UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

                                   FORM 10-QSB

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

                For the quarterly period ended September 30, 1998

                                       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 
                              -----              -----

169,604 Units of Limited  Partnership  Interest were outstanding as of September
30, 1998.

Transitional small business disclosure format:

                          Yes                 No   X
                              -----              -----




                                  Page 1 of 12

<PAGE>


                          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,
                                                          1998          1997
                                                          ----          ----
ASSETS
Cash and cash equivalents                                $2,863        $2,693

Accounts receivable (net of allowance for losses
   on accounts receivable of $112 and $157 at
   September 30, 1998 and December 31, 1997,
   respectively)                                              9           206

Notes receivable (net of allowance for losses
   on notes receivable of $162 at September 30,
   1998 and December 31, 1997)                              420           812

Equipment on operating leases and held for lease
   (net of accumulated depreciation of $3,447 and
   $6,141 at September 30, 1998 and December 31,
   1997, respectively)                                       18           204

Netinvestment in financing leases (net of allowance
   for early terminations of $90 and $80 at
   September 30, 1998 and December 31, 1997,
   respectively)                                            804         1,758

Investment in joint ventures                                133           296

Capitalized acquisition fees (net of accumulated
   amortization of $3,573 and $3,508 at September
   30, 1998 and December 31, 1997, respectively)             49           114

Other assets                                                 48            55
                                                         ------        ------

     Total Assets                                        $4,344        $6,138
                                                         ======        ======

LIABILITIES AND PARTNERS' CAPITAL
Liabilities
   Accounts payable and accrued expenses                 $  282        $  508
                                                         ------        ------

     Total Liabilities                                      282           508
                                                         ------        ------

Partners' Capital
   General Partner                                         --            --

   Limited Partners, 300,000 units authorized,
     175,285 units issued and 169,604 and
     169,972 units outstanding at September 30,
     1998 and December 31, 1997, respectively             4,042         5,604

   Unrealized gains on available-for-sale
     securities                                              20            26
                                                         ------        ------

     Total Partners' Capital                              4,062         5,630
                                                         ------        ------


     Total Liabilities and Partners' Capital             $4,344        $6,138
                                                         ======        ======

        The accompanying notes are an integral part of these statements.


                                       2
<PAGE>



                            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,
                                              1998     1997       1998    1997
                                              ----     ----       ----    ----
INCOME

   Rental income                             $  624  $  336      $1,228  $1,278
   Earned income, financing leases               36      95         155     401
   Gain on sale of equipment                      4      56          52     238
   Equity in earnings from joint ventures,
     net                                         32      40         156     142
   Interest income, notes receivable             40      53         103     186
   Other income                                  35      40          97     130
                                             ------  ------      ------  ------

     Total Income                               771     620       1,791   2,375
                                             ------  ------      ------  ------

EXPENSES

   Depreciation                                  46     105         187     342
   Amortization of acquisition fees              20      35          65     128
   Lease related operating expenses               7       9          41      90
   Management fees to General Partner            37      45          99     172
   Reimbursed administrative costs to
     General Partner                             17      32          69     154
   Provision for losses on receivables         --        44          10      68
   General and administrative expenses           19      29          81     103
                                             ------  ------      ------  ------

     Total Expenses                             146     299         552   1,057
                                             ------  ------      ------  ------

NET INCOME                                   $  625  $  321      $1,239  $1,318
                                             ======  ======      ======  ======


NET INCOME PER LIMITED
   PARTNERSHIP UNIT                          $ 3.31  $ 1.39      $ 6.48  $ 6.26
                                             ======  ======      ======  ======

DISTRIBUTIONS PER LIMITED
   PARTNERSHIP UNIT                          $ 2.94  $ 9.35      $15.86  $28.05
                                             ======  ======      ======  ======

ALLOCATION OF NET INCOME:
     General Partner                         $   28  $   84      $  140  $  252
     Limited Partners                           597     237       1,099   1,066
                                             ------  ------      ------  ------

                                             $  625  $  321      $1,239  $1,318
                                             ======  ======      ======  ======

        The accompanying notes are an integral part of these statements.



