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 JUNE 19, 1998

                                       OR

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


                           Commission File No. 0-15736

                    COURTYARD BY MARRIOTT LIMITED PARTNERSHIP
             (Exact name of registrant as specified in its charter)

         Delaware                                   52-1468081
-----------------------------            -----------------------------------
  (State of Organization)                (I.R.S. Employer Identification Number)

   10400 Fernwood Road, 
       Bethesda, MD                                 20817-1109
-----------------------------            -------------------------------
(Address of principal executive offices)            (Zip Code)

       Registrant's telephone number, including area code: (301) 380-2070
Securities  registered  pursuant  to Section  12(b) of the Act:
                                 Not Applicable
          Securities registered pursuant to Section 12(g) of the Act:
                     Units of Limited Partnership Interest
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.  Yes ____ No ____ (Not  Applicable).  On August 25, 1992,  the
Registrant  filed an application  for relief from the reporting  requirements of
the Securities  Exchange Act of 1934 pursuant to Section 12(h) thereof.  Because
of the pendency of such application, the Registrant was not required to, and did
not make,  any filings  pursuant  to the  Securities  Exchange  Act of 1934 from
October 23, 1989 until the application was voluntarily  withdrawn on January 27,
1998.

================================================================================
<PAGE>
================================================================================
                   COURTYARD BY MARRIOTT LIMITED PARTNERSHIP
================================================================================


                                TABLE OF CONTENTS

                                                     
                         PART I - FINANCIAL INFORMATION


Item 1.    Financial Statements

Condensed Statement of Operations
 Twelve and Twenty-Four Weeks Ended June 19, 1998 and June 20, 1997...........1

Condensed Balance Sheet
 June 19, 1998 and December 31, 1997..........................................2

Condensed Statement of Cash Flows
 Twenty-Four Weeks Ended June 19, 1998 and June 20, 1997......................3

Notes to Condensed Financial Statements.......................................4

Item 2.    Management's Discussion and Analysis of Financial
              Condition and Results of Operations.............................6



                           PART II - OTHER INFORMATION


Item 1.    Legal Proceedings..................................................9

Item 6.    Exhibits and Reports on Form 8-K..................................10






<PAGE>
                          PART I. FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS

                    COURTYARD BY MARRIOTT LIMITED PARTNERSHIP
                        CONDENSED STATEMENT OF OPERATIONS
                                   (Unaudited)
                     (in thousands except per Unit amounts)

<TABLE>

                                                              Twelve Weeks Ended                Twenty-Four Weeks Ended
                                                           June 19,         June 20,           June 19,         June 20,
                                                             1998             1997               1998             1997
                                                        -------------     ------------       ------------     --------

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

REVENUES................................................$      26,271     $     24,502       $     50,048     $     46,190
                                                        -------------     ------------       ------------     ------------

OPERATING COSTS AND EXPENSES
   Depreciation.........................................        4,119            3,933              8,087            8,040
   Base and Courtyard management fees...................        2,965            2,785              5,741            5,392
   Incentive management fees............................        2,565            4,512              4,800            4,512
   Ground rent, taxes and other.........................        3,766            2,656              7,630            6,253
                                                        -------------     ------------       ------------     ------------

        Total Operating Costs and Expenses..............       13,415           13,886             26,258           24,197
                                                        -------------     ------------       ------------     ------------

OPERATING PROFIT........................................       12,856           10,616             23,790           21,993
   Interest expense.....................................       (6,075)          (6,113)           (12,328)         (11,693)
   Interest income......................................          246              276                370              360
                                                        -------------     ------------       ------------     ------------

NET INCOME BEFORE EXTRAORDINARY ITEMS                           7,027            4,779             11,832           10,660

EXTRAORDINARY ITEMS
   Gain on forgiveness of deferred fees.................           --               --                 --           14,896
   Loss on extinguishment of debt.......................           --               --                 --           (2,423)
                                                        -------------     ------------       ------------     ------------
                                                                   --               --                 --           12,473
                                                        -------------     ------------       ------------     ------------

NET INCOME..............................................$       7,027     $      4,779       $     11,832     $     23,133
                                                        =============     ============       ============     ============

