UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                 ---------------


                                    FORM 10-Q


             (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                      THE SECURITIES EXCHANGE ACT OF 1934.
                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001
                                       OR
          ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934.
                 FOR THE TRANSITION PERIOD FROM ______ TO ______


                         Commission File Number 33-14582
                        PAINEWEBBER R&D PARTNERS II, L.P.
             (Exact name of registrant as specified in its charter)


                    DELAWARE                                   13-3437420
         (State or other jurisdiction of                    (I.R.S. Employer
          Incorporation or organization)                   Identification No.)


 1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK                  10019
    (Address of principal executive offices)                   (Zip code)

       Registrant's telephone number, including area code: (212) 713-2000

                                 ---------------


      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

                                 ---------------

<PAGE>


                             SPECIAL NOTE REGARDING
                           FORWARD LOOKING STATEMENTS



      The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Except for the historical information
contained herein, the matters discussed herein are forward-looking statements.
Such forward-looking statements involve known and unknown risks, uncertainties
and other factors that may cause the actual results, performance or achievements
of PaineWebber R&D Partners II, L.P. or industry results to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include, among others,
the following: general economic and business conditions; fluctuations in the
value of securities for which only a limited, or no, public market exists; the
Sponsor Companies (hereinafter defined) having insufficient funds to
commercialize products to their maximum potential; the restructuring of Sponsor
Companies; the dependence of PaineWebber R&D Partners II, L.P. on the skills of
certain scientific personnel; and the dependence of PaineWebber R&D Partners II,
L.P. on the General Partner (hereinafter defined).



<PAGE>


                        PAINEWEBBER R&D PARTNERS II, L.P.
                        (A DELAWARE LIMITED PARTNERSHIP)


                                    FORM 10-Q
                                 MARCH 31, 2001



                                Table of Contents

PART I.       FINANCIAL INFORMATION                                        Page

Item 1.       Financial Statements

              Statements of Financial Condition (unaudited) at               2
              March 31, 2001 and December 31, 2000

              Statements of Operations
              (unaudited) for the three months ended March 31,
              2001 and 2000                                                  3

              Statement of Changes in Partners' Capital
              (unaudited) for the three months
              ended March 31, 2001                                           3

              Statements of Cash Flows
              (unaudited) for the three months
              ended March 31, 2001 and 2000                                  4

              Notes to Financial Statements
              (unaudited)                                                   5-9

Item 2.       Management's Discussion and Analysis of Financial             10
              Condition and Results of Operations

PART II.      OTHER INFORMATION

Item 6.       Exhibits and Reports on Form 8-K                              11

              Signatures                                                    12


All schedules are omitted either because they are not applicable or the
information required to be submitted has been included in the financial
statements or notes thereto.



                                       1
<PAGE>


                          PART I FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS

PAINEWEBBER R&D PARTNERS II, L.P.
(A DELAWARE LIMITED PARTNERSHIP)

STATEMENTS OF FINANCIAL CONDITION
(unaudited)


                                                    March 31,      December 31,
                                                         2001              2000
--------------------------------------------------------------------------------
Assets:

      Cash                                        $     6,998       $     6,998

      Marketable securities, at market value        5,606,903         1,018,977

      Royalty  and other receivables                2,747,286         1,893,334

                                                  -----------       -----------
Total assets                                      $ 8,361,187       $ 2,919,309
                                                  ===========       ===========

Liabilities and partners' capital:

      Accrued liabilities                         $    93,115       $   146,657

      Partners' capital                             8,268,072         2,772,652

                                                  -----------       -----------
Total liabilities and partners' capital           $ 8,361,187       $ 2,919,309
                                                  ===========       ===========


--------------------------------------------------------------------------------
See notes to financial statements.




