Page 27 of 27
                                    Form 10-Q

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

                       |X|  Quarterly  Report  Pursuant to Section 13
                            or 15(d) of the  Securities  Exchange Act
                            of 1934.  For the quarterly  period ended
                            March 31, 2005

                       |_|  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 000-33103

                      ATEL Capital Equipment Fund VIII, LLC
             (Exact name of registrant as specified in its charter)

California                                                           94-3307404
(State or other jurisdiction of                              (I. R. S. Employer
Incorporation or organization)                              Identification No.)


        600 California Street, 6th Floor, San Francisco, California 94108
                    (Address of principal executive offices)

        Registrant's telephone number, including area code (415) 989-8800

        Securities registered pursuant to section 12(b) of the Act: None

Securities  registered  pursuant to section 12(g) of the Act: Limited  Liability
Company Units


Indicate  by a 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 |_|

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). Yes |_| No |X|


  The number of Limited Liability Company Units outstanding as of March 31, 2005
was 13,570,188.


                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None








                                       1
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC



                                      Index



  Part I. Financial Information

  Item 1. Financial Statements (Unaudited)

     Balance Sheets, March 31, 2005 and December 31, 2004.

     Statements of  Operations  for the three month periods ended March 31, 2005
     and 2004.

     Statements of Changes in Members'  Capital for the year ended  December 31,
     2004 and for the three month period ended March 31, 2005.

     Statements  of Cash Flows for the three month  periods ended March 31, 2005
     and 2004.

     Notes to the Financial Statements

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

  Item 3. Quantitative and Qualitative Disclosures About Market Risk

  Item 4. Controls and Procedures


  Part II. Other Information

  Item 1. Legal Proceedings

  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

  Item 3. Defaults Upon Senior Securities

  Item 4. Submission of Matters to a Vote of Security Holders

  Item 5. Other Information

  Item 6. Exhibits







                                       2
<PAGE>




                          Part I. FINANCIAL INFORMATION


  Item 1.  Financial Statements (unaudited).


                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                                 BALANCE SHEETS

                      MARCH 31, 2005 AND DECEMBER 31, 2004



                                     ASSETS

<TABLE>
<CAPTION>
                                                                                           March 31,
                                                                                             2005                December 31,
                                                                                             ----
                                                                                          (Unaudited)               2004
<S>                                                                                      <C>                      <C>
Cash and cash equivalents                                                                $      548,521           $   2,569,911
Accounts receivable, net of allowance for doubtful accounts of $85,615 in 2005 and
  $52,115 in 2004                                                                             1,641,554               1,611,290
Other assets                                                                                      3,980                 378,264
Investments in equipment and leases                                                          57,310,234              59,689,715
                                                                                       --------------------    -------------------
Total assets                                                                             $   59,504,289           $  64,249,180
                                                                                       ====================    ===================


                        LIABILITIES AND MEMBERS' CAPITAL

Long-term debt                                                                           $    9,508,000           $  13,192,000
Non-recourse debt                                                                             5,736,096               6,039,946
Line of credit                                                                                2,500,000                       -
Accounts payable and accruals:
   Managing Member                                                                            1,141,038                 613,310
   Other                                                                                        164,319                 239,038
Accrued interest payable                                                                         65,569                 105,336
Interest rate swap contracts                                                                    997,680               1,435,454
Unearned operating lease income                                                                 632,181                 436,055
                                                                                       --------------------    -------------------
Total liabilities                                                                            20,744,883              22,061,139

Members' capital:
     Accumulated other comprehensive income                                                    (673,345)               (725,935)
     Members' capital                                                                        39,432,751              42,913,976
                                                                                       --------------------    -------------------
Total Members' capital                                                                       38,759,406              42,188,041
                                                                                       --------------------    -------------------
Total liabilities and Members' capital                                                   $   59,504,289           $  64,249,180
                                                                                       ====================    ===================
</TABLE>

                             See accompanying notes.





                                       3
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                            STATEMENTS OF OPERATIONS

                            THREE MONTH PERIODS ENDED
                             MARCH 31, 2005 AND 2004
                                   (Unaudited)


<TABLE>
<CAPTION>
Revenues:                                                            2005                    2004
                                                                     ----                    ----
Leasing activities:
<S>                                                           <C>                     <C>
   Operating leases                                           $     3,056,749         $    5,944,402
   Direct financing leases                                             56,334                340,794
   Gain on sales of assets                                            103,414                449,642
Interest                                                                3,952                    926
Other                                                                   7,046                 14,669
                                                           --------------------     -------------------
                                                                    3,227,495             6,750,433
Expenses:
Depreciation of operating lease assets                              2,253,670             4,816,678
Interest expense                                                      393,539               878,434
Asset management fees to Managing Member                              126,337               271,849
Equipment maintenance                                                  53,807               130,447
Cost reimbursements to Managing Member                                691,970               699,215
Amortization of initial direct costs                                   34,137                72,015
Professional fees                                                      38,080                81,443
Outside services                                                       22,883                51,956
Insurance                                                              28,838                42,320
Provision for doubtful accounts                                        33,500                11,000
Fair value adjustments on interest rate swap contracts              (385,184)                     -
Franchise fees and taxes                                                  102                25,000
Other                                                                  80,290                89,019
                                                           --------------------     -------------------
                                                                    3,371,969              7,169,376
                                                           --------------------     -------------------
Net loss                                                      $     (144,474)         $    (418,943)
                                                           ====================     ===================


Net income (loss):
   Managing Member                                            $       250,256         $     250,294
   Other Members                                                    (394,730)              (669,237)
                                                           --------------------     -------------------
                                                              $     (144,474)         $    (418,943)
                                                           ====================     ===================


Net loss per Limited Liability Company Unit (Other Members)   $        (0.03)         $       (0.05)

Weighted average number of Units outstanding                       13,570,188             13,570,188
</TABLE>

                             See accompanying notes.




                                       4
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                    STATEMENTS OF CHANGES IN MEMBERS' CAPITAL

                      FOR THE YEAR ENDED DECEMBER 31, 2004
                                   AND FOR THE
                            THREE MONTH PERIOD ENDED

                                 MARCH 31, 2005
                                   (Unaudited)

<TABLE>
<CAPTION>
                                      Other Members
                                                                                            Accumulated Other
                                                                                              Comprehensive
                                     Units                Amount         Managing Member      Income (Loss)           Total
                                     -----                ------                  ------      -------------           -----

<S>                                   <C>            <C>                 <C>                  <C>                 <C>
 Balance December 31, 2003            13,570,188     $   51,040,262      $             -      $   (3,143,144)     $   47,897,118
 Distributions to Managing                     -                                        )
   Member                                                         -           (1,001,155                  -            (1,001,155)
 Distributions to Other                        -
   Members ($0.91 per Unit)                             (12,347,383)                   -                  -           (12,347,383)
 Unrealized decrease in                        -
   interest rate swap
   liability                                                      -                    -          1,772,141            1,772,141
 Reclassification adjustment                   -
   for portion of swap
   liability charged to net
   loss                                                          -                     -            645,068              645,068
 Net income                                    -         4,221,097             1,001,155                  -            5,222,252
                                  -------------    -----------------    ----------------    -----------------    -----------------
 Balance December 31, 2004            13,570,188         42,913,976                    -            (725,935)         42,188,041