                                       3
<PAGE>


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

                                                             Nine Months Ended
                                                               September 30,
                                                             1998         1997
                                                             ----         ----
Operating Activities:
--------------------
   Net income                                               $ 1,239     $ 1,318

   Adjustments to reconcile net income to net
     cash provided by operating activities:
       Depreciation                                             187         342
       Amortization of acquisition fees                          65         128
       Equity in earnings from joint ventures, net             (156)       (142)
       Gain on sale of equipment                                (52)       (238)
       Gain on sale of securities                                (4)       --
       Provision for (recovery of) losses in
         accounts receivable                                     (9)         34
       Provision for early termination, financing
         leases                                                  19          34
       Decrease (increase) in accounts receivable               206         (68)
       Decrease in accounts payable and accrued
         expenses                                              (226)       (113)
       Decrease in other assets                                   1          39
                                                            -------     -------

Net cash provided by operating activities                     1,270       1,334
                                                            -------     -------

Investing Activities:
--------------------
   Principal payments, financing leases                         934       2,341
   Principal payments, notes receivable                         490         379
   Proceeds from sale of equipment                               52         351
   Distributions from joint ventures                            319         815
   Proceeds from sale of securities                               4        --
   Investment in financing leases                              --           (70)
   Investment in notes receivable                               (98)       (300)
                                                            -------     -------

Net cash provided by investing activities                     1,701       3,516
                                                            -------     -------

Financing Activities:
--------------------
   Redemptions of capital                                        (3)        (13)
   Distributions to partners                                 (2,798)     (5,027)
                                                            -------     -------

Net cash used by financing activities                        (2,801)     (5,040)
                                                            -------     -------

Increase (decrease) in cash and cash equivalents                170        (190)

Cash and cash equivalents, beginning of period                2,693       3,323
                                                            -------     -------

Cash and cash equivalents, end of period                    $ 2,863     $ 3,133
                                                            =======     =======

        The accompanying notes are an integral part of these statements.



                                       4
<PAGE>

                           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.

         The Partnership  Agreement  stipulates the methods by which income will
be allocated to the General Partner and the limited  partners.  Such allocations
will be made using income or loss calculated under Generally Accepted Accounting
Principles  for book purposes,  which varies from income or loss  calculated for
tax purposes.

         The  calculation  of items of income and loss for book and tax purposes
may result in book basis  capital  accounts that vary from the tax basis capital
accounts. The requirement to restore any deficit capital balances by the General
Partner  will  be  determined  based  on the  tax  basis  capital  accounts.  At
liquidation  of the  Partnership,  the General  Partner's  remaining  book basis
capital  account  will be reduced to zero  through the  allocation  of income or
loss.

Note 2.  Reclassification.
         ----------------

         Reclassification  - Certain  1997  amounts  have been  reclassified  to
conform to the 1998 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, 1998, the Partnership has
investments in notes  receivable,  before  allowance for losses,  of $583,000 of
which $110,000 is considered to be impaired.  The  Partnership  has an allowance
for losses of $162,000 as of September 30, 1998. The average recorded investment
in impaired  loans during the nine months ended  September 30, 1998 and 1997 was
approximately $109,000 and $86,000, respectively.



                                       5
<PAGE>


         The activity in the allowance for losses on notes receivable during the
nine months ended September 30, is as follows:
                                                        1998       1997
                                                        ----       ----
                                                     (Amounts In Thousands)
         Beginning balance                              $162       $216
              Provision for losses                       --         --
              Write downs                                --         --
                                                        ----       ----
         Ending balance                                 $162       $216
                                                        ====       ====

Note 5.  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 169,702 and 170,213 for the nine months
ended September 30, 1998 and 1997, 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.

Note 6.  Investment in Joint Ventures:
         ----------------------------

Equipment Joint Venture
-----------------------

         The aggregate  financial  information of the equipment joint venture is
presented below:

                                       September 30,   December 31,
                                           1998            1997
                                           ----            ----
                                           (Amounts in Thousands)

         Assets                            $146            $730
         Liabilities                         77             156
         Partners' Capital                   69             574


                                  Three Months Ended   Nine Months Ended
                                     September 30,       September 30,
                                    1998       1997      1998      1997
                                    ----       ----      ----      ----
                                           (Amounts in Thousands)

         Revenue                     $133      $320      $689      $903
         Expenses                       8       173        55       355
         Net Income                   125       147       634       548




                                       6
<PAGE>

Financing Joint Ventures
------------------------

         The aggregate  financial  information of the financing joint venture is
presented below:

                                           September 30,   December 31,
                                               1998           1997
                                               ----           ----
                                               (Amounts in Thousands)

         Assets                                $613            $803
         Liabilities                            143             136
         Partners' Capital                      470             667

                                      Three Months Ended  Nine Months Ended
                                         September 30,      September 30,
                                        1998      1997     1998      1997
                                        ----      ----     ----      ----
                                              (Amounts in Thousands)

         Revenue                         $20      $30       $68      $99
         Expenses                          5        3        13       21
         Net Income                       15       27        55       78

Foreclosed Cable Systems Joint Venture
--------------------------------------

         The aggregate  financial  information of the  foreclosed  cable systems
joint venture is presented below:

                                         September 30,   December 31,
                                             1998           1997
                                             ----           ----
                                            (Amounts in Thousands)

         Assets                              $--              $--
         Liabilities                          --               --
         Partners' Capital                    --               --

                                   Three Months Ended    Nine Months Ended
                                      September 30,        September 30,
                                     1998       1997     1998        1997
                                     ----       ----     ----        ----
                                           (Amounts in Thousands)

         Revenue                    $ --        $165     $ --        $125
         Expenses                     --           7       --          11
         Net Income                   --         158       --         114




                                       7
<PAGE>


                            PHOENIX INCOME FUND, L.P.

