Form 10-Q

                       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, 2004

         |_|    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 94108-2733
                    (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, 2004
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, 2004 and December 31, 2003.

          Statements of  Operations  for the three month periods ended March 31,
          2004 and 2003.

          Statements of Changes in Members'  Capital for the year ended December
          31, 2003 and for the three month period ended March 31, 2004.

          Statements  of Cash Flows for the three month  periods ended March 31,
          2004 and 2003.

          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, 2004 AND DECEMBER 31, 2003


                                     ASSETS


<TABLE>
<CAPTION>
                                                                   March 31,          December 31,
                                                                     2004                 2003
                                                                     ----                 ----
                                                                  (Unaudited)

<S>                                                                 <C>                  <C>
Cash and cash equivalents                                              $ 544,135             $ 508,584
Accounts receivable, net of allowance for doubtful accounts of
   $236,115 in 2004 and $225,115 in 2003                               1,817,041             2,124,902
Other assets                                                              17,500                25,000
Investments in equipment and leases                                  101,512,893           107,564,258
                                                               ------------------  --------------------
Total assets                                                        $103,891,569         $ 110,222,744
                                                               ==================  ====================


                        LIABILITIES AND MEMBERS' CAPITAL


Long-term debt                                                       $36,819,000          $ 39,946,000
Line of credit                                                        12,000,000             9,500,000
Non-recourse debt                                                      6,336,442             6,609,335

Accounts payable:
   Managing Member                                                       330,423               889,555
   Other                                                                 247,592               820,799

Accrued interest payable                                                 127,730               115,844

Unearned operating lease income                                          703,941             1,236,498

Interest rate swap contracts                                           3,061,496             3,207,595
                                                               ------------------  --------------------
Total liabilities                                                     59,626,624            62,325,626

Members' capital
   Accumulated other comprehensive loss                               (3,019,319)           (3,143,144)
   Members' capital                                                   47,284,264            51,040,262
                                                               ------------------  --------------------
                                                                      44,264,945            47,897,118
                                                               ------------------  --------------------
Total liabilities and members' capital                              $103,891,569         $ 110,222,744
                                                               ==================  ====================
</TABLE>

                             See accompanying notes.


                                       3
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                            STATEMENTS OF OPERATIONS

                            THREE MONTH PERIODS ENDED
                             MARCH 31, 2004 AND 2003
                                   (Unaudited)


<TABLE>
<CAPTION>
Revenues:                                            2004                 2003
                                                     ----                 ----
Leasing activities:
<S>                                                  <C>                   <C>
   Operating leases                                  $ 5,944,402           $ 7,378,891
   Direct financing leases                               340,794               172,311
   Gain on sales of assets                               449,642               154,414
Interest                                                     926                 2,012
Other                                                     14,669                17,696
                                               ------------------  --------------------
                                                       6,750,433             7,725,324
Expenses:
Depreciation of operating lease assets                 4,816,678             5,336,930
Interest expense                                         878,434             2,022,644
Cost reimbursements to Managing Member                   699,215               656,763
Asset management fees to Managing Member                 271,849               300,571
Railcar maintenance                                      130,447               672,087
Professional fees                                         81,443               181,096
Amortization of initial direct costs                      72,015                94,037
Outside services                                          51,956                50,836
Insurance                                                 42,320                     -
Provision for (recovery of) doubtful accounts             11,000              (200,000)
Impairment losses                                              -             1,910,861
Other                                                    114,019                79,200
                                               ------------------  --------------------
                                                       7,169,376            11,105,025
                                               ------------------  --------------------
Net loss                                              $ (418,943)         $ (3,379,701)
                                               ==================  ====================

Net income (loss):
   Managing member                                     $ 250,294             $ 250,287
   Other members                                        (669,237)           (3,629,988)
                                               ------------------  --------------------
                                                      $ (418,943)         $ (3,379,701)
                                               ==================  ====================

Net loss per Limited Liability Company Unit              $ (0.05)              $ (0.27)
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, 2003
                                   AND FOR THE
                            THREE MONTH PERIOD ENDED
                                 MARCH 31, 2004
                                   (Unaudited)


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

<S>                                        <C>               <C>                <C>              <C>                   <C>
Balance December 31, 2002                  13,570,188        $71,908,105               $ -       $ (5,381,342)         $ 66,526,763

