UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                             -----------------------

                                    FORM 10-Q
                   Quarterly Report Under Section 13 or 15(d)
              of the United States Securities Exchange Act of 1934

                             -----------------------


For The Quarter Ended September 30, 1996             Commission File No. 0-15630


                    HANOVER LEASE INCOME LIMITED PARTNERSHIP
             (Exact name of registrant as specified in its charter)


         Massachusetts                                                04-2923206
(State or other jurisdiction of                                 (I.R.S. Employer
incorporation or organization)                               Identification No.)


    One Financial Center, 21st Floor, Boston, MA                           02111
(Address of principal executive offices)                              (Zip Code)


Registrant's telephone number, including area code                (617) 482-8000

                            -------------------------


                                 Not Applicable
              (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 ___

                             There are no Exhibits.

                                  Page 1 of 11

<PAGE>

<TABLE>
<CAPTION>

                    HANOVER LEASE INCOME LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)



<S>           <C>                                                                                            <C>
                                  INDEX                                                                      Page No.

Part I.       FINANCIAL INFORMATION

              Financial Statements

                    Balance Sheets as of September 30, 1996 and December 31, 1995                            3

                    Statements of Operations For the Quarters Ended
                          September 30, 1996 and 1995 and the Nine Months Ended
                          September 30, 1996 and 1995                                                        4

                    Statements of Cash Flows For the Nine Months Ended
                          September 30, 1996 and 1995                                                        5

                    Notes to Financial Statements                                                            6

              Management's Discussion and Analysis of Financial Condition
                    and Results of Operation                                                                 7 - 8

              Computer Equipment Portfolio                                                                   9

Part II.      OTHER INFORMATION

              Items 1 - 6                                                                                    10

              Signature                                                                                      11
</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                          PART I. FINANCIAL INFORMATION

                    HANOVER LEASE INCOME LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                                 Balance Sheets

                                    Assets                                          (Unaudited)            (Audited)
                                                                                      9/30/96               12/31/95
                                                                                 ----------------        ---------------
<S>                                                                              <C>                     <C>            
Investment property, at cost (note 2):
   Capital equipment                                                             $      5,834,359        $     6,453,248
     Less accumulated depreciation                                                      5,834,359              6,453,248
                                                                                 ----------------        ---------------
       Investment property, net                                                                 -                      -

Cash and cash equivalents                                                                 295,777                 98,385
Rents receivable                                                                           13,274                 40,087
Sales receivable                                                                                -                  8,100
                                                                                 ----------------        ---------------

     Total assets                                                                $        309,051        $       146,572
                                                                                 ================        ===============

                        Liabilities and Partners' Equity
Liabilities:
   Accounts payable and accrued
     expenses - affiliates (note 3)                                              $          9,471        $        13,594
   Accounts payable and accrued expenses                                                  229,617                 74,209
   Unearned rental income                                                                  36,000                 38,207
                                                                                 ----------------        ---------------

     Total liabilities                                                                    275,088                126,010
                                                                                 ----------------        ---------------

Partners' equity:
   General Partner:
     Capital contribution                                                                   1,000                  1,000
     Cumulative net income                                                              1,124,003              1,104,971
     Cumulative cash distributions                                                     (1,114,506)            (1,096,564)
                                                                                 ----------------        ---------------
                                                                                           10,497                  9,407
                                                                                 ----------------        ---------------
   Limited Partners (57,239 units):
     Capital contribution, net of
       offering costs                                                                  25,569,053             25,569,053
     Cumulative net income                                                              3,025,220              2,583,616
     Cumulative cash distributions                                                    (28,570,807)           (28,141,514)
                                                                                 ----------------        ---------------
                                                                                           23,466                 11,155
                                                                                 ----------------        ---------------
     Total partners' equity                                                                33,963                 20,562
                                                                                 ----------------        ---------------

     Total liabilities and partners' equity                                      $        309,051        $       146,572
                                                                                 ================        ===============
</TABLE>

                 See accompanying notes to financial statements.


