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 June 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 June 30,
1998.

Transitional small business disclosure format:

                          Yes _____           No __X__




                                  Page 1 of 11

<PAGE>





                          Part I. Financial Information
                          -----------------------------
                          Item 1. Financial Statements
                            PHOENIX INCOME FUND, L.P.
                                 BALANCE SHEETS
                 (Amounts in Thousands Except for Unit Amounts)
                                   (Unaudited)
                                                          June 30,  December 31,
                                                            1998        1997
                                                            ----        ----
ASSETS

Cash and cash equivalents                                  $2,459     $2,693

Accounts receivable (net of allowance for
   losses on accounts receivable of $111
   and $157 at June 30, 1998 and December 31,
   1997, respectively)                                          3        206

Notes receivable (net of allowance for losses
   on notes receivable of $162 at June 30,
   1998 and December 31, 1997)                                525        812

Equipment on operating leases and held for
   lease (net of accumulated depreciation of
   $5,665 and $6,141 at June 30, 1998 and
   December 31, 1997, respectively)                            64        204

Net investment in financing leases (net of
   allowance for early terminations of $90
   and $80 at June 30, 1998 and December 31,
   1997, respectively)                                      1,059      1,758

Investment in joint ventures                                  187        296

Capitalized acquisition fees (net of
   accumulated amortization of $3,553 and
   $3,508 at June 30, 1998 and December 31,
   1997, respectively)                                         69        114

Other assets                                                   60         55
                                                           ------     ------
     Total Assets                                          $4,426     $6,138
                                                           ======     ======
LIABILITIES AND PARTNERS' CAPITAL

Liabilities
   Accounts payable and accrued expenses                   $  423     $  508
                                                           ------     ------
     Total Liabilities                                        423        508
                                                           ------     ------
Partners' Capital
   General Partner                                           --         --

   Limited Partners, 300,000 units authorized,
     175,285 units issued and 169,604 and
     169,972 units outstanding at June 30,
     1998 and December 31, 1997, respectively               3,973      5,604

   Unrealized gains on available-for-sale
     securities                                                30         26
                                                           ------     ------
     Total Partners' Capital                                4,003      5,630
                                                           ------     ------
     Total Liabilities and Partners' Capital               $4,426     $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  Six Months Ended
                                                  June 30,          June 30,
                                               1998     1997      1998    1997
                                               ----     ----      ----    ----
INCOME

   Rental income                              $  281  $  494    $  603  $  942
   Earned income, financing leases                52     140       119     306
   Gain on sale of equipment                      27     149        48     182
   Equity in earnings from joint
     ventures, net                                83      36       124     102
   Interest income, notes receivable              31      49        63     134
   Other income                                   35      51        63      89
                                              ------  ------    ------  ------

     Total Income                                509     919     1,020   1,755
                                              ------  ------    ------  ------

EXPENSES

   Depreciation                                   73      72       141     237
   Amortization of acquisition fees               22      41        45      93
   Lease related operating expenses               17      11        33      81
   Management fees to General Partner             30      62        62     127
   Reimbursed administrative costs to
     General Partner                              24      57        53     123
   Provision for losses on receivables             4      24        10      24
   General and administrative expenses            32      38        62      73
                                              ------  ------    ------  ------

     Total Expenses                              202     305       406     758
                                              ------  ------    ------  ------

NET INCOME                                    $  307  $  614    $  614  $  997
                                              ======  ======    ======  ======


NET INCOME PER LIMITED
PARTNERSHIP UNIT                              $ 1.65  $ 3.12    $ 2.96  $ 4.87
                                              ======  ======    ======  ======

DISTRIBUTIONS PER LIMITED
PARTNERSHIP UNIT                              $ 3.09  $ 9.25    $12.55  $18.70
                                              ======  ======    ======  ======

ALLOCATION OF NET INCOME:
     General Partner                          $   28  $   83    $  112  $  168
     Limited Partners                            279     531       502     829
                                              ------  ------    ------  ------

                                              $  307  $  614    $  614  $  997
                                              ======  ======    ======  ======

        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)

                                                           Six Months Ended
                                                               June 30,
                                                           1998        1997
                                                           ----        ----
Operating Activities:
   Net income                                            $   614     $   997

