Page 1 of 12


                UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    ---------

                                    FORM 10-Q

  X    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
-----  ACT OF 1934

                For the quarterly period ended September 30, 1996

                                       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 0-19063
                                                -------


                           PHOENIX INCOME FUND, L.P .
--------------------------------------------------------------------------------
                                   Registrant


     California                                          68-0204588
---------------------                         ----------------------------------
State of Jurisdiction                         I.R.S. Employer Identification No.



2401 Kerner Boulevard, San Rafael, California               94901-5527
--------------------------------------------------------------------------------
   Address of Principal Executive Offices                    Zip Code

       Registrant's telephone number, including area code: (415) 485-4500
                                                            -------------


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
preceding requirements for the past 90 days.

                                 Yes _X_ No ___


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                                                                    Page 2 of 12


                          Part I. Financial Information
                          -----------------------------
                          Item 1. Financial Statements
                            PHOENIX INCOME FUND, L.P.
                                 BALANCE SHEETS
                 (Amounts in Thousands Except for Unit Amounts)
                                   (Unaudited)

                                                   September 30,    December 31,
                                                        1996            1995
                                                        ----            ----
ASSETS

Cash and cash equivalents                            $  3,177        $  2,364

Accounts receivable (net of allowance
  for losses on accounts  receivable of $126
  and $147 at September 30, 1996 and
  December 31, 1995, respectively)                        152             219

Notes receivable (net of allowance for
  losses on notes receivable of $216 and
  $230 at September 30, 1996 and
  December 31, 1995, respectively)                      1,350           1,850

Equipment on operating leases and held for
  lease (net of accumulated depreciation of
  $13,394 and $15,279 at September 30, 1996
  and December 31, 1995, respectively)                    697           1,407

Net investment in financing  leases (net of
  allowance for early  terminations of
  $123 and $436 at September 30, 1996
  and December 31, 1995, respectively)                  5,582           8,980

Investment in joint ventures                            1,250           1,103

Capitalized acquisition fees (net of
  accumulated amortization of $3,285 and
  $3,084 at September 30, 1996 and
  December 31, 1995, respectively)                        310             505

Other assets                                              130             284
                                                     --------        --------

    Total Assets                                     $ 12,648        $ 16,712
                                                     ========        ========

LIABILITIES AND PARTNERS' CAPITAL

Liabilities
  Accounts payable and accrued expenses              $    665        $    868
                                                     --------        --------

    Total Liabilities                                     665             868
                                                     --------        --------

Partners' Capital
  General Partner                                          (4)            (14)

  Limited Partners, 300,000 units authorized,
    175,285 units issued and 170,561 and
    171,073 units outstanding at September 30,
    1996 and December 31, 1995, respectively           11,946          15,727

  Unrealized gains on available-for-sale
    securities                                             41             131
                                                     --------        --------

    Total Partners' Capital                            11,983          15,844
                                                     --------        --------

    Total Liabilities and Partners' Capital          $ 12,468        $ 16,712
                                                     ========        ========

        The accompanying notes are an integral part of these statements.

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                                                                    Page 3 of 12





                            PHOENIX INCOME FUND, L.P.
                            STATEMENTS OF OPERATIONS
               (Amounts in Thousands Except for Per Unit Amounts)
                                   (Unaudited)

                                        Three Months Ended  Nine Months Ended
                                           September 30,       September 30,
                                          1996      1995      1996      1995
                                          ----      ----      ----      ----
INCOME

  Rental income                          $  473    $  779    $1,638    $2,567
  Earned income, financing leases           222       324       760     1,092
  Gain on sale of securities               --        --         128      --
  Equity in earnings from joint
    ventures, net                           100        98       229       266
  Interest income, notes receivable          58        63       190       197
  Other income                               40        52       124       190
                                         ------    ------    ------    ------

    Total Income                            893     1,316     3,069     4,312
                                         ------    ------    ------    ------

EXPENSES

  Depreciation                              187       796       868     2,548
  Amortization of acquisition fees           54        87       201       328
  Lease related operating expenses           23        53       101       228
  Management fees to General Partner         67        89       226       319
  Reimbursed administrative costs to
    General Partner                          66        84       205       239
  Interest expense                         --          15      --         136
  Provision for losses on receivables        55      --         107      --
  General and administrative expenses        34        45        98       153
                                         ------    ------    ------    ------

    Total Expenses                          486     1,169     1,806     3,951
                                         ------    ------    ------    ------