Distributions to members                            -        (12,345,603)       (1,000,979)                 -           (13,346,582)
Reclassification adjustment for
   portion of swap liability charged to
   net loss                                         -                  -                 -             64,451                64,451
Unrealized decrease in value of
   interest rate swap contracts                     -                  -                 -          2,173,747             2,173,747
Net income (loss)                                   -         (8,522,240)        1,000,979                  -            (7,521,261)
                                    ------------------ ------------------ ----------------- ------------------  --------------------
Balance December 31, 2003                  13,570,188         51,040,262                 -         (3,143,144)           47,897,118

Distributions to members                            -         (3,086,761)         (250,294)                 -            (3,337,055)
Unrealized decrease in value of
   interest rate swap contracts                     -                  -                 -            123,825               123,825
Net income (loss)                                   -           (669,237)          250,294                  -              (418,943)
                                    ------------------ ------------------ ----------------- ------------------  --------------------
Balance March 31, 2004                     13,570,188        $47,284,264               $ -       $ (3,019,319)         $ 44,264,945
                                    ================== ================== ================= ==================  ====================
</TABLE>





                             See accompanying notes.


                                       5
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                            STATEMENTS OF CASH FLOWS

                            THREE MONTH PERIODS ENDED
                             MARCH 31, 2004 AND 2003
                                   (Unaudited)


<TABLE>
<CAPTION>
Operating activities:                                        2004                 2003
                                                             ----                 ----
<S>                                                            <C>                   <C>
Net loss                                                      $ (418,943)         $ (3,379,701)
Adjustments to reconcile net loss to net cash
   provided by operating activities:
   Gain on sales of assets                                      (449,642)             (154,414)
   Depreciation of operating lease assets                      4,816,678             5,336,930
   Impairment losses                                                   -             1,910,861
   Amortization of initial direct costs                           72,015                94,037
   Provision for (recovery of) doubtful accounts                  11,000              (200,000)
   Changes in operating assets and liabilities:
      Accounts receivable                                        296,861            (1,046,101)
      Due from Managing Member                                         -               171,119
      Other assets                                                 7,500                 7,500
      Accounts payable, Managing Member                         (559,132)              260,648
      Accounts payable, other                                   (573,207)              (25,420)
      Accrued interest expense                                    11,886                28,151
      Unearned lease income                                     (532,557)              246,393
      Interest rate swap contracts                               (22,274)                    -
                                                       ------------------  --------------------
Net cash provided by operating activities                      2,660,185             3,250,003
                                                       ------------------  --------------------

Investing activities:
Reduction of net investment in direct financing leases           126,655               278,040
Proceeds from sales of assets                                  1,485,659             2,021,157
                                                       ------------------  --------------------
Net cash provided by investing activities                      1,612,314             2,299,197
                                                       ------------------  --------------------

Financing activities:
Borrowings under line of credit                                3,500,000             3,900,000
Repayments of long-term debt                                  (3,127,000)           (5,421,000)
Distributions to Other Members                                (3,086,761)           (3,086,875)
Repayments of borrowings under line of credit                 (1,000,000)           (1,900,000)
Repayments of non-recourse debt                                 (272,893)                    -
Distributions to Managing Member                                (250,294)             (250,287)
                                                       ------------------  --------------------
Net cash used in financing activities                         (4,236,948)           (6,758,162)
                                                       ------------------  --------------------

Net increase (decrease) in cash and cash equivalents              35,551            (1,208,962)

Cash and cash equivalents at beginning of period                 508,584             2,263,479
                                                       ------------------  --------------------
Cash and cash equivalents at end of period                     $ 544,135           $ 1,054,517
                                                       ==================  ====================

Supplemental disclosures of cash flow information:
Cash paid during the period for interest                       $ 866,548           $ 1,994,493
                                                       ==================  ====================

Schedule of non-cash transactions:
Change in fair value of interest rate swaps contracts          $ 123,825             $ 310,830
                                                       ==================  ====================
</TABLE>

                             See accompanying notes.


                                       6
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 2004
                                   (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, 2004 are
not necessarily indicative of the results for the year ending December 31, 2004.

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, 2003,  filed with the  Securities  and Exchange
Commission.


2.  Organization and 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. The Company shall
continue until December 31, 2019.

Upon the sale of the  minimum  amount  of Units  of  Limited  Liability  Company
interest  (Units)  of  $1,200,000  and the  receipt of the  proceeds  thereof on
January 13, 1999, the Company commenced operations.