   Adjustments to reconcile net income to net
     cash provided by operating activities:
       Depreciation                                          141         237
       Amortization of acquisition fees                       45          93
       Gain on sale of equipment                             (48)       (182)
       Equity in earnings from joint ventures, net          (124)       (102)
       Gain on sale of securities                             (4)       --
       Provision for (recovery of) losses in
         accounts receivable                                  (9)       --
       Provision for early termination,
         financing leases                                     19          24
       Decrease (increase) in accounts receivable            212          (1)
       Decrease in accounts payable and accrued
         expenses                                            (85)       (164)
       Decrease (increase) in other assets                    (1)         41
                                                         -------     -------

Net cash provided by operating activities                    760         943
                                                         -------     -------

Investing Activities:
   Principal payments, financing leases                      679       1,774
   Principal payments, notes receivable                      287         209
   Proceeds from sale of equipment                            48         277
   Distributions from joint ventures                         233         573
   Proceeds from sale of securities                            4        --
                                                         -------     -------

Net cash provided by investing activities                  1,251       2,833
                                                         -------     -------

Financing Activities:
   Redemptions of capital                                     (3)        (10)
   Distributions to partners                              (2,242)     (3,352)
                                                         -------     -------

Net cash used by financing activities                     (2,245)     (3,362)
                                                         -------     -------

Increase (decrease) in cash and cash equivalents            (234)        414

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

Cash and cash equivalents, end of period                 $ 2,459     $ 3,737
                                                         =======     =======





        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 June 30, 1998, the Partnership has
investments in notes  receivable,  before  allowance for losses,  of $687,000 of
which $104,000 is considered to be impaired.  The  Partnership  has an allowance
for losses of $162,000 as of June 30, 1998. The average  recorded  investment in
impaired  loans  during  the six  months  ended  June  30,  1998  and  1997  was
approximately $108,000 and $33,000, respectively.

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

                                               1998         1997
                                               ----         ----
                                             (Amounts In Thousands)

              Beginning balance                $162         $216
                Provision for losses             --           --
                Write downs                      --           --
                                               ----         ----
              Ending balance                   $162         $216
                                               ====         ====

                                        5

<PAGE>





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 169,752 and 170,277 for the six
months ended June 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:

                                                   June 30,  December 31,
                                                     1998       1997
                                                     ----       ----
                                                  (Amounts in Thousands)
 
              Assets                                  $313      $730
              Liabilities                               77       156
              Partners' Capital                        236       574


                                          Three Months Ended    Six Months Ended
                                               June 30,            June 30,
                                            1998      1997      1998      1997
                                            ----      ----      ----      ----
                                                  (Amounts in Thousands)

              Revenue                       $374      $237      $556      $582
              Expenses                        27        97        47       181
              Net Income                     347       140       509       401

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

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

                                                   June 30,  December 31,
                                                     1998       1997
                                                     ----       ----
                                                  (Amounts in Thousands)
 
              Assets                                  $680      $803
              Liabilities                              141       136
              Partners' Capital                        539       667








                                        6

<PAGE>



                                          Three Months Ended   Six Months Ended
                                               June 30,            June 30,
                                            1998      1997      1998      1997
                                            ----      ----      ----      ----
                                                   (Amounts in Thousands)


              Revenue                       $22       $33        $48      $68
              Expenses                        4         3          8       17
              Net Income                     18        30         40       51

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

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

                                                     June 30, December 31,
                                                      1998       1997
                                                      ----       ----
                                                   (Amounts in Thousands)
 
              Assets                                 $ --       $ --
              Liabilities                              --         --
              Partners' Capital                        --         --

                                          Three Months Ended    Six Months Ended
                                               June 30,             June 30,
                                            1998      1997       1998     1997
                                            ----      ----       ----     ----
                                                   (Amounts in Thousands)

              Revenue                       $--       $ (2)      $--      $(40)
              Expenses                       --          4        --         4
              Net Loss                       --         (6)       --       (44)



                                        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 $307,000 and $614,000  during
the three and six months ended June 30, 1998,  respectively,  as compared to net
income of $614,000 and  $997,000  during the three and six months ended June 30,
1997,  respectively.  The  Partnership  reported  an overall  decrease  in total
revenues and expenses.  However,  the decrease in revenues exceeded the decrease
in expenses, generating a decrease in net income for the period.

