<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

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

For Quarter Ended               June 30, 2002
                 ---------------------------------------------


                                       or

 [x]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

For the transition period from _________________ to  _______________

Commission File Number:   0-18444
                       ------------

                  YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


  North Carolina                                        56-1560476
--------------------------------------------------------------------------------
(State or other jurisdiction of                (I.R.S. Employer Identification
incorporation or organization)                             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  [ ]

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                     PROCEEDINGS DURING THE PAST FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
                                               Yes [x]       No  [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.




<PAGE>


PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS




                  YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
                            CONDENSED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                            June 30,        December 31,
                                                              2002              2001
                                                         ---------------   --------------
                                                           (Unaudited)          (Note)
<S>                                                           <C>               <C>
   ASSETS

CURRENT ASSETS
 Cash and cash equivalents                                    $ 112,471         $ 65,583
 Accounts receivable, tenant                                     42,093           42,091
 Prepaid expenses                                                 1,084                -
 Securities available for sale                                   60,238           59,223
                                                         ---------------   --------------

        Total current assets                                    215,886          166,897
                                                         ---------------   --------------

INVESTMENTS AND NONCURRENT RECEIVABLES
 Properties on operating leases and properties held
   for lease, net of accumulated depreciation
   2002 $705,480;  2001 $705,480                              2,287,569        2,287,569

OTHER ASSETS
 Deferred charges, net of accumulated amortization
   2002 $12,190; 2001 $12,190                                     2,810            2,810
 Deferred leasing commissions, net of accumulated
   amortization 2002 $19,265; 2001 $19,265                       33,122           33,122
                                                         ---------------   --------------

                                                            $ 2,539,387      $ 2,490,398
                                                         ===============   ==============

   LIABILITIES AND PARTNERS' EQUITY

CURRENT LIABILITIES
 Current maturities of long-term debt                          $ 70,000      $ 1,452,000
 Accounts payable                                                 6,002           11,793
 Accrued expenses                                                35,856            8,769
 Deferred revenue                                                 2,179                -
                                                         ---------------   --------------

        Total current liabilities                               114,037        1,472,562
                                                         ---------------   --------------

LONG-TERM DEBT, less current maturities                       1,352,000                -
                                                         ---------------   --------------

COMMITMENT AND CONTINGENCY (Note 4)

PARTNERS' EQUITY
 General partners                                               (12,430)         (12,993)
 Limited partners                                             1,097,088        1,041,388
 Net unrealized gain (loss) on investment securities            (11,307)         (10,559)
                                                         ---------------   --------------

                                                              1,073,350        1,017,836
                                                         ---------------   --------------

                                                            $ 2,539,387      $ 2,490,398
                                                         ===============   ==============
</TABLE>


Note:    The Condensed Balance Sheet at December 31, 2001 has been taken from
         the audited financial statements at that date. See Notes to Condensed
         Financial Statements.


                                       2
<PAGE>



                  YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
                       CONDENSED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                             Three Months Ended                      Six Months Ended
                                                  June 30,                               June 30,
                                      ---------------------------------      --------------------------------
                                          2002                2001               2002               2001
                                      -------------       -------------      -------------       ------------
                                                (Unaudited)                               (Unaudited)

<S>                                      <C>                 <C>                <C>                <C>
Rental income                            $ 148,330           $ 146,628          $ 295,955          $ 290,299

Operating expenses:
 Wages and contract labor                    1,500               1,500              3,000              3,000
 Depreciation and amortization                   -                   -                  -                  -
 Repairs and maintenance                    38,839              51,386             81,148             89,895
 Management fees                             4,515               4,422              8,944              8,706
 Utilities                                  24,849              21,854             48,070             43,986
 Professional fees                          24,484              22,633             41,398             42,199
 Property taxes                             10,665               9,621             21,330             19,242
 Miscellaneous                               2,466               2,232              3,528              3,154
                                      -------------       -------------      -------------       ------------
                                           107,318             113,648            207,417            210,182
                                      -------------       -------------      -------------       ------------
        Operating income                    41,012              32,980             88,537             80,117
                                      -------------       -------------      -------------       ------------

