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 QUARTER ENDED APRIL 30, 2000

                                    OR

       |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

            For the transition period from ______ to _______ .


                      Commission File Number: 0-18076


                 PAINEWEBBER INSURED MORTGAGE PARTNERS 1-B, L.P.
               ---------------------------------------------------
             (Exact name of registrant as specified in its charter)


            Delaware                                       04-3038480
            --------                                       ----------
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                          Identification No.)


265 Franklin Street, Boston, Massachusetts                    02110
------------------------------------------                    -----
(Address of principal executive offices)                    (Zip Code)


Registrant's telephone number, including area code  (617) 439-8118
                                                    --------------

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>



                 PAINEWEBBER INSURED MORTGAGE PARTNERS 1-B, L.P.

                                 BALANCE SHEETS
                  April 30, 2000 and July 31, 1999 (Unaudited)
                                 (In thousands)

                                     ASSETS
                                     ------

                                                   April 30       July 31
                                                   --------       -------

Investments in Debt Securities:
   Mortgage-Backed Securities
     available for sale                          $       -      $   2,715
   Participating Insured Mortgage Loans
     available for sale                             10,637         17,930
                                                 ---------      ---------
                                                    10,637         20,645

Cash and cash equivalents                              693          1,420
Interest and other receivables                          76            145
Deferred expenses, net                                  25            177
                                                 ---------      ---------
                                                 $  11,431      $  22,387
                                                 =========      =========


                        LIABILITIES AND PARTNERS' CAPITAL
                        ---------------------------------

Accounts payable - affiliates                    $       -      $      25
Accounts payable and accrued expenses                   27             39
Partners' capital                                   11,404         22,323
                                                 ---------      ---------
                                                 $  11,431      $  22,387
                                                 =========      =========


















                             See accompanying notes.


<PAGE>


                 PAINEWEBBER INSURED MORTGAGE PARTNERS 1-B, L.P.

                  STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
     For the three and nine months ended April 30, 2000 and 1999 (Unaudited)
                      (In thousands, except per Unit data)

                                      Three Months Ended      Nine Months Ended
                                           April 30,              April 30,
                                      ------------------      -----------------
                                        2000      1999         2000      1999
Revenues:                               ----      ----         ----      ----
   Interest income - Debt Securities   $   236   $   430     $  1,059   $ 1,315
   Interest income - Money Market           67        21          116        74
                                       -------   -------     --------   -------
                                           303       451        1,175     1,389
Expenses:
   Management fees                           -        47           90       143
   General and administrative              105        61          207       152
   Amortization expense                     45        43          133       132
                                       -------   -------     --------   -------
                                           150       151          430       427
                                       -------   -------     --------   -------
Operating income                           153       300          745       962

Gain on sale of Mortgage-Backed
  Securities                                16         -           16         -

Gain on sale of Participating
  Insured Mortgage Loan                      -         -          519         -
                                       -------   -------     --------   -------
Net income                                 169       300        1,280       962

Other comprehensive income (loss):
   Unrealized holding gains (losses)
     on debt securities                    (61)       (2)         331      (122)
   Reclassification adjustment for
     gain on sale of debt securities
     included in net income                (16)        -         (535)        -
                                       -------   -------     --------   -------
                                           (77)       (2)        (204)     (122)
                                       -------   -------     --------   -------
Comprehensive income                   $    92   $   298     $  1,076   $   840
                                       =======   =======     ========   =======

Net income per Unit of
  Depositary Receipt                   $  0.30    $ 0.54      $  2.29    $ 1.73
                                       =======    ======      =======    ======

Cash distributions per Unit of
  Depositary Receipt                   $ 20.11    $ 3.35      $ 21.72    $ 5.70
                                       =======    ======      =======    ======

      The above net income and cash distributions per Unit of Depositary Receipt
are based upon the 551,604 Units outstanding for each period.

                             See accompanying notes.


<PAGE>


                 PAINEWEBBER INSURED MORTGAGE PARTNERS 1-B, L.P.

              STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
          For the nine months ended April 30, 2000 and 1999 (Unaudited)
                                 (In thousands)

                                                            Corporate Limited
                                                  General      Partner and
                                                  Partner      Unitholders
                                                  -------      -----------

Balance at July 31, 1998                           $   (4)         $ 24,764

Comprehensive income:
    Net income                                         10               952
    Net unrealized holding losses
      on debt securities                                -              (122)
                                                   ------          --------
                                                       10               830

Cash distributions                                    (12)           (2,796)
                                                   ------          --------

Balance at April 30, 1999                          $   (6)         $ 22,798
                                                   ======          ========

Balance at July 31, 1999                           $   (6)         $ 22,329

Comprehensive income:
     Net income                                        13             1,267
     Net unrealized holding gain
       on debt securities                               -               331
     Reclassification adjustment for
       gain on sale of debt securities
       included in net income                           -              (535)
                                                   ------          --------
                                                       13             1,063

Cash distributions                                     (7)          (11,988)
                                                   ------          --------

Balance at April 30, 2000                          $    -          $ 11,404
                                                   ======          ========







                             See accompanying notes.


<PAGE>


                 PAINEWEBBER INSURED MORTGAGE PARTNERS 1-B, L.P.

                            STATEMENTS OF CASH FLOWS
                For the nine months ended April 30, 2000 and 1999
          Increase (Decrease) in Cash and Cash Equivalents (Unaudited)
                                 (In thousands)

                                                        2000        1999
                                                        ----        ----

Cash flows from operating activities:
  Net income                                        $  1,280    $    962
  Adjustments to reconcile net income to
   net cash provided by operating activities:
   Gain on sale of Mortgage-Backed Securities            (16)          -
   Gain on sale of Participating Insured
     Mortgage Loan                                      (519)          -
   Amortization expense                                  133         132
   Amortization of discount/premium on
     debt securities                                      35          46
   Changes in assets and liabilities:
     Interest and other receivables                       69          10
     Accounts payable - affiliates                       (25)          -
     Accounts payable and accrued expenses               (12)         (7)
                                                    --------    --------
      Total adjustments                                 (335)        181
                                                    --------    --------
      Net cash provided by operating activities          945       1,143
                                                    --------    --------

Cash flows from investing activities:
  Principal collections on Mortgage-Backed
    Securities                                           340       1,080
  Principal collections on Participating Insured
    Mortgage Loans                                        64          68
  Net proceeds from sale of Mortgage-Backed
    Securities                                         2,307           -
  Net proceeds from sale of Participating
    Insured Mortgage Loan                              7,612           -
                                                    --------    --------
      Net cash provided by investing activities       10,323       1,148
                                                    --------    --------

Cash flows from financing activities:
  Distributions to Unitholders and partners          (11,995)     (2,808)
                                                    --------    --------

Net decrease in cash and cash equivalents               (727)       (517)

Cash and cash equivalents, beginning of period         1,420       1,702
                                                    --------    --------
Cash and cash equivalents, end of period            $    693    $  1,185
                                                    ========    ========




                             See accompanying notes.


<PAGE>


                 PAINEWEBBER INSURED MORTGAGE PARTNERS 1-B, L.P.
                          Notes to Financial Statements
                                   (Unaudited)

1.  General
-----------

      The accompanying financial statements,  footnotes and discussion should be
read in conjunction with the financial statements and footnotes contained in the
Partnership's  Annual Report for the year ended July 31, 1999. In the opinion of
management, the accompanying financial statements,  which have not been audited,
reflect all adjustments  necessary to present fairly the results for the interim
period. All of the accounting  adjustments reflected in the accompanying interim
financial statements are of a normal recurring nature.

      The  accompanying  financial  statements have been prepared on the accrual
basis of accounting in accordance with generally accepted accounting  principles
which  requires  management to make  estimates and  assumptions  that affect the
reported amounts of assets and liabilities and disclosures of contingent  assets
and liabilities as of April 30, 2000 and July 31, 1999 and revenues and expenses
for each of the three- and  nine-month  periods  ended  April 30, 2000 and 1999.
Actual results could differ from the estimates and assumptions used.

