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


                                    FORM 10-Q


(Mark One)
[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

For the quarterly period ended                    March 31, 1997
                                   ---------------------------------------------

[  ]    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
                                     0-16720

                   PARTICIPATING INCOME PROPERTIES 1986, L.P.
                                       and
                    FFCA INVESTOR SERVICES CORPORATION 86-B
--------------------------------------------------------------------------------
               (Exact Name of Co-Registrants as Specified in Their
                            Organizational Documents)


          Delaware                                        86-0570015
--------------------------------------------------------------------------------
(Partnership State of Organization)                 (Partnership I.R.S. Employer
                                                        Identification Number)

          Delaware                                        86-0557949
--------------------------------------------------------------------------------
(Corporation State of Incorporation)                (Corporation I.R.S. Employer
                                                        Identification Number)

The Perimeter Center
17207 North Perimeter Drive
Scottsdale, Arizona                                                      85255
--------------------------------------------------------------------------------
(Address of principal executive offices)                              (zip code)


Co-Registrants' telephone number including area code             (602) 585-4500
                                                       -------------------------


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
                                       ---    ---
<PAGE>
PART 1 - FINANCIAL INFORMATION
     Item l.  Financial Statements.
     -------  ---------------------


            PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE

                           CONSOLIDATED BALANCE SHEETS
                      MARCH 31, 1997 AND DECEMBER 31, 1996
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                 March 31,     December 31,
                                                                                                   1997            1996
                                                                                               ------------    ------------
                                                            ASSETS
                                                            ------

<S>                                                                                            <C>             <C>         
CASH AND CASH EQUIVALENTS                                                                      $  2,356,736    $  2,346,371

RECEIVABLES FROM LESSEES                                                                            144,697         149,803

SECURED NOTES RECEIVABLE                                                                            123,920         131,323

PROPERTY SUBJECT TO OPERATING LEASES, at cost
      Land                                                                                        6,773,272       6,773,272
      Buildings                                                                                  29,669,322      29,669,322
      Equipment                                                                                     626,781         626,781
                                                                                               ------------    ------------
         Total                                                                                   37,069,375      37,069,375
      Less-Accumulated depreciation                                                              11,266,994      10,937,860
                                                                                               ------------    ------------

                                                                                                 25,802,381      26,131,515
                                                                                               ------------    ------------

                  Total assets                                                                 $ 28,427,734    $ 28,759,012
                                                                                               ============    ============


                                               LIABILITIES AND PARTNERS' CAPITAL
                                               ---------------------------------

DISTRIBUTION PAYABLE TO LIMITED PARTNERS                                                       $  1,316,851    $  1,321,426

PAYABLE TO GENERAL PARTNER                                                                           14,821          10,304

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES                                                             47,618          49,704

RENTAL DEPOSITS                                                                                     114,400         114,400
                                                                                               ------------    ------------

                  Total liabilities                                                               1,493,690       1,495,834
                                                                                               ------------    ------------

MINORITY INTEREST (Note 1)                                                                          (15,252)        (14,923)
                                                                                               ------------    ------------

PARTNERS' CAPITAL (DEFICIT):
      General partner                                                                              (161,347)       (158,058)
      Limited partners                                                                           27,110,643      27,436,159
                                                                                               ------------    ------------

                  Total partners' capital                                                        26,949,296      27,278,101
                                                                                               ------------    ------------

                  Total liabilities and partners' capital                                      $ 28,427,734    $ 28,759,012
                                                                                               ============    ============
</TABLE>
<PAGE>
            PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE

                        CONSOLIDATED STATEMENTS OF INCOME
               FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
                                   (Unaudited)



                                                            1997         1996
                                                         ----------   ----------
REVENUES:
      Rental                                             $1,072,247   $1,078,631
      Participating rentals                                 413,241      468,335
      Interest and other                                     26,152       24,777
      Gain on sale of property                                 --         16,410
                                                         ----------   ----------

                                                          1,511,640    1,588,153
                                                         ----------   ----------

EXPENSES:
      General partner fees                                  131,523      136,780
      Depreciation                                          329,134      414,632
      Operating                                              48,777       50,400
                                                         ----------   ----------