                                       2

<PAGE>


PAINEWEBBER R&D PARTNERS II, L.P.
(A DELAWARE LIMITED PARTNERSHIP)

STATEMENTS OF OPERATIONS
(unaudited)

For the three months ended March 31,                      2001            2000
--------------------------------------------------------------------------------
Revenues:
      Interest income                              $    52,133     $     4,030
      Income from product development projects       5,502,286       9,459,498
                                                   -----------     -----------
                                                     5,554,419       9,463,528
Expenses:
      General and administrative costs                  58,999         165,002
                                                   -----------     -----------

Net income                                         $ 5,495,420     $ 9,298,526
                                                   ===========     ===========
Net income per partnership unit:
      Limited partners (based on 8,257 units)      $    658.89     $  1,114.88
      General partner                              $ 54,954.20     $ 92,985.26

--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
(unaudited)

                                                   Limited           General
For the three months ended March 31, 2001          Partners          Partner        Total
-------------------------------------------------------------------------------------------
<S>                                              <C>               <C>          <C>
Balance at January 1, 2001                       $ 2,740,843       $  31,809    $ 2,772,652

Net income                                         5,440,466          54,954      5,495,420
                                                 -----------       ---------    -----------
Balance at March 31, 2001                        $ 8,181,309       $  86,763    $ 8,268,072
                                                 ===========       =========    ===========
</TABLE>


--------------------------------------------------------------------------------
See notes to financial statements.




                                        3
<PAGE>


PAINEWEBBER R&D PARTNERS II, L.P.
(A DELAWARE LIMITED PARTNERSHIP)

STATEMENTS OF CASH FLOWS
(unaudited)


For the three months ended March 31,                       2001            2000
--------------------------------------------------------------------------------
Cash flows from operating activities:
Net income                                         $  5,495,420    $  9,298,526

Increase in operating assets:
  Marketable securities                              (4,587,926)     (4,203,631)
  Royalty  and other receivables                       (853,952)     (5,144,652)
  Prepaid expense                                             -          (5,900)

(Decrease) increase in operating liabilities:
  Accrued liabilities                                   (53,542)         55,657
                                                   ------------    ------------
Cash provided by operating activities                         -               -
                                                   ------------    ------------

Increase in cash                                              -               -

Cash at beginning of period                               6,998           6,998
                                                   ------------    ------------

Cash at end of period                              $      6,998    $      6,998
                                                   ============    ============


--------------------------------------------------------------------------------

Supplemental disclosure of cash flow information:

The Partnership paid no cash for interest or taxes during the three months ended
March 31, 2001 and 2000.

--------------------------------------------------------------------------------
See notes to financial statements.




                                        4
<PAGE>


                        PAINEWEBBER R&D PARTNERS II, L.P.
                        (A DELAWARE LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)


1.    ORGANIZATION AND BUSINESS


         The financial information as of and for the periods ended March 31,
2001 and 2000 is unaudited. However, in the opinion of management of PaineWebber
R&D Partners II, L.P. (the "Partnership"), such information includes all
adjustments, consisting only of normal recurring accruals, necessary for a fair
presentation. The results of operations reported for the interim period ended
March 31, 2001, are not necessarily indicative of results to be expected for the
year ended December 31, 2001. These financial statements should be read in
conjunction with the most recent annual report of the Partnership on Form 10-K
for the year ended December 31, 2000.

      The Partnership is a Delaware limited partnership that commenced
operations on September 30, 1987 with a total of $72.0 million available for
investment. PWDC Holding Company (the "Manager") is the general partner of
PaineWebber Technologies II, L.P. (the "General Partner"), which is the general
partner of the Partnership. PWDC Holding Company is a wholly-owned subsidiary of
Paine Webber Development Corporation ("PWDC"), an indirect, wholly-owned
subsidiary of UBS Americas Inc. (formerly, Paine Webber Group Inc. ("PWG")).1
The Partnership will terminate on December 31, 2012, unless its term is extended
or reduced by the General Partner.

      The principal objective of the Partnership has been to provide long-term
capital appreciation to investors through investing in the development and
commercialization of new products with technology companies ("Sponsor
Companies"), which have been expected to address significant market
opportunities. The Partnership has been engaged in diverse product development
projects (the "Projects") including product development contracts, participation
in other partnerships and investments in securities of the Sponsor Companies.
Once the product development phase has been completed, the Sponsor Companies
have had the option to license and commercialize the products resulting from the
product development project, and the Partnership has had the right to receive
payments based upon the sale of such products.