NET INCOME                               $  407    $  147    $1,263    $  361
                                         ======    ======    ======    ======


NET INCOME PER LIMITED
  PARTNERSHIP UNIT                       $ 1.87    $ --      $ 5.87    $ --
                                         ======    ======    ======    ======

DISTRIBUTIONS PER LIMITED
  PARTNERSHIP UNIT                       $ 9.33    $ 8.88    $27.77    $26.39
                                         ======    ======    ======    ======

ALLOCATION OF NET INCOME:
    General Partner                      $   87    $  147    $  260    $  361
    Limited Partners                        320      --       1,003      --
                                         ------    ------    ------    ------

                                         $  407    $  147    $1,263    $  361
                                         ======    ======    ======    ======


        The accompanying notes are an integral part of these statements.

<PAGE>


                                                                    Page 4 of 12


                            PHOENIX INCOME FUND, L.P.
                              STATEMENTS CASH FLOWS
                             (Amounts in Thousands)
                                   (Unaudited)

                                                          Nine Months Ended
                                                            September 30,
                                                          1996          1995
                                                          ----          ----
Operating Activities:
  Net income                                           $  1,263       $    361
  Adjustments to reconcile net income to net
    cash provided by operating activities:
      Depreciation                                          868          2,548
      Amortization of acquisition fees                      201            328
      Loss on sale of equipment                              61             93
      Equity in earnings from joint ventures, net          (229)          (266)
      Gain on sale of securities                           (128)          --
      Provision for early termination, financing
        leases                                               92           --
      Provision for losses on accounts receivable            29           --
      Recovery of losses on notes receivable                (14)          --
      Decrease in accounts receivable                        38            220
      Decrease in accounts payable and accrued
        expenses                                           (139)          (457)
      Decrease in other assets                               64            139
                                                       --------       --------

Net cash provided by operating activities                 2,106          2,966
                                                       --------       --------

Investing Activities:
  Principal payments, financing leases                    3,040          3,826
  Principal payments, notes receivable                      452            425
  Proceeds from sale of equipment                           199            937
  Distributions from joint ventures                         179            464
  Proceeds from sale of securities                          128           --
  Investment in financing leases                           (128)           (86)
  Purchase of equipment                                     (24)          --
  Investment in notes receivable                           --              (42)
  Investment in joint ventures                              (35)          --
  Payment of acquisition fees                               (70)           (40)
                                                       --------       --------

Net cash provided by investing activities                 3,741          5,484
                                                       --------       --------

Financing Activities:
  Payments of principal, notes payable                     --           (5,836)
  Redemptions of capital                                    (40)           (97)
  Distributions to partners                              (4,994)        (4,765)
                                                       --------       --------

Net cash used by financing activities                    (5,034)       (10,698)
                                                       --------       --------

Increase (decrease) in cash and cash equivalents            813         (2,248)
Cash and cash equivalents, beginning of period            2,364          5,712
                                                       --------       --------

Cash and cash equivalents, end of period               $  3,177       $  3,464
                                                       ========       ========

Supplemental Cash Flow Information:

  Cash paid for interest expense                       $   --         $    148

        The accompanying notes are an integral part of these statements.

<PAGE>


                                                                    Page 5 of 12


                            PHOENIX INCOME FUND, L.P.
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

Note 1.    General.

        The  accompanying  unaudited  condensed  financial  statements have been
prepared by the  Partnership in accordance  with generally  accepted  accounting
principles, pursuant to the rules and regulations of the Securities and Exchange
Commission. In the opinion of Management,  all adjustments (consisting of normal
recurring  accruals)  considered  necessary  for a fair  presentation  have been
included. Although management believes that the disclosures are adequate to make
the information  presented not misleading,  it is suggested that these condensed
financial  statements be read in conjunction  with the financial  statements and
the notes included in the Partnership's  Financial Statement,  as filed with the
SEC in the latest annual report on Form 10-K.

        Non Cash Investing  Activities.  During the nine months ended  September
30, 1996, the Partnership,  along with other affiliated  partnerships managed by
the General Partner,  obtained title to a cable television company that had been
pledged as collateral for a  non-performing  note. As a result,  the Partnership
reclassified $62,000 to Investment in Joint Ventures on the balance sheet.

Note 2.    Reclassification.

        Reclassification  -  Certain  1995  amounts  have been  reclassified  to
conform to the 1996 presentation.

Note 3.    Income Taxes.