 Distributions to Managing                     -                                        )
   Member                                                         -             (250,256                  -              (250,256)
 Distributions to Other                        -
   Members ($0.23 per Unit)                              (3,086,495)                   -                  -            (3,086,495)
 Reclassification adjustment                   -
   for portion of swap
   liability charged to net
   loss                                                           -                    -             52,590               52,590
 Net income (loss)                             -           (394,730)             250,256                  -              (144,474)
                                  -------------    -----------------    ----------------    -----------------    -----------------
 Balance March 31, 2005               13,570,188     $   39,432,751      $             -      $     (673,345)     $   38,759,406
                                  =============    =================    ================    =================    =================
</TABLE>

                             See accompanying notes






                                       5
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                            STATEMENTS OF CASH FLOWS

                            THREE MONTH PERIODS ENDED
                             MARCH 31, 2005 AND 2004
                                   (Unaudited)
<TABLE>
<CAPTION>
   Operating activities                                                                         2005                 2004
                                                                                                ----                 ----
<S>                                                                                         <C>                    <C>
  Net loss                                                                                  $       (144,474)      $   (418,943)
  Adjustment to reconcile net loss to net cash provided by operating activities:
    Gain on sales of lease assets                                                                   (103,414)          (449,642)
    Depreciation of operating lease assets                                                         2,253,670          4,816,678
    Amortization of initial direct costs                                                              34,137             72,015
    Fair value adjustment on interest rate swap contracts                                           (385,184)           (22,274)
    Provision for doubtful accounts                                                                   33,500             11,000
    Changes in operating assets and liabilities:
       Accounts receivable                                                                           (63,764)           296,861
       Other assets                                                                                        -              7,500
       Accounts payable, Managing Member                                                             527,729           (559,132)
       Accounts payable, other                                                                       (74,719)          (566,023)
       Accrued interest payable                                                                      (39,767)            11,886
       Unearned lease income                                                                         196,126           (532,557)
                                                                                           ------------------    ---------------
  Net cash provided by operating activities                                                        2,233,840          2,667,369
                                                                                           ------------------    ---------------

  Investing activities:
  Proceeds from sales of lease assets                                                                274,834          1,485,659
  Reduction of net investment in direct financing leases                                             294,115            126,655
  Purchases of equipment on operating leases                                                             422                  -
                                                                                           ------------------    ---------------
  Net cash provided by investing activities                                                          569,371          1,612,314
                                                                                           ------------------    ---------------

  Financing activities:
  Repayments of long-term debt                                                                    (3,684,000)        (3,127,000)
  Borrowings under line of credit                                                                  3,000,000          3,500,000
  Repayments of borrowings under line of credit                                                     (500,000)        (1,000,000)
  Repayments of non-recourse debt                                                                   (303,850)          (272,893)
  Distributions to Other Members                                                                  (3,086,495)        (3,086,761)
  Distributions to Managing Member                                                                  (250,256)          (250,294)
                                                                                           ------------------    ---------------
  Net cash used in financing activities                                                           (4,824,601)        (4,236,948)
                                                                                           ------------------    ---------------

  Net (decrease) increase in cash and cash equivalents                                            (2,021,390)            42,735
  Cash and cash equivalents at beginning of period                                                 2,569,911            508,584
                                                                                           ------------------    ---------------
  Cash and cash equivalents at end of period                                                $        548,521       $    551,319
                                                                                           ==================    ===============

  Supplemental disclosures of cash flow information:
  Cash paid during the period for interest                                                  $        433,306       $    866,548

  Schedule of non-cash transactions:
  Change in fair value of interest rate swap contracts                                      $        437,774       $    123,825
                                                                                           ==================    ===============
</TABLE>

                             See accompanying notes.






                                       6
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 2005
                                   (Unaudited)

  1. Summary of significant accounting policies:

  Basis of presentation:

  The  accompanying   unaudited  financial  statements  have  been  prepared  in
  accordance with accounting  principles generally accepted in the United States
  (GAAP) for interim  financial  information and with  instructions to Form 10-Q
  and Article 10 of Regulation S-X. The unaudited interim  financial  statements
  reflect all  adjustments  which are, in the  opinion of the  Managing  Member,
  necessary to a fair statement of financial  position and results of operations
  for the  interim  periods  presented.  All  such  adjustments  are of a normal
  recurring nature.  The preparation of financial  statements in accordance with
  GAAP  requires  management  to make  estimates  and  assumptions  that  effect
  reported  amounts  in  the  financial   statements  and  accompanying   notes.
  Therefore, actual results could differ from those estimates. Operating results
  for the three months ended March 31, 2005 are not  necessarily  indicative  of
  the results for the year ending December 31, 2005.

  Certain prior year balances have been  reclassified  to conform to the current
period presentation.

  These unaudited  interim  financial  statements  should be read in conjunction
  with the financial  statements  and notes  thereto  contained in the report on
  Form 10-K for the year ended December 31, 2004,  filed with the Securities and
  Exchange Commission.

  Equipment on operating leases:

  Equipment  on  operating  leases  is  stated  at cost.  Depreciation  is being
  provided  by use of the  straight-line  method  over the terms of the  related
  leases to the equipment's estimated residual values at the end of the leases.

  Asset Valuation:

  Recorded values of the Company's asset portfolio are periodically reviewed for
  impairment  in accordance  with  Statement of Financial  Accounting  Standards
  (SFAS) No. 144,  Accounting  for the  Impairment  or  Disposal  of  Long-Lived
  Assets.  An impairment  loss is measured and recognized  only if the estimated
  undiscounted  future  cash  flows of the asset  are less  than  their net book
  value.  The  estimated  undiscounted  future  cash  flows  are  the sum of the
  estimated  residual  value  of the  asset at the end of the  asset's  expected
  holding period and estimates of undiscounted  future rents. The residual value
  assumes,  among other things,  that the asset is utilized normally in an open,
  unrestricted  and stable market.  Short-term  fluctuations in the market place
  are disregarded and it is assumed that there is no necessity either to dispose
  of a significant number of the assets, if held in quantity,  simultaneously or
  to dispose of the asset  quickly.  Impairment  is measured  as the  difference
  between the fair value (as determined by the discounted  estimated future cash
  flows) of the assets and its carrying value on the measurement date.

  Revenue recognition:

  Operating leases
  Operating lease revenue is recognized on a  straight-line  basis over the term
  of the underlying  leases. The initial lease terms will vary as to the type of
  equipment subject to the leases,  the needs of the lessees and the terms to be
  negotiated,  but  initial  leases are  generally  expected  to be for 36 to 84
  months.  Income  from  step  rent  provisions,   escalation  clauses,  capital
  improvement  funding provisions or other lease concessions in lease contracts,
  and lease rates  subject to  variation  based on changes in market  indexes or
  interest rates are recognized on a straight line basis.



                                       7
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 2005
                                   (Unaudited)

  1. Summary of significant accounting policies (continued):

  Direct finance leases
  Income  from  direct  financing  lease  transactions  is  reported  using  the
  financing  method of  accounting,  in which the  Company's  investment  in the
  leased  property is reported as a  receivable  from the lessee to be recovered
  through  future  rentals.  The  income  portion  of  each  rental  payment  is
  calculated so as to generate a constant  rate of return on the net  receivable
  outstanding.