The  Company  does not make a  provision  for income  taxes since all income and
losses will be allocated to the Members for  inclusion in their  individual  tax
returns.

ATEL Financial  Services,  LLC (AFS), an affiliated entity, acts as the Managing
Member of the Company.

Certain prior period amounts have been reclassified to conform to current period
presentation.

The Company is in its operating phase and is making  distributions  on a monthly
and quarterly basis.



                                       7
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 2004
                                   (Unaudited)


3. Investment in equipment and leases:

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

<TABLE>
<CAPTION>
                                                                        Depreciation /
                                                                         Amortization
                                                                          Expense or
                                                         Balance        Amortization of       Reclass-              Balance
                                                      December 31,     Direct Financing    ifications and          March 31,
                                                          2003              Leases          Dispositions             2004
                                                          ----              ------          ------------             ----

<S>                                                       <C>               <C>                <C>                   <C>
Net investment in operating leases                        $87,112,340       $ (4,816,678)      $ (6,107,462)         $ 76,188,200
Net investment in direct financing leases                  11,497,801           (126,655)                 -            11,371,146
Assets held for sale or lease, net of
   accumulated depreciation of $26,746,348 in
   2004 and $16,874,083 in 2003                             8,636,682                  -          5,071,445            13,708,127
Initial direct costs, net of accumulated
   amortization of $1,244,687 in 2004 and
   $1,345,313 in 2003                                         317,435            (72,015)                 -               245,420
                                                    ------------------ ------------------ ------------------  --------------------
                                                         $107,564,258       $ (5,015,348)      $ (1,036,017)        $ 101,512,893
                                                    ================== ================== ==================  ====================
</TABLE>

Management  periodically reviews the carrying values of its assets on leases and
assets held for lease or sale.  As a result of the review during the three month
period ended March 31, 2003,  management determined that the value of a fleet of
covered  hopper rail cars had  declined in value to the extent that the carrying
values had become impaired.  This decline was the result of decreased  long-term
demand for these types of assets and a corresponding reduction in the amounts of
rental payments that these assets could command. Management recorded a provision
for the  decline in value of those  assets in the amount of  $1,910,861  for the
three months ended March 31, 2003. There were no such impairment losses in 2004.

Impairment losses are recorded as an addition to accumulated depreciation of the
impaired assets.  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:

                                           2004               2003
                                           ----               ----
Depreciation expense                       $ 4,816,678        $ 5,336,930
Impairment losses                                    -          1,910,861
                                     ------------------ ------------------
                                           $ 4,816,678        $ 7,247,791
                                     ================== ==================



                                       8
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 2004
                                   (Unaudited)


3. Investment in equipment and leases (continued):

Operating leases:

Property on operating leases consists of the following:

<TABLE>
<CAPTION>
                                      Balance                              Reclass-              Balance
                                   December 31,       Depreciation      ifications and          March 31,
                                       2003              Expense         Dispositions             2004
                                       ----              -------         ------------             ----
<S>                                 <C>                 <C>                 <C>                   <C>
Manufacturing                       $   41,079,479           $      -      $ (15,109,991)        $  25,969,488
Transportation, rail                    34,295,402                  -         (1,593,361)           32,702,041
Aircraft                                15,448,037                  -                  -            15,448,037
Transportation, other                   23,302,778                  -                  -            23,302,778
Containers                              21,165,000                  -                  -            21,165,000
Other                                   10,991,981                  -         (1,135,900)            9,856,081
Natural gas compressors                 13,677,449                  -           (136,146)           13,541,303
Materials handling                       7,313,238                  -           (786,212)            6,527,026
                                 ------------------ ------------------ ------------------  --------------------
                                       167,273,364                  -        (18,761,610)          148,511,754
Less accumulated depreciation          (80,161,024)        (4,816,678)        12,654,148           (72,323,554)
                                 ------------------ ------------------ ------------------  --------------------
                                    $   87,112,340      $  (4,816,678)      $ (6,107,462)         $ 76,188,200
                                 ================== ================== ==================  ====================
</TABLE>

Direct financing leases:

As of March 31,  2004,  investment  in direct  financing  leases  consists of an
anhydrous ammonia storage facility,  office automation equipment,  point of sale
equipment,  over the road  trailers and hotel laundry  equipment.  The following
lists the components of the Company's  investment in direct  financing leases as
of March 31, 2004:

