##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-QSB

|                                      |  |                                                                                         
|------------------------------------- |  | ----------------------------------------------------------------------------------------
|(Mark one)                           
|x                                     |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|                                      |  |                                                                                         
|For Quarter Ended      March 31, 2004
|                                      |  |                                                                                         
|or                                   
|                                      |  |                                                                                         
|o                                     |  | 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 incorporation or organization) |  | (I.R.S. Employer Identification Number)
|                                                               |  |                                        
|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 o





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##### 



PART I  FINANCIAL INFORMATION
Item 1. Financial Statements

YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
CONDENSED BALANCE SHEETS

|                                     |                           |   |             |           |              |   |           |           | 
|------------------------------------ | ------------------------- | - | ----------- | --------- | ------------ | - | --------- | --------- | 
|                                     |                           |   | March 31,   |           | December 31,
|                                     |                           |   | 2004        |           | 2003        
|                                     |                           |   |             |           |             
|                                     |                           |   | (Unaudited) |           | (Note)      
|ASSETS                               |                           |   |             |           |              |   |           |          
|CURRENT ASSETS                       |                           |   |             |           |              |   |           |          
|Cash and cash equivalents            |                           | $ | 276,074     |           |              | $ | 208,237   |          
|Accounts receivable, tenant          |                           |   | 47,721      |           |              |   | 45,962    |          
|Prepaid expenses                     |                           |   | 3,280       |           |              |   | 242       |          
|                                     |                           |   |             |           |              |   |           |          
|                                     |                           |   |             |           |              |   |           |          
|                                     | Total current assets      |   |             | 327,075   |              |   |           | 254,441   | 
|                                     |                           |   |             |           |              |   |           |          
|                                     |                           |   |             |           |              |   |           |          
|Leased property held for sale        |                           |   | 2,323,501   |           |              |   | 2,323,501 |          
|                                     |                           |   |             |           |              |   |           |          
|                                     |                           |   |             |           |              |   |           |          
|                                     |                           | $ | 2,650,576   |           |              | $ | 2,577,942 |          
|                                     |                           |   |             |           |              |   |           |          
|LIABILITIES AND PARTNERS EQUITY     |                           |   |             |           |              |   |           |          
|                                     |                           |   |             |           |              |   |           |          
|CURRENT LIABILITIES                  |                           |   |             |           |              |   |           |          
|Current maturities of long-term debt |                           | $ | 1,282,000   |           |              | $ | 1,303,000 |          
|Accounts payable                     |                           |   | 45,747      |           |              |   | 4,445     |          
|Accrued expenses                     |                           |   | 11,683      |           |              |   | 1,163     |          
|Deferred revenue                     |                           |   | 2,179       |           |              |   |          |          
|                                     |                           |   |             |           |              |   |           |          
|                                     |                           |   |             |           |              |   |           |          
|                                     | Total current liabilities |   |             | 1,341,609 |              |   |           | 1,308,608 | 
|                                     |                           |   |             |           |              |   |           |          
|Commitment and Contingency           |                           |   |             |           |              |   |           |          
|                                     |                           |   |             |           |              |   |           |          
|PARTNERS EQUITY                     |                           |   |             |           |              |   |           |          
|General partners                     |                           |   | (10,145     | )         |              |   | (10,541   | )        
|Limited partners                     |                           |   | 1,319,112   |           |              |   | 1,279,875 |          
|                                     |                           |   |             |           |              |   |           |          
|                                     |                           |   |             |           |              |   |           |          
|                                     |                           |   | 1,308,967   |           |              |   | 1,269,334 |          
|                                     |                           |   |             |           |              |   |           |          
|                                     |                           |   |             |           |              |   |           |          
|                                     |                           | $ | 2,650,576   |           |              | $ | 2,577,942 |          
|                                     |                           |   |             |           |              |   |           |          

|      |  |                                                                                                                                                                 
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
|Note: |  | The Condensed Balance Sheet at December 31, 2003 has been taken from the audited
financial statements at that date. See Notes to Condensed Financial Statements.