      As previously  reported,  the  Partnership  has been  analyzing  potential
disposition  strategies for its remaining  investments.  As discussed further in
Note 3, on January 26, 2000 the  Partnership  received  total  consideration  of
approximately $7,747,000 for the sale of its Participating Insured Mortgage Loan
secured by the Quarter Mill Apartments, a 266-unit facility located in Richmond,
Virginia.  Subsequent  to the  disposition  of the  Partnership's  Quarter  Mill
investment,  management  began the  process  of  liquidating  the  Partnership's
portfolio of  non-participating  mortgage-backed  securities  through  secondary
market  sale  transactions.  As  discussed  further  in Note 2, such  sales were
completed in late February 2000, with the  Partnership  receiving total proceeds
of $2,318,000.  In addition,  the Partnership  continues to evaluate the current
economic  benefits it would receive if the owner of the Emerald Cove  Apartments
was to prepay its Participating  Loan in the near term. During the quarter ended
April 30,  2000,  the  Partnership  reached an  agreement  with the Emerald Cove
property  owner  regarding  what  the  Partnership  would  accept  from  a  sale
transaction  as repayment in full of the  Participating  Insured  Mortgage Loan,
provided that such a sale  transaction  is completed by June 30, 2000. If a near
term  prepayment  of  the  Emerald  Cove  investment  is not  completed,  in all
likelihood, the Partnership will conduct a secondary market sale process similar
to the one completed for Quarter Mill.  Under either  scenario,  management  now
expects to be able to complete a liquidation  of the  Partnership  by the end of
fiscal year 2000. There are no assurances,  however, that the disposition of the
remaining  asset and a liquidation of the Partnership  will be completed  within
this time frame.

2.  Mortgage-Backed Securities
------------------------------

      At July 31, 1999, the Partnership held  non-participating  mortgage-backed
securities ("MBS") backed by single-family or multi-family mortgage loans issued
or originated in connection with the housing programs of the Government National
Mortgage  Association   ("GNMA"),   and  guaranteed  by  GNMA,  as  follows  (in
thousands):

                                  July 31, 1999
                          -----------------------------
                          Estimated
                            Market    Face    Amortized
     Description            Value     Value      Cost
     -----------            -----     -----      ----

    9.5% GNMA Pool        $ 1,056    $   986   $   982

    9.0% GNMA Pool             78         76        79

    8.0% GNMA Pool          1,469      1,437     1,480

    7.5% GNMA Pool            112        112       111
                          -------    -------   -------
                          $ 2,715    $ 2,611   $ 2,652
                          =======    =======   =======

      The Partnership's investments in MBS were carried at fair value as of July
31, 1999.  Investments  in MBS were valued based on quoted  market  prices.  The
amortized  cost of the MBS  represented  the face value of the securities net of
unamortized  premium or discount.  Beginning  in fiscal  1998,  the premiums and
discounts  were being  amortized  on a  straight-line  basis  over the  expected
remaining  holding  periods of the  investments of three years.  Prior to fiscal
1998, the premium and discounts were being amortized over an original  estimated
holding  period of fifteen  years.  Investments  in  non-participating  MBS were
limited to no more than 30% of the original net offering  proceeds per the terms
of the Partnership's offering prospectus.  The loans included in these GNMA pool
programs could be prepaid, without penalty, at any time.

      As  discussed  in Note 1,  subsequent  to the  sale  of the  Quarter  Mill
Participating  Insured  Mortgage  Loan,  on January  26,  2000 (see Note 3), the
Partnership began the process of liquidating its portfolio of  non-participating
mortgage-backed  securities  through  secondary  market  sale  transactions.  In
February  2000,  the  Partnership  received  total  proceeds  of  $2,318,000  in
connection  with these sale  transactions,  which included  accrued  interest of
$11,000.  The 9.5% MBS, which were purchased at a discount on December 14, 1988,
carried  a coupon  interest  rate of 9.5% per  annum  and  included  loans  with
scheduled maturities between June 2009 and December 2009. The 9.5% MBS were sold
at a premium with a settlement  date of February 22, 2000.  The 9.0% MBS,  which
were purchased at a premium on November 16, 1989, carried a coupon interest rate
of 9.0% per annum and included loans with scheduled maturities between June 2001
and  September  2002.  The 9.0% MBS were sold at par with a  settlement  date of
February 17, 2000.  The 8.0% MBS,  which were purchased at a premium on July 30,
1992,  carried a coupon  interest rate of 8.0% per annum and included loans with
scheduled  maturities in June 2022.  The 8.0% MBS were sold at a slight  premium
with a settlement  date of February 22, 2000. The 7.5% MBS, which were purchased
at a discount on October 30, 1992,  carried a coupon  interest rate of 7.50% per
annum and included loans with  scheduled  maturities in March 2022. The 7.5% MBS
were sold at a discount  with a settlement  date of February  22, 2000.  The net
proceeds of the MBS sale transactions were included in a Special Distribution to
the Unitholders  which was paid on March 3, 2000. The  Partnership  recognized a
net gain of  $16,000  on these MBS sale  transactions  in the third  quarter  of
fiscal 2000.