Total minimum lease payments receivable                            $15,334,189
Estimated residual values of leased equipment (unguaranteed)         1,290,842
                                                                ---------------
Investment in direct financing leases                               16,625,031
Less unearned income                                                (5,253,885)
                                                                ---------------
Net investment in direct financing leases                          $11,371,146
                                                                ===============

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



                                       9
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 2004
                                   (Unaudited)


3. Investment in equipment and leases (continued):

At March 31, 2004, the aggregate amounts of future minimum lease payments are as
follows:

<TABLE>
<CAPTION>
                                                              Direct
                                          Operating          Financing
                                           Leases             Leases                Total
<S>                                         <C>                <C>                  <C>
 Nine months ending December 31, 2004       $11,393,762        $ 2,085,407          $ 13,479,169
        Year ending December 31, 2005        11,533,863          2,509,643            14,043,506
                                 2006         5,401,808          2,253,648             7,655,456
                                 2007         3,436,648          1,686,719             5,123,367
                                 2008           942,587          1,455,562             2,398,149
                           Thereafter           641,520          5,343,210             5,984,730
                                      ------------------ ------------------  --------------------
                                            $33,350,188        $15,334,189          $ 48,684,377
                                      ================== ==================  ====================
</TABLE>


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. The notes mature from 2004 through 2007.

At March 31, 2004, future minimum payments of non-recourse debt are as follows:

<TABLE>
<CAPTION>
                                         Principal          Interest               Total

<S>                                        <C>                  <C>                 <C>
Nine months ending December 31, 2004         $ 296,497          $ 147,543             $ 444,040
       Year ending December 31, 2005         4,715,234            180,430             4,895,664
                                2006           646,128             57,792               703,920
                                2007           678,583             25,337               703,920
                                     ------------------ ------------------  --------------------
                                           $ 6,336,442          $ 411,102           $ 6,747,544
                                     ================== ==================  ====================
</TABLE>



                                       10
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 2004
                                   (Unaudited)


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 Poors
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 (1.4764% at March 31, 2004).  The Program  expired as to
new borrowings in March 2002.

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, 2004, the Company receives or pays interest on a notional principal of
$35,908,041, 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
with the last of the swaps maturing in 2009.  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.  In 2003,  the  remaining
amount owing on an original  borrowing of $8,000,000 was repaid in full,  though
the associated swap will not mature until January 2005.

Borrowings under the Program are as follows:

<TABLE>
<CAPTION>
                                                         Notional             Swap             Payment Rate
                   Original            Balance            Balance             Value             on Interest
                    Amount            March 31,          March 31,          March 31,              Swap
Date Borrowed      Borrowed             2004               2004               2004               Agreement
-------------      --------             ----               ----               ----               ---------
<S>                  <C>                <C>                <C>                 <C>                 <C>
 11/11/1999          $20,000,000        $ 3,096,000        $ 2,991,008         $ (164,706)         6.84%
 12/21/1999           20,000,000         12,288,000         12,326,702         (1,520,600)         7.41%
 12/24/1999           25,000,000          2,980,000          2,142,377           (151,371)         7.44%
  4/17/2000            6,500,000          2,515,000          2,484,496           (169,883)         7.45%
  4/28/2000            1,900,000            328,000            325,763            (23,153)         7.72%
  8/3/2000            19,000,000          8,203,000          8,180,103           (702,837)         7.50%
 10/31/2000            7,500,000          2,959,000          2,942,672           (216,503)         7.13%
  1/29/2001            8,000,000                  -          2,068,337            (42,177)*        5.91%
  6/1/2001             2,000,000             26,000                  -                  -          5.04%
  9/1/2001             9,000,000          2,478,000          2,446,583            (70,266)         4.35%
  1/31/2002            3,900,000          1,946,000                  -                  -           **
               ------------------ ------------------ ------------------ ------------------
                    $122,800,000        $36,819,000        $35,908,041       $ (3,061,496)
               ================== ================== ================== ==================
</TABLE>


* This interest rate swap contract is deemed to be ineffective and the change in
value for the three  month  period  ended  March 31,  2004 has been  charged  to
operations.