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

Results of Operations

         The Partnership  reported net income of $625,000 and $1,239,000  during
the three and nine months ended September 30, 1998, respectively, as compared to
net income of $321,000  and  $1,318,000  during the three and nine months  ended
September 30, 1997,  respectively.  The Partnership reported an overall decrease
in total  revenues and expenses  for the nine month period ended  September  30,
1998.  However,  the  decrease in revenues  exceeded  the  decrease in expenses,
generating  a decrease in net income for the period.  For the three months ended
September 30, 1998, the  Partnership  reported an increase in total revenues due
to the increase in rental income.

         Total  revenues  increased  by  $151,000  for the  three  months  ended
September 30, 1998 and decreased $584,000 during the nine months ended September
30,  1998,  as  compared  to the same  periods in 1997.  The  increase  in total
revenues for the three months ended  September  30, 1998 is  attributable  to an
increase in rental income.  The $288,000 increase in rental income for the three
months ended September 30, 1998 is due to settlements  received from lessees who
had  defaulted.  The  increase  in  rental  income  for the three  months  ended
September 30, 1998,  compared to the same period in 1997, is partially offset by
a decrease in earned income from financing leases.

         Earned income from financing  leases  decreased by $59,000 and $246,000
during the three and nine months  ended  September  30, 1998,  respectively,  as
compared  to the same  periods in 1997.  This  decrease is  attributable  to the
decline in net  investment in financing  leases since  September  30, 1997.  The
Partnership  had  investments  in financing  leases of $804,000 at September 30,
1998, as compared to $2,376,000  at September  30, 1997.  The net  investment in
financing leases will continue to decline over the lease term as the Partnership
amortizes income over the life of the lease using the interest method.

         The decrease in total revenues, for the nine months ended September 30,
1998 is due primarily to decreases in earned income from  financing  leases,  as
previously discussed,  and gain on sale of equipment. The Partnership reported a
gain on sale of  equipment of $52,000 for the nine months  ended  September  30,
1998,  compared  $238,000 for the nine months  ended  September  30,  1997.  The
decreased  gain on sale of equipment,  as well as the decrease in sales proceeds
received,  during  1998 is a  result  of a  decrease  in sales  activity  of the
Partnership's  equipment  portfolio.  The  Partnership  sold  equipment  with an
aggregate  original cost of $7.6 million for the nine months ended September 30,
1998  compared  to $9.2  million for the same  period in 1997.  As a result,  at
September 30, 1998, the Partnership  owned equipment with an aggregate  original
cost of $8.4  million,  as compared to the $21.5  million of equipment  owned at
September 30, 1997.

         Total  expenses of the  Partnership  decreased by $153,000 and $505,000
during  the  three and nine  months  ended  September  30,  1998,  respectively,
compared  to the same  periods  in  1997.  All  expense  items  decreased,  with
depreciation expense contributing the largest decline, during the three and nine
months ended September 30, 1998, as compared to the same periods in 1997, due to
the decrease in the amount of equipment owned by the  Partnership.  Depreciation
expense  decreased  by $59,000 and  $155,000 for the three and nine months ended


                                       8
<PAGE>

September 30, 1998, respectively,  as compared to the same periods in 1997. This
decrease  is  attributable  to the decline in the amount of  equipment  owned as
previously  discussed,  but additionally as a result of 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  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,  1998 of
$2,694,000,  as  compared  to  $4,054,000  during the same  period in 1997.  The
decline in net cash generated from leasing and financing activities for the nine
months ended  September 30, 1998, as compared to the same period in the previous
year, is attributable to a decrease in principal payments from financing leases,
as previously discussed in the Results of Operations.

         The Partnership received  distributions from joint ventures of $319,000
and  $815,000  for  the  nine  months  ended   September   30,  1998  and  1997,
respectively.  The decrease in distributions from joint ventures is attributable
to one joint venture  experiencing a decline in cash available for distributions
as a result of a reduction in rental income and sales proceeds received.