3.  Investments in Participating Insured Mortgage Loans
-------------------------------------------------------

      Participating   Insured   Mortgage   Loans  secured  by  GNMA   securities
outstanding  at April 30, 2000 and July 31, 1999 are  comprised of the following
(in thousands):

                                      April 30, 2000          July 31, 1999
                                  --------------------    --------------------
    GNMA                          Estimated               Estimated
 Certificate           Interest     Market   Amortized      Market   Amortized
   Number    Property    Rate       Value      Cost         Value      Cost
   ------    --------    ----       -----      ----         -----      ----

   279985  Quarter Mill  8.50%     $     -    $     -      $ 7,236    $ 7,094
   279119  Emerald Cove  8.75%      10,637     10,446       10,694     10,504
                                   -------    -------      -------    -------
                                   $10,637    $10,446      $17,930    $17,598
                                   =======    =======      =======    =======

     The Partnership's  investments in Participating  Insured Mortgage Loans are
carried at fair value as of April 30,  2000 and July 31,  1999.  Investments  in
Participating  Insured  Mortgage  Loans,  for which quoted market prices are not
available, are valued by a pricing service which determines the valuations based
on a comparison of recent  secondary  market  trades of securities  with similar
characteristics.  Because of the inherent  uncertainty of valuations,  estimated
values,  as  reflected  herein,  may differ from the values that would have been
used had a ready market for the  securities  existed and may be  different  than
what the  Partnership  would  realize  from a  prepayment  of the  Participating
Insured  Mortgage  Loan  in  accordance  with  its  terms.  Descriptions  of the
properties   financed  by  the  Partnership's  loans  and  the  loan  agreements
themselves are summarized below:

      Quarter Mill Apartments
      -----------------------

      The  Partnership  acquired  a  Participating  Insured  Mortgage  Loan with
respect to a 266-unit apartment complex known as Quarter Mill Apartments located
in Richmond,  Virginia (the "Virginia  Project").  Construction  of the Virginia
Project was completed in November of 1990. Initial closing of this Participating
Insured Mortgage loan took place on August 2, 1989. The project owner is Amurcon
Corporation.  The Base Component of this Participating Insured Mortgage Loan was
coinsured by FHA and  represented by GNMA  Securities with an initial face value
of $7,316,600,  which GNMA Securities bore interest at the rate of 10.25% during
construction  of the Virginia  Project and 8.50%  thereafter.  Effective  May 1,
1991, the  construction  loan was converted to a permanent loan with a principal
balance of  $6,525,000.  On June 21,  1991 an  additional  $791,600  was funded,
completing  the  Partnership's  investment of  $7,316,600.  Monthly  payments of
principal  and  interest  totalling   approximately  $53,553  were  due  through
maturity, on October 15, 2031.