----------

(1)  On November 3, 2000, pursuant to the Agreement and Plan of Merger dated as
     of July 12, 2000 by and among PWG, UBS AG and UBS Americas Inc., PWG merged
     with and into UBS Americas Inc. The General Partner does not expect this
     transaction to have a material effect on the Partnership.


                                       5
<PAGE>

                        PAINEWEBBER R&D PARTNERS II, L.P.
                        (A DELAWARE LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

(NOTE 1 CONTINUED)

      The following table sets forth the proportion of each distribution to be
received by limited partners of the Partnership (the "Limited Partners") and the
General Partner (collectively the "Partners"). All distributions to the
individual Limited Partners have been made pro rata in accordance with their
individual capital contributions.
                                                            LIMITED     GENERAL
                                                           PARTNERS     PARTNER
                                                          ----------   ---------
      I.   Until the value of the aggregate
           distributions for each limited
           partnership unit ("Unit") equals
           $10,000 plus simple interest on such
           amount accrued at 7% per annum for
           each Unit sold at the Initial Closing
           (6% per annum for each subsequent Unit
           sold up to the 5,000th Unit and 5% per
           annum for each Unit sold thereafter)
           ("Contribution Payout"). At March 31,
           2001, Contribution Payout ranged from
           $15,875 per Unit to $19,450 per Unit ............   99%         1%

      II.  After Contribution Payout and until
           the value of the aggregate
           distributions for each Unit equals
           $50,000 ("Final Payout") ........................   80%        20%

      III. After Final Payout ..............................   75%        25%

      For the quarter ended March 31, 2001, the Partnership made no cash
distributions. As of this date, the Partnership has made cash and security
distributions, as valued on the dates of distribution, since inception of $5,856
and $7,206 per Unit, respectively.

      Profits and losses of the Partnership are allocated as follows: (i) until
cumulative profits and losses for each Unit equals Contribution Payout, 99% to
Limited Partners and 1% to the General Partner, (ii) after Contribution Payout
and until cumulative profits and losses for each Unit equals Final Payout, 80%
to Limited Partners and 20% to the General Partner, and (iii) after Final
Payout, 75% to Limited Partners and 25% to the General Partner. As of March 31,
2001, the cumulative profit for the Partnership was $1,608 per Unit.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      The financial statements are prepared in conformity with accounting
principles generally accepted in the United States which require management to
make certain estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ from
those estimates.

      Marketable securities consist of a money market fund which is recorded at
market value. Marketable securities are not considered cash equivalents for the
Statements of Cash Flows.

      The Partnership has invested in product development contracts with Sponsor
Companies either directly or through product development limited partnerships.
The Partnership has expensed product


                                        6
<PAGE>


                        PAINEWEBBER R&D PARTNERS II, L.P.
                        (A DELAWARE LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)


(NOTE 2 CONTINUED)

development costs when incurred by the Sponsor Companies. Income received and/or
accrued from investments in Projects is reflected in the Statements of
Operations for the period in which the income has been earned.

MARKETABLE SECURITIES

      As of March 31, 2001 and December 31, 2000, the Partnership had invested
$5,606,903 and $1,018,977, respectively, in a money market fund.

4.    RELATED PARTY TRANSACTIONS

      The Manager is entitled to receive a management fee for services rendered
to the Partnership. Commencing July 1, 1996, the Manager elected to discontinue
the management fee charged to the Partnership.

      The money market fund invested in by the Partnership is managed by an
affiliate of UBS PaineWebber Inc. ("PWI").

      PWDC and PWI, and its affiliates, have acted in an investment banking
capacity for several of the Sponsor Companies. In addition, PWDC and its
affiliates have had direct limited partnership interests in some of the same
Projects as the Partnership.

5.    PRODUCT DEVELOPMENT PROJECTS

      On January 31, 1997, pursuant to the provisions of the Partnership
Purchase Option Agreement between Centocor, Inc. ("Centocor") and the
Partnership, Centocor exercised its option to purchase the limited partnership
interests of Centocor Partners III, L.P. ("CP III"). The Partnership owned 22
Class A limited partnership units and 111 Class C limited partnership units. As
a result, the Partnership has been and will continue to receive future quarterly
payments (the "CPIs") based on sales of ReoPro(TM), a drug developed by CP III.
For the quarters ended March 31, 2001 and 2000 the Partnership accrued income
due from the CPIs of $1,575,000 and $2,200,000, respectively.

