UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549FORM 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, 2003or

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

For the transition period from __________ to __________
Commission File #0-16790Inland'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:  630-218-8000N/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

Indicate by a checkmark whether the registrant is an accelerated filer (as defined in Securities Exchange Act Rule 12b-2)    Yes    No X

-1-

---

INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Balance Sheets
September 30, 2003 and December 31, 2002
(unaudited)

Assets

|                                                                                                                                                                                           |   | 2003       | 2002      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | - | ---------- | ----------
|Current assets:                                                                                                                                                                            |   |            |           
|Cash and cash equivalents                                                                                                                                                                  | $ | 1,224,740  | 1,904,517 
|Accounts and interest receivable                                                                                                                                                           |   | 2,097      | 3,636     
|Current portion of mortgage loans (Note 4)                                                                                                                                                 |   | 3,630      | 6,883     
|                                                                                                                                                                                           |   |            |           
|Total current assets                                                                                                                                                                       |   | 1,230,467  | 1,915,036 
|                                                                                                                                                                                           |   |            |           
|Investment properties (including acquisition fees paid to Affiliates of   $1,186,224, as of September 30, 2003 and December 31, 2002):                                                     |   |            |           
|Land                                                                                                                                                                                       |   | 1,982,878  | 1,982,878 
|Buildings and improvements                                                                                                                                                                 |   | 10,550,722 | 10,150,722
|                                                                                                                                                                                           |   |            |           
|                                                                                                                                                                                           |   | 12,533,600 | 12,133,600
|Less accumulated depreciation                                                                                                                                                              |   | 4,627,487  | 4,403,556 
|                                                                                                                                                                                           |   |            |           
|Net investment properties                                                                                                                                                                  |   | 7,906,113  | 7,730,044 
|                                                                                                                                                                                           |   |            |           
|Other assets:                                                                                                                                                                              |   |            |           
|Mortgage loans receivable, less current portion                                                                                                                                            |   | 207,089    | 881,934   
|Deferred loan fees (net of accumulated amortization of $95,341     and $90,752 at September 30, 2003 and December 31, 2002,     respectively)                                              |   | 3,569      | 8,158     
|Deferred leasing fees (including $219,451 paid to Affiliates) (net of     accumulated amortization of $324,751 and $321,315 at September     30, 2003 and December 31, 2002, respectively) |   | 19,636     | 23,072    
|Deferred rent receivable (Note 2)                                                                                                                                                          |   | 226,399    | 238,911   
|                                                                                                                                                                                           |   |            |           
|Total other assets                                                                                                                                                                         |   | 456,693    | 1,152,075 
|                                                                                                                                                                                           |   |            |           
|Total assets                                                                                                                                                                               | $ | 9,593,273  | 10,797,155



See accompanying notes to financial statements.

-2-

---

INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Balance Sheets
(continued)
September 30, 2003 and December 31, 2002
(unaudited)Liabilities and Partners' Capital

|                                                                                                                                                                |   | 2003         | 2002        
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------ | ------------
|Current liabilities:                                                                                                                                            |   |              |             
|Accounts payable and accrued expenses                                                                                                                           | $ | 10,839       | 11,585      
|Accrued real estate taxes                                                                                                                                       |   | 2,006        | 2,500       
|Distributions payable (Note 5)                                                                                                                                  |   | 107,204      | 114,175     
|Due to Affiliates (Note 3)                                                                                                                                      |   | 16,212       | 3,795       
|Deposits held for others                                                                                                                                        |   | 86,775       | 105,222     
|Current portion of deferred gain on sale of investment property                                                                                                 |   | 950          | 1,742       
|                                                                                                                                                                |   |              |             
|Total current liabilities                                                                                                                                       |   | 223,986      | 239,019     
|                                                                                                                                                                |   |              |             
|Other liabilities                                                                                                                                               |   | 20,727       | -           
|Deferred loan fees                                                                                                                                              |   | 234          | 800         
|Long-term debt                                                                                                                                                  |   | 1,515,000    | 1,515,000   
|Commission payable to Affiliates                                                                                                                                |   | 156,835      | 156,835     
|Deferred gain on sale of investment property, less current portion                                                                                              |   | 57,409       | 115,861     
|                                                                                                                                                                |   |              |             
|Total liabilities                                                                                                                                               |   | 1,974,191    | 2,027,515   
|                                                                                                                                                                |   |              |             
|Partners' capital:                                                                                                                                              |   |              |             
|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, 59,285.65 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                                                                                                                                           |   | 26,010,526   | 25,678,129  
|Cumulative distributions                                                                                                                                        |   | (46,804,646) | (45,321,691)
|                                                                                                                                                                |   |              |             
|                                                                                                                                                                |   | 7,655,325    | 8,805,883   
|                                                                                                                                                                |   |              |             
|Total Partners' capital                                                                                                                                         |   | 7,619,082    | 8,769,640   
|                                                                                                                                                                |   |              |             
|Total liabilities and Partners' capital                                                                                                                         | $ | 9,593,273    | 10,797,155  



