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

                                    FORM 10-Q

[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 No. 000-30509
                                              ---------

                            Belcrest Capital Fund LLC
                            -------------------------
             (Exact name of registrant as specified in its charter)

             Massachusetts                             04-3453080
             -------------                             ----------
        (State of organization)          (I.R.S. Employer Identification No.)

       The Eaton Vance Building
           255 State Street
        Boston, Massachusetts                            02109
        ---------------------                            -----
(Address of principal executive offices)              (Zip Code)

    Registrant's telephone number:                    617-482-8260
                                                      ------------

                                      None
                                      ----
     (Former Name, Former Address and Former Fiscal Year, if changed since
                                  last report)


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

                                                   YES  X      NO
                                                       ---        ---

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934).

                                                   YES  X      NO
                                                       ---        ---
<PAGE>
                            BELCREST CAPITAL FUND LLC
                               Index to Form 10-Q

                                                                           Page
PART I FINANCIAL INFORMATION..............................................   3

Item 1. Condensed Consolidated Financial Statements.......................   3

        Condensed Consolidated Statements of Assets and
        Liabilities as of March 31, 2004 (Unaudited) and
        December 31, 2003.................................................   3

        Condensed Consolidated Statements of Operations
        (Unaudited) for the Three Months Ended
        March 31, 2004 and 2003...........................................   4

        Condensed Consolidated Statements of Changes in Net
        Assets for the Three Months Ended March 31, 2004
        (Unaudited) and the Year Ended December 31, 2003..................   6

        Condensed Consolidated Statements of Cash Flows
        (Unaudited) for the Three Months Ended
        March 31, 2004 and 2003...........................................   7

        Financial Highlights (Unaudited) for the Three Months
        Ended March 31, 2004..............................................   9

        Notes to Condensed Consolidated Financial Statements
        as of March 31, 2004 (Unaudited)..................................  10

Item 2. Management's  Discussion and Analysis of Financial Condition
        and Results of Operations.........................................  17

Item 3. Quantitative and Qualitative Disclosures About Market Risk........  21

Item 4. Controls and Procedures...........................................  24

PART II OTHER INFORMATION.................................................  24

Item 1. Legal Proceedings.................................................  24

Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases
        of Equity Securities..............................................  24

Item 3. Defaults Upon Senior Securities...................................  25

Item 4. Submission of Matters to a Vote of Security Holders...............  25

Item 5. Other Information.................................................  25

Item 6. Exhibits and Reports on Form 8-K..................................  25

SIGNATURES................................................................  26

EXHIBIT INDEX.............................................................  27
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
BELCREST CAPITAL FUND LLC
Condensed Consolidated Statements of Assets and Liabilities

                                                                                           March 31, 2004         December 31,
                                                                                            (Unaudited)               2003
                                                                                           ---------------        ------------
<S>                                                                                        <C>                   <C>
Assets:
 Investment in Belvedere Capital Fund Company LLC
  (Belvedere Company)                                                                      $2,809,547,176        $2,801,412,510
 Investment in Partnership Preference Units                                                   537,346,788           458,160,352
 Investment in other real estate                                                              457,896,613           613,004,358
 Short-term investments                                                                        39,746,000            48,059,348
                                                                                            ---------------      ---------------
Total investments                                                                          $3,844,536,577        $3,920,636,568
 Cash                                                                                          10,790,513             5,842,185
 Escrow deposits - restricted                                                                   4,864,419            10,925,963
 Open interest rate swap agreements, at value                                                           -             3,006,128
 Distributions and interest receivable                                                          2,523,987               676,240
 Other assets                                                                                   5,314,887             7,425,731
                                                                                            ---------------      ---------------
Total assets                                                                               $3,868,030,383        $3,948,512,815
                                                                                            ---------------      ---------------

Liabilities:
 Loan payable - Credit Facility                                                            $  720,000,000        $  652,000,000
 Mortgages payable                                                                            397,120,010           513,988,494
 Payable for Fund Shares redeemed                                                                  98,834                     -
 Distributions payable to minority shareholders                                                         -                16,800
 Special Distributions payable                                                                          -                 1,059
 Open interest rate swap agreements, at value                                                   5,687,108                     -
 Security deposits                                                                              1,747,151             2,017,195
 Due to bank - cash overdraft                                                                           -             6,723,986
 Swap interest payable                                                                            401,788               397,212
 Accrued expenses:
  Interest expense                                                                              2,897,947             3,552,170
  Property taxes                                                                                2,167,920             8,998,462
  Other expenses and liabilities                                                                5,398,617             8,629,435
 Minority interests in controlled subsidiaries                                                 15,991,138            23,003,410
                                                                                            ---------------      ---------------
Total liabilities                                                                          $1,151,510,513        $1,219,328,223
                                                                                            ---------------      ---------------
Net assets                                                                                 $2,716,519,870        $2,729,184,592
                                                                                            ---------------      ---------------
Shareholders' Capital                                                                      $2,716,519,870        $2,729,184,592
                                                                                            ---------------      ---------------
Shares outstanding                                                                             25,580,642            26,024,771
                                                                                            ---------------      ---------------
Net asset value and redemption price per Share                                             $       106.19        $       104.87
                                                                                            ---------------      ---------------
</TABLE>
       See notes to unaudited condensed consolidated financial statements