ALLOCATION OF NET INCOME
   General Partner......................................$         351     $        239       $        591     $      1,157
   Limited Partners.....................................        6,676            4,540             11,241           21,976
                                                        -------------     ------------       ------------     ------------
                                                        $       7,027     $      4,779       $     11,832     $     23,133
                                                        =============     ============       ============     ============

NET INCOME BEFORE EXTRAORDINARY ITEMS
   PER LIMITED PARTNER UNIT (1,150 Units)...............$       5,805     $      3,948       $      9,774     $      8,806
                                                        =============     ============       ============     ============

NET INCOME PER LIMITED PARTNER UNIT
   (1,150 Units)........................................$       5,805     $      3,948       $      9,774     $     19,110
                                                        =============     ============       ============     ============





     See Notes to Condensed Financial Statements.

</TABLE>


<PAGE>


                    COURTYARD BY MARRIOTT LIMITED PARTNERSHIP
                             CONDENSED BALANCE SHEET
                                 (in thousands)


<TABLE>
                                                                                             June 19,       December 31,
                                                                                               1998               1997

                                                                                            (Unaudited)
<S>                                                                                      <C>               <C>    
ASSETS

  Property and equipment, net............................................................$      305,451    $       305,156
  Due from Courtyard Management Corporation...............................................         2,659              4,913
  Other assets............................................................................        10,747              7,923
  Restricted cash.........................................................................         8,229              7,964
  Cash and cash equivalents...............................................................         8,289              5,450
                                                                                          --------------    ---------------

                                                                                          $      335,375    $       331,406
                                                                                          ==============    ===============


LIABILITIES AND PARTNERS' CAPITAL ( DEFICIT)

LIABILITIES
   Mortgage debt..........................................................................$      316,801    $       320,407
   Due to Marriott International, Inc. and affiliates.....................................        19,509             19,616
   Due to Host Marriott Corporation.......................................................        13,885             13,594
   Incentive management fees due to Courtyard Management Corporation......................         5,078              6,476
   Accounts payable and accrued liabilities...............................................         2,275              2,898
                                                                                          --------------    ---------------

     Total Liabilities....................................................................       357,548            362,991
                                                                                          --------------    ---------------

PARTNERS' CAPITAL (DEFICIT)
   General Partner........................................................................           216               (254)
   Limited Partners.......................................................................       (22,389)           (31,331)
                                                                                          ---------------   ---------------

     Total Partners' Capital (Deficit)....................................................       (22,173)           (31,585)
                                                                                          ---------------   ---------------

                                                                                          $      335,375    $       331,406
                                                                                          ==============    ===============










                  See Notes to Condensed Financial Statements.

</TABLE>

<PAGE>


                    COURTYARD BY MARRIOTT LIMITED PARTNERSHIP
                        CONDENSED STATEMENT OF CASH FLOWS
                                   (Unaudited)
                                 (in thousands)

<TABLE>

                                                                                              Twenty-Four Weeks Ended
                                                                                            June 19,          June 20,
                                                                                              1998              1997
                                                                                         --------------    ---------
<S>                                                                                     <C>                <C>    

OPERATING ACTIVITIES
     Net income.........................................................................$       11,832     $        23,133
     Extraordinary items................................................................            --             (12,473)
                                                                                        --------------     ---------------

     Income before extraordinary items..................................................        11,832              10,660
     Noncash items......................................................................         8,582               8,789
     Changes in operating accounts......................................................          (229)             (9,234)
                                                                                        ---------------    ---------------

        Cash provided by operating activities...........................................        20,185              10,215
                                                                                        --------------     ---------------

INVESTING ACTIVITIES
     Additions to property and equipment, net...........................................        (8,382)             (7,747)
     Change in property improvement fund................................................        (3,026)             (3,752)
                                                                                        ---------------    ---------------

        Cash used in investing activities...............................................       (11,408)            (11,499)
                                                                                        ---------------    ---------------

