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  OCTOBER 31, 1997
                                              ----------------
                                       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
                 October 31, 1997 and July 31, 1997 (Unaudited)
                                 (In thousands)

                                     ASSETS
                                                     October 31    July 31
                                                     ----------    -------
Investments in Debt Securities (at market value):
   Mortgage-Backed Securities available for sale     $  5,222    $  5,379
   Participating Insured Mortgage Loans 
     available for sale                                18,561      18,586
                                                     --------    --------  
                                                       23,783      23,965

Cash and cash equivalents                               1,429       1,310
Interest receivable                                       163         165
Deferred expenses, net                                    487         531
                                                     --------    --------  
                                                     $ 25,862    $ 25,971
                                                     ========    ========

                        LIABILITIES AND PARTNERS' CAPITAL

Accounts payable - affiliates                        $     29    $     29
Accounts payable and accrued expenses                      41          39
Partners' capital                                      25,792      25,903
                                                     --------    --------  
                                                     $ 25,862    $ 25,971
                                                     ========    ========
  

              STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
        For the three months ended October 31, 1997 and 1996 (Unaudited)
                                 (In thousands)
                                                                  Corporate
                                                                  Limited
                                                  General         Partner and
                                                  Partner         Unitholders
                                                  -------         -----------

Balance at July 31, 1996                          $    1           $  29,161
Net unrealized holding gains
  on debt securities                                   -                 134
Cash distributions                                    (5)               (688)
Net income                                             4                 432
                                                  ------           ---------
Balance at October 31, 1996                       $    -           $  29,039
                                                  ======           =========

Balance at July 31, 1997                          $   (2)          $  25,905
Net unrealized holding gains
  on debt securities                                   -                  27
Cash distributions                                    (5)               (488)
Net income                                             4                 351
                                                  ------           ---------
Balance at October 31, 1997                       $   (3)          $  25,795
                                                  ======           =========

                             See accompanying notes.


<PAGE>

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

                              STATEMENTS OF INCOME
        For the three months ended October 31, 1997 and 1996 (Unaudited)
                      (In thousands, except per Unit data)

                                                 1997              1996
                                                 ----              ----

Revenues:
   Interest income - Investments               $  475            $  507
   Interest income - Money Market                  19                50
                                               ------            ------
                                                  494               557

Expenses:
   Management fees                                 52                55
   General and administrative                      43                45
   Amortization expense                            44                21
                                               ------            ------
                                                  139               121
                                               ------            ------
Net income                                     $  355            $  436
                                               ======            ======

Net income per Unit 
  of Depositary Receipt                        $ 0.64            $ 0.79
                                               ======            ======

Cash distributions per Unit
  of Depositary Receipt                        $ 0.89            $ 1.25
                                               ======            ======

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 CASH FLOWS
              For the three months ended October 31, 1997 and 1996
          Increase (Decrease) in Cash and Cash Equivalents (Unaudited)
                                 (In thousands)

                                                        1997        1996
                                                        ----        ----
Cash flows from operating activities:
  Net income                                         $    355    $    436
  Adjustments to reconcile net income to
   net cash provided by operating activities:
   Amortization expense                                    44          21
   Amortization of discount/premium on debt
    securities                                             15           4
   Changes in assets and liabilities:
     Interest receivable                                    2           2
     Accounts payable and accrued expenses                  2           2
                                                     --------    --------
      Total adjustments                                    63          29
                                                     --------    --------
      Net cash provided by operating activities           418         465
                                                     --------    --------

Cash flows from investing activities:
  Principal collections on Mortgage-Backed Securities     174         258
  Principal collections on Participating Insured
    Mortgage Loans                                         20          18
                                                     --------    --------
      Net cash provided by investing activities           194         276
                                                     --------    --------

Cash flows from financing activities:
  Distributions to Unitholders and partners              (493)       (693)
                                                     --------    --------

Net increase in cash and cash equivalents                 119          48

Cash and cash equivalents, beginning of period          1,310       3,637
                                                     --------    --------

Cash and cash equivalents, end of period             $  1,429    $  3,685
                                                     ========    ========




                             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, 1997. 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 October  31,  1997 and July 31,  1997 and  revenues  and
expenses for each of the  three-month  period  ended  October 31, 1997 and 1996.
Actual results could differ from the estimates and assumptions used.