          Total revenues decreased by $410,000 and $735,000 during the three and
six months ended June 30, 1998, respectively, as compared to the same periods in
1997.  The  decrease in total  revenues is due  primarily to decreases in rental
income from operating  leases,  earned income from financing  leases and gain on
sale of equipment.  The $213,000 and $339,000  decrease in rental income for the
three and six months ended June 30, 1998,  respectively,  is  attributable  to a
decrease in the amount of equipment  owned.  At June 30, 1998,  the  Partnership
owned equipment with an aggregate original cost of $12.5 million, as compared to
the $24 million of equipment owned at June 30, 1997.

          Earned income from financing  leases decreased by $88,000 and $187,000
during the three and six months ended June 30, 1998,  respectively,  as compared
to the same  periods in 1997.  This is  attributable  to the decrease in the net
investment  in  financing  leases  since June 30, 1997.  The  Partnership  owned
financing  leases with a net  investment  of $1.1 million at June 30,  1998,  as
compared to $3.2  million at June 30,  1997.  The net  investment  in  financing
leases will continue to decline over the lease term as payments are received.

          The  Partnership  reported a gain on sale of  equipment of $27,000 and
$48,000 for the three and six months ended June 30, 1998, respectively, compared
$149,000  and  $182,000  for the  three  and six  months  ended  June 30,  1997,
respectively.  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 $3.5 million for the six months
ended June 30, 1998 compared to $6.7 million for the same period in 1997.

          Total expenses of the  Partnership  decreased by $103,000 and $352,000
during the three and six months ended June 30, 1998,  respectively,  compared to
the same periods in 1997. Most expense items decreased  during the three and six
months ended June 30,  1998,  as compared to the same periods in 1997 due 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  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.





                                        8

<PAGE>





          The Partnership  reported net cash generated by equipment  leasing and
financing activities during the six months ended June 30, 1998 of $1,726,000, as
compared to $2,926,000  during the same period in 1997.  The decline in net cash
generated  from leasing and financing  activities  for the six months ended June
30, 1998, as compared to the same period in the previous  year, is  attributable
to decreases in rental income from operating leases and principal  payments from
financing leases, as previously discussed in the Results of Operations.

          An additional factor contributing to the decline in net cash generated
is the  reduction in the amount of proceeds  received from the sale of equipment
for the six months ended June 30, 1998,  as compared to the previous  year.  The
Partnership  received  proceeds from the sale of equipment of $48,000 during the
six months  ended June 30, 1998,  as compared to $277,000  during the six months
ended June 30, 1997.

          The Partnership received distributions from joint ventures of $233,000
and $573,000 for the six months ended June 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 June 30, 1998, the  Partnership  owned  equipment being held for
lease with an original  cost of $5,115,000  and a net book value of $14,000,  as
compared to equipment  with an original cost of $3,715,000  and a net book value
of $70,000 at June 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 $2,242,000 and $3,352,000  during
the six months ended June 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  $2,130,000  and  $3,184,000  in  cash
distributions for the six months ended June 30, 1998 and 1997, respectively. The
cumulative  cash   distributions  to  limited  partners  at  June  30,  1998  is
$37,828,000,  as compared to $32,500,000  at June 30, 1997. The General  Partner
received cash  distributions  of $112,000 and $168,000 for its share of the cash
distribution for the six months ended June 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.

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


                                        9

<PAGE>





                            PHOENIX INCOME FUND, L.P.

                                  June 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 L.P.,
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  constructive  trust and judicial  dissolution  and
winding up of the Partnerships,  and damages based on fraud, breach of fidicuary
duty and  breach  of  contract  by the  Companies  as  general  partners  of the
Partnerships.  Plaintiffs  are expected to serve an amended  complaint on August
14, 1998. 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



                                       10

<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
    ----                       -----                             ---------


August 12, 1998      Senior Vice President                 /S/ GARY W. MARTINEZ
---------------      and a Director of                     --------------------
                     Phoenix Leasing Associates, Inc.      (Gary W. Martinez)

                     

August 12, 1998      Chief Financial Officer,              /S/ HOWARD SOLOVEI
---------------      Treasurer and a Director of           --------------------
                     Phoenix Leasing Associates, Inc.      (Howard Solovei)
                     


August 12, 1998      Senior Vice President,                /S/ BRYANT J. TONG
---------------      Financial Operations of               --------------------
                     Phoenix Leasing Associates, Inc.      (Bryant J. Tong)





                                       11