2



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##### 



YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF OPERATIONS

|                                                                                                                                   |                                                                                                                            |   |                    |        |      |   |         |        | 
|---------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------- | - | ------------------ | ------ | ---- | - | ------- | ------ | 
|                                                                                                                                   |                                                                                                                            |   | Three Months Ended
|                                                                                                                                   |                                                                                                                            |   | March 31,         
|                                                                                                                                   |                                                                                                                            |   |                   
|                                                                                                                                   |                                                                                                                            |   | 2004               |        | 2003
|                                                                                                                                   |                                                                                                                            |   |                    |        |     
|                                                                                                                                   |                                                                                                                            |   | (Unaudited)       
|                                                                                                                                  
|Rental income                                                                                                                      |                                                                                                                            | $ | 154,980            |        |      | $ | 152,495 |       
|Operating expenses:                                                                                                                |                                                                                                                            |   |                    |        |      |   |         |       
|Contract labor                                                                                                                     |                                                                                                                            |   | 1,500              |        |      |   | 1,500   |       
|Repairs and maintenance                                                                                                            |                                                                                                                            |   | 32,840             |        |      |   | 33,939  |       
|Management fees                                                                                                                    |                                                                                                                            |   | 4,662              |        |      |   | 4,395   |       
|Utilities                                                                                                                          |                                                                                                                            |   | 22,814             |        |      |   | 23,016  |       
|Professional fees                                                                                                                  |                                                                                                                            |   | 28,254             |        |      |   | 19,111  |       
|Property taxes                                                                                                                     |                                                                                                                            |   | 10,575             |        |      |   | 10,665  |       
|Miscellaneous                                                                                                                      |                                                                                                                            |   | 1,611              |        |      |   | 2,947   |       
|                                                                                                                                   |                                                                                                                            |   |                    |        |      |   |         |       
|                                                                                                                                   |                                                                                                                            |   |                    |        |      |   |         |       
|                                                                                                                                   |                                                                                                                            |   | 102,256            |        |      |   | 95,573  |       
|                                                                                                                                   |                                                                                                                            |   |                    |        |      |   |         |       
|                                                                                                                                   |                                                                                                                            |   |                    |        |      |   |         |       
|                                                                                                                                   | Operating income                                                                                                           |   |                    | 52,724 |      |   |         | 56,922 | 
|                                                                                                                                   |                                                                                                                            |   |                    |        |      |   |         |       
|Nonoperating income (expense):                                                                                                     |                                                                                                                            |   |                    |        |      |   |         |       
|Interest and dividend income                                                                                                       |                                                                                                                            |   | 13                 |        |      |   | 983     |       
|Interest expense                                                                                                                   |                                                                                                                            |   | (13,104            | )      |      |   | (14,668 | )     
|                                                                                                                                   |                                                                                                                            |   |                    |        |      |   |         |       
|                                                                                                                                   |                                                                                                                            |   |                    |        |      |   |         |       
|                                                                                                                                   |                                                                                                                            |   | (13,091            | )      |      |   | (13,685 | )     
|                                                                                                                                   |                                                                                                                            |   |                    |        |      |   |         |       
|                                                                                                                                   |                                                                                                                            |   |                    |        |      |   |         |       
|                                                                                                                                   | Net income                                                                                                                 |   | $                  | 39,633 |      |   | $       | 43,237 | 
|                                                                                                                                   |                                                                                                                            |   |                    |        |      |   |         |       
|Deduct net income applicable to limited
partners (per limited partner unit for the
quarter ended March 31, 2004 $6.14; 2003 $6.70) |                                                                                                                            | $ | 39,237             |        |      | $ | 42,805  |       
|                                                                                                                                   |                                                                                                                            |   |                    |        |      |   |         |       
|                                                                                                                                   | Net income applicable to general partners
(per general partner unit for the quarter ended
March 31, 2004 $7.92; 2003 $8.64 |   | $                  | 396    |      |   | $       | 432    | 
|                                                                                                                                   |                                                                                                                            |   |                    |        |      |   |         |       

See Notes to Condensed Financial Statements.