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

     At  October  31,  1997  and  1996 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):
<TABLE>
<CAPTION>

                                       October 31, 1997                      July 31, 1997
                             --------------------------------    ------------------------------------ 
                             Estimated                            Estimated
                             Market      Face      Amortized      Market        Face      Amortized
     Description             Value       Value      Cost          Value         Value      Cost
     -----------             -----       -----      ----          -----         -----      ----
       <S>                    <C>        <C>        <C>           <C>          <C>        <C>

    9.5% GNMA Pool           $ 1,739     $ 1,602    $ 1,591       $ 1,799      $ 1,664    $ 1,652

    9.0% GNMA Pool               232         225        234           268          260        270

    8.0% GNMA Pool             2,961       2,837      2,956         3,016        2,907      3,037

    7.5% GNMA Pool               290         283        281           296          290        287
                             -------     -------    -------       -------      -------    -------
                             $ 5,222     $ 4,947    $ 5,062       $ 5,379      $ 5,121    $ 5,246
                             =======     =======    =======       =======      =======    =======
</TABLE>


     The  Partnership's  investments  in MBS are  carried  at fair  value  as of
October  31,  1997 and July 31,  1997.  Investments  in MBS are valued  based on
quoted market prices. The amortized cost of the MBS represents the face value of
the  securities  net  of  unamortized   premium  or  discount.   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 9.5% MBS,  which were  purchased  at a discount on December  14,  1988,
carry a coupon  interest rate of 9.5% per annum and include loans with scheduled
maturities  between  June  2009 and  December  2009.  The 9.0% MBS,  which  were
purchased  at a premium on November 16, 1989,  carry a coupon  interest  rate of
9.0% per annum and include loans with scheduled maturities between June 2001 and
September  2002.  The 8.0% MBS,  which were  purchased  at a premium on July 30,
1992,  carry a coupon  interest  rate of 8.0% per annum and  include  loans with
scheduled  maturities  in June 2022.  The 7.5% MBS,  which were  purchased  at a
discount on October 30, 1992,  carry a coupon  interest  rate of 7.50% per annum
and include loans with scheduled maturities in March 2022. The loans included in
these GNMA pool programs may be prepaid, without penalty, at any time.
<PAGE>
3.  Investments in Participating Insured Mortgage Loans
    ---------------------------------------------------

      Participating   Insured   Mortgage   Loans  secured  by  GNMA   securities
outstanding at October 31, 1997 and July 31, 1997 are comprised of the following
(in thousands):
<TABLE>
<CAPTION>
                                                        October 31, 1997                        July 31, 1997
                                                ----------------------------          -------------------------------
    GNMA                                          Estimated                             Estimated
    Certificate                    Interest       Market         Amortized              Market           Amortized
    Number          Property       Rate           Value            Cost                 Value              Cost
    ------          --------       ----           -----            ----                 -----              ----
   <S>              <C>            <C>            <C>             <C>                   <C>               <C>

    279985        Quarter Mill     8.50%          $  7,409       $  7,158               $  7,417          $  7,166
    279119        Emerald Cove     8.75%            11,152         10,628                 11,169            10,645
                                                  --------       --------               --------          --------
                                                  $ 18,561       $ 17,786               $ 18,586          $ 17,811
                                                  ========       ========               ========          ========
</TABLE>

     The Partnership's  investments in Participating  Insured Mortgage Loans are
carried at fair value as of October 31, 1997 and July 31, 1997.  Investments  in
Participating  Insured  Mortgage  Loans,  for which quoted market prices are not
available,  are valued by an independent  pricing  service which  determines the
valuations based on the reported financial results of the underlying  properties
and  a  comparison  of  recent   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.  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 is
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 $53,533 are due through maturity,
on October 15,  2031.  Scheduled  principal  repayments  of  $158,633  have been
received through October 31, 1997.

      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 remaining  expected  holding period of the investment.  Monthly
payments of  principal  and  interest  totalling  approximately  $81,114 are due
through maturity, on August 15, 2031. Scheduled principal repayments of $208,223
have been received through July 31, 1997.
<PAGE>
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 $52,000
and $55,000 for the three months ended October 31, 1997 and 1996,  respectively.
Of these amounts, $9,000 and $10,000,  respectively,  represent additional asset
management  fees  paid  to  PWPI  which  are  based  on the  Partnership's  cash
distributions of operating income. Accounts payable - affiliates at both October
31, 1997 and July 31, 1997 consists of management fees of $29,000 payable to the
General Partner and its affiliates.