      As  discussed  in Note 1, on January 26, 2000,  the  Partnership  received
total   consideration   of   approximately   $7,747,000  for  the  sale  of  its
Participating Insured Mortgage Loan secured by the Quarter Mill Apartments.  The
Quarter Mill Participating Insured Mortgage Loan consisted of a GNMA Certificate
with  an  8.5%  coupon  interest  rate  and a  subordinated  note  securing  the
Contingent Component of the Partnership's interest in the Quarter Mill property.
The Contingent Component of the Participating Insured Mortgage Loan provided for
the payment of Contingent Interest equal to 30% of the Net Project Cash Flow, if
any, and 25% of the Net Project  Residuals,  if any, derived from the applicable
Project.  The face value of the GNMA  Certificate as of the date of the sale was
approximately $7,074,000.  The excess of the total proceeds over the face amount
of the GNMA Certificate  reflected a premium of $108,000 on the GNMA Certificate
itself,  accrued interest of $40,000 through the date of the sale and a value of
$525,000 attributed to the Contingent  Component.  As previously  reported,  the
Partnership  had  engaged  the  services  of a  nationally  recognized  mortgage
brokerage firm to market the Quarter Mill  Participating  Loan for sale. Initial
marketing  materials  were  distributed  to over 100  buyers  of these  types of
investments in the secondary market. All offers were due by January 19, 2000 and
a sale was  expected  to close  shortly  thereafter  if the  offers  equaled  or
exceeded a specified  minimum  price.  As a result of these  marketing  efforts,
several  offers were  received  and the  minimum  sale price was  exceeded.  The
winning  bidder funded a  non-refundable  deposit of $105,000 on January 20, and
the remainder of the proceeds were received on January 26. The Partnership  paid
a commission  of $95,000 to the  mortgage  broker in  connection  with this sale
transaction. As a result of this transaction,  the Partnership no longer has any
interest in the Quarter Mill property. As a result of the disposition on January
26,  2000  of  the  Partnership's   investments  secured  by  the  Quarter  Mill
Apartments,  the Partnership made a Special  Distribution of the net proceeds of
this transaction to the Unitholders on March 3, 2000. The Partnership recognized
a gain  of  $519,000  on the  sale of the  Quarter  Mill  Participating  Insured
Mortgage Loan.

      Emerald Cove Apartments
      -----------------------

      The  Partnership  acquired  a  Participating  Insured  Mortgage  Loan with
respect to a 276-unit  apartment  complex  known as Emerald Cove  Apartments  in
Charlotte,  North Carolina (the "North  Carolina  Project").  Initial closing of
this  Participating  Insured  Mortgage Loan took place on October 16, 1989.  The
project  owners are Ronald Curry and Ralph  Abercia.  The Base Component of this
Participating  Insured Mortgage Loan is coinsured by FHA and represented by GNMA
Securities  with an initial  face value of  $10,783,900  at closing,  which GNMA
Securities bore interest at the rate of 10.25% during  construction of the North
Carolina  Project and 8.75%  thereafter.  During  fiscal 1992,  the  Partnership
funded its remaining  commitment on the investment of  approximately  $1,184,000
and,  effective May 1, 1992,  the  investment  was converted to a permanent loan
with a  principal  balance of  $10,776,500.  The  Partnership  paid a premium of
$107,840 to the GNMA issuer to obtain the original  loan  commitment  due to the
fact that the permanent  loan interest  rate was higher than  comparable  market
rates at the time of the initial closing.  Prior to fiscal 1998, the premium had
been amortized on the straight-line  method over a 15-year  amortization period.
Beginning in fiscal 1998, the amortization  rate has been increased to reflect a
reduction in the expected  remaining  holding period of the investment.  Monthly
payments of  principal  and  interest  totalling  approximately  $81,141 are due
through maturity, on August 15, 2031. Scheduled principal repayments of $327,784
have been received through April 30, 2000.

4.  Related Party Transactions
------------------------------

      Management  fees earned by the  General  Partner  and its  affiliates  for
services rendered in managing the business of the Partnership aggregated $90,000
and $143,000  for the nine months  ended April 30, 2000 and 1999,  respectively.
Included in these two amounts is $15,000 and $24,000, respectively, representing
additional   asset  management  fees  paid  to  PWPI  which  are  based  on  the
Partnership's  cash  distributions of operating  income, as discussed further in
the Partnership's Annual Report.  Accounts payable - affiliates at July 31, 1999
consisted of management fees payable to the General Partner and its affiliates.

      Included in general and administrative  expenses for the nine months ended
April 30,  2000 and 1999 is  $76,000  and  $73,000,  respectively,  representing
reimbursements  to an affiliate  of the General  Partner for  providing  certain
financial, accounting and investor communication services to the Partnership.

      Also included in general and  administrative  expenses for the  nine-month
period  ended  April  30,  2000 and 1999 is  $2,000  and  $4,000,  respectively,
representing  fees  earned  by an  affiliate,  Mitchell  Hutchins  Institutional
Investors, Inc., for managing the Partnership's cash assets.