  Notes receivable
  Income  from  notes  receivable  is  reported  using the  financing  method of
  accounting.  The Company's  investment in notes  receivable is reported as the
  present  value of the future note  payments.  The income  portion of each note
  payment is  calculated  so as to generate a constant rate of return on the net
  balance outstanding.

  Initial direct costs:

  The Company  capitalizes  initial direct costs associated with the acquisition
  of lease  assets.  These costs are  amortized  over a five year period,  which
  approximates average lease term, using a straight line method.

  Segment Reporting:

  The Company adopted the provisions of SFAS No. 131 Disclosures  about Segments
  of an Enterprise and Related Information.  SFAS No. 131 establishes annual and
  interim  standards  for  operating  segments  of a company.  It also  requires
  entity-wide  disclosures  about the products and services an entity  provides,
  the material  countries in which it holds assts and reports  revenue,  and its
  major customers.  The Company is not organized by multiple  operating segments
  for the  purpose  of making  operating  decisions  or  assessing  performance.
  Accordingly the Company  operates in one reportable  operating  segment in the
  United States.


  2.  Organization and Limited Liability Company matters:

  ATEL Capital  Equipment Fund VIII, LLC (the Company) was formed under the laws
  of the state of  California  on July 31,  1998 for the  purpose  of  acquiring
  equipment to engage in equipment  leasing and sales  activities,  primarily in
  the United  States.  The Company may continue  until  December  31, 2019.  The
  Managing  Member of the  Company  is ATEL  Financial  Services  LLC  (AFS),  a
  California  limited  liability  company.  Prior  to  converting  to a  limited
  liability  company  structure,  AFS  was  formerly  known  as  ATEL  Financial
  Corporation.  Each Member's personal  liability for obligations of the Company
  generally will be limited to the amount of their respective  contributions and
  rights to undistributed profits and assets of the Company.

  On January 13, 1999,  subscriptions  for the minimum number of Units (120,000,
  $1,200,000) had been received.  On that date, the Company commenced operations
  in its primary business (leasing activities).

  As a limited liability company, the liability of any individual member for the
  obligations of the Fund is limited to the extent of capital  contributions  to
  the Fund by the individual member.

  Pursuant  to  the  Operating   Agreement,   AFS  receives   compensation   and
  reimbursements for services rendered on behalf of the Company. AFS is required
  to maintain in the Company  reasonable cash reserves for working capital,  the
  repurchase of Units and contingencies.


                                       8
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 2005
                                   (Unaudited)

  2.  Organization and Limited Liability Company matters (continued):

  The Company's principal objectives are to invest in a diversified portfolio of
  equipment  that will (i) preserve,  protect and return the Company's  invested
  capital;  (ii)  generate  regular  distributions  to the  members of cash from
  operations  and cash from sales or  refinancing,  with any  balance  remaining
  after  certain  minimum  distributions  to  be  used  to  purchase  additional
  equipment during the Reinvestment  Period,  ending December 31, 2006 and (iii)
  provide additional  distributions  following the Reinvestment Period and until
  all equipment has been sold. The Company is governed by its Limited  Liability
  Company Operating Agreement (Operating Agreement).

  3. Investment in equipment and leases:

  The Company's investment in leases consists of the following:

<TABLE>
<CAPTION>
                                                Balance December 31,     Depreciation/     Reclassifi-cations      Balance March,
                                                                          Amortization
                                                                           Expense or
                                                                        Amortization of
                                                                        Direct Financing
                                                       2004                 Leases          & Dispositions          31, 2005
                                                       ----                ------            ------------              ----

<S>                                             <C>                    <C>                  <C>                 <C>
Net investment in operating leases              $   51,091,946         $  (2,252,710)       $     567,188       $    49,406,424
Net investment in direct financing leases            3,092,071              (294,115)                  -              2,797,956
Assets held for sale or lease, net of
  accumulated depreciation of $12,856,578 in
  2005 and $16,086,674 in 2004                       5,405,497                  (960)            (364,747)            5,039,790
Initial direct costs, net of accumulated
  amortization of $1,424,044 in 2005 and
  $1,389,906 in 2004                                   100,201               (34,137)                  -                 66,064
                                               ------------------    -----------------    ----------------    -----------------
                                                $   59,689,715         $  (2,581,922)       $     202,441       $    57,310,234
                                               ==================    =================    ================    =================
</TABLE>

  Impairment  losses are recorded as an addition to accumulated  depreciation of
  the impaired assets.  For the periods ended March 31, 2005 and 2004, no assets
  were  identified as impaired.  Depreciation  expense and impairment  losses on
  property  subject  to  operating  leases and  property  held for lease or sale
  consist of the following for the three month periods ended March 31:

                                             2005                 2004
                                             ----                 ----
  Depreciation expense                 $      2,253,670    $      4,816,678
                                       ================    ================







                                       9
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 2005
                                   (Unaudited)


  3. Investment in equipment and leases (continued):

  Operating leases:

  Property on operating leases consists of the following:

<TABLE>
<CAPTION>
                                          Balance               Depreciation          Reclassifications &        Balance March
                                        December 31,                                                              31, 2005
                                                                                                                      ----
                                            2004                  Expense               Dispositions
<S>                                 <C>                      <C>                      <C>                     <C>
Transportation, rail                $      45,148,174        $                -       $         733,654       $     45,881,828
Containers                                 21,165,000                         -                       -             21,165,000
Aircraft                                   15,448,037                         -                       -             15,448,037
Natural gas compressors                    13,541,303                         -                       -             13,541,303
Manufacturing                               4,599,823                         -                 (61,960)             4,537,863
Transportation, other                       3,107,988                         -                       -              3,107,988
Materials handling                          1,090,279                         -                       -              1,090,279
Other                                       5,313,054                         -                       -              5,313,054
                                   --------------------     ----------------------   ---------------------   ------------------
                                          109,413,658                         -                 671,694            110,085,352
Less accumulated depreciation             (58,321,712)               (2,252,710)               (104,506)          (60,678,928)
                                   --------------------     ----------------------   ---------------------   ------------------
                                    $      51,091,946        $       (2,252,710)      $         567,188       $     49,406,424
                                   ====================     ======================   =====================   ==================
</TABLE>

  The Company utilizes a straight line depreciation  method for equipment in all
  of the categories currently in its portfolio of lease transactions. The useful
  lives for investment in leases by category are as follows:

                           Equipment category             Useful Life
                           ------------------             -----------
                           Transportation, rail             30 - 40
                           Aircraft                         20 - 30
                           Manufacturing                    10 - 20
                           Materials handling                7 - 10
                           Transportation, other             7 - 10
                           Natural gas compressors           7 - 10
                           Containers                        7 - 10
                           Other                             3 - 5



                                       10
<PAGE>
                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 2005
                                   (Unaudited)


  3. Investment in equipment and leases (continued):

  Direct financing leases:

  As of March 31, 2005,  investment in direct  financing leases consists of rail
  cars, anhydrous ammonia storage tanks, office automation  equipment,  point of
  sale equipment,  refrigerated  trailers and laundry  equipment.  The following
  lists the components of the Company's investment in direct financing leases as
  of March 31, 2005:

  Total minimum lease payments receivable                       $  2,049,455
  Estimated residual values of leased equipment (unguaranteed)       986,704
                                                              -----------------
  Investment in direct financing leases                            3,036,159
  Less unearned income                                               (238,203)
                                                              -----------------
  Net investment in direct financing leases                     $  2,797,956
                                                              =================

  All of the equipment on leases was acquired in 2002, 2001, 2000 and 1999.