FINANCING ACTIVITIES
     Repayments of mortgage debt .......................................................        (3,606)           (290,101)
Capital distributions ..................................................................        (2,420)            (30,384)
     Change in restricted cash..........................................................            90                  --
     Payment of financing costs.........................................................            (2)             (5,889)
     Proceeds from mortgage debt........................................................            --             325,000
                                                                                        --------------     ---------------

        Cash used in financing activities...............................................        (5,938)             (1,374)
                                                                                        ---------------    ---------------

 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.......................................         2,839              (2,658)

CASH AND CASH EQUIVALENTS at beginning of period........................................         5,450              12,709
                                                                                        --------------     ---------------

CASH AND CASH EQUIVALENTS at end of period..............................................$        8,289     $        10,051
                                                                                        ==============     ===============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
     Cash paid for mortgage and other interest..........................................$       12,681     $        11,945
                                                                                        ==============     ===============





                  See Notes to Condensed Financial Statements.
</TABLE>

<PAGE>


                    COURTYARD BY MARRIOTT LIMITED PARTNERSHIP
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

1.   The accompanying  condensed financial  statements have been prepared by the
     Courtyard  By Marriott  Limited  Partnership  (the  "Partnership")  without
     audit.  Certain information and footnote  disclosures  normally included in
     financial  statements  presented  in  accordance  with  generally  accepted
     accounting  principles have been condensed or omitted from the accompanying
     statements.  The Partnership  believes the disclosures made are adequate to
     make the  information  presented  not  misleading.  However,  the condensed
     financial  statements  should be read in conjunction with the Partnership's
     financial  statements and notes thereto included in the Partnership's  10-K
     for the fiscal year ended December 31, 1997.

     In the opinion of the  Partnership,  the accompanying  unaudited  condensed
     financial  statements  reflect all  adjustments  (which include only normal
     recurring  adjustments)  necessary to present fairly the financial position
     of the  Partnership  as of June 19, 1998, the results of operations for the
     twelve and twenty-four  weeks ended June 19, 1998 and June 20, 1997 and the
     cash flows for the twenty-four weeks ended June 19, 1998 and June 20, 1997.
     Interim results are not necessarily  indicative of fiscal year  performance
     because of seasonal and short-term variations.

     For financial  reporting  purposes,  the net income of the  Partnership  is
     allocated  95% to the  Limited  Partners  and  5% to the  General  Partner.
     Significant   differences  exist  between  the  net  income  for  financial
     reporting  purposes  and the net income  reported  for  Federal  income tax
     purposes.  These  differences  are due  primarily to the use for income tax
     purposes of accelerated depreciation methods, shorter depreciable lives for
     the assets,  difference  in the timing of  recognition  of certain fees and
     straight-line rent adjustments.

2.   Certain  reclassifications  were  made  to  the  prior  year  financial
     statements to conform to the 1998 presentation.

3.   Revenues  represent  house  profit  of the  Partnership  hotels  since  the
     Partnership  has delegated  substantially  all of the  operating  decisions
     related to the  generation  of house  profit of the hotels to  Courtyard by
     Marriott Limited Partnership (the "Manager"). House profit reflects the net
     revenues  flowing to the Partnership as property owner and represents hotel
     operating results less  property-level  expenses,  excluding  depreciation,
     base,  Courtyard and incentive  management fees, property taxes,  equipment
     rent and  certain  other  costs,  which  are  disclosed  separately  in the
     accompanying condensed statement of operations.

     On November  20,  1997,  the  Emerging  Issues  Task Force  ("EITF") of the
     Financial  Accounting  Standards  Board  reached a  consensus  of EITF 97-2
     "Application  of FASB  Statement No. 94 and APB Opinion No. 16 to Physician
     Practice  Management  Entities and Certain Other Entities with  Contractual
     Management  Arrangements." EITF 97-2 addresses the circumstances in which a
     management entity may include the revenues and expenses of a managed entity
     in its financial statements.

