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, 1996
                                    --------------------------------------------

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

For the transition period from                        to
                                ----------------------  ------------------------

                             Commission file number
                                     0-16720

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


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

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

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


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


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.


                               Yes   X   No
                                   -----     -----
<PAGE>
PART 1 - FINANCIAL INFORMATION

    Item l.  Financial Statements.
    -------  ---------------------


            PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE

                           CONSOLIDATED BALANCE SHEETS
                    SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
                                   (Unaudited)

                                                   September 30,   December 31,
                                                       1996            1995
                                                   ------------    ------------
                                     ASSETS
                                     ------

CASH AND CASH EQUIVALENTS                          $  2,394,341    $  3,649,977

RECEIVABLES FROM LESSEES                                158,000         144,183

SECURED NOTES RECEIVABLE                                138,545         157,911

PROPERTY SUBJECT TO OPERATING LEASES, at cost
      Land                                            6,773,272       7,021,917
      Buildings                                      29,669,322      29,669,322
      Equipment                                         626,781       3,969,303
                                                   ------------    ------------
         Total                                       37,069,375      40,660,542
      Less-Accumulated depreciation                  10,608,727      12,233,701
                                                   ------------    ------------

                                                     26,460,648      28,426,841
                                                   ------------    ------------

         Total assets                              $ 29,151,534    $ 32,378,912
                                                   ============    ============


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


DISTRIBUTION PAYABLE TO LIMITED PARTNERS           $  1,391,911    $  3,438,656

PAYABLE TO GENERAL PARTNER                                 --            17,705

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES                 52,914          61,088

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

         Total liabilities                            1,559,225       3,631,849
                                                   ------------    ------------

MINORITY INTEREST                                       (14,594)        (13,436)
                                                   ------------    ------------

PARTNERS' CAPITAL (DEFICIT):
      General partner                                  (154,769)       (143,234)
      Limited partners                               27,761,672      28,903,733
                                                   ------------    ------------

         Total partners' capital                     27,606,903      28,760,499
                                                   ------------    ------------

         Total liabilities and partners' capital   $ 29,151,534    $ 32,378,912
                                                   ============    ============
<PAGE>
            PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE

                        CONSOLIDATED STATEMENTS OF INCOME
         FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                                   (Unaudited)




<TABLE>
<CAPTION>
                                              Three Months   Three Months    Nine Months    Nine Months
                                                  Ended         Ended           Ended         Ended
                                                9/30/96        9/30/95         9/30/96       9/30/95
                                              ------------   ------------    -----------    -----------
<S>                                            <C>            <C>            <C>            <C>       
REVENUES:
      Rental                                   $1,072,248     $1,078,631     $3,223,126     $3,235,893
      Participating rentals                       481,911        521,156      1,408,249      1,444,029
      Interest and other                           25,627         42,653         72,960        127,816
      Gain on sale of property                     59,548           --           75,958           --
                                               ----------     ----------     ----------     ----------

                                                1,639,334      1,642,440      4,780,293      4,807,738
                                               ----------     ----------     ----------     ----------

EXPENSES:
      General partner fees                        139,026        144,158        411,592        420,030
      Depreciation                                401,444        474,629      1,230,709      1,438,573
      Operating                                    33,479         38,245        126,404        135,186
                                               ----------     ----------     ----------     ----------

                                                  573,949        657,032      1,768,705      1,993,789
                                               ----------     ----------     ----------     ----------

MINORITY INTEREST
      IN INCOME                                     1,239          1,155          3,536          3,294
                                               ----------     ----------     ----------     ----------

NET INCOME                                     $1,064,146     $  984,253     $3,008,052     $2,810,655
                                               ==========     ==========     ==========     ==========


NET INCOME ALLOCATED TO:
      General partner                          $   10,641     $    9,843     $   30,081     $   28,107
      Limited partners                          1,053,505        974,410      2,977,971      2,782,548
                                               ----------     ----------     ----------     ----------

                                               $1,064,146     $  984,253     $3,008,052     $2,810,655
                                               ==========     ==========     ==========     ==========



NET INCOME PER LIMITED
    PARTNERSHIP UNIT (based on
    51,687 units held by limited partners)     $    20.38     $    18.85     $    57.62     $    53.83
                                               ==========     ==========     ==========     ==========
</TABLE>
<PAGE>
            PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE

             CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
                                   (Unaudited)



<TABLE>
<CAPTION>
                                                            Limited Partners
                                       General        -----------------------------
                                       Partner           Number                              Total
                                       Amount            of Units         Amount             Amount
                                    ------------      ------------     ------------      ------------
<S>                                 <C>                     <C>        <C>               <C>         
BALANCE, December 31, 1995          $   (143,234)           51,687     $ 28,903,733      $ 28,760,499

      Net income                          30,081              --          2,977,971         3,008,052

      Distributions to partners          (41,616)             --         (4,120,032)       (4,161,648)
                                    ------------      ------------     ------------      ------------

BALANCE, September 30, 1996         $   (154,769)           51,687     $ 27,761,672      $ 27,606,903
                                    ============      ============     ============      ============
</TABLE>
<PAGE>
            PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                 1996             1995
                                                             -----------      -----------
<S>                                                          <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                              $ 3,008,052      $ 2,810,655
     Adjustments to net income:
        Depreciation                                           1,230,709        1,438,573
        Gain on sale of property                                 (75,958)            --
        Minority interest in income                                3,536            3,294
        Change in assets and liabilities:
           Increase in receivables from lessees                  (13,817)         (10,000)
           Decrease in payable to general partner                (17,705)            --
           Decrease in accounts payable and
               accrued liabilities                                (8,174)         (54,043)
                                                             -----------      -----------

               Net cash provided by operating activities       4,126,643        4,188,479
                                                             -----------      -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Principal collections on secured notes receivable            19,366            5,489
     Proceeds from sale of property                              811,442             --
                                                             -----------      -----------

               Net cash provided by investing activities         830,808            5,489
                                                             -----------      -----------

CASH FLOWS FOR FINANCING ACTIVITIES:
     Distributions to partners                                (6,208,393)      (4,170,192)
     Distributions to minority interest                           (4,694)          (4,733)
                                                             -----------      -----------

               Net cash used in financing activities          (6,213,087)      (4,174,925)
                                                             -----------      -----------

NET INCREASE (DECREASE) IN CASH AND CASH
     EQUIVALENTS                                              (1,255,636)          19,043

CASH AND CASH EQUIVALENTS, beginning of period                 3,649,977        3,433,132
                                                             -----------      -----------

CASH AND CASH EQUIVALENTS, end of period                     $ 2,394,341      $ 3,452,175
                                                             ===========      ===========
</TABLE>
<PAGE>
PART I  -  FINANCIAL INFORMATION
--------------------------------

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


      As of September 30, 1996,  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
      $1,391,645 for the quarter ended  September 30, 1996 (the period),  which,
      combined with the first and second  quarterly  distributions of $2,728,387
      amounts to $4,120,032  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  as compared to  $1,078,631  for the same period of
      the prior year. In the first quarter of 1996, the Registrant  sold a piece
      of land on the Boise, Idaho travel plaza property,  resulting in a monthly
      reduction of $2,128 in rental revenue.  The Registrant received or accrued
      participating  rentals of $481,911  for the period  which were higher than
      each of the previous three quarters. Participating rentals for the quarter
      ended  September 30, 1995 of $521,156 were especially high compared to the
      four  quarters  that  followed.  Total  expenses  decreased  by $83,083 to
      $573,949  for the  period  primarily  due to a  decrease  in  depreciation
      expense  related to the sale of travel plaza  equipment in the last twelve
      months.  The Registrant sold six equipment  packages to lessees during the
      period for a gain of  $59,548.  The  Registrant  does not  anticipate  any
      significant  changes  in  rental  revenues  related  to  the  sale  of the
      equipment packages.

      The  decrease in total  assets  reflected  in the  Registrant's  financial
      statements filed with this Report is mainly  attributable to the return of
      capital to the limited  partners  from the sale of the Boise  travel plaza
      lodging  facility and 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, 1996
                       ----------------------------------





                                     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 7, 1996     By /s/ John R. Barravecchia
                                ---------------------------------------------
                                John R. Barravecchia, Chief Financial Officer
<PAGE>
                                   SIGNATURES
                                   ----------

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

                                 FFCA INVESTOR SERVICES CORPORATION 86-B



      Date:    October 7, 1996        By /s/ John R. Barravecchia
                                 ---------------------------------------
                                 John R. Barravecchia, President