  At March 31, 2005, the aggregate  amounts of future minimum lease payments are
as follows:

<TABLE>
<CAPTION>
                                        Operating             Direct Financing
                                          Leases                     Leases            Total
                                          ------                     ------            -----
<S>                                  <C>                     <C>                <C>
Nine months ending December 31, 2005 $      4,765,955        $      873,807     $      5,639,762
       Year ending December 31, 2006        2,638,733               846,888            3,485,621
                                2007        1,980,926               279,959            2,260,885
                                2008        1,161,780                48,801            1,210,581
                                2009          993,520                     -              993,520
                                2010          204,090                     -              204,090
                          Thereafter          447,720                     -              447,720
                                     ----------------        --------------     ----------------
                                      $    12,192,724         $   2,049,455      $    14,242,179
                                     ================        ==============     ================
</TABLE>





                                       11
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 2005
                                   (Unaudited)


  4.  Non-recourse debt:

  Notes  payable to  financial  institutions  are due in varying  quarterly  and
  semi-annual  installments of principal and interest.  The notes are secured by
  assignments  of lease  payments and pledges of the assets which were purchased
  with the proceeds of the particular  notes.  Interest on the notes is at rates
  ranging from 4.96% to 6.845%.  The notes are secured by  assignments  of lease
  payments and pledges of assets.  At March 31, 2005,  the carrying value of the
  pledged assets was $10,184,180. The notes mature from 2005 through 2007.

  At March  31,  2005,  future  minimum  payments  of  non-recourse  debt are as
follows:

<TABLE>
<CAPTION>
                                         Principal            Interest            Total
<S>                                  <C>                  <C>                <C>
Nine months ending December 31, 2005 $      4,411,385     $      102,185     $     4,513,570
       Year ending December 31, 2006          646,128             57,792             703,920
                                2007          678,583             25,337             703,920
                                     ----------------     --------------     ---------------
                                       $    5,736,096       $    185,314       $   5,921,410
                                     ================     ==============     ===============
</TABLE>


  5. Other long-term debt:

  In 1999, the Company  entered into a $70 million  receivables  funding program
  (the Program),  (which was  subsequently  increased to $125  million),  with a
  receivables  financing  company  that  issues  commercial  paper  rated  A1 by
  Standard and Poor's and P1 by Moody's  Investor  Services.  Under the Program,
  the receivables  financing  company receives a general lien against all of the
  otherwise  unencumbered  assets  of the  Company.  The  Program  provides  for
  borrowing at a variable  interest rate (3.30% at March 31, 2005).  The Program
  expired  as to new  borrowings  in April  2002.  The  Company  had  $9,508,000
  outstanding under this program as of March 31, 2005.

  The Program  requires  AFS, on behalf of the  Company,  to enter into  various
  interest rate swaps with a financial  institution (also rated A1/P1) to manage
  interest rate exposure  associated  with variable rate  obligations  under the
  Program by effectively converting the variable rate debt to fixed rates. As of
  March 31, 2005, the Company receives or pays interest on a notional  principal
  of  $22,819,087  based on the  difference  between  nominal rates ranging from
  4.35% to 7.72% and the variable rate under the Program. No actual borrowing or
  lending is involved.  The termination of the swaps coincides with the maturity
  of the  debt.  Through  the swap  agreements,  the  interest  rates  have been
  effectively  fixed.  The  differential  to be paid or  received  is accrued as
  interest rates change and is recognized currently as an adjustment to interest
  expense related to the debt.

  The Partnership had utilized hedge accounting as prescribed under Statement of
  Financial  Accounting  Standards  ("SFAS") No. 133,  Accounting for Derivative
  Instruments and Hedging Activities, in prior periods. Beginning in the quarter
  ended March 31, 2005, the Partnership is  discontinuing  hedge  accounting and
  will recognize any future  gain/loss in the statement of operations.  Previous
  amounts recorded in Accumulated Other Comprehensive Income ("AOCI") related to
  the interest rate swaps will be  recognized  in earnings  when the  previously
  hedged  items  impact  earnings.  For the quarter  ended March 31,  2005,  the
  reclassification adjustment from AOCI totaled $52,950.





                                       12
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 2005
                                   (Unaudited)


  5. Other long-term debt (continued):

  Borrowings under the Program are as follows:

<TABLE>
<CAPTION>
     Date Borrowed          Original            Balance March             Notional                 Swap             Payment Rate
     -------------
                                                                          Balance                                    On Interest
                                                                         March 31,                 Value                Swap
                        Amount Borrowed           31, 2005                  2005              March 31, 2005          Agreement
                               --------              -----                  ----                       -----          ---------
<S>                   <C>                    <C>                   <C>                      <C>                         <C>
       11/11/1999     $       20,000,000     $         655,000     $          1,574,040     $        (29,749)           6.84%
       12/21/1999             20,000,000             4,523,000               10,161,634             (610,134)           7.41%
       12/24/1999             25,000,000               233,000                1,217,089              (37,699)           7.44%
       4/17/2000               6,500,000             1,043,000                1,314,179              (39,650)           7.45%
       4/28/2000               1,900,000                     -                  155,519               (5,734)           7.72%
        8/3/2000              19,000,000               510,000                5,235,538             (216,559)           7.50%
       10/31/2000              7,500,000               874,000                1,796,244              (58,486)           7.13%
       1/29/2001               8,000,000                     -                        -                     -           5.91%
        6/1/2001               2,000,000                     -                        -                     -           5.04%
        9/1/2001               9,000,000               685,000                1,364,844                 331             4.35%
       1/31/2002               3,900,000               985,000                        -                     -             *
                     -- ----------------    -- ---------------    -- ------------------    -- ---------------
                      $      122,800,000     $       9,508,000     $         22,819,087     $       (997,680)
                     == ================    == ===============    == ==================    == ===============
</TABLE>

  * Under the terms of the Program, no interest rate swap agreement was required
for this borrowing.

  Other  long-term debt  borrowings  mature from 2005 through 2007. At March 31,
  2005, future minimum payments of other long-term debt are as follows:

<TABLE>
<CAPTION>
                                     Debt                   Debt                Interest               Total            Rates on
                                                                                --------               -----
                                  Principal              Principal                                                    Interest Swap
                                   Swapped              Not Swapped                                                    Agreements*
                                   -------              -----------                                                    -----------
         Nine months ending
<S>                           <C>                   <C>                     <C>                 <C>                   <C>    <C>
          December 31, 2005   $      4,105,000      $          879,000      $      391,496      $        5,375,496    6.899%-7.172%
   Year ending December 31,
                       2006          3,349,000                  60,000             229,873               3,638,873    7.337%-7.348%
                       2007          1,069,000                  46,000              26,606               1,141,606       7.336%
                            --- --------------    --- ----------------    --- ------------    --- ----------------
                              $      8,523,000      $          985,000      $      647,975      $       10,155,975
                            === ==============    === ================    === ============    === ================
</TABLE>

  * Represents the range of monthly  weighted  average fixed interest rates paid
  for amounts maturing in the particular year. The receive-variable rate portion
  of the swap represents commercial paper rates (3.30% at March 31, 2005).