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




                                       11
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 2004
                                   (Unaudited)


5. Other long-term debt (continued):

Other  long-term  debt  borrowings  mature from 2003 through  2009. At March 31,
2004, future minimum payments of other long-term debt are as follows:

<TABLE>
<CAPTION>
                                          Debt               Debt                                                     Rates on
                                        Principal          Principal                                                Interest Swap
                                         Swapped          Not Swapped         Interest             Total             Agreements*
                                         -------          -----------         --------             -----             -----------
<S>                                       <C>                  <C>              <C>                <C>                 <C>
Nine months ending December 31, 2004      $ 8,646,000          $ 758,000        $ 1,725,239        $11,129,239         6.985%-7.018%
       Year ending December 31, 2005        9,886,000            816,000          1,605,677         12,307,677         7.044%-7.154%
                                2006        7,130,000            120,000            970,792          8,220,792         7.186%-7.213%
                                2007        4,529,000            172,000            517,970          5,218,970         7.039%-7.103%
                                2008        3,013,000             12,000            247,771          3,272,771         6.832%-7.063%
                                2009        1,669,000             68,000             44,526          1,781,526         6.077%-6.600%
                                    ------------------ ------------------ ------------------ ------------------
                                          $34,873,000        $ 1,946,000        $ 5,111,975        $41,930,975
                                    ================== ================== ================== ==================
</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 (1.4764% at March 31, 2004).


6.  Related party transactions:

The terms of the Limited  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 services to the Company. 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 an estimate of actual time incurred by employees  working
on  Company  business  and an  allocation  of rent  and  other  costs  based  on
utilization studies.

Substantially  all employees of AFS record time incurred in performing  services
on behalf of all of the  companies  serviced by AFS. 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  services in the same  geographic  location and are  reimbursable  in
accordance with the Limited Liability Company Operating Agreement.

During  the three  month  periods  ended  March 31,  2004 and 2003,  AFS  and/or
affiliates earned fees, commissions and reimbursements,  pursuant to the Limited
Liability Company Agreement as follows:

                                        2004                 2003
                                        ----                 ----
Costs reimbursed to AFS                   $ 699,215             $ 656,763
Asset management fees to AFS                271,849               300,571
                                  ------------------  --------------------
                                          $ 971,064             $ 957,334
                                  ==================  ====================


                                       12
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 2004
                                   (Unaudited)


6. Related party transactions (continued):

In 2003, it came to the Company's attention that an affiliated company had under
billed the  Company  in a prior  year for  interest  costs  associated  with the
financing  of an asset  acquired on its behalf.  During the three  months  ended
March 31, 2003, the Company recorded  additional interest expense of $742,000 to
correct the  accounting for the  transaction.  The Company does not believe that
this amount is  material  to the periods in which it should have been  recorded,
nor that it is material to the Company's  operating  results for the year ending
December 31, 2003. The effect of the  additional  interest  expense  recorded in
2003 was to increase the loss in 2003 by $0.05 per Unit.


7.  Line of credit:

The Company participates with AFS and certain of its affiliates in a $61,400,000
revolving line of credit  (comprised of an acquisition  facility and a warehouse
facility)  with  a  financial   institution  that  includes  certain   financial
covenants.  During the quarter  ended March 31, 2004,  the facility was extended
for an additional year. At the same time, the total available under the facility
was  increased.  The line of credit  expires on June 28,  2005.  As of March 31,
2004, borrowings under the facility were as follows:

Amount  borrowed by the Company under the acquisition
   facility                                                     $   12,000,000
Amounts borrowed by affiliated partnerships and limited
   liability companies under the acquisition facility               14,500,000
                                                               ----------------
Total borrowings under the acquisition facility                     26,500,000
Amounts borrowed by AFS and its sister corporation under the
   warehouse facility                                                        -
                                                               ----------------
Total outstanding balance                                       $   26,500,000
                                                               ================

Total available under the line of credit                        $   61,400,000
Total outstanding balance                                         (26,500,000)
                                                               ----------------
Remaining availability                                          $   34,900,000
                                                               ================

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
partnerships 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, 2004.
Interest  rates on the balances  outstanding at March 31, 2004 ranged from 2.99%
to 4.00%.




