<PAGE>


                                  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, 2001
                 ---------------------------------------------------------------

                                       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 [X]       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.




<PAGE>


PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS




                  YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
                            CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                            September 30,         December 31,
                                                                2001                  2000
                                                           ---------------       --------------
                                                            (Unaudited)              (Note)
<S>                                                              <C>                    <C>
   ASSETS

CURRENT ASSETS
 Cash and cash equivalents                                       $ 75,755             $ 72,209
 Accounts receivable, tenant                                       42,093               54,159
 Prepaid expenses                                                   1,050                    -
 Securities available for sale                                     75,534               59,113
                                                           ---------------       --------------

        Total current assets                                      194,432              185,481
                                                           ---------------       --------------

INVESTMENTS AND NONCURRENT RECEIVABLES
 Properties on operating leases and properties held
   for lease, net of accumulated depreciation
   2001 $705,480;  2000 $705,480                                2,295,107            2,287,569

OTHER ASSETS
 Deferred charges, net of accumulated amortization
   2001 $12,190; 2000 $12,190                                       2,810                2,810
 Deferred leasing commissions, net of accumulated
   amortization 2001 $19,265; 2000 $19,265                         33,122               33,122
                                                           ---------------       --------------

                                                              $ 2,525,471          $ 2,508,982
                                                           ===============       ==============

   LIABILITIES AND PARTNERS' EQUITY

CURRENT LIABILITIES
 Current maturities of long-term debt                         $ 1,467,000             $ 60,000
 Accounts payable                                                   7,880                5,994
 Accrued expenses                                                  46,591               53,902
 Deferred revenue                                                       -                    -
                                                           ---------------       --------------

        Total current liabilities                               1,521,471              119,896
                                                           ---------------       --------------

LONG-TERM DEBT, less current maturities                                 -            1,452,000
                                                           ---------------       --------------

COMMITMENT AND CONTINGENCY (Note 4)

PARTNERS' EQUITY
 General partners                                                 (13,305)             (13,840)
 Limited partners                                               1,010,567              957,563
 Net unrealized gain (loss) on investment securities                6,738               (6,637)
                                                           ---------------       --------------

                                                                1,004,000              937,086
                                                           ---------------       --------------

                                                              $ 2,525,471          $ 2,508,982
                                                           ===============       ==============
</TABLE>


Note:    The Condensed Balance Sheet at December 31, 2000 has been taken from
         the audited financial statements at that date. See Notes to Condensed
         Financial Statements.

                                      2
<PAGE>


                  YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
                       CONDENSED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                          Three Months Ended                      Nine Months Ended
                                                             September 30,                          September 30,
                                                   -------------       -------------      -------------       ------------
                                                       2001                2000               2001                2000
                                                   -------------       -------------      -------------       ------------
                                                             (Unaudited)                               (Unaudited)

<S>                                                   <C>                 <C>                <C>                <C>
Rental income                                         $ 148,664           $ 137,965          $ 438,963          $ 412,296

Operating expenses:
 Wages and contract labor                                 1,500               1,500              4,500              4,500
 Depreciation and amortization                                -                   -                  -                  -
 Repairs and maintenance                                 42,114              36,420            132,009            100,150
 Management fees                                          4,450               4,073             13,156             12,354
 Utilities                                               25,978              23,206             69,964             68,877
 Professional fees                                       10,204               7,815             52,403             43,382
 Property taxes                                           9,621               9,621             28,863             28,863
 Miscellaneous                                            1,148               1,858              4,302              5,096
                                                   -------------       -------------      -------------       ------------
                                                         95,015              84,493            305,197            263,222
                                                   -------------       -------------      -------------       ------------
        Operating income                                 53,649              53,472            133,766            149,074
                                                   -------------       -------------      -------------       ------------
 Nonoperating income (expense):
 Interest and dividend income                             1,067               2,713              4,661              6,770
 Interest expense                                       (24,723)            (37,225)           (84,888)          (108,299)
 Other                                                        -               1,171                  -             (4,709)
                                                   -------------       -------------      -------------       ------------
                                                        (23,656)            (33,341)           (80,227)          (106,238)
                                                   -------------       -------------      -------------       ------------
        Net income                                     $ 29,993            $ 20,131           $ 53,539           $ 42,836
                                                   =============       =============      =============       ============
        Net income per limited
          partnership unit                               $ 4.69              $ 3.15             $ 8.38             $ 6.70
                                                   =============       =============      =============       ============
</TABLE>


See Notes to Condensed Financial Statements.

