nine month periods ended September 30, 1996 and
1995 and its Statements of Cash Flows for the nine month periods ended September
30, 1996 and 1995.

       The accompanying financial statements include 100 percent of the accounts
of the Partnership and those of the Brighton, Broomfield and Boulder County,
Colorado (collectively, the "Colorado Systems"); the Myrtle Creek, Oregon
system; the Lake County, California system; the South Sioux City, Nebraska
system; and the Three Rivers and Watervliet, Michigan systems reduced by the 40
percent minority interest in Jones Cable Income Fund 1-B/C Venture (the
"Venture"). All interpartnership accounts and transactions have been eliminated.

(2)    Jones Intercable, Inc. (the "General Partner"), a publicly held Colorado
corporation, manages the Venture and receives a fee for its services equal to 5
percent of the gross revenues of the Venture, excluding revenues from the sale
of cable television systems or franchises. Management fees paid to the General
Partner by the Venture for the three and nine month periods ended September 30,
1996 were $310,044 and $915,931, respectively, compared to $291,171 and
$851,352, respectively, for the comparable periods in 1995.

       The Venture reimburses the General Partner for certain allocated overhead
and administrative expenses. These expenses represent the salaries and related
benefits paid for corporate personnel, rent, data processing services and other
corporate facilities costs. Such personnel provide engineering, marketing,
administrative, accounting, legal and investor relations services to the
Venture. Allocations of personnel costs are based primarily on actual time spent
by employees of the General Partner with respect to each partnership managed.
Remaining expenses are allocated based on the pro rata relationship of the
Venture's revenues to the total revenues of all systems owned or managed by the
General Partner and certain of its subsidiaries. Systems owned by the General
Partner and all other systems owned by partnerships for which Jones Intercable,
Inc. is the general partner are also allocated a proportionate share of these
expenses. The General Partner believes that the methodology used in allocating
overhead and administrative expenses is reasonable. Overhead and administrative
expenses allocated to the Venture by the General Partner for the three and nine
month periods ended September 30, 1996 were $361,338 and $1,168,462,
respectively, compared to $399,925 and $1,207,042, respectively, for the
comparable periods in 1995.

(3)    On September 13, 1996, the Venture entered into an asset purchase
agreement providing for the sale of the Colorado Systems by the Venture to an
unaffiliated party for a sales price of $35,000,000, subject to normal closing
adjustments. The Jones Group, Ltd., a subsidiary of the General Partner, will
receive a brokerage fee of 2.5 percent of the sales price for acting as a broker
in this transaction. A condition to the closing of this transaction is that the
sale of the Colorado Systems occur on or prior to January 27, 1997. There can be
no assurance that all closing conditions will be met by that date because
closing of the sale is subject to the receipt of the consent of the governmental
franchising authorities and other regulatory authorities having jurisdiction.
Because the sale of the Colorado Systems does not represent the sale of all or
substantially all of the assets of the Venture, no vote of the limited partners
of the Partnership is required to approve this sale. Following this sale, the
Venture will continue to own and operate its systems in California, Oregon,
Nebraska and Michigan.

(4)    Certain prior year amounts have been reclassified to conform to the 1996
presentation.

                                       6
<PAGE>
 
                       JONES CABLE INCOME FUND 1-C, LTD.
                       ---------------------------------
                            (A Limited Partnership)

        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        ---------------------------------------------------------------
                             RESULTS OF OPERATIONS
                             ---------------------


  FINANCIAL CONDITION
  -------------------

       It is the General Partner's publicly announced policy that it intends to
liquidate its managed limited partnerships, including the Partnership, as
opportunities for sales of partnership cable television systems arise in the
marketplace over the next several years. In accordance with the General
Partner's policy, the Venture has entered into an agreement to sell its Colorado
Systems in January 1997. No specific dates or terms have yet been set for the
sale of the Venture's remaining systems. There can be no assurance as to the
timing or terms of any sale.

       The Partnership owns a 60 percent interest in the Venture. The
accompanying financial statements include 100 percent of the accounts of the
Partnership and those of the Venture systems reduced by the 40 percent minority
interest in the Venture.

       On September 13, 1996, the Venture entered into an asset purchase
agreement providing for the sale of the Colorado Systems by the Venture to an
unaffiliated party for a sales price of $35,000,000, subject to normal closing
adjustments. The Jones Group, Ltd., a subsidiary of the General Partner, will
receive a brokerage fee of 2.5 percent of the sales price for acting as a broker
in this transaction. A condition to the closing of this transaction is that the
sale of the Colorado Systems occur on or prior to January 27, 1997. There can be
no assurance that all closing conditions will be met by that date because
closing of the sale is subject to the receipt of the consent of the governmental
franchising authorities and other regulatory authorities having jurisdiction.
Because the sale of the Colorado Systems does not represent the sale of all or
substantially all of the assets of the Venture, no vote of the limited partners
of the Partnership is required to approve this sale. Following this sale, the
Venture will continue to own and operate its systems in California, Oregon,
Nebraska and Michigan.
       