                                       3
<PAGE>

BELCREST CAPITAL FUND LLC
Condensed Consolidated Statements of Operations (Unaudited)
<TABLE>
<CAPTION>
                                                                       Three Months        Three Months
                                                                          Ended               Ended
                                                                      March 31, 2004      March 31, 2003
                                                                      --------------      --------------
<S>                                                                   <C>                 <C>
Investment Income:
 Dividends allocated from Belvedere Company
  (net of foreign taxes of $116,448 and $106,401, respectively)       $  9,764,448        $  8,736,786
 Interest allocated from Belvedere Company                                  47,419             174,381
 Expenses allocated from Belvedere Company                              (4,235,876)         (3,564,995)
                                                                      --------------      --------------
 Net investment income allocated from Belvedere Company               $  5,575,991        $  5,346,172
 Distributions from Partnership Preference Units                        13,509,652          13,821,632
 Rental income                                                          24,591,229          28,255,238
 Interest                                                                  188,409             130,477
                                                                      --------------      --------------
Total investment income                                               $ 43,865,281        $ 47,553,519
                                                                      --------------      --------------

Expenses:
 Investment advisory and administrative fees                          $  2,629,213        $  2,532,153
 Property management fees                                                  939,373           1,082,976
 Distribution and servicing fees                                         1,002,601             788,949
 Interest expense on mortgages                                           9,645,194          10,348,506
 Interest expense on Credit Facility                                     2,472,752           3,622,027
 Property and maintenance expenses                                       9,292,127           8,989,832
 Property taxes and insurance                                            3,318,940           3,854,036
 Miscellaneous                                                             321,303             287,060
                                                                      --------------      --------------
Total expenses                                                        $ 29,621,503        $ 31,505,539
Deduct-
 Reduction of investment advisory and administrative fees                  683,198             546,845
                                                                      --------------      --------------
Net expenses                                                          $ 28,938,305        $ 30,958,694
                                                                      --------------      --------------
Net investment income before minority interests in
 net income of controlled subsidiaries                                $ 14,926,976        $ 16,594,825
Minority interests in net income of controlled subsidiaries               (245,705)           (957,405)
                                                                      -------------      --------------
Net investment income                                                 $ 14,681,271        $ 15,637,420
                                                                      --------------      --------------
</TABLE>
       See notes to unaudited condensed consolidated financial statements

                                       4
<PAGE>

BELCREST CAPITAL FUND LLC
Condensed Consolidated Statements of Operations (Unaudited) (Continued)

<TABLE>
<CAPTION>
                                                                                        Three Months        Three Months
                                                                                           Ended               Ended
                                                                                       March 31, 2004      March 31, 2003
                                                                                       ---------------    ----------------
<S>                                                                                     <C>                <C>
Realized and Unrealized Gain (Loss)
Net realized gain (loss) -
 Investment transactions from Belvedere Company (identified cost basis)                 $ 10,298,643       $ (10,452,878)
 Investment transactions in Partnership Preference Units (identified cost basis)           1,094,376             624,980
 Investment transactions in other real estate                                            (14,221,385)                  -
 Interest rate swap agreements (1)                                                        (4,928,667)        (12,290,495)
                                                                                       ---------------    ----------------
Net realized loss                                                                       $ (7,757,033)      $ (22,118,393)
                                                                                       ---------------    ----------------

Change in unrealized appreciation (depreciation) -
 Investment in Belvedere Company (identified cost basis)                                $ 42,849,016       $(107,493,190)
 Investments in Partnership Preference Units (identified cost basis)                      (6,938,524)         32,788,723
 Investments in other real estate (net of minority interests in
  unrealized gain (loss) of controlled subsidiaries of  $6,125,636,
  and $(4,167,143), respectively)                                                         11,084,297         (24,604,397)
 Interest rate swap agreements                                                            (8,693,236)          8,935,053
                                                                                       ---------------    ----------------
Net change in unrealized appreciation (depreciation)                                    $ 38,301,553       $ (90,373,811)
                                                                                       ---------------    ----------------

Net realized and unrealized gain (loss)                                                 $ 30,544,520       $(112,492,204)
                                                                                       ---------------    ----------------

Net increase (decrease) in net assets from operations                                   $ 45,225,791       $ (96,854,784)
                                                                                       ===============    ================
</TABLE>
(1)  Amount  represents  periodic payments made in connection with interest rate
     swap agreements. (Note 4)