                                       13
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 2005
                                   (Unaudited)

  6.  Related party transactions:

  The terms of the Limited Liability  Company  Operating  Agreement provide that
  AFS and/or  affiliates  are  entitled to receive  certain  fees for  equipment
  acquisition, management and resale and for management of the Company.

  The Limited Liability Company Operating Agreement allows for the reimbursement
  of costs incurred by AFS in providing  administrative services to the Company.
  Administrative   services  provided  include  Company   accounting,   investor
  relations,  legal  counsel and lease and equipment  documentation.  AFS is not
  reimbursed  for  services  where it is entitled  to receive a separate  fee as
  compensation  for  such  services,  such  as  acquisition  and  management  of
  equipment.  Reimbursable  costs  incurred by AFS are  allocated to the Company
  based upon  estimated time incurred by employees  working on Company  business
  and an allocation of rent and other costs based on utilization studies.

  Each of ATEL Leasing Corporation ("ALC"),  ATEL Equipment Corporation ("AEC"),
  ATEL Investor  Services  ("AIS") and AFS is a wholly-owned  subsidiary of ATEL
  Capital Group and performs services for the Company.  Acquisition services are
  performed for the Company by ALC, equipment  management,  lease administration
  and asset disposition  services are performed by AEC,  investor  relations and
  communications  services  are  performed  by AIS  and  general  administrative
  services for the Company are performed by AFS.

  Cost  reimbursements to the Managing Member are based on costs incurred by AFS
  in  performing  administrative  services for the Company that are allocated to
  each Company that AFS manages  based on certain  criteria  such as existing or
  new  leases,  number  of  investors  or equity  depending  on the type of cost
  incurred..  AFS believes that the costs reimbursed are the lower of (i) actual
  costs  incurred on behalf of the Company or (ii) the amount the Company  would
  be required to pay independent parties for comparable  administrative services
  in the same geographic location.

  During the three  month  periods  ended  March 31,  2005 and 2004,  AFS and/or
  affiliates  earned  fees,  commissions  and  reimbursements,  pursuant  to the
  Limited Liability Company Agreement as follows:

<TABLE>
<CAPTION>
                                                      2005                2004
                                                      ----                ----

<S>                                           <C>                    <C>
  Asset management fees to Managing Member    $         126,337      $        271,849
  Cost reimbursements to Managing Member                691,970               699,215
                                                                    -- --------------
                                          ----- ---------------     -- --------------
                                              $         818,307      $        971,064
                                          ===== ===============     == ==============
</TABLE>

  The Managing  Member makes certain  payments to third parties on behalf of the
  Company for convenience  purposes.  During the three month periods ended March
  31, 2005 and 2004,  the  Managing  Member made such  payments of $126,300  and
  $96,751, respectively.




                                       14
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 2005
                                   (Unaudited)
7.       Members' capital:

  As of March 31,  2005,  13,570,188  Units  were  issued and  outstanding.  The
  Company is authorized to issue up to 15,000,000 Units in addition to the Units
  issued to the initial members (50 Units).

  As defined in the Company's Operating Agreement, the Company's Net Income, Net
  Losses,  and  Distributions are to be allocated 92.5% to the Other Members and
  7.5% to AFS.

  Distributions to the Other Members were as follows:

<TABLE>
<CAPTION>
                                                        Three Months Ended
                                                             March 31,
                                                     2005                2004
                                                     ----                ----
<S>                                             <C>                  <C>
  Distributions                                 $       3,086,495    $       3,086,761
  Weighted average number of Units outstanding         13,570,188           13,570,188
  Weighted average distributions per Unit       $            0.23    $            0.23
</TABLE>


  8.  Financing Arrangement:

  The Company participates with AFS and certain of its affiliates in a financing
  arrangement  (comprised  of a term  loan to AFS and a line of  credit)  with a
  group of financial institutions that includes certain financial covenants. The
  financial   arrangement  is   $75,000,000   and  expires  in  June  2006.  The
  availability of borrowings to the Company under this financing  arrangement is
  reduced by the amount AFS has outstanding as a term loan. As of March 31, 2005
  borrowings under the facility were as follows:

<TABLE>
<CAPTION>
<S>                                                                                                           <C>
  Total amount available under the financing arrangement                                                      $      75,000,000
  Term loan to AFS as of March 31, 2005                                                                              (1,482,182)
                                                                                                              -------------------
  Total available under the acquisition and warehouse facilities                                                     73,517,818

  Amount borrowed by the Company under the acquisition facility                                                      (2,500,000)
  Amounts  borrowed by  affiliated  partnerships  and limited  liability  companies  under the  acquisition
  facility                                                                                                          (13,500,000)
                                                                                                              -------------------
  Total remaining available under the acquisition and warehouse facilities                                    $      57,517,818
                                                                                                              ===================
</TABLE>

  Draws on the acquisition  facility by any individual borrower are secured only
  by that borrower's assets, including equipment and related leases.  Borrowings
  on the warehouse  facility are recourse  jointly to certain of the  affiliated
  Memberships and limited liability companies, the Company and AFS.

  The credit agreement includes certain financial  covenants  applicable to each
  borrower.  The Company was in  compliance  with its  covenants as of March 31,
  2005.

  As of March 31, 2005, the acquisition  line of credit consists of two notes in
  the amount of $1,000,000 and $1,500,000.  Any or the entire principal balances
  may be repaid then re-borrowed,  on notes with maturities ranging from one day
  to six months, until the line is terminated in June 2006. As of March 31, 2005
  the interest rates were 5.75% and 4.62% on the $1,000,000 and $1,500,000  note
  balances, respectively.


                                       15
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 2005
                                   (Unaudited)


  9. Guarantees:

  The Company enters into contracts that contain a variety of  indemnifications.
  The Company's maximum exposure under these  arrangements is unknown.  However,
  the Company has not had prior claims or losses pursuant to these contracts and
  expects the risk of loss to be remote.

  In the normal course of business, the Company enters into contracts of various
  types, including lease contracts,  contracts for the sale or purchase of lease
  assets,  management  contracts,  loan agreements,  credit lines and other debt
  facilities.  It is  prevalent  industry  practice  for most  contracts  of any
  significant value to include provisions that each of the contracting parties -
  in  addition  to  assuming  liability  for  breaches  of the  representations,
  warranties,  and  covenants  that  are  part  of  the  underlying  contractual
  obligations  - also  assume  an  obligation  to  indemnify  and hold the other
  contracting party harmless for such breaches,  for harm caused by such party's
  gross  negligence and willful  misconduct,  including,  in certain  instances,
  certain costs and expenses arising from the contract.  The Managing Member has
  substantial experience in managing similar leasing programs subject to similar
  contractual  commitments  in similar  transactions,  and the losses and claims
  arising from these commitments have been insignificant,  if any. Generally, to
  the extent these  contracts are  performed in the ordinary  course of business
  under the reasonable  business  judgment of the Managing Member,  no liability
  will arise as a result of these provisions.  The Managing Member has no reason
  to  believe  that  the  facts  and  circumstances  relating  to the  Company's
  contractual commitments differ from those it has entered into on behalf of the
  prior  programs  it has  managed.  The  Managing  Member  knows of no facts or
  circumstances that would make the Company's  contractual  commitments  outside
  standard  mutual  covenants  applicable  to  commercial  transactions  between
  businesses.  Accordingly,  the  Company  believes  that these  indemnification
  obligations  are made in the  ordinary  course of business as part of standard
  commercial and industry practice,  and that any potential  liability under the
  Company's  similar  commitments  is remote.  Should  any such  indemnification
  obligation become payable, the Company would separately record and/or disclose
  such liability in accordance with GAAP.