          The  Partnership is assessing the impact of EITF 97-2 on its policy of
          excluding  property-level revenues and operating expenses of the Hotel
          from its statements of operations.  If the Partnership  concludes that
          EITF 97-2 should be applied to the Hotels,  it would include operating
          results  of  this  managed  operation  in  its  financial  statements.
          Application  of EITF 97-2 to  financial  statements  as of and for the
          twelve and twenty-four weeks ended June 19, 1998, would have increased
          both revenues and operating  expenses by approximately $23 million and
          $46 million, respectively, and would have had no impact on net income.
<PAGE>

     Revenues consist of the following hotel operating results for 1998 and 1997
     (in thousands):
<TABLE>


                                                                Twelve Weeks Ended               Twenty-Four Weeks Ended
                                                            June 19,          June 20,         June 19,          June 20,
                                                              1998              1997             1998              1997
       <S>                                                <C>              <C>               <C>              <C>     
       HOTEL SALES
         Rooms............................................$      44,681    $      41,793     $      86,475    $      80,694
         Food and beverage................................        3,166            3,055             6,153            6,078
         Other............................................        1,562            1,576             3,053            3,100
                                                          -------------    -------------     -------------    -------------
                                                                 49,409           46,424            95,681           89,872
                                                          -------------    -------------     -------------    -------------
       HOTEL EXPENSES
         Departmental direct costs
           Rooms..........................................        9,220            8,704            18,049           16,958
           Food and beverage..............................        2,569            2,614             5,125            5,114
         Other............................................       11,349           10,604            22,459           21,610
                                                          -------------    -------------     -------------    -------------
                                                                 23,138           21,922            45,633           43,682
                                                          -------------    -------------     -------------    -------------

       REVENUES...........................................$      26,271    $      24,502     $      50,048    $      46,190
</TABLE>

     


          4. As previously reported, Host Marriott Corporation, on behalf of the
          General   Partner,   CBM  One   Corporation,   filed   a   preliminary
          Prospectus/Consent  Solicitation  Statement  with the  Securities  and
          Exchange Commission in December 1997, which proposed the consolidation
          (the  "Consolidation")  of this  Partnership  and five  other  limited
          partnerships  into a publicly  traded  real  estate  investment  trust
          ("REIT").

          In addition,  we reported to you that there are existing  REIT's which
          are active in the moderate  price and extended stay hotel segment that
          have  expressed an interest in  acquiring  the hotels owned by the six
          limited partnerships. Although the General Partner has had preliminary
          discussions with some of these companies,  no agreements have yet been
          reached.  The General Partner has retained Merrill Lynch to advise the
          Partnership with respect to the Partnership's  strategic alternatives.
          The General Partner intends to continue to explore these  alternatives
          and determine which path to pursue,  obviously  subject to appropriate
          partner approval.



<PAGE>


ITEM 2.         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                AND RESULTS OF OPERATIONS


FORWARD-LOOKING STATEMENTS

Certain matters discussed herein are forward-looking  statements and as such may
involve  known and unknown  risks,  uncertainties,  and other  factors which may
cause the actual  results,  performance or achievements of the Partnership to be
different  from any future  results,  performance or  achievements  expressed or
implied by such  forward-looking  statements.  Although the Partnership believes
the  expectations  reflected in such  forward-looking  statements are based upon
reasonable  assumptions,  it can give no assurance that its expectations will be
attained.  These  risks  are  detailed  from  time to time in the  Partnership's
filings with the Securities and Exchange Commission.  The Partnership undertakes
no  obligation  to  publicly  release  the  result  of any  revisions  to  these
forward-looking  statements  that may be made to reflect  any  future  events or
circumstances.

RESULTS OF OPERATIONS

First Two Quarters of 1998 Compared to the First Two Quarters of 1997

Revenues.  Revenues (hotel sales less direct hotel operating costs and expenses)
for the first two quarters of 1998 increased $3.9 million to $50 million,  an 8%
increase  when  compared to the first two  quarters of 1997.  The  Partnership's
revenues and operating  profit were impacted by improved  lodging  results.  The
increase  was  driven   primarily  by  growth  in  revenue  per  available  room
("REVPAR"). REVPAR is a commonly used indicator of market performance for hotels
which  represents  the  combination  of daily room charged and the average daily
occupancy achieved (although it is not a GAAP, or generally accepted  accounting
principles,  measure of  revenue).  REVPAR does not include food and beverage or
other ancillary revenues  generated by the property.  For the first two quarters
of 1998,  room sales  increased  $5.8  million to $86.5  million,  a 7% increase
compared to the first two quarters of 1997.