       See notes to unaudited condensed consolidated financial statements

                                       5
<PAGE>
BELCREST CAPITAL FUND LLC
Condensed Consolidated Statements of Changes in Net Assets
<TABLE>
<CAPTION>
                                                                                          Three Months
                                                                                              Ended              Year Ended
                                                                                         March 31, 2004         December 31,
                                                                                           (Unaudited)              2003
                                                                                         ---------------       ---------------
<S>                                                                                      <C>                   <C>
Increase (Decrease) in Net Assets:
 Net investment income                                                                   $   14,681,271        $   56,327,694
 Net realized loss from investment transactions                                              (7,757,033)          (36,317,202)
 Net change in unrealized appreciation (depreciation) of investments                         38,301,553           575,006,241
                                                                                         ---------------       ---------------
Net increase in net assets from operations                                               $   45,225,791        $  595,016,733
                                                                                         ---------------       ---------------

Transactions in Fund Shares -
 Net asset value of Fund Shares issued to Shareholders in payment of
  distributions declared                                                                 $    4,033,847        $    4,796,611
 Net asset value of Fund Shares redeemed                                                    (51,785,798)         (158,225,543)
                                                                                         ---------------       ---------------
Net decrease in net assets from Fund Share transactions                                  $  (47,751,951)       $ (153,428,932)
                                                                                         ---------------       ---------------

Distributions -
 Distributions to Shareholders                                                           $  (10,138,562)       $  (11,893,682)
 Special Distributions to Shareholders                                                                -                (1,059)
                                                                                         ---------------       ---------------
Total distributions                                                                      $  (10,138,562)       $  (11,894,741)
                                                                                         ---------------       ---------------

Net (decrease) increase in net assets                                                    $  (12,664,722)       $  429,693,060

Net assets:
 At beginning of period                                                                  $2,729,184,592        $2,299,491,532
                                                                                         ---------------       ---------------
 At end of period                                                                        $2,716,519,870        $2,729,184,592
                                                                                         ===============       ===============
</TABLE>
       See notes to unaudited condensed consolidated financial statements

                                       6
<PAGE>

BELCREST CAPITAL FUND LLC
Condensed Consolidated Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
                                                                                              Three Months         Three Months
                                                                                                  Ended                Ended
                                                                                             March 31, 2004       March 31, 2003
                                                                                             ---------------      ---------------
<S>                                                                                           <C>                  <C>
Cash Flows From (For) Operating Activities -
Net increase (decrease) in net assets from operations                                         $  45,225,791        $ (96,854,784)
Adjustments to reconcile net increase (decrease) in net assets from operations
 to net cash flows (for) from operating activities -
  Net investment income allocated from Belvedere Company                                         (5,575,991)          (5,346,172)
  Decrease in escrow deposits                                                                     4,139,943            3,349,941
  Decrease in receivable for investments sold                                                             -           73,554,369
  Increase in interest receivable from other real estate investments                                (69,871)             (39,237)
  Decrease in other assets                                                                        1,212,236              865,947
  (Increase) decrease in distributions and interest receivable                                   (1,847,747)           1,258,413
  Increase in interest payable for open swap agreements                                               4,576               54,164
  Increase in security deposits, accrued interest and accrued other expenses
   and liabilities                                                                                  134,101              414,175
  Decrease in due to bank - cash overdraft                                                       (6,723,986)                   -
  Decrease in accrued property taxes                                                             (6,343,270)          (6,203,867)
  Purchases of Partnership Preference Units                                                    (139,065,289)                   -
  Proceeds from sales of Partnership Preference Units                                            54,034,705                    -
  Proceeds from sale of investment in other real estate                                          28,699,431                    -
  Improvements to rental property                                                                  (923,454)            (840,675)
  Decrease in cash due to sale of majority interest in  controlled subsidiary                      (983,616)                   -
  Net increase in investment in Belvedere Company                                                         -          (23,700,000)
  Interest incurred on interest rate swap agreements                                             (4,928,667)         (12,290,495)
  Decrease (increase) in short-term investments                                                   8,313,348           (2,570,089)
  Minority interests in net income of controlled subsidiaries                                       245,705              957,405
  Net realized loss from investment transactions                                                  7,757,033           22,118,393
  Net change in unrealized (appreciation) depreciation of investments                           (38,301,553)          90,373,811
                                                                                             ---------------      ---------------
Net cash flows (for) from operating activities                                                $ (54,996,575)       $  45,101,299
                                                                                             ---------------      ---------------