Nonoperating income (expense):
 Interest and dividend income                1,159               1,647              2,372              3,594
 Interest expense                          (17,512)            (27,468)           (34,647)           (60,165)
 Other                                           -              (4,974)                 -                  -
                                      -------------       -------------      -------------       ------------
                                           (16,353)            (25,821)           (32,275)           (56,571)
                                      -------------       -------------      -------------       ------------
        Net income                        $ 24,659             $ 7,159           $ 56,262           $ 23,546
                                      =============       =============      =============       ============

        Net income per limited
          partnership unit                   $3.86              $ 1.12             $ 8.80             $ 3.68
                                      =============       =============      =============       ============
</TABLE>


See Notes to Condensed Financial Statements.


                                       3
<PAGE>




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



<TABLE>
<CAPTION>
                                                                       Six Months Ended
                                                                           June 30,
                                                               --------------------------------
                                                                   2002               2001
                                                               -------------       ------------
                                                                          (Unaudited)
<S>                                                                <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)                                                  $ 56,262           $ 23,546
 Adjustments to reconcile net income (loss) to net cash
   provided by (used in) operating activities:
   Depreciation and amortization                                          -                  -
   Loss on sale of securities available for sale                          -                  -
 Change in assets and liabilities:
   (Increase) Decrease in prepaids, deferrals and                    (1,085)            11,105
      other receivables
    Increase (Decrease) in accounts payable and accrued expense      23,475            (11,029)
                                                               -------------       ------------

        Net cash provided by (used in) operating activities          78,652             23,622
                                                               -------------       ------------

CASH FLOWS FROM INVESTING ACTIVITIES
 Sale of securities available for sale                                    -                  -
 Purchase of securities available for sale                           (1,764)            (2,396)
 Improvements in investment property                                      -             (7,538)
 Disbursements for deferred charges                                       -                  -
                                                               -------------       ------------

        Net cash provided by (used in) investing activities          (1,764)            (9,934)

CASH FLOWS FROM FINANCING ACTIVITIES
 Principal payments on long-term borrowings                         (30,000)           (30,000)
                                                               -------------       ------------

        Net cash (used in) financing activities                     (30,000)           (30,000)

        Net increase (decrease) in cash and cash equivalents         46,888            (16,312)

Cash and cash equivalents:
 Beginning                                                           65,583             72,209
                                                               -------------       ------------
 Ending                                                           $ 112,471           $ 55,897
                                                               =============       ============
</TABLE>

See Notes to Condensed Financial Statements.


                                       4
<PAGE>





                  YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)



1.    Nature of Business:

      The Partnership was formed in July 1986 to acquire, operate, hold for
      investment and sell real estate. The Partnership currently owns the
      EastPark Executive Center in Charlotte, North Carolina. On April 24, 1998,
      the Partnership sold its only other real property holding, the BB&T
      building facilities (formerly the UCB building) located in Greenville,
      South Carolina.

2.    Opinion of Management:

      In the opinion of management, the accompanying unaudited condensed
      financial statements contain all adjustments (all of which were normal
      recurring accruals) necessary for a fair presentation. The results of
      operations for the interim periods are not necessarily indicative of the
      results which may be expected for an entire year.

3.    Statement of Cash Flows:

      For purposes of reporting the statements of cash flows, the 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, 2001, the cumulative unpaid priority return to the unit
      holders was $3,137,969 compared to $2,895,185 one year prior. This
      increase resulted from no distributions being made to partners during the
      year. Based on the current and projected commercial real estate market
      conditions, the General Partners believe that it is reasonably unlikely
      that a sale of the remaining Partnership property would produce net sale
      proceeds sufficient to pay any of such priority return. Furthermore, the
      General Partners believe that it is reasonably unlikely that the
      Partnership's operating income or any refinancing of Partnership debt
      would generate sufficient funds to pay any portion of the priority return.