REVPAR  increased 6% to $71 for the first two quarters of 1998 when  compared to
the first two  quarters  of 1997,  primarily  due to the  increase  in  combined
average room rate of $7, or 9%, to $88 offset by a one percentage point decrease
in average occupancy to approximately 81%.

Operating  Costs and Expenses.  The  Partnership's  operating costs and expenses
increased  $2.1 million,  or 9% from $24.2 million for the first two quarters of
1997 to $26.3  million for the first two  quarters of 1998  primarily  due to an
increase in base,  Courtyard  and incentive  management  fees, as well as ground
rent,  taxes  and other  expenses.  As a  percentage  of hotel  revenues,  hotel
operating  costs and expenses  remained  stable at 52% of revenues for the first
two quarters of 1998 compared to the first two quarters of 1997.

Operating  Profit.  As a result of changes in revenues and  operating  costs and
expenses  discussed above,  operating profit increased $1.8 million,  or 8% from
$22  million  for the first two  quarters  of 1997 to $23.8  million,  or 48% of
revenues for the first two quarters of 1998.

Interest Expense. Interest expense increased 5% to $12.3 million for
the first two quarters of 1998 due to the refinancing of the mortgage
debt at a higher fixed rate and an increase in the loan balance from
$280.8 million to $325 million.

Income before  Extraordinary  Items. Income before extraordinary items increased
by $1.1 million, or 11% to $11.8 million for the first two quarters of 1998 when
compared to the first two  quarters of 1997,  primarily  due to the $1.8 million
increase  in  operating  profit  offset  by the  increase  in  interest  expense
discussed  above.   

Extraordinary  Items.  The  Partnership   recognized  a  net
extraordinary  gain  in  the  first  two  quarters  of  1997  of  $12.5  million
representing the forgiveness of deferred management fees by Courtyard Management
Corporation   partially   offset   by  an   extraordinary   loss  on  the  early
extinguishment of debt.

Net  Income.  Net  income for the first two  quarters  of 1998  decreased  $11.3
million to $11.8  million,  or 24% of  revenues  when  compared to net income of
$23.1  million,  for the  first  two  quarters  of 1997 as a result of the items
discussed above.

Second Quarter 1998 Compared to Second Quarter 1997

Revenues.  Revenues  increased  $1.8 million to $26.3 million for second quarter
1998, a 7% increase when compared to second quarter 1997, due to the increase in
REVPAR as described below.

REVPAR for second  quarter  1998  increased  5% to $74 when  compared  to second
quarter 1997  primarily due to the increase in combined  average room rate of $7
to $89 for second quarter 1998, offset by a one percentage point decrease in the
combined average occupancy to approximately 83% over the same period in 1997.

Operating  Costs and Expenses.  The  Partnership's  operating costs and expenses
decreased 3% to $13.4 million for second  quarter 1998 when compared to the same
period in 1997  primarily due to a decrease in incentive  management fee expense
offset by an  increase  in ground  rent,  taxes  and other  costs and  expenses.
Incentive  management  fee  expense  for  second  quarter  1998 was higher as it
included an adjustment for first quarter 1998 incentive management fees.

Operating  Profit.  As a result of changes in revenues and  operating  costs and
expenses discussed above,  operating profit increased for second quarter 1998 by
$2.3  million,  or 21%, to $12.9  million,  when  compared to the same period in
1997.

CAPITAL RESOURCES AND LIQUIDITY

The  Partnership's  financing needs have  historically  been funded through loan
agreements with various lenders and Host Marriott Corporation ("Host Marriott").
The General Partner believes that the Partnership  will have sufficient  capital
resources  and  liquidity  to continue to conduct its  business in the  ordinary
course.

Principal Sources and Uses of Cash

Cash  provided by operating  activities  was $20.2 million and $10.2 million for
the first two quarters 1998 and the first two quarters 1997, respectively.  Cash
provided by operations  was higher in second  quarter 1998  primarily due to the
payment of $4.2  million of  deferred  management  fees in  connection  with the
refinancing  in 1997 as well as a decrease in the rent  receivable  due from the
Manager.