Cash Flows From (For) Financing Activities -
 Proceeds from (Repayment of) Credit Facility                                                 $  68,000,000        $ (42,200,000)
 Repayments on mortgages                                                                         (1,308,981)          (1,201,829)
 Payments for Fund Shares redeemed                                                               (1,097,980)            (710,585)
 Distributions paid to Shareholders                                                              (6,105,774)          (7,097,071)
 Distributions paid to minority shareholders                                                        (16,800)              (1,465)
 Capital contributed to controlled subsidiaries                                                     474,438                       -
                                                                                             ---------------      ---------------
Net cash flows from (for) financing activities                                                $  59,944,903        $ (51,210,950)
                                                                                             ---------------      ---------------

Net increase (decrease) in cash                                                               $   4,948,328        $  (6,109,651)

Cash at beginning of period                                                                   $   5,842,185        $  12,216,034
                                                                                             ---------------      ---------------
Cash at end of period                                                                         $  10,790,513        $   6,106,383
                                                                                             ===============      ===============
</TABLE>
       See notes to unaudited condensed consolidated financial statements

                                       7
<PAGE>

BELCREST CAPITAL FUND LLC
Condensed Consolidated Statements of Cash Flows (Unaudited) (Continued)

<TABLE>
<CAPTION>
                                                                                              Three Months         Three Months
                                                                                                  Ended                Ended
                                                                                             March 31, 2004       March 31, 2003
                                                                                             ---------------      ---------------
<S>                                                                                           <C>                  <C>
Supplemental Disclosure and Non-cash Investing and Financing Activities -
 Interest paid on loan - Credit Facility                                                      $   2,408,034       $    3,685,091
 Interest paid on mortgages                                                                   $   10,193,147      $   10,212,387
 Interest paid on swap agreements                                                             $    4,924,091      $   12,067,939
 Market value of securities distributed in payment of redemptions                             $   50,588,984      $   39,804,648
 Market value of real property and other assets, net of current liabilities,
  disposed of in conjunction with sale of other real estate                                   $  155,855,342      $           -
 Mortgage disposed of in conjunction with sale of other real estate                           $  120,901,649      $           -
 Partnership Preference Units exchanged for an equity investment in real estate
  companies and an investment in note receivable                                              $            -      $   (6,440,043)
 Market value of an equity investment in real estate companies                                $            -      $    3,087,607
 Investment in note receivable                                                                $            -      $    3,352,436
</TABLE>
       See notes to unaudited condensed consolidated financial statements

                                       8
<PAGE>

BELCREST CAPITAL FUND LLC as of March 31, 2004
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended March 31, 2004
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                            <C>
Net asset value - Beginning of period                                                                          $ 104.870
-----------------------------------------------------------------------------------------------------------------------------------

Income (loss) from operations
-----------------------------------------------------------------------------------------------------------------------------------
Net investment income (6)                                                                                      $   0.568
Net realized and unrealized gain                                                                                   1.142
-----------------------------------------------------------------------------------------------------------------------------------
Total income from operations                                                                                   $   1.710
-----------------------------------------------------------------------------------------------------------------------------------

Distributions
-----------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders                                                                                  $  (0.390)
-----------------------------------------------------------------------------------------------------------------------------------
Total distributions                                                                                            $  (0.390)
-----------------------------------------------------------------------------------------------------------------------------------

Net asset value - End of period                                                                                $ 106.190
-----------------------------------------------------------------------------------------------------------------------------------

Total Return (1)                                                                                                    1.64%
<CAPTION>
                                                                                     As a Percentage           As a Percentage
                                                                                     of Average Net            of Average Gross
Ratios                                                                                  Assets(5)               Assets (2)(5)
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                      <C>                      <C>
Expenses of Consolidated Real Property Subsidiaries
 Interest and other borrowing costs (7)                                                  1.09% (9)                0.79% (9)
 Operating expenses (7)                                                                  1.50% (9)                1.08% (9)
Belcrest Capital Fund LLC Expenses
 Interest and other borrowing costs (4)(8)                                               0.36% (9)                0.27% (9)
 Investment advisory and administrative fees,
  servicing fees and other Fund operating expenses (3)(4)                                1.08% (9)                0.78% (9)
                                                                                  -------------------------------------------------
Total expenses                                                                           4.03% (9)                2.92% (9)

Net investment income                                                                    2.15% (9)                1.56% (9)
-----------------------------------------------------------------------------------------------------------------------------------