                                                            509,434      601,812
                                                         ----------   ----------

MINORITY INTEREST IN INCOME                                   1,168        1,164
                                                         ----------   ----------

NET INCOME                                               $1,001,038   $  985,177
                                                         ==========   ==========

NET INCOME ALLOCATED TO:
      General partner                                    $   10,010   $    9,852
      Limited partners                                      991,028      975,325
                                                         ----------   ----------

                                                         $1,001,038   $  985,177
                                                         ==========   ==========

NET INCOME PER LIMITED PARTNERSHIP UNIT
      (based on 51,687 units held by limited partners)   $    19.17   $    18.87
                                                         ==========   ==========
<PAGE>
            PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE

             CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL
                    FOR THE THREE MONTHS ENDED MARCH 31, 1997
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                Limited Partners
                                                            General      ----------------------------       
                                                            Partner         Number                           Total
                                                             Amount        of Units         Amount          Amount
                                                          ------------   ------------    ------------    ------------
<S>                                                       <C>                   <C>      <C>             <C>         
BALANCE, December 31, 1996                                $   (158,058)         51,687   $ 27,436,159    $ 27,278,101

   Net income                                                   10,010            --          991,028       1,001,038

   Distribution to partners                                    (13,299)           --       (1,316,544)     (1,329,843)
                                                          ------------   ------------    ------------    ------------

BALANCE, March 3l, 1997                                   $   (161,347)         51,687   $ 27,110,643    $ 26,949,296
                                                          ============    ============   ============    ============
</TABLE>
<PAGE>
            PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                1997           1996
                                                            -----------    -----------
<S>                                                         <C>            <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                              $ 1,001,038    $   985,177
    Adjustments to net income:
      Depreciation                                              329,134        414,632
      Gain on sale of property                                     --          (16,410)
      Minority interest in income                                 1,168          1,164
      Change in assets and liabilities:
        Decrease (increase) in receivables from lessees           5,106        (20,023)
        Increase (decrease) in payable to general partner         4,517        (17,705)
        Decrease in accounts payable and
          accrued liabilities                                    (2,086)        (4,990)
                                                            -----------    -----------

          Net cash provided by operating activities           1,338,877      1,341,845
                                                            -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Proceeds from sale of property                                 --          430,192
    Principal collections on secured notes receivable             7,403          6,702
                                                            -----------    -----------


          Net cash provided by investing activities               7,403        436,894
                                                            -----------    -----------

CASH FLOWS FOR FINANCING ACTIVITIES:
    Partner distributions declared                           (1,329,843)    (3,452,049)
    Decrease in distribution payable                             (4,575)          --
    Distribution to minority interest                            (1,497)        (1,564)
                                                            -----------    -----------

          Net cash used in financing activities              (1,335,915)    (3,453,613)
                                                            -----------    -----------

NET INCREASE (DECREASE) IN CASH AND
    CASH EQUIVALENTS                                             10,365     (1,674,874)

CASH AND CASH EQUIVALENTS, beginning of period                2,346,371      3,649,977
                                                            -----------    -----------

CASH AND CASH EQUIVALENTS, end of period                    $ 2,356,736    $ 1,975,103
                                                            ===========    ===========
</TABLE>
<PAGE>
PART I  -  FINANCIAL INFORMATION


Item 2.         Management's Discussion and Analysis of
-------         Financial Condition and Results of Operations
                ---------------------------------------------

      As of March 31,  1997,  Participating  Income  Properties  1986,  L.P.,  a
      Delaware limited partnership,  (the Registrant),  had received $51,687,000
      in gross  proceeds  from its offering of Units.  Net funds  available  for
      investment,  after payment of sales  commissions,  organization  costs and
      acquisition  fees,  amounted to $45,232,790.  The offering of Units is the
      Registrant's  sole  source of  capital,  and since  the final  closing  of
      limited  partnership units was held on April 16, 1987, the Registrant will
      not receive  additional funds from the offering.  The Registrant was fully
      invested in eleven travel plaza  properties by September 1988 and does not
      anticipate any further capital expenditures.

