FORM 10-Q


                                        SECURITIES AND EXCHANGE COMMISSION

                                              Washington, D.C. 20549


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


(Mark One)
{ X }  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
        SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended  September 30, 1997

{   }  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
        SECURITIES EXCHANGE ACT OF 1934

For the transition period from                              to


For Quarter Ended  September 30, 1997           Commission file number  33-32125

                                Redwood Equipment Leasing Income Fund L.P.
                          (Exact Name of Registrant as Specified in its Charter)


             Delaware                                           52-1650971
(State or Other Jurisdiction of                              (I.R.S. Employer
Incorporation or Organization)                            Identification Number)



225 East Redwood Street, Baltimore, Maryland                        21202
(Address of Principal Executive Offices)                         (Zip Code)

Registrant's Telephone Number, Including Area Code:        (410) 727-4083


                                                   N/A
                          (Former Name, Former Address, and Former Fiscal Year,
                                      if Changed Since Last Report.)


  Indicate  by check  mark  whether  the  registrant  (1) has filed all  reports
required to be filed by Section 13 or 15 (d) of the  Securities  Exchange Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

             Yes     X                                             No

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                                    REDWOOD EQUIPMENT LEASING INCOME FUND L.P.



                                                       INDEX


                                                                      Page No.

Part I.    Financial Information


     Item 1.    Financial Statements

                       Balance Sheets                                    1
                       Statements of Operations                          2
                       Statements of Partners' Capital                   3
                       Statements of Cash Flows                          4
                       Notes to Financial Statements                    5-6


     Item 2.    Management's Discussion and Analysis of
                   Financial Condition and Results of Operations         7



Part II.   Other Information


     Item 1. through Item 6.                                             8

     Signatures                                                          9


<PAGE>
REDWOOD EQUIPMENT LEASING INCOME FUND L.P.

Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
                                                               September 30,        December 3
                                                                    1997               1996


Assets

<S>                                                          <C>                   <C>
 Cash and cash equivalents                                   $        332,611      $2,772,471
 Lease payment and other receivables                                  191,780          33,098
 Deposit                                                                     -         10,000
 Investment in direct finance leases, net                             918,076       1,631,824

  Total assets                                               $      1,442,467      $4,447,393


Liabilities and Partners' Capital

 Accounts payable and accrued expenses                       $         19,177      $   18,656
 Amounts due to affiliates                                             12,526          12,403
 Advance rentals                                                        9,261          40,634

  Total liabilities                                                    40,964          71,693


 Partners' Capital
  General Partner                                                    (117,095)        (85,305)
  Assignor Limited Partner:
  Assignment of limited partnership interests - $25 stated
    value per unit, 401,180 units outstanding                       1,518,121       4,460,235
  Limited partnership interests - $25 stated value per
   unit, 40 units outstanding                                             277             570
  Special Limited Partners                                                200             200

  Total partners' capital                                           1,401,503       4,375,700

  Total liabilities and partners' capital                    $      1,442,467      $4,447,393

</TABLE>




See accompanying notes to financial statements

-1-
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REDWOOD EQUIPMENT LEASING INCOME FUND L.P.

Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>

                                                            Three months ended                Nine months ended
                                                              September 30,    September 30,   September 30,  September 30,
                                                                   1997            1996            1997           1996

Revenues
<S>                                                         <C>               <C>             <C>            <C>
 Direct finance lease revenue                               $         26,617  $      43,776   $      97,800  $     143,487
 Interest income                                                       4,367         35,474          33,506         96,898
 Gain from sale of leased equipment                                         -         6,575          29,556         36,091

                                                                      30,984         85,825         160,862        276,476


Expenses
 Administrative expenses including
  amounts to related party                                            14,659         13,008          52,149         49,442
 Management fees to advisor                                            2,378          4,022          13,343         10,129
 Professional fees                                                     4,125          4,000          12,545         12,450
 Amortization of acquisition costs                                     2,981          3,417           9,386         10,497

                                                                      24,143         24,447          87,423         82,518


Net earnings                                                $          6,841  $      61,378   $      73,439  $     193,958


Net earnings per unit of assignee
 limited partnership interest                               $           0.02  $        0.15   $        0.18  $        0.47

</TABLE>



See accompanying notes to financial statements

-2-

<PAGE>

         REDWOOD EQUIPMENT LEASING INCOME FUND L.P.