Supplemental Data
-----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted)                                                                     $ 2,716,520
Portfolio turnover of Tax-Managed Growth Portfolio (the Portfolio)                                                   0.61%
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)  Returns are  calculated by determining  the percentage  change in net asset
     value with all distributions reinvested. Total return is not computed on an
     annualized basis.
(2)  Average  Gross Assets is defined as the average  daily amount of all assets
     of  Belcrest  Capital  Fund  LLC  (Belcrest  Capital)  (not  including  its
     investment  in Belcrest  Realty  Corporation  (Belcrest  Realty))  plus all
     assets of Belcrest Realty minus the sum of each entity's  liabilities other
     than the principal amount of money borrowed.  For this purpose,  the assets
     and liabilities of Belcrest Realty's controlled subsidiaries are reduced by
     the  proportionate  interests  therein of  investors  other  than  Belcrest
     Realty.
(3)  Includes  Belcrest  Capital's share of Belvedere Capital Fund Company LLC's
     allocated expenses, including those expenses allocated from the Portfolio.
(4)  Includes the expenses of Belcrest  Capital and  Belcrest  Realty.  Does not
     include expenses of the real estate subsidiaries majority-owned by Belcrest
     Realty.
(5)  For the purpose of calculating  ratios, the income and expenses of Belcrest
     Realty's controlled subsidiaries are reduced by the proportionate interests
     therein of investors other than Belcrest Realty.
(6)  Calculated using average shares outstanding.
(7)  Includes Belcrest Realty's  proportional shares of expenses incurred by its
     majority-owned subsidiaries.
(8)  Ratios do not include  interest  incurred in connection  with interest rate
     swap agreements. Had such amounts been included, ratios would be higher.
(9)  Annualized.

       See notes to unaudited condensed consolidated financial statements

                                       9
<PAGE>

BELCREST CAPITAL FUND LLC as of March 31, 2004
Notes to Condensed Consolidated Financial Statements (Unaudited)

1    Basis of Presentation

The condensed consolidated interim financial statements of Belcrest Capital Fund
LLC (Belcrest Capital) and its subsidiaries  (collectively,  the Fund) have been
prepared,  without audit,  in accordance with  accounting  principles  generally
accepted in the United States of America for interim  financial  information and
with  the   instructions  to  Form  10-Q  and  Article  10  of  Regulation  S-X.
Accordingly,  certain information and footnote  disclosures normally included in
annual financial  statements  prepared in accordance with accounting  principles
generally  accepted  in the United  States of  America  have been  condensed  or
omitted as permitted by such rules and regulations. All adjustments,  consisting
of normal recurring  adjustments,  have been included.  Management believes that
the disclosures are adequate to present fairly the financial  position,  results
of operations,  cash flows and financial  highlights as of the dates and for the
periods  presented.  It is suggested that these interim financial  statements be
read in conjunction with the financial statements and the notes thereto included
in the Fund's latest annual report on Form 10-K. Results for interim periods are
not necessarily indicative of those to be expected for the full fiscal year.

The balance  sheet at December  31, 2003 has been  derived from the December 31,
2003 audited  financial  statements but does not include all of the  information
and footnotes required by accounting principles generally accepted in the United
States  of  America  for  complete  financial  statements  as  permitted  by the
instructions to Form 10-Q and Article 10 of Regulation S-X.

Certain  amounts  in  the  prior  period's  condensed   consolidated   financial
statements   have  been   reclassified   to  conform  with  the  current  period
presentation.

2    Investment Transactions

The following table summarizes the Fund's investment  transactions for the three
months ended March 31, 2004 and March 31, 2003:
<TABLE>
<CAPTION>
                                                 Three Months Ended          Three Months Ended
       Investment Transaction                      March 31, 2004              March 31, 2003
------------------------------------------------------------------------------------------------
<S>                                                <C>                         <C>
Increases in investment in Belvedere Company       $      -                    $  23,700,000
Decreases in investment in Belvedere Company       $  50,588,984               $  39,804,648
Purchases of Partnership Preference Units (1)      $ 139,065,289               $           -
Sales of Partnership Preference Units (2)          $  54,034,705               $           -
Sales of other real estate (3)                     $  28,699,431               $           -
------------------------------------------------------------------------------------------------
</TABLE>
(1)  Purchases  of  Partnership  Preference  Units during the three months ended
     March 31, 2004 represent Partnership  Preference Units purchased from other
     investment  funds  advised  by  Boston   Management  and  Research  (Boston
     Management).

(2)  Sales of Partnership  Preference Units for the three months ended March 31,
     2004 include  Partnership  Preference  Units sold to other investment funds
     advised by Boston Management for which a gain of $159,204 was recognized.

(3)  During the three months ended March 31, 2004,  Belcrest Realty  Corporation
     (Belcrest  Realty) sold its majority  interest in Casco Property Trust, LLC
     (Casco) to another investment fund advised by Boston Management,  for which
     a loss of $14,221,385 was recognized.

During the three  months ended March 31, 2003,  the Fund  exchanged  Partnership
Preference  Units in the amount of  $6,440,043  for an equity  investment in two
private real estate  companies  affiliated with the issuer of such formerly held
Partnership  Preference Units and a note receivable in the amounts of $3,087,607
and $3,352,436,  respectively. The secured note receivable (valued at $3,663,758
as of March 31, 2004 and  $3,391,673 as of March 31, 2003) earns  interest of 8%
per annum and matures in February 2013 or on demand.

