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      September 30, 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
                         Commission file number 0-16721

                   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
                    SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
                                   (Unaudited)

                                                    September 30,  December 31,
                                                        1997          1996
                                                    -----------    -----------
                                     ASSETS
                                     ------

CASH AND CASH EQUIVALENTS                           $ 2,439,252    $ 2,346,371

RECEIVABLES FROM LESSEES                                178,718        149,803

SECURED NOTES RECEIVABLE                                108,547        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                  11,925,261     10,937,860
                                                    -----------    -----------

                                                     25,144,114     26,131,515
                                                    -----------    -----------

         Total assets                               $27,870,631    $28,759,012
                                                    ===========    ===========


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

DISTRIBUTION PAYABLE TO LIMITED PARTNERS            $ 1,430,793    $ 1,321,426

PAYABLE TO GENERAL PARTNER                                 -            10,304

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES                 49,660         49,704

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

         Total liabilities                            1,594,853      1,495,834
                                                    -----------    -----------

MINORITY INTEREST                                       (15,911)       (14,923)
                                                    -----------    -----------

PARTNERS' CAPITAL (DEFICIT):
      General partner                                  (167,922)      (158,058)
      Limited partners                               26,459,611     27,436,159
                                                    -----------    -----------

         Total partners' capital                     26,291,689     27,278,101
                                                    -----------    -----------

         Total liabilities and partners' capital    $27,870,631    $28,759,012
                                                    ===========    ===========
<PAGE>
            PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE

                        CONSOLIDATED STATEMENTS OF INCOME
         FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                   (Unaudited)

<TABLE>
<CAPTION>
                                               Three Months       Three Months         Nine Months         Nine Months
                                                   Ended              Ended               Ended               Ended
                                                  9/30/97            9/30/96             9/30/97             9/30/96
                                               ------------       ------------         -----------         -----------
<S>                                             <C>                <C>                 <C>                 <C>       
REVENUES:
      Rental                                    $1,072,248         $1,072,248          $3,216,742          $3,223,126
      Participating rentals                        529,171            481,911           1,421,282           1,408,249
      Interest and other                            28,033             25,627              82,666              72,960
      Gain on sale of property                       -                 59,548                -                 75,958
                                                ----------         ----------          ----------          ----------

                                                 1,629,452          1,639,334           4,720,690           4,780,293
                                                ----------         ----------          ----------          ----------

EXPENSES:
      General partner fees                         142,900            139,026             412,855             411,592
      Depreciation                                 329,133            401,444             987,401           1,230,709
      Operating                                     40,058             33,479             128,734             126,404
                                                ----------         ----------          ----------          ----------

                                                   512,091            573,949           1,528,990           1,768,705
                                                ----------         ----------          ----------          ----------

MINORITY INTEREST
      IN INCOME                                      1,285              1,239               3,685               3,536
                                                ----------         ----------          ----------          ----------

NET INCOME                                      $1,116,076         $1,064,146          $3,188,015          $3,008,052
                                                ==========         ==========          ==========          ==========


NET INCOME ALLOCATED TO:
      General partner                           $   11,161         $   10,641          $   31,880          $   30,081
      Limited partners                           1,104,915          1,053,505           3,156,135           2,977,971
                                                ----------         ----------          ----------          ----------

                                                $1,116,076         $1,064,146          $3,188,015          $3,008,052
                                                ==========         ==========          ==========          ==========

NET INCOME PER LIMITED
    PARTNERSHIP UNIT (based on
    51,687 units held by limited partners)          $21.38             $20.38              $61.06              $57.62
                                                    ======             ======              ======              ======
</TABLE>
<PAGE>
            PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE

             CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 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                          31,880              --          3,156,135         3,188,015

   Distributions to partners          (41,744)             --         (4,132,683)       (4,174,427)
                                 ------------      ------------     ------------      ------------

BALANCE, September 30, 1997      $   (167,922)           51,687     $ 26,459,611      $ 26,291,689
                                 ============      ============     ============      ============
</TABLE>
<PAGE>
            PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                    1997                 1996
                                                                 -----------          -----------
<S>                                                              <C>                  <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                                  $ 3,188,015          $ 3,008,052
     Adjustments to net income:
        Depreciation                                                 987,401            1,230,709
        Gain on sale of property                                        -                 (75,958)
        Minority interest in income                                    3,685                3,536
        Change in assets and liabilities:
           Increase in receivables from lessees                      (28,915)             (13,817)
           Decrease in payable to general partner                    (10,304)             (17,705)
           Decrease in accounts payable and
               accrued liabilities                                       (44)              (8,174)
                                                                 -----------          -----------

               Net cash provided by operating activities           4,139,838            4,126,643
                                                                 -----------          -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Proceeds from sale of property                                     -                 811,442
     Principal collections on secured notes receivable                22,776               19,366
                                                                 -----------          -----------

               Net cash provided by investing activities              22,776              830,808
                                                                 -----------          -----------

CASH FLOWS FOR FINANCING ACTIVITIES:
     Partner distributions declared                               (4,174,427)          (4,161,648)
     Increase (decrease) in distribution payable                     109,367           (2,046,745)
     Distributions to minority interest                               (4,673)              (4,694)
                                                                 -----------          -----------

               Net cash used in financing activities              (4,069,733)          (6,213,087)
                                                                 -----------          -----------

NET INCREASE (DECREASE) IN CASH AND CASH
     EQUIVALENTS                                                      92,881           (1,255,636)

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

CASH AND CASH EQUIVALENTS, end of period                         $ 2,439,252          $ 2,394,341
                                                                 ===========          ===========
</TABLE>
<PAGE>
PART I  -  FINANCIAL INFORMATION
--------------------------------


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

      As of September 30, 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
      $1,430,432 for the quarter ended  September 30, 1997 (the period),  which,
      combined with the first and second  quarterly  distributions of $2,702,251
      amounts to $4,132,683  year to date.  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 $1,072,248, which remains unchanged from the prior year, while
      the corresponding  year-to-date period reflects a small decrease from 1996
      due to the  sale of a land  parcel  in  1996,  as  discussed  in  previous
      reports.  The  Registrant  received  or accrued  participating  rentals of
      $529,171 for the quarter ended September 30, 1997 representing an increase
      over participating rentals of $481,911 for the comparable quarter of 1996.
      On June 1,  1996,  CFJ  Properties  (lessee  of eight of the  Registrant's
      travel plazas) curtailed its relationship with a large third party billing
      company for the trucking  industry.  The billing company requested changes
      to its contract that were  unacceptable to CFJ Properties'  management due
      to the significant  long-term  ramifications of the proposed change on CFJ
      Properties' future business.  This resulted in reduced volume and margins,
      which  contributed  to low  participating  rental  revenues in the quarter
      ended  September 30, 1996 as compared to the quarter  ended  September 30,
      1997.  Participating  rentals for the corresponding  year-to-date  periods
      were similarly affected,  although to a lesser extent. For the quarter and
      nine months ended September 30, 1997, total expenses  decreased by $61,858
      and $239,715,  respectively,  primarily due to a decrease in  depreciation
      expense related to the sale of travel plaza equipment.

      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 - SEPTEMBER 30, 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 LIMITED PARTNERSHIP
                                  General Partner


                                  By PERIMETER CENTER MANAGEMENT COMPANY
                                  Corporate General Partner



Date:     October 22, 1997        By /s/ John Barravecchia
                                  ----------------------------------------------
                                  John 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:     October 22, 1997        By /s/ John Barravecchia
                                  ----------------------------------------------
                                  John Barravecchia, President