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


                                    FORM 10-Q


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

For the quarterly period ended                 March 31, 1998
                               -------------------------------------------------

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

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

                             Commission file number
                                     0-16720

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


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

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

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


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

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


                              Yes   X      No
                                  -----       -----
<PAGE>
PART 1 - FINANCIAL INFORMATION
     Item l.  Financial Statements.
     ------   --------------------


            PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE

                           CONSOLIDATED BALANCE SHEETS
                      MARCH 31, 1998 AND DECEMBER 31, 1997
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                              March 31,     December 31,
                                                                1998            1997
                                                            ------------    ------------
<S>                                                         <C>             <C>         
                                         ASSETS
                                         ------

CASH AND CASH EQUIVALENTS                                   $  5,786,675    $  2,402,680

RECEIVABLES FROM LESSEES                                         151,608         161,608

SECURED NOTES RECEIVABLE                                          92,390         100,569

PROPERTY SUBJECT TO OPERATING LEASES, at cost
      Land                                                     5,766,190       6,773,272
      Buildings                                               28,456,079      29,669,322
      Equipment                                                  626,781         626,781
                                                            ------------    ------------
                                                              34,849,050      37,069,375
      Less - Accumulated depreciation                         11,994,561      12,253,903
                                                            ------------    ------------

                                                              22,854,489      24,815,472
                                                            ------------    ------------

                  Total assets                              $ 28,885,162    $ 27,480,329
                                                            ============    ============


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

DISTRIBUTION PAYABLE TO LIMITED PARTNERS                    $  4,730,901    $  1,366,497

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES                          53,707          52,297

PAYABLE TO GENERAL PARTNER (Note 1)                              101,574            --

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

                  Total liabilities                            5,000,582       1,533,194
                                                            ------------    ------------

MINORITY INTEREST                                                (14,815)        (16,239)
                                                            ------------    ------------

PARTNERS' CAPITAL (DEFICIT):
      General partner                                           (157,986)       (171,205)
      Limited partners                                        24,057,381      26,134,579
                                                            ------------    ------------

                  Total partners' capital                     23,899,395      25,963,374
                                                            ------------    ------------

                  Total liabilities and partners' capital   $ 28,885,162    $ 27,480,329
                                                            ============    ============
</TABLE>
<PAGE>
            PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE

                        CONSOLIDATED STATEMENTS OF INCOME
               FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
                                   (Unaudited)


                                                            1998         1997
                                                         ----------   ----------
REVENUES:
      Rental                                             $1,037,825   $1,072,247
      Participating rentals                                 460,326      413,241
      Interest and other                                     47,544       26,152
      Gain on sale of property                            1,725,741         --
                                                         ----------   ----------

                                                          3,271,436    1,511,640
                                                         ----------   ----------

EXPENSES:
      General partner fees (Note 1)                         235,910      131,523
      Depreciation                                          300,940      329,134
      Operating                                              51,537       48,777
                                                         ----------   ----------

                                                            588,387      509,434
                                                         ----------   ----------

MINORITY INTEREST IN INCOME                                   2,957        1,168
                                                         ----------   ----------

NET INCOME                                               $2,680,092   $1,001,038
                                                         ==========   ==========

NET INCOME ALLOCATED TO:
      General partner                                    $   26,801   $   10,010
      Limited partners                                    2,653,291      991,028
                                                         ----------   ----------

                                                         $2,680,092   $1,001,038
                                                         ==========   ==========

NET INCOME PER LIMITED PARTNERSHIP UNIT
      (based on 51,687 units held by limited partners)   $    51.33   $    19.17
                                                         ==========   ==========
<PAGE>
            PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE

             CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL
                    FOR THE THREE MONTHS ENDED MARCH 31, 1998
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                     Limited Partners
                                  General      ---------------------------
                                  Partner         Number                         Total
                                  Amount         of Units        Amount          Amount
                               ------------    ------------   ------------    ------------

<S>                            <C>             <C>            <C>             <C>         
BALANCE, December 31, 1997     $   (171,205)         51,687   $ 26,134,579    $ 25,963,374

   Net income                        26,801            --        2,653,291       2,680,092

   Distribution to partners,
      cash from operations          (13,582)           --       (1,344,705)     (1,358,287)

Return of capital to
      limited partners                 --              --       (3,385,784)     (3,385,784)
                               ------------    ------------   ------------    ------------

BALANCE, March 3l, 1998        $   (157,986)         51,687   $ 24,057,381    $ 23,899,395
                               ============    ============   ============    ============
</TABLE>
<PAGE>
            PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                            1998           1997
                                                        -----------    -----------
<S>                                                     <C>            <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                          $ 2,680,092    $ 1,001,038
    Adjustments to net income:
      Depreciation                                          300,940        329,134
      Gain on sale of property                           (1,725,741)          --
      Minority interest in income                             2,957          1,168
      Change in assets and liabilities:
        Decrease in receivables from lessees                 10,000          5,106
        Increase in payable to general partner              101,574          4,517
        Increase (decrease) in accounts payable
          and accrued liabilities                             1,410         (2,086)
                                                        -----------    -----------

          Net cash provided by operating activities       1,371,232      1,338,877
                                                        -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Proceeds from sale of property                        3,385,784           --
    Principal collections on secured notes receivable         8,179          7,403
                                                        -----------    -----------

          Net cash provided by investing activities       3,393,963          7,403
                                                        -----------    -----------

CASH FLOWS FOR FINANCING ACTIVITIES:
    Partner distributions declared                       (1,358,287)    (1,329,843)
    Return of capital to limited partners declared       (3,385,784)          --
    Increase (decrease) in distribution payable           3,364,404         (4,575)
    Distribution to minority interest                        (1,533)        (1,497)
                                                        -----------    -----------