                                       10
<PAGE>

3    Indirect Investment in the Portfolio

The following  table  summarizes  the Fund's  investment in  Tax-Managed  Growth
Portfolio (the Portfolio)  through Belvedere Capital Fund Company LLC (Belvedere
Company),  for the  three  months  ended  March 31,  2004 and  March  31,  2003,
including allocations of income,  expenses and net realized and unrealized gains
(losses) for the respective periods then ended:

<TABLE>
<CAPTION>
                                                                              Three Months Ended     Three Months Ended
                                                                                March 31, 2004         March 31, 2003
-----------------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>                    <C>
Belvedere Company's interest in the Portfolio (1)                              $11,520,846,141        $ 8,400,349,853
The Fund's investment in Belvedere Company (2)                                 $ 2,809,547,176        $ 2,294,359,439
Income allocated to Belvedere Company from the Portfolio                       $    39,365,471        $    32,398,573
Income allocated to the Fund from Belvedere Company                            $     9,811,867        $     8,911,167
Expenses allocated to Belvedere Company from the Portfolio                     $    12,634,511        $     9,667,954
Expenses allocated to the Fund from Belvedere Company                          $     4,235,876        $     3,564,995
Net realized gain (loss) allocated to Belvedere Company from the Portfolio     $    41,048,575        $   (37,772,155)
Net realized gain (loss) allocated to the Fund from Belvedere Company          $    10,298,643        $   (10,452,878)
Change in unrealized appreciation (depreciation) allocated to Belvedere
 Company from the Portfolio                                                    $   163,577,445        $  (389,828,192)
Change in unrealized appreciation (depreciation) allocated to the Fund
 from Belvedere Company                                                        $    42,849,016        $  (107,493,190)
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)  As of March 31, 2004 and 2003, the value of Belvedere Company's interest in
     the Portfolio  represents  63.9% and 61.1% of the  Portfolio's  net assets,
     respectively.

(2)  As of March 31, 2004 and 2003, the Fund's  investment in Belvedere  Company
     represents 24.4% and 27.3% of Belvedere Company's net assets, respectively.

A summary of the  Portfolio's  Statement of Assets and  Liabilities at March 31,
2004,  December  31,  2003 and March 31, 2003 and its  operations  for the three
months  ended March 31, 2004,  for the year ended  December 31, 2003 and for the
three months ended March 31, 2003 follows:

<TABLE>
<CAPTION>
                                        March 31,               December 31,               March 31,
                                          2004                      2003                      2003
                                     --------------------------------------------------------------------
<S>                                 <C>                       <C>                       <C>
Investments, at value               $ 18,003,359,532          $ 17,584,390,762          $ 13,797,517,752
Other assets                              25,944,066                25,462,745                24,535,362
---------------------------------------------------------------------------------------------------------

Total assets                        $ 18,029,303,598          $ 17,609,853,507          $ 13,822,053,114
Total liabilities                            254,697                   264,502                73,659,303
---------------------------------------------------------------------------------------------------------
Net assets                          $ 18,029,048,901          $ 17,609,589,005          $ 13,748,393,811
=========================================================================================================
Dividends and interest              $     62,101,320          $    232,925,912          $     53,431,732
---------------------------------------------------------------------------------------------------------
Investment adviser fee              $     19,348,796          $     67,584,543          $     15,490,999
Other expenses                               598,921                 2,295,653                   477,083
---------------------------------------------------------------------------------------------------------
Total expenses                      $     19,947,717          $     69,880,196          $     15,968,082
---------------------------------------------------------------------------------------------------------
Net investment income               $     42,153,603          $    163,045,716          $     37,463,650
Net realized gain (loss)                  64,894,806                70,909,770               (62,969,970)
Net change in unrealized
 appreciation (depreciation)             261,922,214             3,174,709,110              (649,928,537)
---------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
 assets from operations             $    368,970,623          $  3,408,664,596          $   (675,434,857)
---------------------------------------------------------------------------------------------------------
</TABLE>