                                       16
<PAGE>

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

  Statements contained in this Item 2, "Management's  Discussion and Analysis of
  Financial  Condition  and Results of  Operations,"  and elsewhere in this Form
  10-Q, which are not historical facts, may be forward-looking  statements. Such
  statements  are subject to risks and  uncertainties  that could  cause  actual
  results to differ  materially form those  projected.  In particular,  economic
  recession and changes in general economic conditions,  including, fluctuations
  in demand for equipment, lease rates, and interest rates, may result in delays
  in investment and reinvestment, delays in leasing, re-leasing, and disposition
  of  equipment,   and  reduced  returns  on  invested  capital.  The  Company's
  performance  is  subject  to  risks  relating  to  lessee   defaults  and  the
  creditworthiness  of its lessees.  The Fund's  performance  is also subject to
  risks  relating to the value of its equipment at the end of its leases,  which
  may be affected by the condition of the equipment,  technological obsolescence
  and the  markets  for new  and  used  equipment  at the  end of  lease  terms.
  Investors   are  cautioned   not  to  attribute   undue   certainty  to  these
  forward-looking statements, which speak only as of the date of this Form 10-Q.
  We  undertake  no  obligation  to  publicly  release  any  revisions  to these
  forward-looking  statements to reflect events or circumstances  after the date
  of this Form 10-Q or to reflect the occurrence of unanticipated  events, other
  than as required by law.

  Capital Resources and Liquidity

  During the first quarters of 2005 and 2004, the Company's primary activity was
engaging in equipment leasing and sales activities.

  A primary source of liquidity,  the Company has contractual obligations with a
  diversified group of lessees for fixed lease terms at fixed rental amounts. As
  the  initial  lease  terms  expire,  the  Company  will  re-lease  or sell the
  equipment.  The future liquidity  beyond the contractual  minimum rentals will
  depend on AFS's success in re-leasing or selling the equipment as it comes off
  lease.

  The Company participates with AFS and certain of its affiliates in a financing
  arrangement  (comprised  of a term  loan to AFS and a line of  credit)  with a
  group of financial institutions that includes certain financial covenants. The
  financial   arrangement  is   $75,000,000   and  expires  in  June  2006.  The
  availability of borrowings to the Company under this financing  arrangement is
  reduced by the amount AFS has outstanding as a term loan. As of March 31, 2005
  borrowings under the facility were as follows:

<TABLE>
<CAPTION>
<S>                                                                                                           <C>
  Total amount available under the financing arrangement                                                      $      75,000,000
  Term loan to AFS as of March 31, 2005                                                                              (1,482,182)
                                                                                                              -------------------
  Total available under the acquisition and warehouse facilities                                                     73,517,818

  Amount borrowed by the Company under the acquisition facility                                                      (2,500,000)
  Amounts  borrowed by  affiliated  partnerships  and limited  liability  companies  under the  acquisition
  facility                                                                                                          (13,500,000)
                                                                                                              -------------------
  Total remaining available under the acquisition and warehouse facilities                                    $      57,517,818
                                                                                                              ===================
</TABLE>

  Draws on the acquisition  facility by any individual borrower are secured only
  by that borrower's assets, including equipment and related leases.  Borrowings
  on the warehouse  facility are recourse  jointly to certain of the  affiliated
  Memberships and limited liability companies, the Company and AFS.



                                       17
<PAGE>

  To manage the  warehousing  line of credit for the holding of assets  prior to
  allocation to specific  investor  programs,  a Warehousing Trust Agreement has
  been entered into by the Company,  ATEL Financial  Services LLC ("AFS"),  ATEL
  Leasing Corporation  ("ALC"),  and certain of the affiliated  partnerships and
  limited liability companies. The warehousing line is used to acquire and hold,
  on a short-term  basis,  certain lease  transactions  that meet the investment
  objectives of each of such entities. Each of the leasing programs sponsored by
  AFS and ALC currently in its  acquisition  stage is a pro rata  participant in
  the Warehousing Trust Agreement,  as described below. When a program no longer
  has a need for short term financing provided by the warehousing  facility,  it
  is removed  from  participation,  and as new leasing  investment  entities are
  formed  by AFS  and ALC and  commence  their  acquisition  stages,  these  new
  entities  will  be  added.  As of  March  31,  2005,  the  investment  program
  participants were ATEL Cash Distribution Fund VI, L.P., ATEL Capital Equipment
  Fund VII, L.P., ATEL Capital  Equipment Fund VIII, LLC, ATEL Capital Equipment
  Fund  IX,  LLC,  and ATEL  Capital  Equipment  Fund X,  LLC.  Pursuant  to the
  Warehousing Trust Agreement,  the benefit of the lease transaction assets, and
  the corresponding liabilities under the warehouse borrowing facility, inure to
  each  of  such  entities  based  upon  each  entity's  pro-rata  share  in the
  warehousing trust estate. The "pro-rata share" is calculated as a ratio of the
  net  worth  of each  entity  over the  aggregate  net  worth  of all  entities
  benefiting from the warehouse trust estate,  excepting that the trustees,  AFS
  and ALC, are both liable for their pro-rata shares of the obligations based on
  their  respective  net worths,  and jointly liable for the pro rata portion of
  the obligations of each of the affiliated  partnerships and limited  liability
  companies  participating  under  the  borrowing  facility.   Transactions  are
  financed  through  this  warehousing  line  only  until the  transactions  are
  allocated to a specific program for purchase or are otherwise  disposed by AFS
  and  ALC.  When a  determination  is made to  allocate  the  transaction  to a
  specific  program for purchase by the program,  the purchaser  repays the debt
  associated  with the asset,  either  with cash or by means of the  acquisition
  facility  financing,  the asset is removed from the warehouse line collateral,
  and ownership of the asset and any debt  obligation  associated with the asset
  are assumed solely by the purchasing entity.

  The credit agreement includes certain financial  covenants  applicable to each
  borrower.  The Company was in  compliance  with its  covenants as of March 31,
  2005.

  The Company  anticipates  reinvesting a portion of lease  payments from assets
  owned in new leasing transactions. Such reinvestment will occur only after the
  payment  of all  obligations,  including  debt  service  (both  principal  and
  interest), the payment of management and acquisition fees to AFS and providing
  for cash distributions to the Limited Members.

  AFS or an  affiliate  may purchase  equipment in its own name,  the name of an
  affiliate  or the name of a  nominee,  a trust  or  otherwise  and hold  title
  thereto on a temporary or interim  basis for the purpose of  facilitating  the
  acquisition  of  such  equipment  or  the  completion  of  manufacture  of the
  equipment  or for any other  purpose  related to the  business of the Company,
  provided,  however,  that: (i) the  transaction is in the best interest of the
  Company;  (ii) such equipment is purchased by the Company for a purchase price
  no greater than the cost of such equipment to AFS or affiliate  (including any
  out-of-pocket  carrying  costs),  except  for  compensation  permitted  by the
  Operating  Agreement;  (iii) there is no difference  in interest  terms of the
  loans  secured by the  equipment at the time  acquired by AFS or affiliate and
  the time acquired by the Company; (iv) there is no benefit arising out of such
  transaction  to AFS or its  affiliate  apart from the  compensation  otherwise
  permitted by the Operating Agreement; and (v) all income generated by, and all
  expenses  associated with,  equipment so acquired will be treated as belonging
  to the Company.