<PAGE>



                 PAINEWEBBER INSURED MORTGAGE PARTNERS 1-B, L.P.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Information Relating to Forward-Looking Statements
--------------------------------------------------

      The following  discussion of financial condition includes  forward-looking
statements  which  reflect  management's  current  views with  respect to future
events and  financial  performance  of the  Partnership.  These  forward-looking
statements  are  subject to certain  risks and  uncertainties,  including  those
identified  in Item 7 of the  Partnership's  Annual  Report on Form 10-K for the
year ended July 31, 1999 under the heading  "Certain  Factors  Affecting  Future
Operating  Results," which could cause actual results to differ  materially from
historical  results  or  those  anticipated.   The  words  "believe,"  "expect,"
"anticipate,"  and  similar  expressions  identify  forward-looking  statements.
Readers  are  cautioned  not to place undue  reliance  on these  forward-looking
statements,  which were made based on facts and conditions as they existed as of
the date of this report.  The  Partnership  undertakes no obligation to publicly
update or revise  any  forward-looking  statements,  whether  as a result of new
information, future events or otherwise.

Liquidity and Capital Resources
-------------------------------

      As previously  reported,  the  Partnership  has been  analyzing  potential
disposition strategies for its remaining investments.  As part of these efforts,
on  January  26,  2000  the   Partnership   received  total   consideration   of
approximately $7,747,000 for the sale of its Participating Insured Mortgage Loan
secured by the Quarter Mill Apartments, a 266-unit facility located in Richmond,
Virginia.  The Quarter Mill  Participating  Insured Mortgage Loan consisted of a
GNMA  Certificate  with an 8.5% coupon  interest  rate and a  subordinated  note
securing the Contingent  Component of the Partnership's  interest in the Quarter
Mill property.  The Contingent  Component of the Participating  Insured Mortgage
Loan  provided for the payment of  Contingent  Interest  equal to 30% of the Net
Project Cash Flow, if any, and 25% of the Net Project Residuals, if any, derived
from the applicable  Project.  The face value of the GNMA  Certificate as of the
date of the sale was approximately $7,074,000.  The excess of the total proceeds
over the face amount of the GNMA Certificate  reflected a premium of $108,000 on
the GNMA Certificate itself, accrued interest of $40,000 through the date of the
sale  and a  value  of  $525,000  attributed  to the  Contingent  Component.  As
previously  reported,  the  Partnership had engaged the services of a nationally
recognized mortgage brokerage firm to market the Quarter Mill Participating Loan
for sale.  Initial  marketing  materials were  distributed to over 100 buyers of
these  types of  investments  in the  secondary  market.  All offers were due by
January 19,  2000 and a sale was  expected to close  shortly  thereafter  if the
offers  equaled or  exceeded a  specified  minimum  price.  As a result of these
marketing  efforts,  several offers were received and the minimum sale price was
exceeded.  The winning  bidder  funded a  non-refundable  deposit of $105,000 on
January 20, 2000 and the  remainder of the proceeds were received on January 26.
The  Partnership  paid a  commission  of  $95,000  to  the  mortgage  broker  in
connection  with this sale  transaction.  As a result of this  transaction,  the
Partnership no longer has any interest in the Quarter Mill property. As a result
of the disposition on January 26, 2000 of the Partnership's  investments secured
by the Quarter Mill Apartments,  the Partnership made a Special  Distribution of
the net proceeds of this transaction to the Unitholders on March 3, 2000.

      Subsequent to the sale of the Quarter Mill Participating  Insured Mortgage
Loan,  the  Partnership  began the  process  of  liquidating  its  portfolio  of
non-participating  mortgage-backed  securities,  which carried  coupon  interest
rates ranging from 7.5% to 9.5%. In February 2000,  the entire  portfolio of MBS
was sold at a small net premium.  The  Partnership  received  total  proceeds of
$2,318,000 in connection with these sale  transactions,  which included  accrued
interest of $11,000. The net proceeds of the MBS sale transactions were included
in a Special Distribution to the Unitholders which was paid on March 3, 2000.