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, 2003 and 2002
(unaudited)

|                                                                     |   | Three months       | Three months       | Nine months        | Nine months       
|-------------------------------------------------------------------- | - | ------------------ | ------------------ | ------------------ | ------------------
|                                                                     |   | ended              | ended              | ended              | Ended             
|                                                                     |   | September 30, 2003 | September 30, 2002 | September 30, 2003 | September 30, 2002
|Income:                                                              |   |                    |                    |                    |                   
|Rental income (Notes 1 and 2)                                        | $ | 367,992            | 389,972            | 1,097,941          | 1,169,914         
|Interest income                                                      |   | 6,290              | 33,365             | 30,654             | 162,040           
|Other income                                                         |   | -                  | 17,429             | -                  | 30,048            
|                                                                     |   |                    |                    |                    |                   
|                                                                     |   | 374,282            | 440,766            | 1,128,595          | 1,362,002         
|Expenses:                                                            |   |                    |                    |                    |                   
|Professional services to Affiliates                                  |   | 6,588              | 3,238              | 18,547             | 9,665             
|Professional services to non-affiliates                              |   | 1,782              | 3,000              | 31,762             | 33,760            
|General and administrative expenses to     Affiliates                |   | 11,717             | 7,573              | 32,058             | 20,078            
|General and administrative expenses to     non-affiliates            |   | 7,205              | 10,658             | 47,000             | 30,755            
|Property operating expenses to Affiliates                            |   | 3,929              | 3,873              | 11,727             | 11,467            
|Property operating expenses to non- affiliates                       |   | 7,745              | -                  | 29,363             | 924               
|Interest expense to non-affiliates                                   |   | 26,985             | 26,985             | 80,076             | 80,076            
|Bad debt expense                                                     |   | -                  | -                  | 372,953            | -                 
|Depreciation                                                         |   | 77,818             | 68,294             | 223,931            | 204,883           
|Amortization                                                         |   | 2,675              | 2,675              | 8,025              | 8,025             
|                                                                     |   |                    |                    |                    |                   
|                                                                     |   | 146,444            | 126,296            | 855,442            | 399,633           
|                                                                     |   |                    |                    |                    |                   
|Operating income                                                     |   | 227,838            | 314,470            | 273,153            | 962,369           
|Gain on sale of investment property                                  |   | 58,294             | 196,903            | 59,244             | 457,582           
|                                                                     |   |                    |                    |                    |                   
|Net income                                                           | $ | 286,132            | 511,373            | 332,397            | 1,419,951         
|                                                                     |   |                    |                    |                    |                   
|Net income allocated to:                                             |   |                    |                    |                    |                   
|General Partner                                                      |   | -                  | -                  | -                  | -                 
|Limited Partners                                                     |   | 286,132            | 511,373            | 332,397            | 1,419,951         
|                                                                     |   |                    |                    |                    |                   
|Net income                                                           | $ | 286,132            | 511,373            | 332,397            | 1,419,951         
|                                                                     |   |                    |                    |                    |                   
|Net income per weighted average Limited   Partner Units of 59,285.65 | $ | 4.83               | 8.63               | 5.61               | 23.95             
|                                                                     |   |                    |                    |                    |                   