         As of September 30, 1998, the  Partnership  owned  equipment being held
for lease with an original cost of $2,431,000 and a net book value of $6,000, as
compared to equipment  with an original cost of $3,724,000  and a net book value
of $42,000 at September 30, 1997. 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 $2,798,000 and $5,027,000  during
the nine months ended September 30, 1998 and 1997,  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  $2,658,000  and  $4,775,000  in  cash
distributions   for  the  nine  months  ended   September  30,  1998  and  1997,
respectively. The cumulative cash distributions to limited partners at September
30, 1998 is  $38,357,000,  as compared to $34,091,000 at September 30, 1997. The
General  Partner  received cash  distributions  of $140,000 and $252,000 for its
share of the cash  distribution for the nine months ended September 30, 1998 and
1997, respectively. The Partnership made distributions at a lower rate beginning
with the April 15, 1998 distribution.

         As provided for by the partnership  agreement,  the General Partner has
determined  to  exercise  its  discretion  that no  further  redemptions  in the
Partnership will be permitted after March 31, 1998.



                                       9
<PAGE>

         The cash to be  generated  from  leasing and  financing  operations  is
anticipated to be sufficient to meet the  Partnership's  continuing  operational
expenses.

Impact of the Year 2000 Issue

         The "Year 2000 problem" arose because many existing  computer  programs
use only the last two digits to refer to a year. Therefore,  these computers and
computer programs do not properly recognize a year that begins with "20" instead
of the familiar "19." If not corrected, many computer applications could fail or
create erroneous results.

         The  General  Partner  has  performed  an  assessment  of the  computer
programs  used to conduct the  business of the  Partnership  that are subject to
Year 2000 risk.  The General  Partner and its  affiliates  are  currently in the
process  of  testing,  upgrading,  modifying  and  replacing  existing  computer
programs  that  have  been  determined  not to be  Year  2000  compliant.  It is
estimated  that this project will be  completed  in mid 1999.  However,  if this
project is not  completed in a timely  matter,  the Year 2000 issue could have a
material impact on the Partnership's operations.  The costs of these changes are
being incurred by the General Partner or its  affiliates.  Costs incurred by the
Partnership will be expensed as incurred and are not currently anticipated to be
material to the Partnership's  financial position or results of operations.  The
General Partner currently does not have a contingency plan, but will continue to
evaluate the need for such plan as systems and programs are tested.

         The  Partnership's  customers  consist of lessees  and  borrowers.  The
Partnership  does  not have  exposure  to any  individual  customer  that  would
materially impact the Partnership  should the customer  experience a significant
Year 2000 problem.

         The assessments of the risks and costs of the Year 2000 issue are based
on management's  best estimates.  However,  there can be no guarantee that these
estimates will be achieved and the actual results could differ  materially  from
those estimates.



                                       10
<PAGE>



                            PHOENIX INCOME FUND, L.P.

                               September 30, 1998

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

Item 1.       Legal Proceedings.
              -----------------

         On October 28, 1997, a Class Action Complaint was filed against Phoenix
Leasing  Incorporated,  Phoenix  Leasing  Associates,  II and III  LP.,  Phoenix
Securities  Inc.  and  Phoenix  American   Incorporated   (the  "Companies")  in
California  Superior Court for the County of Sacramento by eleven individuals on
behalf of investors in Phoenix Leasing Cash Distribution  Funds I through V (the
"Partnerships").  The  Companies  were served with the  Complaint on December 9,
1997. The Complaint  seeks  declaratory and other relief  including  accounting,
receivership,  imposition of a constructive  trust and judicial  dissolution and
winding up of the Partnerships,  and damages based on fraud, breach of fiduciary
duty and  breach  of  contract  by the  Companies  as  general  partners  of the
Partnerships.  Discovery has not commenced.  The Companies  intend to vigorously
defend the Complaint.

         Plaintiffs  severed  one cause of action  from the  Complaint,  a claim
related to the marketing and sale of CDF V, and  transferred  it to Marin County
Superior Court (the "Marin Action").  Plaintiffs  subsequently amended the Marin
Action on August 14, 1998. On October 23, 1998,  the Companies  filed a demurrer
to the Marin Action,  seeking its dismissal.  Discovery has not  commenced.  The
Companies intend to vigorously defend the Complaint.

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




                                       11
<PAGE>



                                   SIGNATURES


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


                                          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 11, 1998    Senior Vice President                 /S/ GARY W. MARTINEZ
-----------------    and a Director of                     --------------------
                     Phoenix Leasing Associates, Inc.      (Gary W. Martinez)

                     

November 11, 1998    Chief Financial Officer,              /S/ HOWARD SOLOVEI
-----------------    Treasurer and a Director of           --------------------
                     Phoenix Leasing Associates, Inc.      (Howard Solovei)
                     


November 11, 1998    Senior Vice President,                /S/ BRYANT J. TONG
-----------------    Financial Operations of               --------------------
                     Phoenix Leasing Associates, Inc.      (Bryant J. Tong)





                                       12