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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q
(Mark one)
[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For Quarter Ended                   September 30, 2000
                   -------------------------------------------------------------

                                       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:        0-18444
                         ------------------

                  YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          North Carolina                                56-1560476
--------------------------------------------------------------------------------
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
 incorporation or organization)

1300 Altura Road     Fort Mill, South Carolina                    29708
--------------------------------------------------------------------------------
(Address of principal executive office)                        (Zip code)

                                 (803) 547-9100
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


              (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  [ ]

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                     PROCEEDINGS DURING THE PAST FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

                                                  Yes [ ]       No  [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.




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PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS


                  YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
                            CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                 September 30,       December 31,
                                                                     2000                1999
                                                                 -------------       -----------
   ASSETS                                                         (Unaudited)           (Note)

<S>                                                                  <C>               <C>
CURRENT ASSETS
 Cash and cash equivalents                                           $ 69,999          $ 11,928
 Accounts receivable, tenant                                           39,016            38,530
 Prepaid expenses                                                         839                --
 Securities available for sale                                         64,200           116,065
                                                                 -------------       -----------

        Total current assets                                          174,054           166,523
                                                                 -------------       -----------

INVESTMENTS AND NONCURRENT RECEIVABLES
 Properties on operating leases and properties held
   for lease, net of accumulated depreciation
   2000 $705,480;  1999 $705,480                                    2,287,569         2,287,569

OTHER ASSETS
 Deferred charges, net of accumulated amortization
   2000 $12,190; 1999 $12,190                                           4,308             2,810
 Deferred leasing commissions, net of accumulated
   amortization 2000 $19,265; 1999 $19,265                             33,122            33,122
                                                                 -------------       -----------

                                                                  $ 2,499,053        $ 2,490,024
                                                                 =============       ===========

   LIABILITIES AND PARTNERS' EQUITY

CURRENT LIABILITIES
 Current maturities of long-term debt                                $ 60,000        $ 1,585,000
 Accounts payable                                                       1,239            10,206
 Accrued expenses                                                      49,270            26,955
 Deferred revenue                                                          --                --
                                                                 -------------       -----------

        Total current liabilities                                     110,509         1,622,161
                                                                 -------------       -----------

LONG-TERM DEBT, less current maturities                             1,467,000                --
                                                                 -------------       -----------

COMMITMENT AND CONTINGENCY (Note 4)

PARTNERS' EQUITY
 General partners                                                     (14,064)          (14,492)
 Limited partners                                                     935,341           892,933
 Unrealized gain (loss) on investment securities                          267           (10,578)
                                                                 -------------       -----------

        Total partner's equity                                        921,544           867,863
                                                                 -------------       -----------

                                                                  $ 2,499,053        $ 2,490,024
                                                                 =============       ===========
</TABLE>


 Note: The Condensed Balance Sheet at December 31, 1999 has been taken from the
                   audited financial statements at that date.
                  See Notes to Condensed Financial Statements.


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                  YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
                       CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                          Three Months Ended                       Nine Months Ended
                                                             September 30,                            September 30,
                                                   -------------------------------          --------------------------------
                                                       2000               1999                  2000                1999
                                                   ------------       ------------          ------------        ------------
                                                             (Unaudited)                               (Unaudited)
<S>                                                  <C>                <C>                   <C>                 <C>
Rental income                                        $ 137,965          $ 140,199             $ 412,296           $ 415,331

Operating expenses:
 Wages and contract labor                                1,500              1,500                 4,500               5,004
 Depreciation and amortization                              --                 --                    --                  --
 Repairs and maintenance                                36,420             28,656               100,150              84,508
 Management fees                                         4,073              4,177                12,354              12,454
 Utilities                                              23,206             25,732                68,877              69,291
 Professional fees                                       7,815             17,566                43,382              60,911
 Property taxes                                          9,621              8,995                28,863              26,984
 Miscellaneous                                           1,858              1,126                 5,096               4,354
                                                   ------------       ------------          ------------        ------------

                                                        84,493             87,752               263,222             263,506
                                                   ------------       ------------          ------------        ------------

        Operating income                                53,472             52,447               149,074             151,825
                                                   ------------       ------------          ------------        ------------