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, 2003 and 2002
(unaudited)

|                                                                                      |   | 2003        | 2002       
|------------------------------------------------------------------------------------- | - | ----------- | -----------
|Cash flows from operating activities:                                                 |   |             |            
|Net income                                                                            | $ | 332,397     | 1,419,951  
|Adjustments to reconcile net income to net cash provided by operating     activities: |   |             |            
|Bad debt expense                                                                      |   | 372,953     | -          
|Gain on sale of investment property                                                   |   | (59,244)    | (457,582)  
|Depreciation                                                                          |   | 223,931     | 204,883    
|Amortization                                                                          |   | 8,025       | 8,025      
|Changes in assets and liabilities:                                                    |   |             |            
|Accounts and interest receivable                                                      |   | 1,539       | 13,818     
|Deferred rent receivable                                                              |   | 12,512      | (83,748)   
|Accounts payable and accrued expenses                                                 |   | (746)       | (220)      
|Accrued real estate taxes                                                             |   | (494)       | (629)      
|Due to Affiliates                                                                     |   | 12,417      | (98)       
|Unearned income                                                                       |   | 20,161      | (6,065)    
|Net cash provided by operating activities                                             |   | 923,451     | 1,098,335  
|Cash flows from investing activities:                                                 |   |             |            
|Additions to investment properties                                                    |   | (400,000)   | -          
|Principal payments received on mortgage loans receivable                              |   | 305,145     | 1,514,933  
|Net cash provided by (used in) investing activities                                   |   | (94,855)    | 1,514,933  
|Cash flows from financing activities:                                                 |   |             |            
|Cash distributions                                                                    |   | (1,489,926) | (1,876,356)
|Deposits held for others                                                              |   | (18,447)    | (33,542)   
|Net cash used in financing activities                                                 |   | (1,508,373) | (1,909,898)
|Net increase (decrease) in cash and cash equivalents                                  |   | (679,777)   | 703,370    
|Cash and cash equivalents at beginning of period                                      |   | 1,904,517   | 996,745    
|                                                                                      |   |             |            
|Cash and cash equivalents at end of period                                            | $ | 1,224,740   | 1,700,115  
|                                                                                      |   |             |            
|Supplemental disclosure of non-cash investing activities:                             |   |             |            
|Cash paid for interest                                                                | $ | 80,370      | 80,370     
|                                                                                      |   |             |            







See accompanying notes to financial statements.

-5-

---

INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
September 30, 2003
(unaudited)

Readers of this Quarterly Report should refer to the Partnership's audited financial statements for the fiscal year ended December 31, 2002, which are included in the Partnership's 2002 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 or units pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The offering terminated on August 3, 1988, after the Partnership had sold 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 as limited partners to the Partnership.  Inland Real Estate Investment Corporation is the general partner.  The limited partners share in the benefits of ownership of the Partnership's real property investments in proportion to the number of units held. 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 preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.

In the opinion of management, the financial statements contain all the adjustments necessary 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.



On January 1, 2003, the Partnership adopted FASB Interpretation No. 45 ("FIN 45") "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others, an interpretation of FASB Statements No. 5, 57 and 107 and a rescission of FASB Interpretation No. 34. FIN 45 elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under guarantees issued. FIN 45 also clarifies that a guarantor is required to recognize, at inception of a guarantee, a liability for the fair value of the obligation undertaken. The adoption of FIN 45 did not have a material effect on the Partnership's financial statements.

-6-



---

INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
September 30, 2003
(unaudited)



In January 2003, FASB issued Interpretation No. 46 ("FIN 46") "Consolidation of Variable Interest Entities and Interpretation of Accounting Research Bulletin (ARB) No. 51".  The primary objectives of FIN No. 46 are to provide guidance on the identification of entities for which control is achieved through means other than through voting rights (Variable Interest Entities) and how to determine when and which business enterprise should consolidate the Variable Interest Entity (the Primary Beneficiary).  The consolidation provisions of FIN 46 apply immediately to variable interests in variable interest entities created after January 31, 2003. It applies in the first fiscal year or interim period beginning after June 15, 2003 to variable interest entities in which an enterprise that is a public company holds a variable interest that it acquired before February 1, 2003. Management of the Partnership does not anticipate that the provisions of FIN 46 will have a material impact on the Partnership's financial condition and results of operations.



In May 2003, the FASB issued Statement No. 150 ("SFAS 150") "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity".  This statement establishes standards for classifying and measuring certain financial instruments as liabilities that embody obligations of the issuer and have characteristics of both liabilities and equity. SFAS No. 150 is effective for all financial instruments created or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. Management of the Partnership does not anticipate that the provisions of SFAS No. 150 will have an impact on the Partnership's financial condition and results of operations.



(2)  Deferred Rent Receivable

Certain tenant leases contain provisions providing for scheduled 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 $12,512 and an increase of $83,748 for the nine months ended September 30, 2003 and 2002, respectively, of rental income for the period of occupancy for which scheduled rent increases apply and $226,399 and $238,911 in related deferred rent receivable as of September 30, 2003 and December 31, 2002, respectively.  These amounts will be collected over the terms of the related leases as scheduled rent payments are made.