Cash used in investing  activities  was $11.4  million and $11.5 million for the
first two  quarters  1998 and the first two  quarters  1997,  respectively.  The
Partnership's  investing  activities  consist  primarily of contributions to the
property improvement fund and capital expenditures for improvements to hotels.

As part of the debt refinancing,  contributions to the property improvement fund
will remain at 5% of gross  hotel sales  through  1998 and may be  increased  by
Courtyard Management Corporation to 6% in 1999 and 2000 and 7% thereafter if the
current  contribution  of 5% of gross  hotel sales is  insufficient  to make the
replacements, renewals and repairs to maintain the hotels in accordance with the
Manager's standards for Courtyard by Marriott hotels.


<PAGE>


     Cash used in financing activities was $5.9 million and $1.4 million for the
first two  quarters  1998 and the first two  quarters  1997,  respectively.  The
Partnership's financing activities consist primarily of capital distributions to
its partners and repayment of debt.  During the first two quarters of 1998,  the
Partnership   distributed  $2.4  million  to  the  partners.  This  distribution
represented  the final  distribution  from 1997  operations,  bringing the total
distribution  from 1997  operations to $10,000 per limited  partner unit. In the
first quarter 1997, the Partnership  received  refinancing proceeds in excess of
repayments of the mortgage debt. This provided cash to the Partnership which was
used to pay refinancing costs and provided funds for a partial return of capital
distribution to the partners. This distribution was paid in second quarter 1997.
On July 27,  1998,  the  Partnership  distributed  $6.9  million,  or $6,000 per
limited partner unit, from first and second quarter 1998 operating  results.  We
anticipate  total  cash  distributions  for 1998 of  approximately  $10,000  per
limited  partner  unit.  However,  actual  distributions  may be higher or lower
depending on actual Hotel  operating  results for the  remainder of the year. We
expect to make a  distribution  from 1998 third quarter  operating  cash flow in
November 1998 and a final distribution for 1998 operations in April 1999.


<PAGE>



                           PART II. OTHER INFORMATION


                           ITEM 1. LEGAL PROCEEDINGS


     Marvin Schick and Jack Hirsch,  the  plaintiffs  in a class action  lawsuit
styled Marvin Schick, et al. v. Host Marriott Corporation,  et al., Civil Action
No. 15991,  filed their complaint on October 16, 1997 in Delaware Chancery Court
against  the  General  Partner,  the  Manager  and  certain of their  respective
affiliates,  officers and directors.  The plaintiff's claim that General Partner
agreed to  decrease  the  owner's  priority  under  the terms of the  Management
Agreement  for the benefit of the Manager  without  obtaining the consent of the
limited  partners.  The lawsuit  includes  claims  against Host Marriott and the
General Partner for breach of contract and breach of fiduciary duty, and against
Marriott International,  Inc. and the Manager for interference with contract and
aiding and  abetting in the breach of  fiduciary  duties.  The  General  Partner
believes that the change in the  Management  Agreement  did not require  limited
partner approval,  because, among other things, it did not result in an increase
in  compensation  to  the  Manager.  The  defendants  filed  an  answer  to  the
plaintiffs'  complaint  and asserted a number of defenses.  The General  Partner
intends to vigorously defend this lawsuit and expects to prevail on the merits.

