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               March 31, 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       March 31, 1997        Commission file number   0-15747

                      Brown-Flournoy Equity Income Fund Limited Partnership
                      (Exact Name of Registrant as Specified in its Charter)


                 Delaware                                 58-1688140
         (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


<PAGE>

              BROWN-FLOURNOY EQUITY INCOME FUND LIMITED PARTNERSHIP




                                      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     7-8


Part II.   Other Information

     Item 1. through Item 6.                                                9

     Signatures                                                            10






<PAGE>
BROWN-FLOURNOY EQUITY INCOME FUND LIMITED PARTNERSHIP

Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
                                                  March 31,        December 31,
                                                     1997              1996

Assets

<S>                                             <C>               <C>
 Investment in real estate                      $ 14,110,887      $ 14,355,212
 Cash and cash equivalents                         1,420,428         1,467,365
 Other assets
  Accounts receivable, including $5,460 due
   affiliates as of March 31, 1997                    26,333            19,744
  Prepaid expenses                                    51,200            70,500
  Loan fees, less accumulated amortization
   of $140,732 and $73,434, respectively              77,463            93,761

 Total other assets                                  154,996           184,005

Total assets                                    $ 15,686,311      $ 16,006,582


Liabilities and Partners' Capital

 Accounts payable and accrued expenses including
  $32,170 and $28,941 due to affiliates, respect$    419,618      $    417,042
 Tenant security deposits                             99,425           110,890
 Mortgage loans payable                           20,400,000        20,400,000

 Total liabilities                                20,919,043        20,927,932


 Partners' Capital
  General Partners                                  (259,197)         (252,969)
  Limited Partners
   Class A - $1,000 stated value per unit;
    27,000 units outstanding                      (4,973,635)       (4,668,481)
   Class B                                               100               100

 Total partners' capital                          (5,232,732)       (4,921,350)

Total liabilities and partners' capital         $ 15,686,311      $ 16,006,582
</TABLE>

See accompanying notes to financial statements

-1-

<PAGE>
BROWN-FLOURNOY EQUITY INCOME FUND LIMITED PARTNERSHIP

Statements of Operations
For the three months ended March 31,
(Unaudited)
<TABLE>
<CAPTION>
                                             1997            1996

Revenues
<S>                                      <C>             <C>
 Rental income                           $1,144,916      $1,150,058
 Interest income                             14,573          13,935

                                          1,159,489       1,163,993


Expenses
 Compensation and related benefits          142,806         117,063
 Utilities                                   68,363          67,197
 Property taxes                              93,007          90,498
 Insurance                                   19,300          17,871
 Advertising                                 27,774          29,673
 Maintenance and repairs                     83,202          99,663
 Property management fee                     57,246          57,503
 Other                                        7,851           7,686
 Administrative and professional fees        29,998          16,983
 Interest expense                           471,750         484,556
 Depreciation of property and equipment     264,521         255,780
 Amortization of loan fees                   67,298          18,547

                                          1,333,116       1,263,020

Net loss                                 $ (173,627)     $  (99,027)


Net loss per unit of Class A limited
 partnership interest                    $    (6.30)     $    (3.59)

</TABLE>

See accompanying notes to financial statements

-2-
<PAGE>
BROWN-FLOURNOY EQUITY INCOME FUND LIMITED PARTNERSHIP

Statements of Partners' Capital
For the three months ended March 31,
          (Unaudited)
<TABLE>
<CAPTION>
                                             Class A     Class B
                                 General     Limited     Limited
                                 Partners    Partner     Partners     Total


<S>                            <C>        <C>          <C>        <C>
Balance at December 31, 1996   $ (252,969)$ (4,668,481)$      100 $ (4,921,350)

Net loss                           (3,473)    (170,154)          -    (173,627)

Distributions to partners          (2,755)    (135,000)          -    (137,755)


Balance at March 31, 1997      $ (259,197)$ (4,973,635)$      100 $ (5,232,732)