                                       13
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 2004
                                   (Unaudited)


8.  Comprehensive loss:

For the three month periods ended March 31, 2004 and 2003,  comprehensive losses
consisted of the following:

<TABLE>
<CAPTION>
                                                        2004               2003
                                                        ----               ----
<S>                                                      <C>              <C>
Net loss                                                 $ (418,943)      $ (3,379,701)
Other comprehensive income:
   Change in value of interest rate swap contracts          123,825            310,830
                                                  ------------------ ------------------
Comprehensive net loss                                   $ (295,118)      $ (3,068,871)
                                                  ================== ==================
</TABLE>

There were no other sources of comprehensive net loss




9.  Members' Capital:

As  of  March  31,  2004,   13,570,188  Units  ($135,701,880)  were  issued  and
outstanding (including the 50 Units issued to the Initial Limited Members).

The Company's Net Income, Net Losses, and Distributions,  as defined,  are to be
allocated 92.5% to the Other Members and 1% to AFS.

Distributions to the Other Members were as follows:

                                                        Three Months
                                                       Ended March 31,
                                                   2004               2003
                                                   ----               ----
Distributions                                   $ 3,086,761        $ 3,086,875
Weighted average number of Units outstanding     13,570,188         13,570,188
Weighted average distributions per Unit              $ 0.23             $ 0.23







                                       14
<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 from those projected.  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 2004 and 2003, the Company's  primary  activity was
engaging in equipment leasing and sales activities.

In the first quarter of 2004 and 2003, the Company's primary source of liquidity
was operating lease rents. The liquidity of the Company will vary in the future,
increasing to the extent cash flows from leases exceed expenses,  and decreasing
as lease assets are acquired,  as  distributions  are made to the members and to
the extent expenses exceed cash flows from leases.

As another 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'
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 $61,400,000
revolving line of credit  (comprised of an acquisition  facility and a warehouse
facility)  with  a  financial   institution  that  includes  certain   financial
covenants.  During the quarter  ended March 31, 2004,  the facility was extended
for an additional year. At the same time, the total available under the facility
was  increased.  The line of credit  expires on June 28,  2005.  As of March 31,
2004, borrowings under the facility were as follows:

Amount  borrowed by the Company under the acquisition
   facility                                                     $   12,000,000
Amounts borrowed by affiliated partnerships and limited
   liability companies under the acquisition facility               14,500,000
                                                               ----------------
Total borrowings under the acquisition facility                     26,500,000
Amounts borrowed by AFS and its sister corporation under the
   warehouse facility                                                        -
                                                               ----------------
Total outstanding balance                                       $   26,500,000
                                                               ================

Total available under the line of credit                        $   61,400,000
Total outstanding balance                                         (26,500,000)
                                                               ----------------
Remaining availability                                          $   34,900,000
                                                               ================

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
partnerships 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, 2004.
Interest  rates on the balances  outstanding at March 31, 2004 ranged from 2.99%
to 4.00%.

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 Partners.

The Company currently has available adequate reserves to meet contingencies, 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.



                                       15
<PAGE>

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, 2004.

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.

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.

Cash Flows

During the first  quarters of 2004 and 2003,  the  Company's  primary  source of
liquidity was rents from operating leases.

In the  first  quarters  of 2004 and  2003,  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 2004 and 2003,  proceeds from sales of assets was the primary  source of
cash from investing activities.  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. There were no investing uses of cash in 2004 or in 2003.

In the first  quarters of 2004 and 2003, the only sources of cash from financing
activities  were  borrowings  under the line of credit.  Financing  uses of cash
included  repayments of debt of $4,127,000  and $7,321,000 in the first quarters
of 2004 and 2003,  respectively.  Distributions  were made to Other  Members  in
amounts of $3,086,761  and  $3,086,875 and to AFS in the amounts of $250,294 and
$250,287 in the first  quarters of 2004 and 2003,  respectively.  Repayments  of
debt for the quarter ended March 31, 2004  decreased from the same period in the
prior year as a result of the reduction in scheduled repayments.

Results of operations

Operations  resulted in a net loss of  $426,284  in the quarter  ended March 31,
2004  compared to a net loss of  $3,379,701 in the quarter ended March 31, 2003.
In the first quarters of 2004 and 2003, the Company's primary source of revenues
was from operating leases. Operating lease rents have decreased in 2004 compared
to 2003 as a result of two factors: (1) a larger portion of the Company's assets
were off lease in the first  quarter  of 2004 than in 2003;  and (2) there  have
been sales of assets over the last  twelve  months.  Depreciation  is related to
operating  lease assets and thus,  to operating  lease  revenues.  Consequently,
depreciation  decreased to $4,816,678 from $5,336,930  during the first quarters
of 2004 and 2003, respectively,  as a result of operating lease asset sales over
the last year.