                                       11
<PAGE>

4    Interest Rate Swap Agreements

Belcrest  Capital has entered into  interest rate swap  agreements  with Merrill
Lynch Capital Services,  Inc. in connection with its real estate investments and
the associated borrowings. Under such agreements, Belcrest Capital has agreed to
make  periodic  payments  at fixed rates in  exchange  for  payments at floating
rates.  The  notional  or  contractual  amounts  of  these  instruments  may not
necessarily  represent the amounts  potentially subject to risk. The measurement
of  the  risks  associated  with  these  investments  is  meaningful  only  when
considered in conjunction  with all related assets,  liabilities and agreements.
Interest rate swap  agreements open at March 31, 2004 and December 31, 2003, are
listed below.
<TABLE>
<CAPTION>
                Notional                                       Initial                        Unrealized         Unrealized
                 Amount                                       Optional         Final         Depreciation      Appreciation
  Effective      (000's      Fixed          Floating         Termination    Termination      at March 31,      at December 31,
    Date        omitted)      Rate            Rate              Date            Date             2004               2003
-----------------------------------------------------------------------------------------------------------------------------------
   <C>         <C>           <C>           <C>                  <C>            <C>          <C>                  <C>
   02/04       $ 78,620      5.00%         LIBOR + 0.30%        08/04          06/10        $   (610,880)        $        -
   10/03         78,620      5.05%         LIBOR + 0.30%        02/04          06/10                   -*           197,524
   10/03        128,116      4.865%        LIBOR + 0.30%        07/04          06/10            (585,103)           451,953
   10/03        170,000      4.795%        LIBOR + 0.30%        09/04          06/10            (944,938)           695,087
   10/03         63,526      4.69%         LIBOR + 0.30%        02/05          06/10            (456,632)           305,966
   10/03         55,375      4.665%        LIBOR + 0.30%        03/05          06/10            (429,986)           272,239
   10/03         80,965      4.145%        LIBOR + 0.30%        03/10          06/10          (1,789,703)           527,521
   10/03         47,253      4.045%        LIBOR + 0.30%          -            06/10            (828,636)           544,812
   06/10          3,870      6.29%         LIBOR + 0.30%          -            07/15             (41,230)            11,026
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                            $ (5,687,108)        $3,006,128
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*    Agreement was terminated on the Initial Optional Termination Date.

5    Debt

A Credit  Facility - On March 16,  2004,  Belcrest  Capital  amended  its credit
agreement  with  DrKW  Holdings,   Inc.  to  establish  a  borrowing   limit  of
$720,000,000  under that  agreement.  Borrowings  under this credit  arrangement
accrue  interest at a rate of one-month  LIBOR plus 0.30% per annum. As of March
31,  2004,   outstanding   borrowings  under  this  credit  arrangement  totaled
$720,000,000.

B  Mortgages  - In  February  2004,  in  conjunction  with the sale of  Belcrest
Realty's  majority interest in Casco (Note 2), the mortgage payable by Casco was
disposed of. At the time of the transaction, the loan balance was $120,901,649.

Rental property held by Belcrest  Realty's  controlled  subsidiaries is financed
through  mortgages  issued to the  controlled  subsidiaries.  The  mortgages are
secured by a rental property or properties.  The mortgages are generally without
recourse to Belcrest Realty and Belcrest  Capital,  except, in the case of Casco
(for the  period  from  January  1, 2004 to  February  24,  2004),  for  certain
liabilities associated with fraud, misrepresentation, misappropriation of funds,
or breach of material  covenants,  and  liabilities  arising from  environmental
conditions  involving or affecting the rental property subject to the mortgages.
Belcrest  Capital and Belcrest  Realty have  received  indemnification  from the
Casco  Minority  Shareholder  for  certain  of such  potential  liabilities.  In
addition,  Belcrest Realty has indemnified the Bel Alliance Minority Shareholder
from  certain  losses  arising  from  the Bel  Alliance  Minority  Shareholder's
guaranty  of certain  exceptions  to the  generally  non-recourse  nature of Bel
Alliance  Properties  LLC's  (Bel  Alliance)  mortgages  (which  exceptions  are
substantially  the same as those described for the Casco mortgages,  but only to
the extent that such losses are caused by Belcrest  Realty.) The  mortgage  debt
obligation of Bel Santa Ana LLC (Bel Santa Ana) is generally without recourse to
Belcrest  Realty,  Belcrest  Capital  and  Shareholders.  Belcrest  Capital  and
Belcrest Realty may, however, be directly or indirectly  responsible for certain
liabilities  constituting exceptions to the generally non-recourse nature of the
mortgage   indebtedness,    including   liabilities   associated   with   fraud,
misrepresentation, misappropriation of funds, or breach of material covenants.

                                       12
<PAGE>

The mortgage  agreements  relating to the rental properties held by Bel Alliance
require certain  covenants be met,  including a covenant that trade payables and
accrued  expenses  incurred in the ordinary  course of business in the aggregate
will not exceed 1% of the  outstanding  principal  balance of the loan. At March
31, 2004, this covenant was not met for certain  mortgage  agreements,  of which
the aggregate  principal balance at March 31, 2004 totals $167.1 million, or 42%
of the total mortgages  outstanding.  The mortgage agreements provide for a cure
period of 30 days after written  notification  from the lenders,  with a further
extension of up to 60 additional  days. As of March 31, 2004 the lenders had not
provided  such  notice.  It is  uncertain as to whether the lenders will seek to
enforce the provisions of the mortgage  agreements.  Bel Alliance may choose not
to commit additional equity to cure certain of these technical defaults.  If the
lenders  pursue  enforcement  and a  mutually  acceptable  arrangement  with the
lenders  cannot be reached,  the result could be a foreclosure on some or all of
those  investment  properties  that secure such mortgages.  However,  the Fund's
current net  investment in Bel Alliance  would not be  negatively  impacted if a
foreclosure  on some or all of those  investment  properties  that  secure  such
mortgages  were to  occur,  based  on the  current  valuations  of the  affected
properties and the related mortgages. The eventual outcome of this matter cannot
be determined at this time. The mortgages are generally  without recourse to the
other  assets  of Bel  Alliance,  Belcrest  Capital  and  Belcrest  Realty.  The
technical  default  of certain  mortgage  agreements  does not  affect  Belcrest
Capital's liquidity.