      Included in general and administrative expenses for the three months ended
October  31, 1997 and 1996 is $23,000 and  $24,000,  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 each of the
three-month periods ended October 31, 1997 and 1996 is $1,000, 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, 1997 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
-------------------------------

      The Partnership is currently  analyzing potential  disposition  strategies
for its remaining  investments.  As part of these  efforts,  the  Partnership is
evaluating the current  economic  benefits it would receive if the owners of the
Emerald Cove  Apartments  and the Quarter Mill  Apartments  were to prepay their
participating  loans within the next two to three years.  While the  Partnership
cannot require either of the owners to prepay their loans, the Partnership could
possibly  sell  one or both of the  participating  loans  and some or all of the
non-participating  mortgage-backed  securities  pools.  In  this  regard,  a key
consideration  is  the  strength  of the  buying  markets  for  these  types  of
investments.  Also, as part of any sale of its two participating mortgage loans,
the  Partnership  would  expect to  receive  fair value for its  entitlement  to
participate in potential cash flow increases and capital  appreciation from each
property  as well as for its  entitlement  to receive  prepayment  penalties  if
either of the  participating  loans were  prepaid by the  property  owners.  The
prepayment  penalties would apply if the participating loans were prepaid before
June 2001 for its Quarter  Mill  investment  and May 2002 for its  Emerald  Cove
investment.

      The Partnership's non-participating MBS have coupon interest rates ranging
from 7.5% to 9.5%.  Based on current market interest rate levels,  the aggregate
market value of these  securities at the present time is slightly above both the
aggregate  face  value  and  amortized  cost,  which  includes  any  unamortized
discounts or premiums.  As of October 31, 1997, the  Partnership's two remaining
Participating  Insured Mortgage Loans, which carry coupon interest rates of 8.5%
and 8.75%, had estimated market values slightly above their face values due to a
variety of factors,  including the participation  features.  Increases in market
interest rates and/or  deterioration in general real estate market conditions in
the near  term  could  cause the  aggregate  market  value of the  Participating
Insured  Mortgage Loans and the portfolio of MBS  investments to fall below face
value and/or amortized cost. In the event that such circumstances were to occur,
management is not  prohibited  from selling any security at a loss and may do so
if it is  believed  that  such a sale  would  be in the  best  interests  of the
Partnership.

      As previously reported,  generally low market interest rates have prompted
a high level of refinancing  activity over the past several years,  resulting in
significant prepayments on the Partnership's  non-participating  mortgage-backed
securities.  Such  prepayments  had the  effect of  reducing  the  Partnership's
investment  income and cash flows from  operating  activities and increasing the
outstanding  balance of the  Partnership's  cash  reserves.  Since it was deemed
unlikely  that  there  would be a default  on either  of the  Partnership's  two
remaining  multi-family  participating  loans,  and since the  current  rates of
return available on non-participating  mortgage-backed  security investments did
not warrant reinvestment by the Partnership,  management concluded during fiscal
1997 that it would be in the best  interests  of the  Unitholders  to return the
portion of the  Partnership's  cash  reserves  which  exceeded  expected  future
requirements. Consequently, the Partnership distributed $2,600,000 of its excess
reserves,  or $47.13 per original $1,000 investment,  in a special  distribution
made on March  14,  1997.  Regular  quarterly  distributions  are  comprised  of
investment  income  and  return of  capital  which  results  from the  scheduled
amortization  of mortgage  principal  on all of the debt  securities  as well as
principal   prepayments   from  the   non-participating   GNMA   mortgage-backed
securities.  Such principal  prepayments are unpredictable  and, as noted above,
have been high during recent years but declined during fiscal 1997, resulting in
a reduction in cash flows from  investing  activities.  Based on this decline in
the rate of principal  prepayments and the  expectation  that this decline would
continue  in  the  future,   the  Partnership   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%, of which approximately 5.5% is expected to represent net investment income
and 1% is expected to be a return of capital.  If the actual  prepayment  levels
exceed  anticipated  levels  through  the  second  quarter of fiscal  1998,  the
Partnership is expected to make a Special  Distribution  of these excess amounts
in March 1998,  and each  subsequent  March,  if warranted  by future  principal
prepayment levels.  Based on the actual prepayments received to date through the
first quarter of fiscal 1998, the Partnership  expects to make a special capital
distribution of  approximately  $10.00 per original  $1,000  investment in March
1998.