                                       5
<PAGE>



                  YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

Changes in Financial Condition

There have not been any significant changes in financial condition from December
31, 2001 to June 30, 2002. Accrued expenses have increased from year-end due to
the monthly accrual of the 2002 real property taxes. Cash has increased due to
cash being provided by operating activities.


Liquidity and Capital Resources

During the quarter ended June 30, 2002, the Partnership operations continued to
meet working capital requirements and the working capital deficit was deceased
by approximately $1,400,000. The working capital as of June 30, 2002 was
$94,849. The large reduction to working capital deficit is mainly attributable
to the reclassification of the current portion of the long-term debt. On June
4th, the General Partners refinanced the existing loan with Wachovia Bank, NA
(formerly First Union National Bank). The new loan matures on December 31, 2004
with interest at the bank's prime rate (currently 4.75%). Monthly principal
payments of $7,000 will commence on August 31, 2002. The new principal payment
is $2,000 higher than the $5,000 previously required.


Results of Operations

Operations for the six months ended June 30, 2002 are comparable to the same
period of the prior year. Rental income is up approximately 2% due to escalation
increases for the current tenants and increased occupancy. Operating expenses
are down approximately $3,000 as compared to the same period of the prior year.
The favorable operating expense variance is related to the normal fluctuations
of repairs and maintenance. Interest expense is down by approximately $25,500 or
42% 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. 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 within the next two years. The tenant, GSA, has the
election to terminate its lease in November 2002. The GSA lease accounts for 86%
of the total rental income at East Park; accordingly, the General Partners will
focus their lease extension efforts towards the GSA lease. However, no
assurances can be given that a replacement tenant could be found if GSA decides
to terminate their lease. In May 2002, the Partnership renewed a 4,046 square
foot lease for an additional year with a 4% rate increase. The renewed lease
expires April 30, 2003 and has a rental rate of $15.23 per square foot. The
General Partners will continue to search for the best offer for the property and
manage it at acceptable standards until such time as it can sell the property to
a qualified buyer.


Forward-Looking Statements

This report contains certain forward-looking statements with respect to the
financial condition, results of operations, plans, objectives, future
performance and business of the Partnership. These forward-looking statements
involve certain risks and uncertainties. Actual results may differ materially
from those contemplated by such forward-looking statements.



                                       6
<PAGE>



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 December 22,
                                            1998 (EastPark Executive Center)

                    9          99.1         Certification pursuant to Section
                                            1350 of Chapter 63 of Title 18 of
                                            the United States Code. (Sarbanes-
                                            Oxley Act of 2002)

                   10          99.2         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, 2002.




--------------------------------------------------------------------------------
*        Incorporated by reference to Exhibit A of the Partnership's Prospectus
         dated December 1, 1987, Registration Number 33-07056-A.

**       Incorporated by reference to Exhibit 3 of the Partnership's Form 10-K
         for the year ended December 31, 1995.

***      Incorporated by reference to Exhibit 4 of the Partnership's Form 10-K
         for the year ended December 31, 1998.




                                       7
<PAGE>




SIGNATURES

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

                                       YAGER/KUESTER PUBLIC FUND
                                        LIMITED PARTNERSHIP
                                       (Registrant)

                                       By:     DRY Limited Partnership,
                                               General Partner of Registrant


Date     08/14/02                      By:      /s/ Dexter R. Yager, Sr.
     -----------------                     ------------------------------------
                                                    Dexter R. Yager, Sr.
                                                    General Partner

Date      08/14/02                     By:      /s/ Thomas K.Emery
     -----------------                    --------------------------------------
                                                    Thomas K. Emery
                                                    Chief Financial Officer



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