<PAGE>

<TABLE>
<CAPTION>

                    HANOVER LEASE INCOME LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                            Statements of Operations
                                   (Unaudited)

                                                     Quarters Ended                         Nine Months Ended
                                                      September 30,                           September 30,
                                            -------------------------------        ---------------------------------
                                                 1996              1995                1996                1995
                                            -------------------------------        ---------------------------------

<S>                                         <C>                <C>                  <C>              <C>            
Revenue:
   Rental income                            $    159,614       $    188,173         $    495,176     $       591,002
   Other income                                      750                  -                  750                   -
   Interest income                                 2,283              1,609                4,649               6,034
   Net gain on sale
     of equipment                                 30,000                  -              100,000             206,727
                                            ------------       ------------         ------------     ---------------

       Total revenue                             192,647            189,782              600,575             803,763
                                            ------------       ------------         ------------     ---------------

Costs and expenses:
   Depreciation                                        -                  -                    -                 927
   Related party expenses (note 3):
     Management fees                               7,981              9,215               24,760              28,633
     General and administrative                   58,395             27,569              115,179              91,645
                                            ------------       ------------         ------------     ---------------

       Total costs and expenses                   66,376             36,784              139,939             121,205
                                            ------------       ------------         ------------     ---------------

Net income                                  $    126,271       $    152,998         $    460,636     $       682,558
                                            ============       ============         ============     ===============

Net income per Limited
   Partnership Unit                         $       2.12       $       2.54         $       7.72     $         11.47
                                            ============       ============         ============     ===============
</TABLE>

                 See accompanying notes to financial statements.


<PAGE>

<TABLE>
<CAPTION>

                    HANOVER LEASE INCOME LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                            Statements of Cash Flows
              For the Nine Months Ended September 30, 1996 and 1995
                                   (Unaudited)

                                                                                    1996                     1995
                                                                                    ----                     ----

<S>                                                                          <C>                        <C>            
Cash flows from operating activities:
   Net income                                                                $        460,636           $       682,558
                                                                             ----------------           ---------------

   Adjustments  to  reconcile  net  income  to net
     cash  provided  by  operating activities:
       Depreciation                                                                         -                       927
       Net gain on sale of equipment                                                 (100,000)                 (206,727)
       Net decrease (increase) in current assets                                       34,913                   (41,628)
       Net increase (decrease) in current liabilities                                 149,078                   (18,100)
                                                                             ----------------           ---------------

         Total adjustments                                                             83,991                  (265,528)
                                                                             ----------------           ---------------

         Net cash provided by operating activities                                    544,627                   417,030
                                                                             ----------------           ---------------

Cash flows from investing activities:
   Proceeds from sales of investment property                                         100,000                   206,727
                                                                             ----------------           ---------------

         Net cash provided by investing activities                                    100,000                   206,727
                                                                             ----------------           ---------------

Cash flows from financing activities:
   Cash distributions to partners                                                    (447,235)                 (735,195)
                                                                             ----------------           ---------------

         Net cash used in financing activities                                       (447,235)                 (735,195)
                                                                             ----------------           ---------------

Net increase (decrease) in cash and cash equivalents                                  197,392                  (111,438)

Cash and cash equivalents at beginning of period                                       98,385                   213,715
                                                                             ----------------           ---------------

Cash and cash equivalents at end of period                                   $        295,777           $       102,277
                                                                             ================           ===============

Supplemental cash flow information:
   Interest paid during the period                                           $              -           $             -
                                                                             ================           ===============
</TABLE>

                 See accompanying notes to financial statements.


<PAGE>


                    HANOVER LEASE INCOME LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                          Notes to Financial Statements
       For the Nine Months Ended September 30, 1996 and September 30, 1995
                                   (Unaudited)

(1)   Organization and Partnership Matters

The foregoing  financial  statements of Hanover Lease Income Limited Partnership
(the  "Partnership")  have  been  prepared  in  accordance  with the  rules  and
regulations of the Securities and Exchange  Commission for Form 10-Q and reflect
all  adjustments  which are, in the opinion of management,  necessary for a fair
presentation of the results for the interim periods presented.  Pursuant to such
rules and  regulations,  certain note  disclosures  which are normally  required
under  generally  accepted  accounting  principles  have  been  omitted.  It  is
recommended  that these  financial  statements be read in  conjunction  with the
Partnership's Annual Report on Form 10-K for the year ended December 31, 1995.