-7-



---

INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
September 30, 2003
(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 $16,212 and $3,795 was unpaid at September 30, 2003 and December 31, 2002, 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 $11,727 and $11,467 for the nine months ended September 30, 2003 and 2002, respectively.



In connection with the sale of McHenry Plaza Shopping Center on July 19, 2000, the Partnership recorded $68,700 of sales commission payable to an affiliate of the general partner.  Such commission has been deferred until the limited partners receive their original capital plus a return as specified in the partnership agreement.



In connection with the sale of Rantoul Walmart on August 5, 2000, the Partnership recorded $82,500 of sales commission payable to an affiliate of the general partner.  Such commission has been deferred until the limited partners receive their original capital plus a return as specified in the partnership agreement.



In connection with the sale of Douglas Towers on August 24, 2001, the Partnership recorded $5,635 of sales commission payable to an affiliate of the general partner.  Such commission has been deferred until the limited partners receive their original capital plus a return as specified in the partnership agreement.



(4)  Mortgage Loans Receivable

In 2001, we sold the Douglas Towers apartment center on an installment basis and recorded a note receivable from the purchaser. As of August 1, 2002, the purchaser of the Douglas Towers apartment complex had ceased making the interest payments on the amount due to us. On June 11, 2003, as mortgagee in possession, we received and accepted an offer on the property at the foreclosure sale for approximately $95,000.  As a result of this offer, we have recorded $372,953 of bad debt expense relating to the mortgage receivable on the property.



(5)  Subsequent Events

During October, 2003, the Partnership paid a distribution of $107,204 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  "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, competition for tenants; 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.



Critical Accounting Policies

On December 12, 2001, the Securities and Exchange Commission issued Financial Reporting Release ("FRR") No. 60 "Cautionary Advice Regarding Disclosure About Critical Accounting Policies."  A critical accounting policy is one that would materially effect our operations or financial condition, and requires management to make estimates or
judgments in certain circumstances. We believe that our most critical accounting policies relate to how we value our investment properties and mortgage loans receivable, recognize revenue, and our cost capitalization and depreciation policies. These
judgments often result from the need to make estimates about the effect of matters that are inherently uncertain.  The purpose of the FRR is to provide stockholders with an understanding of how management forms these policies.  Critical accounting policies discussed in this section are not to be confused with accounting principles and methods disclosed in accordance with accounting principles generally accepted in the United States of America ("GAAP").  GAAP requires information in financial statements about accounting principles, methods used and disclosures pertaining to significant estimates.  The following disclosure discusses
judgments known to management pertaining to trends, events or uncertainties known which were taken into consideration upon the application of those policies and the likelihood that materially different amounts would be reported upon taking into consideration different conditions and assumptions.

Valuation of Investment Properties -On a quarterly basis, in accordance with Statement of Financial Accounting Standards No. 144, we conduct an impairment analysis to ensure that the carrying value of each property does not exceed its estimated fair value.  If this were to occur, we would be required to record an impairment loss equal to the excess of carrying value over fair value.

In determining the value of an investment property and whether the property is impaired, management considers several factors such as projected rental and vacancy rates, property operating expenses, capital expenditures and interest rates.  The capitalization rate used to determine property valuation is based on the market in which the property is located, length of leases, tenant financial strength, the economy in general, demographics, environment, property location, visibility, age, physical condition and investor return requirements among others. All of the aforementioned factors are considered by management in determining the value of any particular property.  The value of any particular property is sensitive to the actual results of any of these uncertain factors, either individually or taken as a whole.  Should the actual results differ from management's judgement, the valuation could be negatively or positively affected.

The valuation and possible subsequent impairment of investment properties is a significant estimate that can and does change based on management's continuous process of analyzing each property.

-9-

---

Valuation Mortgage Loans Receivable-On a quarterly basis, in accordance with Statement of Financial Accounting Standards No. 144, we conduct an impairment analysis to ensure that the carrying value of each mortgage loan receivable does not exceed its estimated fair value.  If this were to occur, we would be required to record an impairment loss equal to the excess of carrying value over fair value.

In determining the value of mortgage loans receivable, management considers several factors such as projected sales proceeds and expenses related to the property associated with the mortgage. Should the actual results differ from management's
judgment, the valuation could be negatively or positively affected.

The valuation and possible subsequent allowance for doubtful accounts is a significant estimate that can and does change based on management's continuous process of analyzing each mortgage loan receivable.