          Net cash used in financing activities          (1,381,200)    (1,335,915)
                                                        -----------    -----------

NET INCREASE IN CASH AND CASH EQUIVALENTS                 3,383,995         10,365

CASH AND CASH EQUIVALENTS, beginning of period            2,402,680      2,346,371
                                                        -----------    -----------

CASH AND CASH EQUIVALENTS, end of period                $ 5,786,675    $ 2,356,736
                                                        ===========    ===========
</TABLE>
<PAGE>
            PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE
            --------------------------------------------------------

                    Note to Consolidated Financial Statements
                    -----------------------------------------

                                 March 31, 1998
                                 --------------



1)    TRANSACTIONS WITH RELATED PARTIES:
      ---------------------------------

         A subordinated  real estate  disposition  fee equal to three percent of
the selling price on the  disposition  of any real property  (subject to certain
limitations) is payable to FFCA  Management  Company  Limited  Partnership  (the
general partner of Participating Income Properties 1986, L.P. (the Partnership))
only after the limited  partners have received an amount equal to their Adjusted
Capital Contribution, as defined, and a cumulative, non-compounded return of 10%
per annum on their Adjusted  Capital  Contribution.  A subordinated  real estate
disposition  fee  amounting  to  $101,574  has been  accrued by the  Partnership
representing three percent of the selling price of the Boise Idaho travel plaza,
which was sold in February 1998 for a cash sales price of $3,385,784.
<PAGE>
PART I  -  FINANCIAL INFORMATION
--------------------------------


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

      As of March 31,  1998,  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.

      On February 2, 1998, the  Registrant  entered into a letter of intent with
      Flying J. Inc. to sell  substantially  all of the Registrant's  assets for
      cash of  approximately  $52  million.  The  sale  is  subject  to  certain
      conditions  specified in the letter of intent,  including the  negotiation
      and execution of definitive sale and financing  agreements with respect to
      the assets of the Registrant  and the approval,  by vote, of a majority of
      the  limited  partner  interests.   In  accordance  with  the  partnership
      agreement,  sale  of  substantially  all  of the  assets  will  result  in
      dissolution  of the Registrant  and  liquidation  of remaining  Registrant
      assets,  net of  liabilities.  There can be no  assurance  as to the final
      terms of the proposed  transaction,  that the conditions will be satisfied
      or that the proposed transaction will be consummated. The limited partners
      will receive a proxy  statement  containing a complete  description of the
      transaction when the sale and financing agreements are finalized.

      In February 1998, the Registrant  sold the Boise,  Idaho travel plaza (the
      Boise Plaza) to CFJ Properties  for a cash sales price of $3,385,784.  The
      above-negotiated  sale  price  of  approximately  $52  million  originally
      included  the Boise  Plaza and since this travel  plaza was sold,  the $52
      million sale price will be reduced by approximately $3.4 million. Proceeds
      from the Boise  Plaza sale were $65.50 per  limited  partnership  unit and
      will be  distributed  to the  limited  partners in April 1998 as a partial
      return of their adjusted capital  contribution.  The Registrant  accrued a
      subordinated  real estate  disposition  fee equal to three  percent of the
      selling  price of the Boise,  Idaho travel plaza  (amounting  to $101,574)
      payable to the general partner of the Registrant.

      The Registrant  also declared a cash  distribution  from operations to the
      limited  partners of $1,344,705  for the quarter ended March 31, 1998 (the
      period).  During the period,  all net proceeds not invested in real estate
      were  invested in Government  Agency  discount  notes and bank  repurchase
      agreements  (which are secured by United  States  Treasury and  Government
      obligations).

      Total revenues during the period increased $1,759,796 primarily due to the
      gain on the sale of the Boise, Idaho travel plaza of $1,725,741.  Proceeds
      from the sale  generated a higher  average cash balance  during the period
      which resulted in an increase in interest and other income of $21,392 over
      the comparable period in 1997. During the period, base rental revenue from
      the travel plaza  leases  decreased  to  $1,037,825  from the prior period
      amount of  $1,072,247  due to the February  1998 sale of the Boise,  Idaho
      travel plaza. The Registrant received or accrued  participating rentals of
      $460,326  for the  period  representing  an  increase  over  participating
      rentals of $413,241 for the  comparable  period of the prior year. On June
      1, 1996,  CFJ  Properties  (a lessee 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 March 31, 1997 as compared to the quarter ended March 31, 1998.  For
      the quarter  ended March 31,  1998,  total  expenses  increased by $78,953
      primarily  due  to  the  accrual  of the  general  partner's  subordinated
      disposition  fee  described  above,  offset by a decrease in  depreciation
      expense related to the sale of travel plaza property.
<PAGE>
      The  increase in total  assets  reflected  in the  Registrant's  financial
      statements  filed  with this  Report is  mainly  attributable  to the cash
      proceeds  received  from the sale of the  Boise,  Idaho  travel  plaza (in
      excess  if its  depreciated  cost)  being  held  in  temporary  investment
      securities pending distribution to the limited partners.

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


                         BALANCE SHEET - MARCH 31, 1998
                         ------------------------------




                                     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  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: May 11, 1998                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  caused  this  report  to be  signed  on  its  behalf  by the
undersigned thereunto duly authorized.

                           FFCA INVESTOR SERVICES CORPORATION 86-B




Date: May 11, 1998             By /s/ John Barravecchia
                           -----------------------------------------------------
                           John Barravecchia, President