3



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##### 



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

|                                                                                          |  |                                                                      |                                           |   |                    |         |         |   |        |         |  
|----------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------- | ----------------------------------------- | - | ------------------ | ------- | ------- | - | ------ | ------- | -
|                                                                                          |  |                                                                      |                                           |   | Three Months Ended
|                                                                                          |  |                                                                      |                                           |   | March 31,         
|                                                                                          |  |                                                                      |                                           |   |                   
|                                                                                          |  |                                                                      |                                           |   | 2004               |         | 2003   
|                                                                                          |  |                                                                      |                                           |   |                    |         |        
|                                                                                          |  |                                                                      |                                           |   | (Unaudited)       
|CASH FLOWS FROM OPERATING ACTIVITIES                                                      |  |                                                                      |                                           |   |                    |         |         |  
|Net income                                                                                |  | $                                                                    | 39,633                                    |   |                    | $       | 43,237  |  
|Adjustments to reconcile net income to net cash
provided by operating activities:         |  |                                                                      |                                           |   |                    |         |         |  
|Change in assets and liabilities:                                                         |  |                                                                      |                                           |   |                    |         |         |  
|                                                                                          |  | (Increase) in prepaids and accounts receivable                       |                                           |   | (4,797             | )       |         |   | (1,542 | )      
|                                                                                          |  | Increase in accounts payable, accrued expenses, and deferred revenue |                                           |   | 54,001             |         |         |   | 8,578  |        
|                                                                                          |  |                                                                      |                                           |   |                    |         |         |  
|                                                                                          |  |                                                                      |                                           |   |                    |         |         |  
|                                                                                          |  |                                                                      | Net cash provided by operating activities |   |                    | 88,837  |         |   |        | 50,273  |  
|                                                                                          |  |                                                                      |                                           |   |                    |         |         |  
|CASH FLOWS FROM INVESTING ACTIVITIES,
proceeds from sale of securities available for sale |  |                                                                      |                                          |   |                    |         | 214     |  
|                                                                                          |  |                                                                      |                                           |   |                    |         |         |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                      |  |                                                                      |                                           |   |                    |         |         |  
|Principal payments on long-term borrowings                                                |  |                                                                      | (21,000                                   | ) |                    |         | (28,000 | )
|Cash distributions                                                                        |  |                                                                      |                                          |   |                    |         | (4,388  | )
|                                                                                          |  |                                                                      |                                           |   |                    |         |         |  
|                                                                                          |  |                                                                      |                                           |   |                    |         |         |  
|                                                                                          |  |                                                                      | Net cash (used in) financing activities   |   |                    | (21,000 | )       |   |        | (32,388 | )
|                                                                                          |  |                                                                      |                                           |   |                    |         |         |  
|                                                                                          |  |                                                                      | Net increase in cash and cash equivalents |   |                    | 67,837  |         |   |        | 18,099  |  
|                                                                                          |  |                                                                      |                                           |   |                    |         |         |  
|Cash and cash equivalents:                                                                |  |                                                                      |                                           |   |                    |         |         |  
|Beginning                                                                                 |  |                                                                      | 208,237                                   |   |                    |         | 124,060 |  
|                                                                                          |  |                                                                      |                                           |   |                    |         |         |  
|                                                                                          |  |                                                                      |                                           |   |                    |         |         |  
|Ending                                                                                    |  | $                                                                    | 276,074                                   |   |                    | $       | 142,159 |  
|                                                                                          |  |                                                                      |                                           |   |                    |         |         |  

See Notes to Condensed Financial Statements.

4



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##### 



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. |  | Basis of Presentation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   |  | In the opinion of management, the accompanying unaudited condensed financial
statements contain all adjustments (all of which were normal recurring
adjustments) 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   |  | Leased property held for sale has been recorded following the Statement of
Financial Accounting Standards No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. Statement No. 144 requires assets held for
sale to be recorded at the lower of their carrying value or estimated fair
value less cost to sell.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  
|3. |  | Statement of Cash Flows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   |  | For purposes of reporting the statements of cash flows, the 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, 2003, the cumulative unpaid priority return to the unit
holders was $3,619,173 compared to $3,380,753 one year prior. This increase
resulted from no distributions being made to partners during the year.
Although no distributions were paid to partners on the priority return, the
Partnership did make distributions in 2003 in the amount of $4,365
representing 2002 Federal and North Carolina tax owed on behalf of foreign
and non-resident partners. 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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##### 



Item 2. Management 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, 2003 to March 31, 2004. Accrued expenses have increased from
year-end due to the accrual of the 2004 real property taxes and the accrual of
operating expenses.