Balance at December 31, 1995   $ (234,522)$ (3,764,559)$      100 $ (3,998,981)

Net loss                           (1,981)     (97,046)          -     (99,027)

Distributions to partners          (2,755)    (135,000)          -    (137,755)


Balance at March 31, 1996      $ (239,258)$ (3,996,605)$      100 $ (4,235,763)

</TABLE>

See accompanying notes to financial statements

              -3-


<PAGE>
BROWN-FLOURNOY EQUITY INCOME FUND LIMITED PARTNERSHIP

Statements of Cash Flows For the nine months ended March 31, (Unaudited)
<TABLE>
<CAPTION>

                                                            1997                 1996

Cash flow from operating activities
<S>                                                   <C>                  <C>
 Net loss                                             $      (173,627)     $       (99,027)
 Adjustments to reconcile net loss to net
  cash provided by operating activities
   Depreciation of property and equipment                     264,521              255,780
   Amortization of loan fees                                   67,298               18,547
   Changes in assets and liabilities
    (Increase) decrease in accounts receivable                 (6,589)               2,245
    Decrease in prepaid expenses                               19,300               17,870
    Increase  in accounts payable and accrued expenses          2,576              (28,209)
    (Decrease) increase in tenant security deposits           (11,465)                   7

Net cash provided by operating activities                     162,014              167,213

Cash flows from investing activities-
 additions to investment in real estate                       (20,196)             (40,768)

Cash flows from financing activities
 Decrease in mortgage loans payable                                  -             (33,411)
 Financing costs                                              (51,000)                    -
 Distributions to investors                                  (137,755)            (137,755)

Net cash used in financing activities                        (188,755)            (171,166)


Net increase (decrease) in cash and cash equivalents          (46,937)             (44,721)

Cash and cash equivalents
 Beginning of period                                        1,467,365            1,447,679

 End of period                                        $     1,420,428      $     1,402,958

</TABLE>


See accompanying notes to financial statements

-4-

<PAGE>
              BROWN-FLOURNOY EQUITY INCOME FUND LIMITED PARTNERSHIP

                                           Notes to Financial Statements
                                                  March 31, 1997
                                                    (Unaudited)


(1)     The Fund and Basis of Preparation

        The accompanying  financial  statements of Brown-Flournoy  Equity Income
        Fund  Limited  Partnership  (the  "Fund")  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.

(2)     Investment in Real Estate

        Investment  in real estate is stated at the lower of fair value or cost,
        net of accumulated depreciation, and is summarized as follows:
<TABLE>
<CAPTION>

                                                                March 31, 1997            December 31, 1996

<S>                                                              <C>                        <C>
              Land                                               $  1,205,950               $  1,205,950
              Buildings                                            20,417,743                 20,417,743
              Furniture, fixtures and equipment                     2,423,862                  2,403,666

                                                                   24,047,555                 24,027,359
              Less:  accumulated depreciation                       9,936,668                  9,672,147

              Total                                               $14,110,887                $14,355,212
</TABLE>

(3)     Cash and Cash Equivalents

        The  Fund  considers  all  highly  liquid   investments   with  original
        maturities of three months or less to be cash equivalents. Cash and cash
        equivalents consist of the following, stated at cost, which approximates
        market value.
<TABLE>
<CAPTION>
                                                                March 31, 1997            December 31, 1996

<S>                                                               <C>                        <C>
        Cash and money market                                     $   473,773                $   532,655
        Certificates of deposit with interest rates
              of 5.2% 1997 and ranging from
              5.5% to 5.6% in 1996                                    946,655                    934,710

                                                                   $1,420,428                 $1,467,365
</TABLE>

(4)     Related Party Transactions

        Brown  Equity  Income  Properties,   Inc.,  the  Administrative  General
        Partner, billed the Fund $14,078 and $12,780 in the quarters ended March
        31,  1997  and  1996,  respectively,  for  reimbursement  of the cost of
        administrative  services  and  expenses  made  on  behalf  of the  Fund.
        Flournoy  Properties,  Inc.,  an  affiliate of the  Development  General
        Partner,  is  the  managing  agent  for  the  properties  and  earned  a
        management fee of $57,246 and $57,503  representing  5% of gross monthly
        operating  revenues from the properties  during the quarters ended March
        31, 1997 and 1996, respectively.