              Statements of Partners' Capital
   For the nine months ended September 30, 1997 and 1996
                        (Unaudited)
<TABLE>
<CAPTION>
                                                              Assignee   Assignor     Special
                                                              Limited    Limited      Limited       General
                                                              Partners   Partner      Partners      Partner      Total


<S>                                                        <C>          <C>      <C>              <C>        <C>
Balance at December 31, 1996                               $  4,460,235 $    570 $            200 $  (85,305)$  4,375,700

Net earnings                                                     72,698        7                 -       734       73,439

Distributions to partners
 Operations                                                    (607,732)     (60)                -    (8,207)    (615,999)
 Return of capital                                           (2,407,080)    (240)                -   (24,317)  (2,431,637)

Balance at September 30, 1997                              $  1,518,121 $    277 $            200 $ (117,095)$  1,401,503



Balance at December 31, 1995                               $  5,020,712 $    626 $            200 $  (73,866)$  4,947,672

Net earnings                                                    190,060       19                 -     3,879      193,958

Distributions to partners                                      (601,770)     (60)                -   (12,282)    (614,112)

Balance at September 30, 1996                              $  4,609,002 $    585 $            200 $  (82,269)$  4,527,518

</TABLE>


       See accompanying notes to financial statements

                            -3-


<PAGE>
REDWOOD EQUIPMENT LEASING INCOME FUND L.P.

Statements  of Cash Flows
For the nine months ended  September  30,  (Unaudited)
<TABLE> <CAPTION>
                                                                   1997                1996


Cash flow from operating activities
<S>                                                           <C>               <C>
 Net earnings                                                 $     73,439      $        193,958
 Adjustments to reconcile net earnings to net
  cash provided by operating activities
   Amortization of acquisition costs                                 9,386                10,497
   Gain from sale of leased equipment                              (29,556)              (36,091)
   Changes in assets and liabilities
    (Increase) decrease in lease payment and other receivables     (16,682)               35,565
    Decrease in deposit                                             10,000                      -
    Increase in accounts payable and accrued expenses                  521                 2,143
    Increase (decrease) in amounts due to affiliates                   123                (1,018)
    Decrease in advance rentals                                    (31,373)               (3,969)

Net cash provided by (used in) operating activities                 15,858               201,085

Cash flows from investing activities
 Principal received on direct finance leases                       503,418               532,560
 Termination of direct finance leases                               88,500                99,137

Net cash provided by investing activities                          591,918               631,697

Cash flows from financing activities-
 distributions to partners                                      (3,047,636)             (614,112)


Net increase (decrease) in cash and cash equivalents            (2,439,860)              218,670

Cash and cash equivalents
 Beginning of period                                             2,772,471             2,500,697

 End of period                                                $    332,611      $      2,719,367


</TABLE>


See accompanying notes to financial statements

-4-


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                                    REDWOOD EQUIPMENT LEASING INCOME FUND L.P.

                                           Notes to Financial Statements
                                                September 30, 1997
                                                    (Unaudited)


Note 1 - The Partnership and Basis of Preparation

         The  accompanying  financial  statements of Redwood  Equipment  Leasing
Income Fund L.P. (the  "Partnership")  do not include all of the information and
note  disclosures   normally  included  in  financial   statements  prepared  in
accordance with generally accepted accounting principles.  The unaudited interim
financial  statements  reflect  all  adjustments  which are,  in the  opinion of
management, necessary to a fair statement of the results for the interim periods
presented.  All such adjustments are of a normal recurring nature. The unaudited
interim financial  information  should be read in conjunction with the financial
statements contained in the 1996 Annual Report.