      The Registrant  declared a cash  distribution  to the limited  partners of
      $1,316,544  for the quarter ended March 31, 1997 (the period).  During the
      period,  all net  proceeds  not  invested in real estate were  invested in
      Government Agency discount notes and bank repurchase agreements (which are
      secured by United States Treasury and Government obligations).

      During the  period,  base  rental  revenue  from the travel  plaza  leases
      amounted to $1,072,247  as compared to  $1,078,631  for the same period of
      the prior  year.  In the first  quarter  of 1996,  the  Registrant  sold a
      portion of the land  comprising  the Boise,  Idaho travel plaza  property,
      resulting  in a  monthly  reduction  of  $2,128  in  rental  revenue.  The
      Registrant received or accrued  participating  rentals of $413,241 for the
      period which is lower than the  comparable  quarter in 1996 by $55,094 and
      is attributable  to decreased  overall travel plaza sales. In June 1996, a
      credit  card  issuer to Flying J Travel  Plaza  customers  terminated  its
      relationship with the travel plazas.  As a result,  volumes and margins at
      many Flying J Travel Plaza locations decreased. CFJ Properties, the lessee
      of eight of the  Registrant's  travel  plazas,  has  advised  the  general
      partner of the  Registrant  that it expects  sales will  stabilize  and be
      restored by mid-1997.  Total expenses decreased by $92,378 to $509,434 for
      the period primarily due to a decrease in depreciation  expense related to
      the sale of travel plaza equipment in the last twelve months.

      The  decrease in total  assets  reflected  in the  Registrant's  financial
      statements   filed  with  this  Report  is  mainly   attributable  to  the
      depreciation allowance, which is deducted for accounting purposes from the
      cost of the assets on the Registrant's books.

      In the opinion of management,  the financial  information included in this
      report reflects all adjustments necessary for fair presentation.  All such
      adjustments are of a normal recurring nature.
<PAGE>
                     FFCA INVESTOR SERVICES CORPORATION 86-B
                     ---------------------------------------


                         BALANCE SHEET - MARCH 31, 1997
                         ------------------------------





                                     ASSETS


Cash                                                                        $100
Investment in Participating Income Properties 1986, L.P., at cost            100
                                                                            ----

                  Total Assets                                              $200
                                                                            ====


                                    LIABILITY

Payable to Parent                                                           $100
                                                                            ----


                              STOCKHOLDER'S EQUITY


Common Stock; $l par value; 100 shares authorized,
     issued and outstanding                                                  100
                                                                             ---

                  Liability and Stockholder's Equity                        $200
                                                                            ====




Note: FFCA Investor  Services  Corporation 86-B (86-B) was organized on June 23,
1986 to act as the assignor limited partner in Participating  Income  Properties
1986, L.P. (PIP-86).

         The  assignor  limited  partner  is the owner of record of the  limited
partnership units of PIP-86. All rights and powers of 86-B have been assigned to
the holders,  who are the registered and beneficial  owners of the units.  Other
than to serve as assignor  limited  partner,  86-B has no other business purpose
and will not engage in any other activity or incur any debt.
<PAGE>
                                   SIGNATURES
                                   ----------

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrants  have duly caused  this  report to be signed on their  behalf by the
undersigned thereunto duly authorized.

                                   PARTICIPATING INCOME PROPERTIES 1986, L.P.

                                   By FFCA MANAGEMENT COMPANY, L.P.
                                   General Partner


                                   By PERIMETER CENTER MANAGEMENT COMPANY
                                   Corporate General Partner


Date:    April 4, 1997                By /s/ John R. Barravecchia
                                   -------------------------------------------
                                   John R. Barravecchia, Chief Financial Officer
<PAGE>
                                   SIGNATURES
                                   ----------

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
co-registrant  has duly  caused  this  report to be signed on its  behalf by the
undersigned thereunto duly authorized.

                                   FFCA INVESTOR SERVICES CORPORATION 86-B



Date:    April 4, 1997                  By /s/ John R. Barravecchia
                                      ------------------------------------------
                                      John R. Barravecchia, President