During the first quarter of 2003, the Company entered into negotiations relating
to the early  termination  of an aircraft lease and the sale of the asset to the
lessee.  The  negotiations  were concluded in early April 2003 and the asset was
sold. As a result,  an  impairment  loss related to the aircraft was recorded in
the first  quarter  of 2003 in the amount of  $1,910,861.  There were no similar
impairments recognized in the first quarter of 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 $271,849 from $300,571 during the first quarters of
2004 and  2003,  respectively,  is a direct  result  of the  decreases  in lease
revenues.

Interest  expense has decreased  from  $2,022,644 in the quarter ended March 31,
2003 to $885,775 in the quarter  ended March 31, 2004.  In 2003,  it came to the
Company's attention that an affiliated company had under billed the Company in a
prior year for interest costs associated with the financing of an asset acquired
on its  behalf.  During the three  months  ended  March 31,  2003,  the  Company
recorded  additional  interest expense of $742,000 to correct the accounting for
the transaction. There was no similar charge in 2004. Overall debt has decreased
from  $79,214,855 at December 31, 2002 to  $55,155,442  at March 31, 2004.  This
decrease in the debt  balances has also resulted in decreased  interest  charges
compared to the same period in 2003.



                                       16
<PAGE>

In the quarter ended March 31,2003, the Company incurred $672,087 of maintenance
costs  relating to  railcars.  These costs were  incurred in order to be able to
place the railcars on a new lease.  Similar  costs  incurred  during the quarter
ended March 31, 2004 were  $130,447.  The costs did not increase the useful life
of the assets or increase their value in the marketplace.

Recoveries of doubtful accounts  decreased from $200,000 in the first quarter of
2003 to a provision of $11,000 in the first  quarter of 2004.  Recoveries of and
provisions  for doubtful  accounts are not  expected to be  consistent  from one
period to another.

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,  2004,  there was
$12,000,000 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, 2004,  borrowings on the facility
were  $36,819,000  and the associated  variable  interest rate was 1.4764%.  The
average fixed interest rate achieved with the swap agreements was 6.985%.

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  240.13a-14(c) under the Securities Exchange
Act of 1934]  was  performed  as of the date of this  report.  Based  upon  this
evaluation,  the  chief  executive  officer  and  the  chief  financial  officer
concluded that, as of the evaluation date, except as noted below, 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.

As  disclosed in the Form 10-K for the year ended  December 31, 2003,  the chief
executive and chief financial  officer of the Managing Member of the Company had
identified  certain  enhanced  controls  needed to  facilitate a more  effective
closing of the Company's financial statements.  During the first quarter of 2004
and since the end of the quarter,  the Managing  Member hired a new  controller,
added  additional  accounting  staff  personnel,  and has  instituted or revised
existing  procedures  in order to ensure that the  Company's  ability to execute
internal  controls in accounting and  reconciliation  in the closing  process is
adequate  in all  respects.  The  Managing  Member  will  continue to review its
accounting  procedures  and  practices  to  determine  their  effectiveness  and
adequacy  and will take such  steps as deemed  necessary  in the  opinion of the
Managing  Member's chief  executive and chief  financial  officers to ensure the
adequacy of the Company's accounting controls and procedures.



                                       17
<PAGE>

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.


                           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.  The following is a discussion  of legal matters  involving the Company,
but which do not represent claims against the Company or its assets.

Solectron:

This is a matter  whereby  the  Company  has  declared a lessee in  default  for
failure to pay rent in a timely manner, and for other various defaults.  A claim
was filed on August 29,  2002,  by AFS on behalf of the Company in the amount of
$13,332,328.  The lessee  filed a  counter-claim  against the Company  asserting
unfair business practices.  In 2003, the Company elected to dismiss its suit and
subsequently  obtained a corresponding  dismissal of Solectron's  counter-claim.
The  Company is  continuing  to seek  resolution  of its claims as a  negotiated
settlement.

Item 2. Changes In Securities.

         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 And Reports On Form 8-K.

(a) 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

(b) Report on Form 8-K

          None


                                       18
<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 11, 2004

                      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


                                       19
<PAGE>