     On February 11, 1998,  four  individual  limited  partners in  partnerships
sponsored by Host Marriott,  filed a class action lawsuit,  styled Ruben, et al.
v. Host Marriott Corporation,  et al., Civil Action No. 16186, in Delaware State
Chancery  Court against Host  Marriott and the general  partners of Courtyard by
Marriott  Limited  Partnership,  Courtyard  by Marriott II Limited  Partnership,
Marriott  Residence Inn Limited  Partnership,  Marriott Residence Inn II Limited
Partnership,  and Fairfield Inn by Marriott Limited  Partnership  (collectively,
the "Five  Partnerships").  The  plaintiffs  allege  that the merger of the Five
Partnerships (the "Merger") into an umbrella  partnership real estate investment
trust  proposed  by CRF Lodging  Company,  L.P.  in a  preliminary  registration
statement filed with the Securities and Exchange Commission,  dated December 22,
1997,  constitutes a breach of the fiduciary duties owed to the limited partners
of the Five  Partnerships by Host Marriott and the general  partners of the Five
Partnerships.  In  addition,  the  plaintiffs  allege  that the Merger  breaches
various  agreements  relating  to the  Five  Partnerships.  The  plaintiffs  are
seeking, among other things, the following: certification of a class; injunctive
relief to block consummation of the Merger or, in the alternative, rescission of
the  Merger;  and  damages.  Host  Marriott  and  the  general  partners  of the
Partnership  believe that these allegations are totally devoid of merit and they
intend to vigorously defend against them. The defendants also maintain that this
lawsuit  is  premature  because  the  Merger  has  not  been,  and  may  not be,
consummated  as  proposed  in the SEC  filings.  Accordingly,  they have filed a
motion to dismiss the lawsuit.

     On March 16, 1998,  limited partners in several  partnerships  sponsored by
Host Marriott  filed a lawsuit,  styled Robert M. Haas,  Sr. and Irwin  Randolph
Joint  Tenants,  et al.  v.  Marriott  International,  Inc.,  et al.,  Case  No.
98-CI-04092,  in the 57th Judicial District Court of Bexar County, Texas against
Marriott International, Inc. ("Marriott International"),  Host Marriott, various
of their  subsidiaries,  J.W. Marriott,  Jr., Stephen Rushmore,  and Hospitality
Valuation Services, Inc. (collectively,  the "Defendants").  The lawsuit relates
to  the  following   limited   partnerships:   Courtyard  by  Marriott   Limited
Partnership,  Courtyard by Marriott II Limited  Partnership,  Marriott Residence
Inn  Limited  Partnership,   Marriott  Residence  Inn  II  Limited  Partnership,
Fairfield Inn by Marriott Limited  Partnership,  Desert Springs Marriott Limited
Partnership, and Atlanta Marriott Marquis Limited Partnership (collectively, the
"Seven  Partnerships").  The plaintiffs  allege,  amoung other things,  that the
Defendants  conspired  to sell  hotels to the Seven  Partnerships  for  inflated
prices and that they charged the Seven Partnerships excessive management fees to
operate the Seven  Partnerships'  hotels. The plaintiffs further allege that the
Defendants  committed  fraud,   breached  fiduciary  duties,  and  violated  the
provisions of various contracts. The plaintiffs are seeking unspecified damages.
The Defendants, which do not include the Seven Partnerships,  believe that there
is no truth to the  plaintiffs'  allegations  and that the  lawsuit  is  totally
devoid of merit. The Defendants  intend to vigorously  defend against the claims
asserted in the lawsuit.  They have filed an answer to the plaintiffs'  petition
and asserted a number of defenses. Although the Seven Partnerships have not been
named as Defendants in the lawsuit,  the partnership  agreements relating to the
Seven  Partnerships  include an  indemnity  provision  which  requires the Seven
Partnerships,  under certain  circumstances,  to indemnify the general  partners
against losses, judgments, expenses and fees.

The  Partnership  and  the  Hotels  are  involved  in  routine   litigation  and
administrative  proceedings arising in the ordinary course of business,  some of
which are expected to be covered by liability  insurance and which  collectively
are not expected to have a material  adverse  effect on the business,  financial
condition or results of operations of the Partnership.


ITEM 6.         EXHIBITS AND REPORTS ON FORM 8-K

a.      Exhibits:

        None.

b.       Reports on Form 8-K:

     May 6, 1998 -- Letter  from the  general  partner to the  limited  partners
regarding status of proposed consolidation.




<PAGE>




                                    SIGNATURE


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this Form  10-Q to be signed on its  behalf by the
undersigned, thereunto duly authorized.


                              COURTYARD BY MARRIOTT
                              LIMITED PARTNERSHIP

                              By:    CBM ONE CORPORATION
                                     General Partner



         July 31, 1998        By:    Earla L. Stowe
                                     Vice President and Chief Accounting Officer