Nonoperating income (expense):
 Interest and dividend income                            2,713              2,453                 6,770               7,376
 Interest expense                                      (37,225)           (33,508)             (108,299)           (112,203)
 Other                                                   1,171              1,494                (4,709)             (1,494)
                                                   ------------       ------------          ------------        ------------

                                                       (33,341)           (29,561)             (106,238)           (106,321)
                                                   ------------       ------------          ------------        ------------

        Net income                                    $ 20,131           $ 22,886              $ 42,836            $ 45,504
                                                   ============       ============          ============        ============

        Net income per limited
          partnership unit                              $ 3.16             $ 3.59                $ 6.72              $ 7.14
                                                   ============       ============          ============        ============
</TABLE>


See Notes to Condensed Financial Statements.


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                  YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
                       CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                         Nine Months Ended
                                                                                           September 30,
                                                                               -------------------------------------
                                                                                     2000                  1999
                                                                               ---------------        --------------
                                                                                            (Unaudited)
<S>                                                                                  <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                                           $ 42,836              $ 22,886
 Adjustments to reconcile net income to net cash
   provided by operating activities:
   Depreciation and amortization                                                           --                    --
   Loss on sale of securities available for sale                                        5,880                    --
 Change in assets and liabilities:
   (Increase) Decrease in prepaids, deferrals and                                      (1,325)                  729
      other receivables
   Increase in accounts payable and accrued expenses                                   13,348                26,892
                                                                               ---------------        --------------

        Net cash provided by operating activities                                      60,739                50,507
                                                                               ---------------        --------------

CASH FLOWS FROM INVESTING ACTIVITIES
 Sale of securities available for sale                                                 91,120                    --
 Purchase of securities available for sale                                            (34,290)                 (896)
 Improvements in investment property                                                       --               (35,482)
 Disbursements for deferred charges                                                    (1,498)                   --
 Disbursements for deferred leasing commissions                                            --                (3,452)
                                                                               ---------------        --------------

        Net cash provided (used) in investing activities                               55,332               (39,830)

CASH FLOWS FROM FINANCING ACTIVITIES
 Principal payments on long-term borrowings                                           (58,000)              (14,990)
                                                                               ---------------        --------------

        Net (used) in financing activities                                            (58,000)              (14,990)

        Net increase (decrease) in cash and cash equivalents                           58,071                (4,313)

Cash and cash equivalents:
 Beginning                                                                             11,928                45,738
                                                                               ---------------        --------------

 Ending                                                                              $ 69,999              $ 41,425
                                                                               ===============        ==============
</TABLE>

See Notes to Condensed Financial Statements.


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                  YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)



1.    Nature of Business:

      The Partnership was formed in July 1986 to acquire, operate, hold for
      investment and sell real estate. The Partnership currently owns the
      EastPark Executive Center in Charlotte, North Carolina. On April 24, 1998,
      the Partnership sold its only other real property holding, the BB&T
      building facilities (formerly the UCB building) located in Greenville,
      South Carolina.

2.    Opinion of Management:

      In the opinion of management, the accompanying unaudited condensed
      financial statements contain all adjustments (all which were normal
      recurring accruals) necessary for a fair presentation. The results of
      operations for the interim periods are not necessarily indicative of the
      results which may be expected for an entire year.

3.    Statement of Cash Flows:

      For purposes of reporting the statements of cash flows, the Limited
      Partnership includes all cash accounts, which are not subject to
      withdrawal restrictions or penalties, and all highly liquid debt
      instruments purchased with a maturity of three months or less as cash and
      cash equivalents on the accompanying condensed balance sheets.

4.    Priority Return:

      At December 31, 1999, the cumulative unpaid priority return to the unit
      holders was $2,652,401 compared to $2,409,617 one year prior. This
      increase resulted from no distributions being made to partners during the
      year. Based on the current and projected commercial real estate market
      conditions, the General Partners believe that it is reasonably unlikely
      that a sale of the remaining Partnership property would produce net sale
      proceeds sufficient to pay any of such priority return. Furthermore, the
      General Partners believe that it is reasonably unlikely that the
      Partnership's operating income or any refinancing of Partnership debt
      would generate sufficient funds to pay any portion of the priority return.



