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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          June 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           (I.R.S. Employer Identification Number)
 of 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.

<PAGE>   2

PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS


                  YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
                            CONDENSED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                           June 30,        December 31,
                                                             2000             1999
                                                         -----------       ----------
                                                         (Unaudited)         (Note)
   ASSETS

<S>                                                      <C>               <C>
CURRENT ASSETS
 Cash and cash equivalents                               $   57,262        $   11,928
 Accounts receivable, tenant                                 39,016            38,530
 Prepaid expenses                                             1,083                --
 Securities available for sale                               62,183           116,065
                                                         ----------        ----------

        Total current assets                                159,544           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
                                                         ----------        ----------

                                                         $2,484,543        $2,490,024
                                                         ==========        ==========

   LIABILITIES AND PARTNERS' EQUITY

CURRENT LIABILITIES
 Current maturities of long-term debt                    $   60,000        $1,585,000
 Accounts payable                                             2,408            10,206
 Accrued expenses                                            42,420            26,955
 Deferred revenue                                             2,179                --
                                                         ----------        ----------

        Total current liabilities                           107,007         1,622,161
                                                         ----------        ----------

LONG-TERM DEBT, less current maturities                   1,477,000                --
                                                         ----------        ----------

COMMITMENT AND CONTINGENCY (Note 4)

PARTNERS' EQUITY
 General partners                                           (14,265)          (14,492)
 Limited partners                                           915,411           892,933
 Unrealized gain on investment securities                      (610)          (10,578)
                                                         ----------        ----------

        Total partner's equity                              900,536           867,863
                                                         ----------        ----------

                                                         $2,484,543        $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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<PAGE>   3

                  YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
                       CONDENSED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                       Three Months Ended               Six Months Ended
                                            June 30,                        June 30,
                                    ------------------------        ------------------------
                                      2000            1999            2000            1999
                                    --------        --------        --------        --------
                                          (Unaudited)                     (Unaudited)

<S>                                 <C>             <C>             <C>             <C>
Rental income                       $137,965        $140,200        $274,331        $275,132

Operating expenses:
 Wages and contract labor              1,500           2,004           3,000           3,504
 Depreciation and amortization            --              --              --              --
 Repairs and maintenance              33,711          28,436          63,730          55,852
 Management fees                       4,133           4,122           8,281           8,277
 Utilities                            22,569          21,962          45,671          43,559
 Professional fees                    18,517          28,025          35,567          43,345
 Property taxes                        9,621           8,994          19,242          17,989
 Miscellaneous                         1,587           2,328           3,238           3,228
                                    --------        --------        --------        --------

                                      91,638          95,871         178,729         175,754
                                    --------        --------        --------        --------

        Operating income              46,327          44,329          95,602          99,378
                                    --------        --------        --------        --------

Nonoperating income (expense):
 Interest and dividend income          1,798           2,269           4,057           4,923
 Interest expense                    (36,242)        (39,201)        (71,074)        (78,695)
 Other                                (4,974)         (1,494)         (5,880)         (1,494)
                                    --------        --------        --------        --------

                                     (39,418)        (38,426)        (72,897)        (75,266)
                                    --------        --------        --------        --------

        Net income                  $  6,909        $  5,903        $ 22,705        $ 24,112
                                    ========        ========        ========        ========

        Net income per limited
          partnership unit          $   1.08        $   0.93        $   3.56        $   3.79
                                    ========        ========        ========        ========
</TABLE>

See Notes to Condensed Financial Statements.

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<PAGE>   4

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



<TABLE>
<CAPTION>
                                                                     Six Months Ended
                                                                          June 30,
                                                                  -----------------------
                                                                    2000           1999
                                                                  --------       --------
                                                                        (Unaudited)

<S>                                                               <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                        $ 22,705       $  5,903
 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                   (1,569)           729
      other receivables
   Increase in accounts payable and accrued expenses                 9,846         26,892
                                                                  --------       --------

        Net cash provided by operating activities                   36,862         33,524
                                                                  --------       --------

CASH FLOWS FROM INVESTING ACTIVITIES
 Sale of securities available for sale                              91,120             --
 Purchase of securities available for sale                         (33,150)          (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            56,472        (39,830)

CASH FLOWS FROM FINANCING ACTIVITIES
 Principal payments on long-term borrowings                        (48,000)       (14,990)
                                                                  --------       --------

        Net (used) in financing activities                         (48,000)       (14,990)

        Net increase (decrease) in cash and cash equivalents        45,334        (21,296)

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

 Ending                                                           $ 57,262       $ 24,442
                                                                  ========       ========
</TABLE>

See Notes to Condensed Financial Statements.

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<PAGE>   5

                  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 June 30, 2000. All items are comparable.

Liquidity and Capital Resources

During the quarter ended June 30, 2000, the Partnership operations continued to
meet working capital requirements, and working capital was improved to a surplus
of $52,537. 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 a 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 six months ended June 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. Operating expenses are up
approximately $3,000 as compared to the same period of the prior year. Repairs
and maintenance is the main cause for this increase. Interest expense is down by
approximately $7,600 due to a lower rate and outstanding loan balance.

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.

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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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          10.3          Promissory Note with First Union
                                             National Bank (EastPark Executive
                                             Center)

                    6          27            Financial Data Schedule



                           (b) Reports on Form 8-K:

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


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

            *   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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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   08/11/00                           By: /s/ Dexter R. Yager, Sr.
    ----------------------------------        ----------------------------------
                                                  Dexter R. Yager, Sr.
                                                  General Partner

Date   08/11/00                           By: /s/ Jerry R. Haynes
    ----------------------------------        ----------------------------------
                                                  Jerry R. Haynes
                                                  Chief Financial Officer

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