                                       3
<PAGE>

                  YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
                       CONDENSED STATEMENTS OF CASH FLOWS



<TABLE>
<CAPTION>
                                                                              Nine Months Ended
                                                                                September 30,
                                                                    ---------------------------------------
                                                                         2001                   2000
                                                                    ----------------       ----------------
                                                                                 (Unaudited)
<S>                                                                        <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)                                                          $ 53,539               $ 42,836
 Adjustments to reconcile net income (loss) to net cash
   provided by (used in) 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                            11,016                 (1,325)
      other receivables
    Increase (Decrease) in accounts payable and accrued expenses             (5,425)                13,348
                                                                    ----------------       ----------------

        Net cash provided by (used in) operating activities                  59,130                 60,739
                                                                    ----------------       ----------------

CASH FLOWS FROM INVESTING ACTIVITIES
 Sale of securities available for sale                                            -                 91,120
 Purchase of securities available for sale                                   (3,046)               (34,290)
 Improvements in investment property                                         (7,538)                     -
 Disbursements for deferred charges                                               -                 (1,498)
                                                                    ----------------       ----------------

        Net cash provided by (used in) investing activities                 (10,584)                55,332

CASH FLOWS FROM FINANCING ACTIVITIES
 Principal payments on long-term borrowings                                 (45,000)               (58,000)
                                                                    ----------------       ----------------

        Net cash (used in) financing activities                             (45,000)               (58,000)

        Net increase (decrease) in cash and cash equivalents                  3,546                 58,071

Cash and cash equivalents:
 Beginning                                                                   72,209                 11,928
                                                                    ----------------       ----------------

 Ending                                                                    $ 75,755               $ 69,999
                                                                    ================       ================
</TABLE>


See Notes to Condensed Financial Statements.

                                       4


<PAGE>



                  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 of 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, 2000, the cumulative unpaid priority return to the unit
      holders was $2,895,185 compared to $2,652,401 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.



                                       5
<PAGE>



                  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, 2000 to September 30, 2001. The Partnership continues to accrue for the 2001
real property taxes to be paid in January 2002; therefore accrued expenses will
continue to increase each quarter of 2001.


Liquidity and Capital Resources

During the quarter ended September 30, 2001, the Partnership operations
continued to meet working capital requirements, and the working capital deficit
was decreased by approximately $33,000. Working capital deficit as of September
30, 2001 was $1,327,039. The large working capital deficit is mainly
attributable to the reclassification of long-term debt to short-term due to the
loan maturing on June 30, 2002. The General Partners anticipate seeking
to refinance such indebtedness with First Union, however no assurances can be
given that such refinancing will occur.

Results of Operations

Rental income for the nine months ended September 30, 2001 is up approximately
6% as compared to the same period of the prior year. This is attributable to
rental escalations as provided by the current leases and the additional space
leased by the General Services Administration ("GSA") earlier in the current
year. Repairs and maintenance has increased approximately $32,000 as compared to
the prior year due to the installation of new security lights, gates and signage
on the property. Professional fees are up approximately $9,000 for the year
mainly due to commission expense paid for the new GSA lease. Interest expense is
down by approximately $23,000 due to lower interest rates on the floating rate
loan with First Union.


Status of EastPark Executive Center

The General Partners remain committed on selling the EastPark facility and
continue to have it listed with a commercial real estate broker. At this time,
the facility is not under contract with any potential buyers. The General
Partners are also working towards extending the leases with the current tenants.
Although the facility is 93% leased, all current tenants have the option to
terminate their leases within the next two years. The GSA has the election to
terminate its lease in October 2002 and accounts for 86% of the total rental
income; accordingly, the General Partners will focus their lease extensions
efforts on the GSA. The Partnership renewed a 1,902 square foot lease with a
smaller tenant at the same rate as in effect for additional two year period.
This lease will now expire on July 31, 2003. The General Partners will continue
to search for the best offer for the property and manage it at acceptable
standards until such time as it can sell the property to a qualified buyer.


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.



                                       6
<PAGE>




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 dated December 22,
                                          1998 (EastPark Executive Center)



                           (b)      Reports on Form 8-K:

                           No reports on Form 8-K have been filed during the
                           three months ended September 30, 2001.





         *        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 December 31, 1998.





                                       7
<PAGE>




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     11/14/01                   By:         /s/ Dexter R. Yager, Sr.
     ----------------                  -----------------------------------------
                                                Dexter R. Yager, Sr.
                                                General Partner

Date     11/14/01                   By:         /s/ Thomas K. Emery
     ----------------                  -----------------------------------------
                                                Thomas K. Emery
                                                Chief Financial Officer

                                       8