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<PAGE>   6


                  YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

Changes in Financial Condition

There have not been any significant changes in financial condition from December
31, 1999 to September 30, 2000. All items are comparable.

Liquidity and Capital Resources

During the quarter ended September 30, 2000, the Partnership operations
continued to meet working capital requirements, and working capital was improved
to a surplus of $63,545. The approximate $1,500,000 improvement in working
capital was due to the reclassification of a portion of the debt to long-term
liabilities. The First Union National Bank loan on the EastPark facility matured
on June 30, 2000. The General Partners refinanced this loan with the same
institution. Under the terms of the new loan, the monthly payment will consist
of a $5,000 principal payment and an interest payment calculated at the bank's
prime rate (currently 9.5%). The loan will mature on June 30, 2002.

Results of Operations

Operations for the nine months ended September 30, 2000 are comparable to the
same period of the prior year. Rental income is down slightly due to increased
vacancy in the current year. Escalation increases for the current tenants have
diminished the effects of this increased vacancy. Total operating expenses are
comparable to the same period of the prior year, although repairs and
maintenance are up approximately $16,000 and professional fees are down
approximately $17,000.

Status of EastPark Executive Center

The General Partners continue to focus on selling the EastPark facility and
continue to have it listed with a commercial real estate broker. As previously
reported, the General Partners entered into two separate sales contracts for
such facility during 1999. Each contract included a sales price of $2,525,000.
Both of these contracts were terminated by the prospective buyers under their
respective terms of such contracts after due diligence by the buyers. The
General Partners have also received lower offers which were declined. The
General Partners will continue to search for the best offer for the property and
manage it at acceptable standards until such time as the Partnership can sell
the property to a qualified buyer. The Partnership is currently in negotiations
with the major tenant at the EastPark facility, the IRS, for an additional 2,200
square feet at a lease rate of $14.83 per square foot. Estimated upfit costs
associated with this lease are approximately $10,000. The EastPark facility will
be 93% occupied upon execution of this lease.


Forward-Looking Statements

This report contains certain forward-looking statements with respect to the
financial condition, results of operations, plans, objectives, future
performance and business of the Partnership. These forward-looking statements
involve certain risks and uncertainties. Actual results may differ materially
from those contemplated by such forward-looking statements.



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<PAGE>   7


PART II. OTHER INFORMATION

             Item 1.     Legal Proceedings

                         The Partnership is not engaged in any legal
                         proceedings of a material nature at the present time.

             Item 6.     Exhibit Index

                         (a) Exhibits:

                       Designation
                       Number Under
             Exhibit   Item 601 of
             Number    Regulation S-K  Exhibit Description
             -------   --------------  -------------------

               1*       4              Instrument defining rights of security
                                         holders - set forth in the Limited
                                         Partnership Agreement

               2*       10             Limited Partnership Agreement

               3**      10.1           Exclusive Leasing and Management
                                         Agreement dated October 1, 1994
                                         (EastPark Executive Center)

               4***     10.2           Listing Agreement of Property For Lease
                                         and/or Sale (EastPark Executive Center)

               5        27             Financial Data Schedule



                         (b)      Reports on Form 8-K:

                                  No reports on Form 8-K have been filed during
                                  the three months ended September 30, 2000.



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               *  Incorporated by reference to Exhibit A of the Partnership's
                  Prospectus dated December 1, 1987, Registration Number
                  33-07056-A.

               ** Incorporated by reference to Exhibit 3 of the
                  Partnership's Form 10-K for the year ended December 31,1995.

              *** Incorporated by reference to Exhibit 4 of the Partnership's
                  Form 10-Q for the quarter ended September 30,1997.



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<PAGE>   8



SIGNATURES

Pursuant to the requirements 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.

                                      YAGER/KUESTER PUBLIC FUND
                                      LIMITED PARTNERSHIP
                                      (Registrant)

                                      By:      DRY Limited Partnership,
                                               General Partner of Registrant


Date     11/15/00                     By:      /s/  Dexter R. Yager, Sr.
     ------------------                   --------------------------------------
                                                    Dexter R. Yager, Sr.
                                                    General Partner

Date     11/15/00                     By:      /s/  Thomas K. Emery
     ------------------                   --------------------------------------
                                                    Thomas K. Emery
                                                    Chief Financial Officer





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