        Federal  and state  income  tax  regulations  provide  that taxes on the
income  or loss of the  Partnership  are  reportable  by the  partners  in their
individual income tax returns. Accordingly, no provision for such taxes has been
made in the financial statements of the Partnership.

Note 4.    Notes Receivable.

        Impaired  Notes   Receivable.   At  September  30,  1996,  the  recorded
investment in notes that are considered to be impaired  under  Statement No. 114
was $152,000  for which there is no related  allowance  for losses.  The average
recorded investment in impaired loans during the nine months ended September 30,
1996 was approximately $156,000.

        On February 14, 1996, the  Partnership  foreclosed  upon a nonperforming
outstanding  note  receivable  to  a  cable  television  operator  to  whom  the
Partnership,  along with other  affiliated  partnerships  managed by the General
Partner,  had extended  credit.  The  Partnership's  net carrying value for this
outstanding  note  receivable  was  $62,000,  for which the  Partnership  had an
allowance for losses on notes of $14,000.  Because the estimated market value of
the cable system at the  foreclosure  date  exceeded the  carrying  value,  this
allowance  of $14,000 was  reversed  and  recognized  as income  during the nine
months ended September 30, 1996. This cable  television  system was subsequently
sold on August 30, 1996 at a small gain.








<PAGE>


                                                                    Page 6 of 12


        The activity in the allowance for losses on notes receivable  during the
nine months ended September 30, is as follows:

                                              1996            1995
                                              ----            ----
                                             (Amounts In Thousands)

             Beginning balance               $ 230           $ 230
               Provision for losses            (14)           --
               Write downs                    --              --
                                             -----           -----
             Ending balance                  $ 216           $ 230
                                             =====           =====

Note 5.    Equipment on Operating Leases and Held for Lease.

        The  Partnership's  policy,  as  disclosed on the  Partnership's  latest
annual report filed on Form 10-K, is to provide additional  depreciation expense
where reviews of equipment indicate that rentals plus anticipated sales proceeds
will not exceed expenses,  including depreciation expense, in any future period.
As a result,  the Partnership has provided  additional  depreciation  expense on
various  leases  that are near the end of their  initial  lease  term  where the
estimated fair market value is not expected to exceed the net book value of such
leases. The portion of additional  depreciation  expense included in the caption
"Depreciation"  on the  statement  of  operations  for  the  nine  months  ended
September 30, 1996 and 1995,  are $83,000 and $283,000,  respectively  ($.49 and
$1.65 per limited partnership unit, respectively).

Note 6.    Net Income (Loss) and Distributions Per Limited Partnership Unit.

        Net income and distributions per limited  partnership unit were based on
the limited  partners' share of net income and  distributions,  and the weighted
average  number of units  outstanding of 170,848 and 171,513 for the nine months
ended September 30, 1996 and 1995, respectively.  For purposes of allocating net
income (loss) to each individual limited partner, the Partnership  allocates net
income  (loss)  based  upon  each  respective   limited  partner's  net  capital
contributions.




<PAGE>


                                                                    Page 7 of 12


Note 7.    Investment in Joint Ventures:

Equipment Joint Venture

        The  statements  of  operations  of  the  equipment  joint  venture  are
presented below:

                            STATEMENTS OF OPERATIONS
                             (Amounts in Thousands)

                                       Three Months Ended     Nine Months Ended
                                          September 30,         September 30,
                                         1996       1995       1996       1995
                                         ----       ----       ----       ----
INCOME
Earned income, financing leases         $  331     $  548     $1,092     $1,688
Gain on sale of equipment                  247         70        405        278
Other income                                38         76        158        290
                                        ------     ------     ------     ------

        Total income                       616        694      1,655      2,256
                                        ------     ------     ------     ------

EXPENSES
Depreciation                                71         24        199         78
Lease related  operating expenses            1       --           21          7
Management fees to General Partner          40         59        149        227
Interest expense                            33        197        215        767
General and administrative expenses         74         31        195        146
                                        ------     ------     ------     ------

        Total expenses                     219        311        779      1,225
                                        ------     ------     ------     ------
Net income                              $  397     $  383     $  876     $1,031
                                        ======     ======     ======     ======

Financing Joint Venture

        The  statements  of  operations  of  the  financing  joint  venture  are
presented below:

                            STATEMENTS OF OPERATIONS
                             (Amounts in Thousands)

                                         Three Months Ended    Nine Months Ended
                                           September 30,         September 30,
                                          1996       1995       1996       1995
                                          ----       ----       ----       ----
INCOME
Interest income - notes receivable        $ 39       $ 46       $121       $142
Other income                                 1          1          3          2
                                          ----       ----       ----       ----