Liquidity and Capital Resources

During the quarter ended March 31, 2004, the Partnership operations continued
to meet working capital requirements and working capital deficit was decreased
by approximately $40,000 since year-end. The working capital deficit as of
March 31, 2004 was $1,014,534. The large working capital deficit is due to the
classification of the long-term debt as short-term, as the current loan matures
on December 31, 2004. The General Partners will seek refinancing with Wachovia
Bank, N.A. (f/k/a First Union National Bank) for the loan on the EastPark
property; however; no assurance can be given that such refinancing will occur.

Results of Operations

Operating income for the period ended March 31, 2004 is down approximately 7%
from the prior year. The majority of the operating expenses stayed consistent
with the prior year except for professional fees. Professional fees increased
by almost 48% from the prior year due to increases in audit fees. Rental
income has increased approximately 2% from the prior year. Interest expense
continues to be down from the prior year due to the decrease in interest rates
on the floating rate loan.

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. The General
Partners have signed an agreement with a new broker in 2004 as the previous
brokers had shifted their objectives and focus towards retail projects only.
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 91% leased, all current tenants have
the option to terminate their leases currently or within the year. The General
Services Administration (GSA) has the election to cancel its lease upon ninety
(90) days written notice and accounts for 85% of the total rental income;
accordingly, the General Partners will focus their lease extension efforts on
the GSA. At this time, the GSA has presented the General Partners with a lease
extension, but the General Partners have not accepted the lease extension due
to the short-term nature of the offer and are continuing to negotiate a
long-term lease with the GSA. 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. Factors that may
cause actual results to differ materially from those contemplated by such
forward-looking statements include, among others, the following possibilities:



| |  |  |  Inability to sell the building due to current market conditions
| |  |  | -----------------------------------------------------------------
|
| |  |  |  Inability to extend the lease to its major tenant              
|
| |  |  |  Inability to renew long-term debt                              





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##### 



Item 3. Controls and Procedures

The Partnerships General Partner and Principal Accounting Officer have
conducted an evaluation of the Partnerships disclosure procedures as of March
31, 2004. Based on their evaluation, the General Partner and Principal
Accounting Officer have concluded that the Partnerships disclosure controls
and procedures are effective to ensure that information required to be
disclosed by the Partnership in reports that it files or submits under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the applicable Securities and Exchange
Commission rules and forms. There were no significant changes in the
Partnerships internal controls or in other factors that could significantly
affect these controls subsequent to the date of the most recent evaluation of
these controls by the Partnerships General Partner and Principal Accounting
Officer, including any corrective actions with regard to significant
deficiencies and material weaknesses.

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 February 2, 2004 (EastPark Executive Center)                  
|       
|5       |  |                | 31.1 |                     |  | Certification required by Section 31 of Item 601 of Regulation S-K                                                      
|       
|6       |  |                | 31.2 |                     |  | Certification required by Section 31 of Item 601 of Regulation S-K                                                      
|       
|7       |  |                | 32.1 |                     |  | Certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code
(Sarbanes-Oxley Act of 2002.)

| |  |  |  |                                                                                     
| |  |  |  | ------------------------------------------------------------------------------------
| |  |  |  | (b) Reports on Form 8-K:                                                            
| |  |  |  |                                                                                     
| |  |  |  | No reports on Form 8-K have been filed during the three
months ended March 31, 2004.



---

|*   |  | 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 10.3 of the Partnerships Form
10-K for the year ended December 31, 2003.                





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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      05/14/04 |  |                                               |  | By:                           |  | /s/ Dexter R. Yager, Sr.                                
|                   |  |                                               |  |                               |  |                                                         
|                   |  |                                               |  |                               |  | Dexter R. Yager, Sr.                                    
|                   |  |                                               |  |                               |  | General Partner                                         
|                   |  |                                               |  |                               |  |                                                         
|Date      05/14/04 |  |                                               |  | By:                           |  | /s/ Thomas K. Emery                                     
|                   |  |                                               |  |                               |  |                                                         
|                   |  |                                               |  |                               |  | Thomas K. Emery                                         
|                   |  |                                               |  |                               |  | (Serving in the function of Principal Financial Officer)