       For the nine months ended September 30, 1996, the Venture generated net
cash from operating activities totaling $2,853,940, which is available to fund
capital expenditures and non-operating costs. During the first nine months of
1996, capital improvements within the Venture's systems totaled approximately
$3,471,000. Approximately 40 percent of these expenditures was for service drops
to homes and approximately 35 percent was for the rebuild and upgrade of the
Venture's Systems. The remainder of these expenditures related to various
enhancements in all of the Venture's systems. Funding for these expenditures was
provided by cash generated from operations and borrowings under the Venture's
credit facility. Anticipated capital expenditures for the remainder of 1996 are
approximately $1,122,000. Service drops to homes are expected to account for
approximately 45 percent of the anticipated expenditures and system upgrades and
rebuilds are expected to account for approximately 26 percent of the
expenditures. The remainder of the expenditures will be for various enhancements
in the Venture's systems. These capital expenditures are necessary to maintain
the value of the Venture's systems. Funding for these expenditures is expected
to be provided by cash generated from operations and available borrowings from
the Venture's credit facility.

       At September 30, 1996, the Venture's $45,000,000 credit facility had
$42,700,000 outstanding, leaving $2,300,000 of available borrowings. The
revolving credit facility matures on June 30, 1997, at which time the General
Partner will attempt to renegotiate the credit facility to extend the revolving
credit period. Interest on outstanding principal is calculated at the Venture's
option of the Prime Rate plus 1/2 percent, or London Interbank Offered Rate plus
1-1/2 percent. The effective interest rates on amounts outstanding as of
September 30, 1996 and 1995 were 7.06 percent and 7.38 percent, respectively.

       One of the primary objectives of the Venture is to provide quarterly cash
distributions to the Venture's partners, primarily from cash generated through
operating activities of the Venture. The Venture's partners in turn seek to
provide quarterly cash distributions to their limited partners. The Venture's
credit facility has a maximum amount available of $45,000,000, of which
$42,700,000 was outstanding on September 30, 1996. This limits the amount of
borrowing available to the Venture to fund capital expenditures; therefore, the
Venture used 

                                       7
<PAGE>
 
cash generated from operations to fund capital expenditures and did not declare
any distributions during the first, second and third quarters of 1996. Due to
these borrowing limitations, the Venture will need to use cash generated from
operations to fund capital expenditures and the Venture does not anticipate the
resumption of distributions to the Venture's partners in the near term.

       The General Partner believes that the Venture has sufficient sources of
capital available from cash generated from operations and from borrowings
available under its credit facility to meet its presently anticipated needs so
long as the Venture does not resume cash distributions to the Venture partners.

RESULTS OF OPERATIONS
---------------------

       Revenues of the Venture increased $377,451, or approximately 6 percent,
to $6,200,872 for the three months ended September 30, 1996 from $5,823,421 for
the comparable 1995 period. Revenues increased $1,291,579, or approximately 8
percent, to $18,318,617 for the nine months ended September 30, 1996 from
$17,027,038 for the comparable 1995 period. These increases in revenues were
primarily due to basic service rate increases and increases in the number of
basic subscribers. Basic service rate increases accounted for approximately 62
percent and 55 percent, respectively, of the increase in revenues for the three
and nine month periods ended September 30, 1996. An increase in the number of
basic subscribers accounted for approximately 38 percent and 32 percent,
respectively, of the increase in revenues for the three and nine month periods
ended September 30, 1996. The number of basic subscribers increased by 2,179
subscribers, or approximately 3 percent, to 66,309 subscribers at September 30,
1996 from 64,130 subscribers at September 30, 1995. No other single factor
significantly affected the increases in revenues.

       Operating expenses consist primarily of costs associated with the
 administration of the Venture's cable television systems. The principal cost
 components are salaries paid to system personnel, programming expenses,
 professional fees, subscriber billing costs, rent for leased facilities, cable
 system maintenance expenses and consumer marketing expenses.

       Operating expenses increased $329,058, or approximately 11 percent, to
$3,409,393 for the three months ended September 30, 1996 from $3,080,335 for the
comparable 1995 period. Operating expenses increased $825,974, or approximately
9 percent, to $10,166,199 for the nine months ended September 30, 1996 from
$9,340,225 for the comparable 1995 period. Operating expenses represented 55
percent and 56 percent, respectively, of revenues for the three and nine month
periods ended September 30, 1996 compared to 53 percent and 55 percent,
respectively, for the similar periods in 1995. These increases in operating
expenses were primarily due to increases in programming costs. No other
individual factor significantly affected the increases in operating expenses for
the periods discussed.