      The Partnership's two remaining  Participating  Insured Mortgage Loans are
secured by the Emerald Cove and Quarter Mill apartment complexes.  The occupancy
level at Emerald Cove averaged 95% for the first quarter of fiscal 1998 compared
to 94% for the fourth  quarter of fiscal 1997 and 96% for the same period in the
prior year.  As discussed  further in the Annual  Report,  due to the  increased
competition during fiscal 1997 in the overall  Charlotte,  North Carolina market
from new rental  units,  the use of rental  concessions  had been  necessary  at
Emerald Cove to maintain the property's occupancy levels.  However,  because the
property's  occupancy has been  increasing  over the past year,  the  property's
leasing team has recently  discontinued  offering rental concessions on both new
leases and on current leases as they are being renewed.  Despite the competitive
conditions,  rental rates on new leases  currently  being signed at the property
have  increased  by  approximately  4% over the  rates  obtained  one year  ago.
Prepayment of the Partnership's Emerald Cove Participating Insured Mortgage Loan
was restricted  through March 1997 and then requires a prepayment  penalty which
declines ratably, from 5% to 2%, over the next four years. Although the owner of
Emerald Cove has initiated  discussions of prepayment on several  occasions over
the past three fiscal years, no viable  prepayment  transaction has materialized
from such  discussions.  There are no ongoing  prepayment  discussions  with the
Emerald Cove owner at the present time.

      The Quarter Mill  Apartments  continued its strong  operating  performance
during the first quarter of fiscal 1998, with an average occupancy level of 98%,
compared  to 99% for the fourth  quarter of 1997 and 98% for the same  period in
the prior year.  Because the Quarter  Mill  Apartments  participates  in the Low
Income  Housing  Tax  Credit  Program,   its  rental  rates  are  based  on  the
metropolitan  area's median family income,  rather than on market rent levels. A
strong local rental  market,  combined with below market rental rates at Quarter
Mill,  has  resulted in  consistently  high  occupancy  levels at the  property.
Although there has been new multi-family  construction  activity in the Richmond
area, there is no new directly  competitive  development  under  construction or
planned in the property's immediate market area. Property operations continue to
generate small amounts of excess cash flow, a portion of which is payable to the
Partnership  as  Contingent  Interest.  During fiscal 1997,  1996 and 1995,  the
Partnership received approximately $49,000,  $46,000 and $37,000,  respectively,
representing  its 30% share of the surplus  cash,  as defined.  The Quarter Mill
Participating  Insured  Mortgage Loan became open to prepayment in February 1996
with a specified prepayment penalty which declines ratably, from 10% to 2%, over
five years. To date, no proposals to prepay the loan have been received from the
owner of Quarter Mill.

      At October 31, 1997,  the  Partnership  had cash and cash  equivalents  of
approximately $1,429,000. Such amounts 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  mortgage securities,  money-market  interest income from invested
cash  reserves,   and  to  a  lesser  extent  from   Contingent   Interest  from
Participating  Insured Mortgage Loans and Net Project Residuals from the sale or
refinancing of the properties securing such investments.

Results of Operations
Three Months Ended October 31, 1997
-----------------------------------

      The Partnership reported net income of $355,000 for the three months ended
October 31,  1997,  as compared to net income of $436,000 for the same period in
the prior year.  This decrease of $81,000 in net income  resulted from a decline
in total revenues of $63,000 and an increase in total  expenses of $18,000.  The
decline in revenues can be attributed to a $32,000  decrease in interest  income
from investments and a $31,000  reduction in money market interest  income.  The
decrease in  interest  income from  investments  resulted  from a decline 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 and prepayments on the MBS. The decline in money market interest
income  resulted  from a  decline  in the  average  outstanding  balance  of the
Partnership's   invested  cash   reserves  due  to  the  $2.6  million   special
distribution  of excess  cash  reserves  made on March 14,  1997,  as  discussed
further above.  The increase in total expenses is attributable to an increase in
amortization  expense as a result of an acceleration in the amortization rate of
the Partnership's  deferred expenses.  Beginning in fiscal 1998, the Partnership
reduced the expected holding period of the remaining  investments which resulted
in higher non-cash amortization charges for the current three-month period.


<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: December 10, 1997       By:   /s/ Walter V. Arnold
                                    --------------------
                                    Walter V. Arnold
                                    Senior Vice President and
                                    Chief Financial Officer