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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                      March 31, 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 [ ]       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>
                                                            March 31,          December 31,
                                                               2001                2000
                                                           -----------         -----------
<S>                                                        <C>                 <C>
   ASSETS                                                  (Unaudited)            (Note)

CURRENT ASSETS
 Cash and cash equivalents                                 $    43,446         $    72,209
 Accounts receivable, tenant                                    46,189              54,159
 Prepaid expenses                                                1,537                  --
 Securities available for sale                                  63,828              59,113
                                                           -----------         -----------

        Total current assets                                   155,000             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
                                                           -----------         -----------

                                                           $ 2,486,039         $ 2,508,982
                                                           ===========         ===========

   LIABILITIES AND PARTNERS' EQUITY

CURRENT LIABILITIES
 Current maturities of long-term debt                      $    60,000         $    60,000
 Accounts payable                                                5,889               5,994
 Accrued expenses                                               24,049              53,902
 Deferred revenue                                                2,179                  --
                                                           -----------         -----------

        Total current liabilities                               92,117             119,896
                                                           -----------         -----------

LONG-TERM DEBT, less current maturities                      1,437,000           1,452,000
                                                           -----------         -----------

COMMITMENT AND CONTINGENCY (Note 4)

PARTNERS' EQUITY
 General partners                                              (13,676)            (13,840)
 Limited partners                                              973,786             957,563
 Unrealized gain on investment securities                       (3,188)             (6,637)
                                                           -----------         -----------

                                                               956,922             937,086
                                                           -----------         -----------

                                                           $ 2,486,039         $ 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.


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<PAGE>   3

                  YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
                       CONDENSED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                          Three Months Ended
                                               March 31,
                                      ---------------------------
                                         2001              2000
                                      ---------         ---------
<S>                                   <C>               <C>
                                     (Unaudited)       (Unaudited)

Rental income                         $ 143,671         $ 136,366

Operating expenses:
 Wages and contract labor                 1,500             1,500
 Depreciation and amortization               --                --
 Repairs and maintenance                 38,509            30,019
 Management fees                          4,284             4,148
 Utilities                               22,132            23,102
 Professional fees                       19,566            17,766
 Property taxes                           9,621             9,621
 Miscellaneous                              922               935
                                      ---------         ---------

                                         96,534            87,091
                                      ---------         ---------

        Operating income                 47,137            49,275
                                      ---------         ---------

Nonoperating income (expense):
 Interest and dividend income             1,947             2,259
 Interest expense                       (32,697)          (34,832)
 Other                                       --              (906)
                                      ---------         ---------

                                        (30,750)          (33,479)
                                      ---------         ---------

        Net income                    $  16,387         $  15,796
                                      =========         =========

        Net income per limited
          partnership unit            $    2.56         $    2.47
                                      =========         =========
</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>
                                                                            Three Months Ended
                                                                                March 31,
                                                                        -------------------------
                                                                          2001             2000
                                                                        --------         --------
<S>                                                                     <C>              <C>
                                                                               (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)                                                       $ 16,387         $ 15,796
 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                              --              906
 Change in assets and liabilities:
   (Increase) Decrease in prepaids, deferrals and                          6,433             (950)
      other receivables
    Increase (Decrease) in accounts payable and accrued expenses         (27,779)          (4,522)
                                                                        --------         --------

        Net cash provided by (used in) operating activities               (4,959)          11,230
                                                                        --------         --------

CASH FLOWS FROM INVESTING ACTIVITIES
 Sale of securities available for sale                                        --           36,094
 Purchase of securities available for sale                                (1,266)            (625)
 Improvements in investment property                                      (7,538)              --
                                                                        --------         --------

        Net cash provided by (used in) investing activities               (8,804)          35,469

CASH FLOWS FROM FINANCING ACTIVITIES
 Principal payments on long-term borrowings                              (15,000)         (24,000)
                                                                        --------         --------

        Net cash (used in) financing activities                          (15,000)         (24,000)

        Net increase (decrease) in cash and cash equivalents             (28,763)          22,699

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

 Ending                                                                 $ 43,446         $ 34,627
                                                                        ========         ========
</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 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.


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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, 2000 to March 31, 2001. Accrued expenses, as well as cash and cash
equivalents, have decreased from year end due to the payment of the 2000 real
property taxes in January 2001 of approximately $37,000. 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 2002.

Liquidity and Capital Resources

During the quarter ended March 31, 2001, the Partnership operations continued to
meet working capital requirements, although the working capital was decreased by
approximately $2,700 from December 31, 2000. Working capital as of March 31,
2001 was $62,883.


Results of Operations

Operations for the three months ended March 31, 2001 are comparable to the same
period of the prior year. Rental income is up approximately 5% due to escalation
increases for the current tenants and increased occupancy. The major tenant, the
General Services Administration ("GSA"), began leasing an additional 2,200
square feet on February 1, 2001. Operating expenses are up approximately $9,000
as compared to the same period of the prior year, generally due to the increase
in repairs and maintenance and professional fees. Interest expense is down by
approximately $2,000.

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. Both of these contracts were terminated by the
prospective buyers under their respective terms of such contracts after due
diligence by the buyers. 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 2
years. The GSA, which has the election to terminate its lease in October 2002
and accounts for 86% of the total rental income, will be the main focus of such
efforts. The General Partners will continue to search for the best offer for the
property and manage it at acceptable standards until such time 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.



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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)



                           (b) Reports on Form 8-K:

                           No reports on Form 8-K have been filed during the
                           three months ended March 31, 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.



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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     05/11/01                     By:    /s/ Dexter R. Yager, Sr.
     ---------------------                ------------------------------------
                                             Dexter R. Yager, Sr.
                                             General Partner

Date      05/11/01                    By:    /s/ Thomas K.Emery
     ---------------------                ------------------------------------
                                             Thomas K. Emery
                                             Chief Financial Officer



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