      In addition to the transactions described above, the Partnership continues
to evaluate the current  economic  benefits it would receive if the owner of the
Emerald  Cove  Apartments  were to prepay their  participating  loan in the near
term. The current strength of the national real estate market makes the prospect
of a prepayment  transaction  a potentially  attractive  option for the property
owner.  During fiscal year 1999, the Partnership  continued to have  discussions
with the  owner of the  Emerald  Cove  Apartments  about  the  possibility  of a
prepayment of its loan before the end of calendar year 1999 or in early calendar
year 2000.  During the quarter ended April 30, 2000, the Partnership  reached an
agreement  with the Emerald Cove property owner  regarding what the  Partnership
would accept from a sale  transaction as repayment in full of the  Participating
Insured  Mortgage  Loan,  provided that such a sale  transaction is completed by
June 30, 2000. If a near term  prepayment of the Emerald Cove  investment is not
completed,  in all likelihood,  the Partnership  will conduct a secondary market
sale  process  similar to the one  completed  for  Quarter  Mill.  Under  either
scenario,  management  now expects to be able to complete a  liquidation  of the
Partnership by the end of fiscal year 2000.  There are no  assurances,  however,
that the disposition of the remaining asset and a liquidation of the Partnership
will be completed within this time frame.

      As  previously  reported,  based on a  decline  in the  rate of  principal
prepayments  on  the  Partnership's  GNMA  mortgage-backed  securities  and  the
expectation that this decline would continue in the future,  the Partnership had
reduced the regular  quarterly  distribution rate effective for the payment made
on June 13, 1997 for the third  quarter of fiscal 1997.  The  distribution  rate
declined  from 8.25% per annum to 6.5%.  During  fiscal  1998 and  fiscal  1999,
however, actual principal prepayment levels were higher than projected resulting
in an  increase  in cash  flows  from  investing  activities.  As a result,  the
Partnership  made a  special  capital  distribution  of  excess  cash  totalling
approximately  $552,000,  or  $10.00  per  original  $1,000  investment,  to the
Unitholders on March 13, 1998 concurrent with the regular quarterly distribution
for the period ended January 31, 1998. During fiscal 1999 a special distribution
of $25.00 per original $1,000 investment was paid to Unitholders of record as of
January 31, 1999. This special capital distribution, which was made on March 15,
1999 and totalled  approximately  $1,379,000,  represented  Partnership reserves
that  exceeded  expected  future  requirements.   During  the  current  quarter,
management  reassessed  its future  cash  reserve  requirements  in light of the
Quarter Mill and  non-participating MBS sale transactions and included a capital
distribution of excess cash reserves in the amount of approximately $700,000, or
$12.69 per original $1,000 investment,  as part of the Special Distribution paid
to the Unitholders on March 3, 2000 from the proceeds of the aforementioned sale
transactions.  Distributions continued to be made at a rate of 6.5% per annum on
remaining  invested  capital  through the payment  made on March 3, 2000 for the
quarter ended January 31, 2000.  However,  since the  Partnership  expects to be
liquidated  in the near term,  no future  regular  quarterly  distributions  are
planned.  The Partnership's  final  distribution  would include the net proceeds
from the  disposition of the Emerald Cove  Participating  Insured  Mortgage Loan
along with the  Partnership's  remaining  cash reserves after the payment of all
liquidation-related expenses.

      At April  30,  2000,  the  Partnership  had cash and cash  equivalents  of
approximately  $693,000.  Such cash and cash  equivalents  will be utilized  for
distributions to the Unitholders and for the working capital requirements of the
Partnership. The source of future liquidity and distributions to the Unitholders
is expected to be primarily  through  interest  income and principal  repayments
from the  Partnership's  remaining debt security,  money-market  interest income
from invested cash  reserves,  and to a lesser extent from  Contingent  Interest
from the remaining Participating Insured Mortgage Loan and Net Project Residuals
from  the  sale  or   refinancing   of  the  property   securing  the  remaining
participating mortgage loan investment.