Note 2 - Cash and Cash Equivalents

         The  Partnership  considers all  short-term  investments  with original
maturities  of  three  months  or  less  as  cash  equivalents.  Cash  and  cash
equivalents  consist of cash,  money market accounts and other liquid short term
investments  and are  stated  at  cost,  which  approximates  market  value,  at
September 30, 1997 and December 31, 1996.


Note 3 - Related Party Transactions

         The  Partnership's  General  Partner earned an asset  management fee of
$5,894 and $6,141 (3% of  distributable  cash  distributions  to investors)  and
received  or was due  reimbursement  of $5,920  and  $5,118  for  certain  costs
incurred relating to  administrative  services for the Partnership for the three
months ended September 30, 1997 and 1996, respectively.

         As the management  agent,  Signet is entitled to an equipment and lease
management fee equal to 1.5% of gross lease rental payments as well as a fee for
services  provided in acquiring  and disposing of leased  assets.  For the three
months  ended  September  30, 1997 and 1996,  Signet  earned  $2,378 and $4,022,
respectively in management and disposition fees.


Note 4 - Leases

         Investment in direct  finance leases with initial terms ranging from 34
to 82 months at September 30, 1997 and December 31, 1996 includes the following:

<TABLE>
<CAPTION>
                                                                September 30, 1997         December 31, 1996

<S>                                                               <C>                        <C>
          Lease payments receivable                               $   719,885                $ 1,259,277
          Estimated residual value                                    308,466                    542,237
          Acquisition fees, net                                         9,130                     18,516
          Unearned income                                             (96,849)                  (165,650)
          Reserve for residual value loss                             (22,556)                   (22,556)

                                                                  $   918,076                $ 1,631,824
</TABLE>

          During the first quarter of 1997, the Partnership  learned that one of
its lessees is in default under the terms of its lease. However, pursuant to the
Security  Agreement and Assignment of Lease,  all rental  payments due from this
lessee have been guaranteed by the lease originator.  The guarantee  obligations
have been honored by the lease originator and  accordingly,  the Partnership has
timely received all rental payments due under the lease.


                                                      -5-


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                                    REDWOOD EQUIPMENT LEASING INCOME FUND L.P.

                                           Notes to Financial Statements
                                                September 30, 1997
                                                    (Unaudited)

Note 4 - Leases - continued

          During the third quarter of 1997, two lease schedules expired.  In the
first transaction,  the Partnership and lessee agreed to extend the lease for an
additional 24 months with monthly payments of $2,284 payable in advance.  At the
expiration of the extended  term,  the lessee has the option of  purchasing  the
equipment  at a price  equal to the  fair  market  sales  value,  not to  exceed
$12,900.  In the second  transaction,  the lessee  has  agreed to  purchase  the
equipment for the booked residual value of $142,000.  The partnership expects to
receive the proceeds by year end. No gain from the sale of leased  equipment was
recorded on either transaction.

          All leases in the  Partnership's  portfolio  are  classified as direct
finance leases.


Note 5 - Net Earnings per Unit of Assigned Limited Partnership Interest

          Net  earnings  per unit of assignee  limited  partnership  interest is
disclosed  on the  Statements  of  Operations  and is based upon  401,180  units
outstanding.


Note 6 - Subsequent Event

          In  November  1997,  the  Partnership  will  make a cash  distribution
totaling  $196,481 of which 99% will be allocated to assignee limited  partners.
This  distribution  will be derived from principal  payments  received on direct
finance  leases and  certain  other  investing  activities.  Holders of assignee
limited  partnership  interests will receive cash distributions of approximately
$.48 per $25 unit.



                                                      -6-
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                                    REDWOOD EQUIPMENT LEASING INCOME FUND L.P.

                            Management's Discussion and Analysis of Financial
                                        Condition and Results of Operations

Liquidity and Capital Resources

         At September 30, 1997, the Partnership  had a working capital  position
that included  cash and cash  equivalents  of $332,611 and accounts  payable and
accrued  expenses of $19,177.  The  Partnership  invests its cash  balances in a
money market account.  The Partnership is reserving  $136,130 as working capital
reserves,  but has the  discretion  to increase  or decrease  reserves as deemed
necessary.  The unexpended  offering  proceeds and working capital  reserves are
sufficient to satisfy the Partnership's liquidity requirements

         Cash and cash equivalents decreased $36,689 during the third quarter of
1997.  This  decrease  represented  the combined  effect of $42,371  provided by
operating activities,  $154,110 received in principal payments on direct finance
leases, and $233,170 distributed to partners.