        Total income                        40         47        124        144
                                          ----       ----       ----       ----

EXPENSES
Management fees to general partner           2          2          4          4
General and administrative expenses        --         --         --           6
                                          ----       ----       ----       ----

        Total expenses                       2          2          4         10
                                          ----       ----       ----       ----
Net income                                $ 38       $ 45       $120       $134
                                          ====       ====       ====       ====



<PAGE>


                                                                    Page 8 of 12


Foreclosed Cable Systems Joint Venture

        The  statements  of  operations  of the  foreclosed  cable systems joint
venture are presented below:

                            STATEMENTS OF OPERATIONS
                             (Amounts in Thousands)

                                          Three Months Ended   Nine Months Ended
                                             September 30,       September 30,
                                              1996   1995        1996    1995
                                              ----   ----        ----    ----

INCOME
Subscriber revenue                          $  567    $--       $1,524    $--
Gain on sale of cable system                   331     --          331     --
Other income                                    12     --           20     --
                                            ------    ---       ------    ---

        Total income                           910     --        1,875     --
                                            ------    ---       ------    ---

EXPENSES
Depreciation and amortization                  134     --          482     --
Program services                               155     --          477     --
Management fees to an affiliate of the
  General Partner                              336     --          379     --
General and administrative expenses            148     --          360     --
Provision for losses on accounts receivable      6     --           16     --
                                            ------    ---       ------    ---

        Total expenses                         779     --        1,714     --
                                            ------    ---       ------    ---

Net income                                  $  131    $--       $  161    $--
                                            ======    ===       ======    ===




<PAGE>


                                                                    Page 9 of 12


                            PHOENIX INCOME FUND, L.P.

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


Results of Operations

        Phoenix  Income  Fund,  L.P.  (the  Partnership)  reported net income of
$407,000 and  $1,263,000  during the three and nine months ended  September  30,
1996,  respectively,  as compared to net income of $147,000 and $361,000  during
the three and nine months ended September 30, 1995,  respectively.  The increase
in earnings  during both periods was primarily  attributable  to the decrease in
depreciation expense.

        Total revenues decreased by $423,000 and $1,243,000 during the three and
nine months  ended  September  30, 1996,  respectively,  as compared to the same
periods in 1995. The decrease in total revenues is due primarily to decreases in
rental income from  operating  leases and earned income from  financing  leases.
Rental  income  decreased  by  $306,000  and  $929,000,  and earned  income from
financing leases  decreased by $102,000 and $332,000,  during the three and nine
months ended September 30, 1996,  respectively,  as compared to the same periods
in 1995. The decrease in rental income and earned income from  financing  leases
is attributable to a decrease in the amount of equipment owned. At September 30,
1996, the Partnership  owned equipment with an aggregate  original cost of $33.2
million,  as compared to the $39.5  million of equipment  owned at September 30,
1995.

        Offsetting the overall decrease in revenues during the nine months ended
September 30, 1996, was a gain on the sale of securities of $128,000.  This gain
was due to the exercise and sale of stock warrants held by the Partnership.  The
Partnership  has been granted  stock  warrants as part of its lease or financing
agreements with emerging growth companies.

        Total expenses of the  Partnership  decreased by $683,000 and $2,145,000
during the three and nine months  ended  September  30, 1996,  respectively,  as
compared  to the same  periods in 1995.  Depreciation  expense  experienced  the
largest decrease during both the three and nine months ended September 30, 1996.
Depreciation  expense  decreased by $609,000 and $1,680,000 during the three and
nine months  ended  September  30, 1996,  respectively,  as compared to the same
periods in 1995. Depreciation expense decreased due primarily to the decrease in
the amount of  equipment  owned by the  Partnership,  as well as, an  increasing
portion of the equipment portfolio having been fully depreciated.

Liquidity and Capital Resources

        The Partnership's primary source of liquidity comes from its contractual
obligations  with a  diversified  group of lessees and borrowers for fixed lease
terms at fixed payment amounts.  As the initial lease terms of the Partnership's
short term operating  leases expire,  the Partnership  will re-lease or sell the
equipment.  The future liquidity of the Partnership will depend upon the General
Partner's success in collecting its contractually  owed amounts from lessees and
borrowers as well as re-leasing and selling the Partnership's equipment when the
lease terms expire.