                                                      -5-


<PAGE>

              BROWN-FLOURNOY EQUITY INCOME FUND LIMITED PARTNERSHIP

                                           Notes to Financial Statements
                                                  March 31, 1997
                                                    (Unaudited)

(5)     Mortgage Loans Payable

        The Fund's General  Partners  secured first  mortgage loans  aggregating
        $20.8  million  on August  30,  1989  which  were  secured  by the land,
        apartment  units  and  all  other  improvements  to the  four  apartment
        properties.  These  loans  were  for an  original  term of 7 years  with
        interest  only  payments  at 9.6%.  Interest  only was  payable  monthly
        through September 1994, and thereafter  monthly payments were based on a
        30- year amortization  schedule with a balloon payment due at the end of
        the 7 year term.

        The mortgage  loans  matured on September 1, 1996.  The Fund  refinanced
        these  loans  with  Columbus  Bank & Trust.  The  terms of the new loans
        provide  for  interest  only  payments  of  prime  plus  1%  in  monthly
        installments and a term of one year. The new loans total $20,400,000 and
        provided  proceeds  sufficient  to  satisfy  the  repayment  of the  old
        mortgage loans, and all costs of the  refinancing.  The Fund is required
        to pay a  commitment  fee of one point  payable in advance in  quarterly
        installments.  The Fund intends to repay these  balances  with  proceeds
        from mortgage refinancing or other capital transactions.

(6)     Net Loss per Unit of Class A Limited Partnership Interest

        Net loss per Class A Limited  Partnership  interest is  disclosed on the
        Statements of Operations and is based upon 27,000 units outstanding.



                                                      -6-


<PAGE>
              BROWN-FLOURNOY EQUITY INCOME FUND LIMITED PARTNERSHIP

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


Liquidity and Capital Resources

         At  March  31,  1997,  the  Fund  had a  working  capital  position  of
unrestricted  cash and cash  equivalents of $1,321,003 and accounts  payable and
accrued expenses of $419,618.  Restricted cash represents  amounts retained from
tenants for security deposits and totaled $99,425 at March 31, 1997. The working
capital  balance  represents   reserves  for  future   contingencies  that  were
established  from mortgage  loan proceeds and are deemed  sufficient to meet the
Fund's liquidity  requirements even under very pessimistic  operating scenarios.
Reserves may be distributed as the General Partners deem appropriate.

         Cash and cash equivalents decreased $46,937 during the first quarter of
1997.  This decrease  represents  the net effect of $162,014 in cash provided by
operating activities, $20,196 utilized for capital expenditures,  loan fees paid
of $51,000 and distributions to investors of $137,755.

         In May 1997 the  Fund  made a cash  distribution  to its  investors  of
$137,755.  This distribution was derived from unrestricted cash available at the
end of the first quarter.

         On August 27,  1996,  the Fund closed on interim  one year,  loans that
mature in September 1997. These loans will serve the financial needs of the Fund
until it selects a permanent  financial  solution for the repayment of its debt.
The terms of the interim financing,  provide for interest only payments of prime
(8.50% at March 31, 1997) plus 1% in monthly installments. The new loans totaled
$20,400,000  and provided  proceeds  sufficient  to satisfy the repayment of the
existing mortgage loans, as well as all costs of the refinancing.


Results of Operations

         The Fund  experienced a slight  decline in rental  revenues  during the
first  quarter of 1997.  Rental  revenues  totaled  $1,144,916  during the first
quarter of 1997, a decline of $5,142 from the same period in 1996.  This decline
is primarily  attributable to the operations at the High Ridge  property,  which
experienced  a 9.6% drop in rental  revenue.  All three of the Fund's  remaining
properties experienced growth in rental revenues during this period.