(2)   Investment Property

At September 30, 1996, the Partnership owned capital equipment with a cost basis
of  $5,834,359.  All  purchases  of  capital  equipment  are  subject to a 4.75%
acquisition fee paid to the General Partner.

(3)   Related Party Transactions

Fees,  commissions  and other expenses paid or accrued by the Partnership to the
General  Partner or affiliates of the General  Partner for the nine months ended
September 30, 1996 and 1995 are as follows:

<TABLE>
<CAPTION>
                                                      1996               1995
                                                      ----               ----

<S>                                              <C>                <C>         
Management fees                                  $      24,760      $     28,633
Reimbursable expenses paid                              78,094            66,399
                                                 -------------      ------------

                                                 $     102,854      $     95,032
                                                 =============      ============
</TABLE>

Under the terms of the Partnership Agreement, the General Partner is entitled to
an  Equipment  Acquisition  Fee of  4.75%  of the  purchase  price  paid  by the
Partnership  for the  equipment.  The  General  Partner  is also  entitled  to a
management  fee equal to 5% of the  monthly  rental  billings.  The  Partnership
reimburses  the  General  Partner  and their  affiliates  for  certain  expenses
incurred by them in connection with the operation of the Partnership.




<PAGE>


                    HANOVER LEASE INCOME LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations
                                   (Unaudited)

Results of Operations

The following discussion relates to the Partnership's operations for the quarter
and for the nine months ended  September  30, 1996,  in  comparison  to the same
periods ended September 30, 1995.

The  Partnership  realized  net income of $126,271 and $152,998 for the quarters
ended September 30, 1996 and 1995, respectively. Rental income decreased $28,559
or 15% between the quarter  periods.  The  decrease is due to lower rental rates
obtained on equipment  lease  extensions and  remarketings  resulting  after the
initial  lease term  expires and due to a decrease  in the  overall  size of the
equipment  portfolio.  Interest  income  increased  $674  from 1995 to 1996 as a
result of higher average  short-term  investment  balances held during the third
quarter of 1996. The increase in net gain on sale of equipment  between 1996 and
1995 can be  attributed  to an increase  in  equipment  sales.  During the first
quarter of 1995, the equipment  portfolio  became fully  depreciated  which will
result in a gain on all future sales of equipment.

Total costs and expenses  increased $29,592 or 80% during the current quarter as
compared to the prior period quarter.  The increase in costs and expenses can be
attributed  to  an  increase  in  the  allocable  salaries  of  the  partnership
accounting  and  reporting  personnel of the General  Partner and an increase in
expenses   associated  with  the  helicopter   lease  with  Storage   Technology
Corporation  between the  quarter  periods.  Management  fees  decreased  in the
current quarter as a result of the decline in rental income.

The Partnership realized net income of $460,636 and $682,558 for the nine months
ended September 30, 1996 and 1995, respectively. Rental income decreased $95,826
or 16% between the nine month periods. The decrease is due to lower rental rates
obtained on equipment  lease  extensions and  remarketings  resulting  after the
initial  lease term  expires and due to a decrease  in the  overall  size of the
equipment portfolio,  as discussed above.  Interest income decreased $1,385 from
1995 to 1996 as a result of lower average  short-term  investment  balances held
between the nine month  periods.  The  decrease in net gain on sale of equipment
between 1996 and 1995 can be attributed to a reduction in equipment sales.

Total costs and expenses increased $18,734 or 15% between the nine month periods
ended  September  30, 1996 and 1995.  The  increase in costs and expenses can be
attributed  to  an  increase  in  the  allocable  salaries  of  the  partnership
accounting and reporting  personnel of the General Partner during the nine month
periods and an increase in expenses  associated  with the helicopter  lease,  as
mentioned above.  Management fees decreased as a result of the decline in rental
income.