Revenue Recognition - Under GAAP, we are required to recognize rental income based on the effective monthly rent for each lease.  The effective monthly rent is equal to the average monthly rent during the term of the lease, not the stated rent for any particular month.  The process, known as "straight-lining" rent generally has the effect of increasing rental revenues during the early phases of a lease and decreasing rental revenues in the latter phases of a lease. If rental income calculated on a straight-line basis exceeds the cash rent due under the lease, the difference is recorded as an increase in deferred rent receivable and included as a component of rental income in the accompanying Statements of Operations.  If the cash rent due under the lease exceeds rental income calculated on a straight-line basis, the difference is recorded as a decrease in deferred rent receivable and is also included as a component of rental income in the accompanying Statements of Operations.

Cost Capitalization and Depreciation Policies -We review all expenditures and capitalize any item exceeding $5,000 deemed to be an upgrade or a tenant improvement.  If we capitalize more expenditures, current depreciation expense would be higher, however, total current expenses would be lower.  Depreciation expense is computed using the straight-line method.  Buildings and improvements are depreciated based upon estimated useful lives of 30 years for buildings and improvements, 15 years for site improvements and the remaining life of the related lease for tenant improvements.



Liquidity and Capital Resources

On August 3, 1987, we commenced an offering of 50,000 (increased to 60,000) limited partnership units or units pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The offering terminated on August 3, 1988, after we had sold 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 have been admitted as limited partners to the partnership.  We acquired seven properties using $25,831,542 of capital proceeds received.  During 1994 and 1995, we sold the thirty-eight six-unit condominium buildings comprising the Schaumburg Terrace condominium complex. We sold one of the three lots adjacent to the Hillside Living Center during September 1997. In August 2001, we sold the 35 unit retirement apartment center, Douglas Tower apartments. As of September 30, 2003, cumulative distributions to limited partners totaled $46,804,646, including $2,095,863 of supplemental capital contributions from the general partner, which represents distributable cash flow from the properties. We repurchased 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.

As of September 30, 2003, we had cash and cash equivalents of approximately $1,224,000 which includes approximately $86,000 for the payment of real estate taxes for Douglas and Hillside Living Centers.

-10-

---

Due to the payoff of the mortgage receivables relating to the sale of Schaumburg Terrace and additional property expenses incurred relating to Douglas Towers, the properties we own, along with the interest received on the Schaumburg Terrace mortgage receivables, did not generate sufficient cash flow to meet the 8% annualized distributions to the limited partners (paid monthly), in addition to covering all our operating expenses for the nine months ended September 30, 2003.  As a result, we have relied on working capital retained from the principal payoffs of the Schaumburg Terrace receivable to meet our cash requirements. To the extent that future cash flow is insufficient to meet our requirements, we may rely on working capital reserve, supplemental capital contributions from our general partner, advances from affiliates of our general partner, other short-term financing, or may sell one or more of the properties.

We executed an amendment of the Scandinavian Health Spa lease through September 30, 2013. Annual base rent increased from $359,094 to $383,231 per year commencing April 1, 2003.  As part of the extension, we paid $400,000 for tenant improvements and equipment at the property.



Transactions with Related Parties

Our general partner and its affiliates are entitled to reimbursement for salaries and expenses of employees of the general partner and its affiliates relating to our administration.  Such costs are included in professional services and general and administrative expenses to affiliates, of which $16,212, and $3,795 was unpaid at September 30, 2003 and December 31, 2002, respectively.

An affiliate of our general partner is entitled to receive property management fees for management and leasing services.  We incurred and paid property management fees of $11,727 and $11,467 for the nine months ended September 30, 2003 and 2002, respectively.





Results of Operations

As of September 30, 2003, we own four operating properties, two living centers, a health club and a Walmart, which are leased on a "triple-net" basis which means that all expenses of the property are passed through to the tenant.

The gain on the sale of investment property of $59,244 and $457,582 for the nine months ended September 30, 2003 and 2002, respectively, is the result of deferred gains from the Schaumburg Terrace condominium sales being recognized as cash is received on the related financing extended to the individual purchasers.  As of September 30, 2003, there is one mortgage loan receivable remaining relating to the sale of the Schaumburg Terrace condominiums.



Rental income was $1,097,941 and $1,169,914 for the nine months ended September 30, 2003 and 2002, respectively. This decrease was due to lower effective annual rents on the nursing home properties as a result of lease amendments effective March 1, 2003.  This decrease was partially offset by an increase in the Scandinavian Health Spa lease which was amended effective April 1, 2003.