      The Partnership's remaining active Project is an investment of 111 Class A
limited partnership units in Genzyme Development Partners, L.P. ("GDP").
Pursuant to the terms of the Partnership Purchase Agreement among Genzyme
Corporation ("Genzyme"), GDP, Genzyme Development Corporation and the Class A
Limited Partners of GDP (including the Partnership), Genzyme exercised its
option to purchase the Class A limited partnership interests of GDP on January
12, 2001. The purchase price consisted of an advance payment price of $35,000
per Class A limited partnership interest plus royalties on the sale of Sepra
products for ten years commencing with the first calendar quarter of 2001. In
January 2001 the Partnership received $3,885,000 as the owner of 111 Class A


                                       7
<PAGE>


                        PAINEWEBBER R&D PARTNERS II, L.P.
                        (A DELAWARE LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)


(NOTE 5 CONTINUED)

limited partnership interests and recognized income from product development
projects of this amount. The Partnership also accrued income of $80,000
representing the first quarterly payment due from Genzyme on the sale of Sepra
products.

      If the Projects produce any product for commercial sale, the Sponsor
Companies have had the option to enter into joint ventures or royalty agreements
with the Partnership to manufacture and market the products developed. In
addition, the Sponsor Companies have had the option to purchase the
Partnership's interest in the technology.

6.    INCOME TAXES

      The Partnership is not subject to federal, state or local income taxes.
Accordingly, individual Partners are required to report their distributive
shares of realized income and loss on their respective federal and state income
tax returns.

7.    LEGAL PROCEEDING

      On July 12, 1995, the Partnership commenced a derivative action against
Centocor and Centocor Development Corporation III ("CDC III") in the Chancery
Court of Delaware (the "Court") arising from certain agreements entered into by
Centocor and Eli Lilly & Company ("Lilly") in July 1992. The Partnership's
complaint alleged, among other things that: at least $25 million of the $100
million paid by Lilly to Centocor represented profits from the sale of ReoPro, a
Centocor drug, that Centocor is required to share with CP III; and because of
the Lilly transaction, Centocor was required to increase the percentages of
profits and revenues from ReoPro that it pays to CP III investors. Centocor had
taken the position that only $500,000 of the $100 million had to be shared with
CP III and that Centocor had no obligation to increase the percentages of ReoPro
profits and revenues that it pays to CP III investors. The Partnership sought to
proceed on behalf of CP III. The complaint sought to require Centocor and CDC
III to pay damages to CP III and to increase the percentages of future ReoPro
profits and revenues that Centocor must pay to CP III and its investors.

      In June 1997, the parties to the Partnership's action entered into an
agreement to settle the action. On March 15, 1999, the Court issued a memorandum
opinion and order approving the settlement as fair and reasonable. The agreement
provided, among other things, for Centocor to pay to CP III investors (including
the Partnership, a former limited partner in CP III) in the aggregate: $10.8
million, net of attorneys' fees and expenses as may be awarded by the Court (the
"Initial Payment"); an additional $5.0 million, if and when cumulative
world-wide sales of ReoPro exceed $600 million (the "Milestone Payment"); and
possible additional payments totaling $2.2 million, depending upon regulatory
developments in Japan.

      The agreement further provided for revisions to the ReoPro royalties
payable by Centocor to CP III investors through 2007 (the "Retroactive
Payments"). Under the agreement, those royalties would be paid based on revenues
from end-sales by Lilly and other distributors, as opposed to Centocor's
revenues on its sales to distributors. For 1997 and 1998, Centocor would pay an
aggregate of 6.5% of the first $175 million of United States end-sales revenues,
3.25% of such revenues above $175 million, and 3.25% of foreign end-sales
revenues. For 1999 through 2007, Centocor would pay


                                       8
<PAGE>


                        PAINEWEBBER R&D PARTNERS II, L.P.
                        (A DELAWARE LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)


(NOTE 7 CONTINUED)

an aggregate of 6.5% of the first $250 million of United States end-sales
revenues, 4% of such revenues above $250 million, and 3.25% of foreign end-sales
revenues. The agreement provided that investors would not receive less than
Centocor would otherwise have paid based on Centocor's sales of ReoPro.