         The Partnership  made a distribution of $233,170 on August 8, 1997 from
funds  generated  from  principal  payments  on  direct  finance  leases.   This
distribution   increased  the  total   distributions  from  the  Partnership  to
$9,309,245 to Unitholders or 92.81% of gross offering proceeds


Results of Operations

         Direct finance lease revenue decreased $17,159 during the third quarter
of 1997 as compared to the third quarter of 1996,  and $45,687  during the first
nine months of 1997 as compared to the first nine months of 1996.  This decrease
resulted  from  scheduled  lease  terminations  and an  expected  decline in the
portion of lease payments recognized as revenue (versus return of principal) for
existing leases.

         Interest income  decreased  $31,107 during the third quarter of 1997 as
compared to the third quarter of 1996,  and $63,392 during the first nine months
of 1997 as  compared to the first nine months of 1996,  due  primarily  to lower
cash balances after the return of capital distribution made in March 1997.

         Total  expenses  decreased by $304 during the third  quarter of 1997 as
compared to the third  quarter of 1996,  and  increased  $4,905 during the first
nine months of 1997 as compared to the first nine months of 1996.  The  increase
is  primarily  attributable  to state taxes and  disposition  fees earned by the
Advisor.

         During the first quarter of 1997, the  Partnership  learned that one of
its lessees is in default under the terms of its lease. However, pursuant to the
Security  Agreement and Assignment of Lease,  all rental  payments due from this
lessee have been guaranteed by the lease originator.  The guarantee  obligations
have been honored by the lease originator and  accordingly,  the Partnership has
timely received all rental payments due under the lease.


Equipment Lease Acquisitions

         During the third quarter of 1997, two lease schedules  expired.  In the
first transaction,  the Partnership and lessee agreed to extend the lease for an
additional 24 months with monthly payments of $2,284 payable in advance.  At the
expiration of the extended  term,  the lessee has the option of  purchasing  the
equipment  at a price  equal to the  fair  market  sales  value,  not to  exceed
$12,900.  In the second  transaction,  the lessee  has  agreed to  purchase  the
equipment for the booked residual value of $142,000.  The partnership expects to
receive the proceeds by year end. No gain from the sale of leased  equipment was
recorded on either transaction.

         As noted in prior reports,  the Partnership has entered the Liquidation
Phase during which the remaining  funds (net of reserves)  were  distributed  to
investors.  Future quarterly  distributions will be dependent on funds generated
from  operations,   principal  payments  and  proceeds  from  lease  sales.  The
Partnership  will  distribute  $196,481  in  November  1997  which  was  derived
primarily  from cash provided by operating  activities  and  principal  payments
received during the quarter ended September 30, 1997.

                                                      -7-


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                                    REDWOOD EQUIPMENT LEASING INCOME FUND L.P.




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 Security Holders

                  Inapplicable

Item 5.     Other Information

                  Inapplicable

Item 6.     Exhibits and Reports on Form 8-K

                  a)  Exhibits:  None

                  b)  Reports on Form 8-K:    None



                                                        -8-


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                                    REDWOOD EQUIPMENT LEASING INCOME FUND L.P.




                                                    SIGNATURES


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

                                            REDWOOD EQUIPMENT LEASING
                                               INCOME FUND L.P.




DATE:       11/10/97                           By:     /s/   John M.  Prugh
                                             John M. Prugh
                                             President and Director
                                             Redwood Leasing, Inc.
                                             General Partner



DATE:       11/10/97                           By:     /s/   Timothy M.  Gisriel
                                             Timothy M. Gisriel
                                             Treasurer
                                             Redwood Leasing, Inc.
                                             General Partner




                                                        -9-

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