Results of Operations
Three Months Ended April 30, 2000
---------------------------------

      The Partnership reported net income of $169,000 for the three months ended
April 30, 2000, as compared to net income of $300,000 for the same period in the
prior  year.  This  decrease in net income was mainly the result of a decline of
$194,000 in interest  income from debt  securities and an increase of $44,000 in
general and  administrative  expenses for the current  three-month  period.  The
decrease in interest  income from debt  securities  resulted from a reduction in
the average  outstanding  principal  balances of Participating  Insured Mortgage
Loans and non-participating  MBS due to scheduled principal  amortization on all
of the debt securities, prepayments on the MBS, the sale of the MBS portfolio in
February 2000 and the sale of the Quarter Mill loan on January 26, 2000. General
and administrative  expenses  increased  primarily due to an increase in certain
required professional fees incurred during the current period in connection with
the potential  liquidation of the  Partnership.  The decrease in interest income
from debt  securities  and the increase in general and  administrative  expenses
were  partially  offset by a decrease of $47,000 in management  fee expense,  an
increase  of $46,000  in money  market  interest  income and the gain of $16,000
realized in the current period on the sale of the MBS portfolio.  Management fee
expense  declined  due to a decrease  in the  outstanding  balances  of the debt
securities upon which such fees are partially based and due to the suspension of
the  Partnership's  quarterly  distribution  payments  effective  for the  third
quarter of fiscal  2000.  Money  market  interest  income  increased  due to the
receipt and temporary  investment of the proceeds  received from the sale of the
Quarter Mill loan in January 2000 and the sale of the MBS  portfolio in February
2000 prior to the  Special  Distribution  to the  Unitholders  which was paid on
March 3, 2000.

Nine Months Ended April 30, 2000
--------------------------------

      The  Partnership  reported  net income of  $1,280,000  for the nine months
ended April 30, 2000,  as compared to net income of $962,000 for the same period
in the prior year.  This  increase in net income was primarily the result of the
$519,000  gain realized in the current  period on the sale of the  Participating
Insured Mortgage Loan secured by the Quarter Mill Apartments.  In addition,  the
Partnership  recognized  a gain of $16,000 in the current  period on the sale of
the MBS  portfolio.  The gains  realized on the Quarter  Mill and MBS sales were
partially offset by a $217,000  decrease in operating  income.  This decrease in
operating  income  resulted from a decrease in total revenues of $214,000 and an
increase in total expenses of $3,000. The decrease in revenues was the result of
a $256,000  decline in interest income from debt securities  which was partially
offset by a $42,000  increase in money market interest  income.  The decrease in
interest  income from debt  securities  resulted from a reduction in the average
outstanding  principal  balances of  Participating  Insured  Mortgage  Loans and
non-participating MBS due to scheduled principal amortization on all of the debt
securities,  prepayments  on the MBS, the sale of the MBS  portfolio in February
2000 and the sale of the Quarter  Mill loan on January 26,  2000.  Money  market
interest  income  was  higher  in the  current  period  due to the  receipt  and
temporary  investment of the proceeds received from the sale of the Quarter Mill
loan in January 2000 and the sale of the MBS portfolio in February 2000 prior to
the Special Distribution to the Unitholders which was paid on March 3, 2000. The
increase in total  expenses was the result of a $55,000  increase in general and
administrative expenses. General and administrative expenses increased primarily
due to an increase in certain  required  professional  fees incurred  during the
current period in connection with the potential  liquidation of the Partnership.
The increase in general and  administrative  expenses was partially  offset by a
decrease in management fee expense of $53,000.  Management fee expense  declined
due to a decrease in the outstanding  balances of the debt securities upon which
such fees are partially  based and due to the  suspension  of the  Partnership's
quarterly distribution payments effective for the third quarter of fiscal 2000.


<PAGE>



                                     PART II
                                Other Information


Item 1. through 5.    NONE
------------------

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

(a)  Exhibits:        NONE

(b)  Reports on Form 8-K:

     No reports on Form 8-K have been filed by the registrant during the quarter
for which this report is filed.


<PAGE>








                 PAINEWEBBER INSURED MORTGAGE PARTNERS 1-B, L.P.

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Partnership  has duly  caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.


                          PAINEWEBBER INSURED MORTGAGE PARTNERS 1-B, L.P.



                             By: FIRST INSURED MORTGAGE PARTNERS, INC.
                                 -------------------------------------
                                 Managing General Partner




Date:   June 7, 2000             By:   /s/ Walter V. Arnold
                                       --------------------
                                       Walter V. Arnold
                                       Senior Vice President and
                                       Chief Financial Officer