  The Company  currently has available  adequate  reserves to meet its immediate
  cash requirements and those of the next twelve months,  but in the event those
  reserves  were  found to be  inadequate,  the  Company  would  likely  be in a
  position to borrow  against its current  portfolio to meet such  requirements.
  AFS envisions no such requirements for operating purposes.

  In 1999, the Company  established a $70 million  receivables  funding  program
  (which  was  subsequently  increased  to  $125  million)  with  a  receivables
  financing  company  that issues  commercial  paper rated A1 from  Standard and
  Poor's and P1 from Moody's  Investor  Services.  In this  receivables  funding
  program,  the lenders  received a general  lien  against all of the  otherwise
  unencumbered  assets of the Company.  The program  provided for borrowing at a
  variable interest rate and required AFS on behalf of the Company to enter into
  interest rate swap agreements with certain  counterparties  (also rated A1/P1)
  to mitigate the interest rate risk  associated  with a variable rate note. AFS
  believes  that this program  allowed the Company to avail itself of lower cost
  debt than that available for individual non- recourse debt  transactions.  The
  program expired as to new borrowings in April 2002.

  No  commitments of capital have been or are expected to be made other than for
  the acquisition of additional equipment.  There were no such commitments as of
  March 31, 2005.

  AFS expects  that  aggregate  borrowings  in the future will not exceed 50% of
  aggregate  equipment  cost.  In  any  event,  the  Limited  Liability  Company
  Operating  Agreement  limits  such  borrowings  to 50% of the  total  cost  of
  equipment,  in  aggregate.  AFS does not  anticipate  any future  non-recourse
  borrowings.


                                       18
<PAGE>

  If inflation in the general  economy  becomes  significant,  it may affect the
  Company inasmuch as the residual (resale) values and rates on re-leases of the
  Company's  leased assets may increase as the costs of similar assets increase.
  However,  the Company's  revenues from existing leases would not increase,  as
  such rates are generally fixed for the terms of the leases without  adjustment
  for inflation.

  If interest rates increase significantly, the lease rates that the Company can
  obtain on future leases will be expected to increase as the cost of capital is
  a  significant  factor in the pricing of lease  financing.  Leases  already in
  place,  for the most part, would not be affected by changes in interest rates.
  For detailed  information on the Company's debt  obligations,  see Notes 4, 5,
  and 8 in the notes to the financial statements in Item 1.

  Cash Flows

  During the first  quarters of 2005 and 2004,  the Company's  primary source of
liquidity was rents from operating leases.

  In the  first  quarters  of 2005 and  2004,  the  primary  source of cash from
  operations was rents from operating  leases.  Operating leases are expected to
  remain as the primary source of cash from operations in future periods.

  In both 2005 and 2004,  proceeds  from sales of assets  and rents from  direct
  financing  leases  accounted for as reductions of the Company's net investment
  in direct  financing  leases  were the primary  source of cash from  investing
  activities.  In the first quarter of 2005, proceeds from sales of lease assets
  decreased to $274,834 from  $1,485,659  compared to the first quarter of 2004.
  Proceeds from the sales of lease assets are not expected to be consistent from
  one period to another.  Asset sales are made as leases  expire,  as purchasers
  can be found and as the sales can be negotiated and completed.

  In the  first  quarters  of 2005 and  2004,  the  only  sources  of cash  from
  financing activities were borrowings under the line of credit.  Financing uses
  of cash included  repayments of debt of $4,487,850 and $4,399,893 in the first
  quarters  of 2005 and  2004,  respectively.  Distributions  were made to Other
  Members in amounts of $3,086,495  and  $3,086,761 and to AFS in the amounts of
  $250,256 and $250,294 in the first quarters of 2005 and 2004, respectively.

  Results of operations

  Operations  resulted in a net loss of $144,474 in the quarter  ended March 31,
  2005  compared to a net loss of $418,943 in the quarter  ended March 31, 2004.
  In the  first  quarters  of 2005 and 2004,  the  Company's  primary  source of
  revenues was from  operating  leases.  Operating  lease rents  decreased  from
  $5,944,402  in the first quarter of 2004 to $3,056,749 in the first quarter of
  2005.  Assets sales over the last twelve months were the largest  contributors
  to the decrease in operating lease rents.  However,  the overall  decrease was
  partially  offset by the re-lease of off-lease  equipment over the same twelve
  months.

  Proceeds from sales of lease assets are not expected to be consistent from one
  period to another.  The Company is a finite life equipment leasing fund, which
  will acquire  leasing  transactions  during the period  ending six years after
  completion of its public offering. On the termination of leases, assets may be
  re-leased  or sold.  Sales of assets  are not  scheduled  and are  created  by
  opportunities  within the  marketplace.  The Company  will seek to acquire and
  lease a wide variety of assets and to enter into leases on a variety of terms.
  Some assets will be  expected to have little or no value upon  termination  of
  the related leases,  while others will be expected to have  substantial  value
  for  re-lease  or  sale  upon  termination  of the  initial  leases,  and  the
  anticipated  residual values are a key factor in pricing and terms  structured
  for each lease.  The  Company's  goal is to seek maximum  return on its leased
  assets and will  determine  when and under what terms to dispose  such  assets
  during the course of its term.

  Depreciation is related to operating lease assets and thus, to operating lease
  revenues. Consequently, depreciation decreased to $2,253,670 from $, 4,816,678
  during  the  first  quarters  of 2005 and 2004,  respectively,  as a result of
  operating lease asset sales over the last year.

  Management  periodically  reviews the carrying  values of its assets on leases
  and assets held for lease or sale. There were no impairments recognized in the
  first quarter of 2005 and 2004.  Asset  management fees are based on the gross
  lease rents of the Company plus proceeds from the sales of lease assets.  They
  are limited to certain  percentages of lease rents,  distributions  to members
  and certain  other items.  The decrease in asset  management  fees to $126,337
  from $271,849 during the first quarters of 2005 and 2004, respectively,  was a
  direct result of the decreases in lease revenues.

  Interest  expense  decreased from $878,434 in the quarter ended March 31, 2004
  to $393,539 in the quarter  ended March 31, 2005.  Overall debt has  decreased
  from  $55,155,442  at March 31, 2004 to  $17,744,096  at March 31, 2005.  This
  decrease in the debt balances resulted in decreased  interest charges compared
  to the same period in 2004.

  The  provision  for  doubtful  accounts  increased  from  $11,000 in the first
  quarter  of 2004 to  $33,500  in the first  quarter  of 2005.  Provisions  for
  doubtful  accounts  are not  expected  to be  consistent  from one  period  to
  another.




                                       19
<PAGE>

  Item 3.  Quantitative and Qualitative Disclosures of Market Risk.

  The Company,  like most other  companies,  is exposed to certain market risks,
  including  primarily  changes in  interest  rates.  The Company  believes  its
  exposure to other market risks, including foreign currency exchange rate risk,
  commodity risk and equity price risk, are  insignificant to both its financial
  position and results of operations.