Liquidity and Capital Resources

For the nine months ended September 30, 1996,  rental revenue generated from the
operating  leases and sales proceeds  generated  from  equipment  sales were the
primary sources of funds for the Partnership. As the equipment leases terminate,
the General  Partner  determines if the  equipment  will be extended to the same
lessee, remarketed to another lessee, or if it is less marketable, sold.
This  decision  is made  upon  analyzing  which  option  would  derive  the most
favorable results.



<PAGE>


                    HANOVER LEASE INCOME LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations
                                   (Unaudited)

Consistent  with prior periods,  Hanover's  operating  activities  resulted in a
decrease of rental  revenues due to expired leases  resulting in equipment sales
and  due to  older  equipment  being  remarketed  at  lower  rental  rates.  The
helicopter  lease with Storage  Technology  Corporation,  scheduled to expire in
October, 1996, has been extended through January, 1997. The rent associated with
the Storage  Technology  Corporation  lease  comprises  65% of the total  rental
revenue for the nine months ended  September  30,  1996.  Upon  expiration,  the
helicopter  will  likely be sold and the  Partnership  will be  liquidated  soon
thereafter.

During the fourth quarter of 1995, the General Partner  announced its intentions
of winding down the operations of the Partnership.  As discussed above, once the
helicopter lease  terminates,  it is anticipated that  substantially  all of the
assets  will  be  liquidated  and the  proceeds  will  be  used  to  settle  all
outstanding  liabilities  and make a final  distribution  to the Partners in the
first half of 1997.

The Partnership's  investing  activities for the nine months ended September 30,
1996 resulted in sales of fully depreciated  equipment,  generating  $100,000 in
sales proceeds. The Partnership has no material capital commitments and will not
purchase  equipment in the future due to the  Partnership  having  fulfilled its
capital expenditure commitments in prior years.

Cash distributions are currently at a level of 3% per Limited  Partnership Unit,
or $3.75 per  Limited  Partnership  Unit on a quarterly  basis.  For the quarter
ended  September  30, 1996,  the  Partnership  declared a cash  distribution  of
$224,680,  of which $10,034 was  distributed to the General Partner and $214,646
will be distributed to the Limited  Partners.  The distribution  will be made on
November 27, 1996. The Partnership  expects  distributions to be volatile as its
operations are winding down. The effects of inflation have not been  significant
to the  Partnership to date and are not  anticipated to have any material impact
in future years.

On  January 9, 1996,  TLP  Holding  LLC  purchased  all the common  stock of TLP
Leasing  Programs,  Inc.  from CMI Holding Co.  Under the new  ownership,  it is
expected  that TLP Leasing  Programs,  Inc. will continue to operate in the same
manner of business as it has in the past.



<PAGE>


                    HANOVER LEASE INCOME LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                         Equipment Portfolio (Unaudited)
                               September 30, 1996

Lessees

BASF Corporation
Federal Paper Board Company, Incorporated
North Shore Data Services, Incorporated
Storage Technology Corporation

<TABLE>
<CAPTION>
Equipment Description                                   Acquisition Price

<S>                                                     <C>             
Helicopter aircraft                                     $      4,678,826
Heavy duty equipment                                             738,906
Computer equipment & printers                                    107,269
Research & experimentation equipment                             143,088
Other                                                            166,270
                                                        ----------------

                                                        $      5,834,359
                                                        ================
</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                           PART II. OTHER INFORMATION

                    HANOVER LEASE INCOME LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)


<S>            <C>
Item 1.        Legal Proceedings
               Response:  None

Item 2.        Changes in the Rights of the Partnership's Security Holders
               Response:  None

Item 3.        Defaults by the Partnership on its Senior Securities
               Response:  None

Item 4.        Results of Votes of Security Holders
               Response:  None

Item 5.        Other Information
               Response:  None

Item 6.        Exhibits and Reports on Form 8-K
               Response:

               A.  None

               B.  None
</TABLE>


<PAGE>


                                    SIGNATURE

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

HANOVER LEASE INCOME LIMITED PARTNERSHIP
(Registrant)

By:    Hanover Leasing Partnership,
       its General Partner

By:    TLP Leasing Programs, Inc.,
       one of its Corporate General Partners


Date:  November 14, 1996

By:    Arthur P. Beecher,
       President