Interest income was $30,654 and $162,040 for the nine months ended September 30, 2003 and 2002, respectively. This decrease is due to the payoff of ten mortgage loans receivable in 2002 and the payoff of two mortgage loans receivable in 2003.

-11-

---

In 2001, we sold the Douglas Towers apartment center on an installment basis and recorded a note receivable from the purchaser. As of August 1, 2002, the purchaser of the Douglas Towers apartment complex had ceased making the interest payments on the amount due to us. We have not recorded any additional interest income receivable subsequent to the cessation of interest payments. Our general partner continued to monitor the operations of the property. In December 2002, we took over management responsibilities of the property. Over the next several months, management realized that the expenses to hold and market the property were greater than anticipated, and due to poor economic conditions in the property area, it was determined that it would be in the best interest of the investors to sell the property. At that time, management believed that the anticipated sales proceeds would exceed the carrying amount of the mortgage receivable. A foreclosure sale was held on June 11, 2003, and only one bidder expressed interest in the property. Rather than incur significant costs to improve the property, management accepted the offer on the property at the foreclosure sale for approximately $95,000.  As a result of this offer, we have recorded $372,953 of bad debt expense relating to the mortgage receivable on the property. The sale was completed on July 15, 2003 and we received $89,654, net of prorations.

Property operating expenses to non-affiliates were $29,363 and $924 for the nine months ended September 30, 2003 and 2002, respectively. This increase was due to property level expenses relating to Douglas Towers that we paid while in the process of obtaining title to the property.



Professional services to affiliates were $18,547 and $9,665 for the nine months ended September 30, 2003 and 2002, respectively. This increase was due to increases in legal and accounting services required by us.

General and administrative expenses to affiliates were $32,058 and  $20,078 for the nine months ended September 30, 2003 and 2002, respectively. This increase was due to mortgage servicing fees paid and an increase in postage expense. General and administrative expenses to non-affiliates were $47,000 and $30,755 for the nine months ended September 30, 2003 and 2002, respectively. This increase was due to an increase in the Illinois replacement tax incurred.



The following is a list of approximate occupancy levels for the partnership's investment properties as of the end of each quarter during 2002 and 2003:

|                                     | 2002  |       | 2003 
|------------------------------------ | ----- | ----- | -----
|Properties                           | 03/31 | 06/30 | 09/30
|Douglas Living &   Retirement Center | 100%  | 100%  | 100% 
|Mattoon, Illinois                    |       |       |      
|                                     |       |       |      
|Hillside Living Center               | 100%  | 100%  | 100% 
|Yorkville, Illinois                  |       |       |      
|                                     |       |       |      
|Scandinavian Health Spa              | 100%  | 100%  | 100% 
|Westlake, Ohio                       |       |       |      
|                                     |       |       |      
|Duncan Wal-Mart *                    | --    | --    | --   
|Duncan, Oklahoma                     |       |       |      



* This store has been vacated by the lessee, however the lessee continues to pay rent.

-12-

---

Item 3: Quantitative and Qualitative Disclosures about Market Risks

Not Applicable.





Item 4: Controls and Procedures



Within 90 days prior to the filing date of this report, the general partner conducted, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures.  Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective in timely alerting them to material information that is required to be disclosed in the periodic reports that we must file with the Securities and Exchange Commission.

There have been no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.







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:

31.1 Rule 13a-14(a)/15d-14(a) Certification by principal executive officer

31.2 Rule 13a-14(a)/15d-14(a) Certification by principal financial officer

32.1 Section 1350 Certification by principal executive officer

32.2 Section 1350 Certification by principal financial officer

(b)  Reports on Form 8-K:

None

-13-



---

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/ BRENDA G. GUJRAL                     
|      |                                          
|By:   | Brenda G. Gujral                         
|      | President                                
|Date: | November 12, 2003                        
|      |                                          
|      |                                          
|      | /S/ PATRICIA A. DELROSSO                 
|      |                                          
|By:   | Patricia A. DelRosso                     
|      | Senior Vice President                    
|Date: | November 12, 2003                        
|      |                                          
|      |                                          
|      | /S/ KELLY TUCEK                          
|      |                                          
|By:   | Kelly Tucek                              
|      | Assistance Vice President and            
|      | principal financial officer              
|Date: | November 12, 2003                        

-14-