      On January 31, 2000, the Court awarded legal fees and expenses relating to
the Centocor litigation approximating $1,476,000 to the Partnership's counsel
plus interest at the statutory rate. PWDC, which had advanced the funds
necessary to pay the Partnership's legal fees and expenses relating to this
litigation, was reimbursed its applicable share of this award in the amount of
$1,244,000. Legal fees and expenses in the amount of $650,000 together with
interest at the statutory rate was awarded to counsel for certain objectors to
the settlement. On February 17, 2000, the Court signed an order of final
judgment resolving all settlement matters regarding the litigation with
Centocor. During the first quarter of 2000, the Partnership received $3,195,190
representing its allocable share of the Initial Payment which has been reflected
as income from product development projects in the accompanying financial
statements. As of March 31, 2000, the Partnership also accrued income from
product development projects in the amount of $4,064,308. Such amount
represented the Partnership's allocable share of the Milestone Payment and the
Retroactive Payments due for the years 1997 through 1999.







                                       9
<PAGE>


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


LIQUIDITY AND CAPITAL RESOURCES

         Partners' capital increased from $2.8 million at December 31, 2000, to
$8.3 million at March 31, 2001, resulting from the recognition of net income of
$5.5 million (as more fully explained in Results of Operations below).

         The Partnership's funds are invested in a money market fund until cash
is needed to pay for the ongoing management and administrative expenses of the
Partnership or upon the remittance of cash distributions to the Partners. Liquid
assets increased from $1.0 million at December 31, 2000 to $5.6 million at March
31, 2001, resulting primarily from the sale by the Partnership of its interest
in GDP for proceeds of $3.9 million and the receipt of a quarterly payment due
from the CPIs of $0.7 million.


RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THE
THREE MONTHS ENDED MARCH 31, 2000:

         Net income for the quarters ended March 31, 2001 and 2000 was $5.5
million and $9.3 million, respectively. The decrease in net income was due
primarily to a decrease in income from product development projects recognized
by the Partnership.

         Revenues for the three months ended March 31, 2001 and 2000 were $5.6
million and $9.5 million, respectively. For the quarter ended March 31, 2001,
the Partnership accrued $1.7 million with respect to income due from Sponsor
Companies as of this date. In addition, the Partnership received proceeds of
$3.9 million upon the sale of its interest in GDP. For this same period in 2000,
the Partnership accrued $2.2 million relating to its quarterly CPI payment due
as of this date. Also, the Partnership received and/or accrued for its allocable
share of the payments due from Centocor pursuant to the settlement agreement of
$7.3 million.

         Expenses decreased from $0.2 million for the quarter ended March 31,
2000 to $0.1 million for this same period in 2001 resulting primarily from a
decrease in the Partnership's legal expenses.








                                       10
<PAGE>


                            PART II OTHER INFORMATION


ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K.

           A)    EXHIBITS:

                 None

           B)    REPORTS ON FORM 8-K:

                 None






                                       11
<PAGE>


                                   SIGNATURES



      Pursuant to the requirements of Section 13 or 15(d) 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, on this 15th day of
May 2001.



                  PAINEWEBBER R&D PARTNERS II, L.P.


                  By:    PaineWebber Technologies II, L.P.
                         (General Partner)


                  By:    PWDC Holding Company
                         (general partner of the General Partner)



                  By:    /s/ Stephen R. Dyer
                         ----------------------------------------
                         Stephen R. Dyer
                         President*



                  By:    /s/ Robert J. Chersi
                         ----------------------------------------
                         Robert J. Chersi
                         Principal Financial and Accounting Officer*




*  The capacities listed are with respect to PWDC Holding Company, the Manager,
   as well as PWDC, the parent company of the Manager.



                                       12