        The  Partnership  reported net cash  generated by equipment  leasing and
financing  activities  during  the  nine  months  ended  September  30,  1996 of
$5,598,000,  as  compared  to  $7,217,000  during  the same  period in 1995.  In
addition,  the  Partnership  received  proceeds  from the sale of  equipment  of


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                                                                   Page 10 of 12


$199,000  during the nine  months  ended  September  30,  1996,  as  compared to
$937,000  during the nine months ended  September 30, 1995.  These proceeds were
used for the repayment of debt and for the payment of cash  distributions to the
partners.  During the nine months ended  September 30, 1996, the Partnership did
not make any debt  payments,  as compared to payments of $5,836,000 of principal
on its  outstanding  debt  during  the same  period in 1995.  The  Partnership's
outstanding debt was paid off during 1995.

        As of September 30, 1996, the Partnership owned equipment being held for
lease with an original cost of $5,713,000  and a net book value of $354,000,  as
compared to equipment  with an original cost of $8,051,000  and a net book value
of $551,000 at September 30, 1995. The General Partner is actively  engaged,  on
behalf of the  Partnership,  in remarketing  and selling the  Partnership's  off
lease  equipment.  Until new lessees or buyers of  equipment  can be found,  the
equipment   will  continue  to  generate   depreciation   expense   without  any
corresponding  rental  income.  The  effect of this will be a  reduction  of the
Partnership earnings during this remarketing period.

        The cash  distributed to partners was  $4,994,000 and $4,765,000  during
the nine months ended September 30, 1996 and 1995,  respectively.  In accordance
with the Partnership Agreement,  the limited partners are entitled to 95% of the
cash available for  distribution and the General partner is entitled to 5%. As a
result,  the  limited  partners  received  $4,744,000  and  $4,527,000  in  cash
distributions   for  the  nine  months  ended   September  30,  1996  and  1995,
respectively. The cumulative cash distributions to limited partners at September
30, 1996 is  $27,704,000,  as compared to $21,404,000 at September 30, 1995. The
General  Partner  received cash  distributions  of $250,000 and $238,000 for its
share of the cash  distribution for the nine months ended September 30, 1996 and
1995, respectively. The Partnership anticipates making distributions to partners
during 1997 at  approximately  the same rate as the current  distributions  made
during the nine months ended September 30, 1996.

        The cash to be  generated  from  leasing  and  financing  operations  is
anticipated to be sufficient to meet the  Partnership's  continuing  operational
expenses, debt service and to provide cash distributions to the Partners.


<PAGE>


                                                                   Page 11 of 12


                            PHOENIX INCOME FUND, L.P.

                               September 30, 1996

                           Part II. Other Information.
                           ---------------------------


Item 1.    Legal Proceedings.  Inapplicable.

Item 2.    Changes in Securities.  Inapplicable

Item 3.    Defaults Upon Senior Securities.  Inapplicable

Item 4.    Submission of Matters to a Vote of Securities Holders.  Inapplicable

Item 5.    Other Information.  Inapplicable

Item 6.    Exhibits and Reports on 8-K:

           a)     Exhibits:

                  (27) Financial Data Schedule

           b)     Reports on 8-K:  None


<PAGE>


                                                                   Page 12 of 12


                                   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.

                       PHOENIX INCOME FUND, L.P.
                       -------------------------
                             (Registrant)

                       BY: PHOENIX LEASING ASSOCIATES LP,
                           a California limited partnership,
                           General Partner

                           BY:  PHOENIX LEASING ASSOCIATES, INC.
                                a Nevada corporation,
                                General Partner

      Date                      Title                          Signature
      ----                      -----                          ---------


November 12, 1996    Chief Financial Officer,            /S/  PARITOSH K. CHOKSI
-----------------    Senior Vice President               -----------------------
                     and Treasurer of                    (Paritosh K. Choksi)
                     Phoenix Leasing Associates, Inc.
                     General Partner


November 12, 1996    Senior Vice President,              /S/  BRYANT J. TONG
-----------------    Financial Operations                -----------------------
                     (Principal Accounting Officer)      (Bryant J. Tong)
                     Phoenix Leasing Associates, Inc.
                     General Partner


November 12, 1996    Senior Vice President               /S/ GARY W. MARTINEZ
-----------------    Phoenix Leasing Associates, Inc.    -----------------------
                     General Partner                     (Gary W. Martinez)


November 12, 1996    Partnership Controller              /S/  MICHAEL K. ULYATT
-----------------    Phoenix Leasing Incorporated        -----------------------
                     General Partner                     (Michael K. Ulyatt)
                     (Parent Company)