         Operating  expenses increased 2.5% during the first quarter of 1997, as
compared to the same period in 1996.  This increase is largely  attributable  to
additional payroll expenses at the Park Place property.  In particular,  certain
ground maintenance  activities which had previously been contracted out, are now
performed  in-house.  Performing  this work  internally led to the hiring of two
additional employees.

         Overall occupancy for the Fund's properties during the first quarter of
1997 remained consistent with the same period of 1996, averaging 88%.

         Occupancy at the Hidden Lake property,  located in Union City, Georgia,
averaged  91%  during the first  quarter of 1997,  a decline of 4% from the same
period  in  1996.  In spite  of the  lower  occupancy,  total  revenue  remained
consistent with 1996 due to higher rental rates on most unit types.

         The High  Ridge  property,  located  in Athens,  Georgia,  achieved  an
average  occupancy  during the quarter of 79%, a 13% drop from the 92%  recorded
during 1996.  The Athens  market has  recently  started to feel the effects of a
surge in  apartment  construction.  As the  supply of units has  increased,  the
demand has remained  relatively flat,  placing strong  competitive forces on all
apartment  communities.  Many of the  newer  properties  have  implemented  deep
concession  packages to try and entice  residents to move out of their  existing
communities.  In an effort to mitigate this  situation,  management has recently
implemented a comprehensive  marketing  package to retain tenants,  while at the
same  time  attracting  new ones.  Management  has also  been  soliciting  local
companies in an effort to boost corporate rental income.



                                                      -7-

<PAGE>

              BROWN-FLOURNOY EQUITY INCOME FUND LIMITED PARTNERSHIP

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

Results of Operations (continued)

         Located  in  Spartanburg,  South  Carolina,  the  Park  Place  property
achieved  an  average  occupancy  of 88% during  the first  quarter of 1997.  An
increase of 5% from the 83% recorded  during 1996. This strong gain in occupancy
led to a 7% increase in revenues.  The Spartanburg apartment market continues to
be challenged by new  competition  and high turnover from tenants  seeking short
term  occupancy  while they build or buy a house.  Management is keenly aware of
these challenges and is actively  reviewing various marketing plans to help meet
these challenges. In particular, management has responded by developing a strong
corporate  rental  program.  This program  includes  direct  marketing to nearby
corporate  employers  to seek out six to twelve  months  stays by  personnel  on
temporary  assignment to the area. Operating expenses during the quarter were 7%
higher due to certain costs associated with performing ground  maintenance which
had previously been outsourced.

         The Southland  Station  property,  located in Warner  Robins,  Georgia,
experienced  a slight  increase in occupancy  during the first  quarter of 1997,
contributing  to a 2%  increase  in  revenues  as compared to the same period in
1996. While management is pleased with the property's improved operations during
the  quarter,  it is  keenly  aware of the  challenges  presented  by the  local
economy. The health of the region's economy is largely tied to the Warner Robins
Air Force Base, its largest employer.

         All four properties remain in excellent condition.




                                                      -8-

<PAGE>


              BROWN-FLOURNOY EQUITY INCOME FUND LIMITED PARTNERSHIP


                           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.



                                                        -9-

<PAGE>
              BROWN-FLOURNOY EQUITY INCOME FUND LIMITED PARTNERSHIP




                                   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.



                        BROWN-FLOURNOY EQUITY INCOME FUND
                                                          LIMITED PARTNERSHIP



DATE:           5/9/97                    By:    /s/ John M. Prugh
                                  John M. Prugh
                                            President and Director
                      Brown Equity Income Properties, Inc.
                         Administrative General Partner



DATE:           5/9/97                   By:     /s/ Timothy M. Gisriel
                               Timothy M. Gisriel
                                            Treasurer
                      Brown Equity Income Properties, Inc.
                         Administrative General Partner




                                                -10-

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