  In  general,  the  Company  manages  its  exposure  to  interest  rate risk by
  obtaining  fixed rate debt.  The fixed rate debt is  structured so as to match
  the cash flows required to service the debt to the payment streams under fixed
  rate lease  receivables.  The  payments  under the leases are  assigned to the
  lenders in satisfaction of the debt. Furthermore, the Company has historically
  been able to  maintain  a stable  spread  between  its cost of funds and lease
  yields in both periods of rising and falling interest rates. Nevertheless, the
  Company  frequently funds leases with its floating rate line of credit and is,
  therefore,  exposed to  interest  rate risk  until  fixed  rate  financing  is
  arranged, or the floating rate line of credit is repaid. As of March 31, 2005,
  there was $2,500,000 outstanding on the floating rate line of credit.

  Also, the Company entered into a receivables  funding  facility in 1999. Since
  interest on the outstanding balances under the facility varies, the Company is
  exposed to market risks associated with changing  interest rates. To hedge its
  interest  rate  risk,  the  Company  enters  into  interest  rate  swaps  that
  effectively  convert the underlying  interest  characteristic  on the facility
  from  floating  to fixed.  Under the swap  agreements,  the  Company  makes or
  receives  variable  interest  payments to or from the counterparty  based on a
  notional  principal  amount.  The net  differential  paid or  received  by the
  Company is  recognized as an  adjustment  to interest  expense  related to the
  facility  balances.  The amount paid or  received  represents  the  difference
  between the payments  required  under the variable  interest rate facility and
  the amounts due under the facility at the fixed (hedged)  interest rate. As of
  March 31, 2005,  borrowings on the facility were $9,508,000 and the associated
  variable  interest rate was 3.30%.  The average  fixed  interest rate achieved
  with the swap agreements was 6.792%.


  Item 4.  Controls and procedures.

  Evaluation of disclosure controls and procedures

  Under the  supervision  and with the  participation  of our  management  (ATEL
  Financial  Services,  LLC as Managing Member of the registrant,  including the
  chief  executive  officer and chief financial  officer),  an evaluation of the
  effectiveness of the design and operation of the Company's disclosure controls
  and  procedures  [as  defined  in Rules  13a-15(e)  and  15d-15(e)  under  the
  Securities  Exchange Act of 1934] was  performed  as of March 31, 2005.  Based
  upon this  evaluation,  the chief  executive  officer and the chief  financial
  officer concluded that, as of the evaluation date, our disclosure controls and
  procedures   were  effective  for  the  purposes  of  recording,   processing,
  summarizing,  and timely reporting  information required to be disclosed by us
  in the reports that we file under the  Securities  Exchange  Act of 1934;  and
  that such  information is accumulated  and  communicated  to our management in
  order to allow timely decisions regarding required disclosure.




                                       20
<PAGE>

  As disclosed in the  Company's  annual  report on Form 10-K for the year ended
  December 31, 2003,  the chief  executive  and chief  financial  officer of the
  Managing Member had identified  certain enhanced controls needed to facilitate
  a more effective closing of the Company's financial statements.  Specifically,
  the Company's auditors advised  management of a material weakness  surrounding
  the financial statement closing process that they believe arose because ATEL's
  accounting  resources  were not  adequate to complete the closing of the books
  and preparation of financial statements in a timely manner. However, it should
  be noted that the  financial  statements  for that  period  were  nevertheless
  issued with an unqualified opinion.  Since the beginning of 2004, ATEL hired a
  new corporate  controller,  added two  assistant  controllers  and  additional
  accounting  staff  personnel,  and has  instituted  new  procedures or revised
  existing  procedures to ensure that the Company's  ability to execute internal
  controls in accounting and  reconciliation  in the closing process is adequate
  in all respects.  In connection with management's  review of the effectiveness
  of internal  disclosure controls and procedures of the Company as of March 31,
  2005,  including  communication with its auditors regarding the audit process,
  ATEL  management  has  determined  that it has  successfully  taken  all steps
  necessary  to  resolve  any  outstanding  issues  with  respect  to its annual
  financial  statement  closing  process and that its  accounting  resources are
  adequate  to  perform  this  process  in a  timely  and  accurate  manner.  In
  connection  with their audit of the Company and related  programs for the year
  ended  December 31, 2004,  the  independent  accountants  issued a no material
  weakness letter which indicates that no matters were noted involving  internal
  control  and  its  operation  that  the  auditor  considered  to  be  material
  weaknesses as defined by the Public Company Accounting Oversight Board (United
  States).  Furthermore,  all financial  statements  for the Company and related
  programs  for 2004 were issued with  unqualified  opinions of the  independent
  accountants.  The  Managing  Member  will  continue  to review its  accounting
  procedures  and practices to determine  their  effectiveness  and adequacy and
  will take any steps deemed  necessary in the opinion of the Managing  Member's
  chief  executive  and chief  financial  officers to ensure the adequacy of the
  Company's  disclosure and  accounting  controls and  procedures.  The Managing
  Member's chief executive  officer and chief financial  officer have determined
  that no weakness in financial and  accounting  controls and procedures had any
  material effect on the accuracy and  completeness  of the Company's  financial
  reporting and disclosure included in this report.

  Changes in internal controls

  There have been no  significant  changes in our internal  controls or in other
  factors that could significantly affect our disclosure controls and procedures
  subsequent to the evaluation date nor were there any significant  deficiencies
  or material  weaknesses in our internal  controls,  except as described in the
  prior paragraphs.







                                       21
<PAGE>

                           PART II. OTHER INFORMATION


Item 1.  Legal Proceedings.

In the ordinary  course of  conducting  business,  there may be certain  claims,
suits, and complaints  filed against the Company.  In the opinion of management,
the  outcome of such  matters,  if any,  will not have a material  impact on the
Company's  financial  position  or  results of  operations.  No  material  legal
proceedings  are  currently  pending  against  the Company or against any of its
assets.


Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

           Inapplicable.


Item 3. Defaults Upon Senior Securities.

           Inapplicable.


Item 4. Submission Of Matters To A Vote Of Security Holders.

           Inapplicable.


Item 5. Other Information.

           Inapplicable.


Item 6. Exhibits.

  Documents filed as a part of this report

      1.   Financial Statement Schedules

           All other  schedules  for which  provision is made in the  applicable
           accounting  regulations of the Securities and Exchange Commission are
           not required under the related instructions or are inapplicable,  and
           therefore have been omitted.

      2.   Other Exhibits

           31.1 Certification of Paritosh K. Choksi
           31.2 Certification of Dean L. Cash
           32.1 Certification Pursuant to 18 U.S.C. section 1350 of Dean L. Cash
           32.2 Certification Pursuant to 18 U.S.C. section 1350 of Paritosh K.
                Choksi






                                       22
<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.

  Date:
  May 13, 2005


                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC
                                  (Registrant)




                                         By: ATEL Financial Services LLC
                                             Managing Member of Registrant





By:      /s/ Dean L. Cash_____________
         Dean L. Cash
         President and Chief Executive Officer
         of Managing Member




By:      /s/ Paritosh K. Choksi_________
         Paritosh K. Choksi
         Principal Financial Officer
         of Registrant



By:      /s/ Donald E. Carpenter________
         Donald E. Carpenter
         Principal Accounting
         Officer of Registrant



By:      /s/ Elif A Kuvvetli________
         Elif A Kuvvetli
         Vice President and
         Corporate Controller





                                       23
<PAGE>