       Management fees and allocated overhead from the General Partner decreased
$19,714, or approximately 3 percent, to $671,382 for the three months ended
September 30, 1996 from $691,096 for the comparable 1995 period. This decrease
was due to a decrease in allocated overhead from the General Partner. Management
fees and allocated overhead from the General Partner increased $25,999, or
approximately 1 percent, to $2,084,393 for the nine months ended September 30,
1996 from $2,058,394 for the comparable 1995 period. This increase was due to an
increase in management fees due to the increase in revenues, upon which such
management fees are based.

       Depreciation and amortization expense decreased $476,383, or
approximately 21 percent, to $1,830,250 for the three months ended September 30,
1996 from $2,306,633 for the comparable 1995 period. Depreciation and
amortization expense decreased $736,398, or approximately 11 percent, to
$6,013,447 for the nine months ended September 30, 1996 from $6,749,845 for the
comparable 1995 period. These decreases were due to the decrease in the
Venture's depreciable asset base.

       The Venture recognized operating income of $289,847 for the three months
ended September 30, 1996 compared to an operating loss of $254,643 for the
comparable period in 1995. This change was due to the increase in revenues and
decreases in management fees and allocated overhead from the General Partner and

                                       8
<PAGE>
 
depreciation and amortization expense exceeding the increase in operating
expenses. The Venture recognized operating income of $54,578 for the nine months
ended September 30, 1996 compared to an operating loss of $1,121,426 for the
comparable period in 1995. This change was due to the increase in revenues and
decrease in depreciation and amortization expense exceeding the increases in
operating expenses and management fees and allocated overhead from the General
Partner.

       The cable television industry generally measures the financial
performance of a cable television system in terms of cash flow or operating
income before depreciation and amortization. The value of a cable television
system is often determined using multiples of cash flow. This measure is not
intended to be a substitute or improvement upon the items disclosed on the
financial statements, rather it is included because it is an industry standard.
Operating income before depreciation and amortization increased $68,107, or
approximately 3 percent, to $2,120,097 for the three months ended September 30,
1996 from $2,051,990 for the comparable 1995 period. This increase was due to
the increase in revenues and decrease in management fees and allocated overhead
from the General Partner exceeding the increase in operating expenses. For the
nine month period ended September 30, 1996, operating income before depreciation
and amortization increased $439,606, or approximately 8 percent, to $6,068,025
in 1996 from $5,628,419 for the comparable period in 1995. This increase was due
to the increase in revenues exceeding the increases in operating expenses and
management fees and allocated overhead from the General Partner.

       Interest expense decreased $12,152, or approximately 2 percent, to
$771,773 for the three months ended September 30, 1996 compared to $783,925 for
the comparable 1995 period. Interest expense decreased $227,771, or
approximately 9 percent, to $2,331,270 for the nine months ended September 30,
1996 from $2,559,041 for the comparable 1995 period. These decreases were due to
lower effective interest rates on interest bearing obligations.

       Net loss decreased $243,329, or approximately 45 percent for the three
month period ended September 30, 1996 to $297,564 from $540,893 for the
comparable 1995 period. For the nine month period ended September 30, 1996, net
loss decreased $750,493, or approximately 35 percent, to $1,368,424 from
$2,118,917 for the comparable 1995 period. These decreases were due to the
factors discussed above.

                                       9
<PAGE>
 
                          PART II - OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K.

         a) Exhibits

            27)  Financial Data Schedule

         b) Reports on Form 8-K

                 Report on Form 8-K dated September 13, 1996, reporting that 
            Jones Cable Income Fund 1-B/C Venture, a Colorado general
            partnership (the "Venture"), entered into an asset purchase
            agreement providing for the sale by the Venture of the cable
            television systems serving subscribers in the cities of Broomfield
            and Brighton, Colorado, the town of Lochbuie, Colorado and Adams,
            Boulder and Weld Counties, Colorado (the "Systems") for a sales
            price of $35,000,000, subject to customary closing adjustments.


                                       10
<PAGE>
 
                                   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.

                                         JONES CABLE INCOME FUND 1-C, LTD.
                                         BY: JONES INTERCABLE, INC.
                                             General Partner



                                         By: /S/ Kevin P. Coyle
                                             -----------------------------
                                             Kevin P. Coyle
                                             Group Vice President/Finance
                                             (Principal Financial Officer)

  Dated:  November 14, 1996

                                       11