During the three months ended March 31, 2004,  Bel Alliance  chose not to commit
additional  equity to rental  properties  operating  at deficits  for payment of
principal  and interest due on certain  mortgages  related to rental  properties
operating at deficits. The rental properties are the only source of security for
these  mortgages.  As a result,  Bel Alliance has reduced the carrying  value of
certain  mortgages  notes by $17,090,168 as of March 31, 2004 and $22,432,314 as
of December 31, 2003 to the estimated fair value of the underlying real estate.

6    Segment Information

Belcrest  Capital  pursues  its  investment  objective  primarily  by  investing
indirectly  in the  Portfolio  through  Belvedere  Company.  The  Portfolio is a
diversified  investment company that emphasizes  investments in common stocks of
domestic and foreign growth  companies that are considered to be high in quality
and  attractive  in their  long-term  investment  prospects.  Separate  from its
investment in Belvedere Company,  Belcrest Capital invests in real estate assets
through its subsidiary,  Belcrest Realty. As of March 31, 2004,  Belcrest Realty
invested  directly and  indirectly in  Partnership  Preference  Units,  debt and
equity investments in private real estate companies and in real property through
controlled subsidiaries,  BSA and Bel Alliance. Management services for the real
property  held by Bel  Alliance  are  provided by an  affiliate  of its minority
shareholder.  The management  agreement provides for a management fee and allows
for  reimbursement of payroll and other direct expenses  incurred by the manager
in conjunction with managing properties.  Belcrest Realty is currently disputing
certain  expenditures,  allocations and  reimbursements  by the property manager
under the management agreement.  For the period from January 1, 2004 to February
24, 2004, Belcrest Realty also invested in Casco.


Belcrest Capital evaluates  performance of the reportable  segments based on the
net increase (decrease) in net assets from operations of the respective segment,
which  includes net  investment  income  (loss),  net  realized  gain (loss) and
unrealized   appreciation   (depreciation).   The  accounting  policies  of  the
reportable  segments are the same as those for the Fund on a consolidated basis.
No reportable segments have been aggregated.  Reportable  information by segment
is as follows:

                                       13
<PAGE>

<TABLE>
<CAPTION>
                                                            Tax-Managed
For the Three Months Ended                                    Growth               Real
March 31, 2004                                              Portfolio*            Estate                Total
--------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>                   <C>                  <C>
Revenue                                                  $     5,575,991       $  38,188,142        $    43,764,133
Interest expense on mortgages                                          -         (9,645,194)             (9,645,194)
Interest expense on Credit Facility                                    -         (2,373,842)             (2,373,842)
Operating expenses                                              (552,025)       (15,193,961)            (15,745,986)
Minority interest in net income of
 controlled subsidiaries                                               -           (245,705)               (245,705)
--------------------------------------------------------------------------------------------------------------------
Net investment income                                        $ 5,023,966       $ 10,729,440         $    15,753,406
Net realized gain (loss)                                      10,298,643        (18,055,676)             (7,757,033)
Change in unrealized appreciation (depreciation)              42,849,016         (4,547,463)             38,301,553
--------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from
 operations of reportable segments                       $    58,171,625       $(11,873,699)        $    46,297,926
--------------------------------------------------------------------------------------------------------------------

                                                            Tax-Managed
For the Three Months Ended                                    Growth               Real
March 31, 2003                                              Portfolio*            Estate                Total
--------------------------------------------------------------------------------------------------------------------
Revenue                                                  $     5,346,172       $ 42,090,566         $    47,436,738
Interest expense on mortgages                                          -        (10,348,506)            (10,348,506)
Interest expense on Credit Facility                                    -         (3,549,586)             (3,549,586)
Operating expenses                                              (349,789)       (15,795,837)            (16,145,626)
Minority interest in net income of
 controlled subsidiaries                                               -           (957,405)               (957,405)
--------------------------------------------------------------------------------------------------------------------
Net investment income                                    $     4,996,383       $ 11,439,232         $    16,435,615
Net realized loss                                            (10,452,878)       (11,665,515)            (22,118,393)
Change in unrealized appreciation (depreciation)            (107,493,190)        17,119,379             (90,373,811)
--------------------------------------------------------------------------------------------------------------------
Net (decrease) increase in net assets from
 operations of reportable segments                       $  (112,949,685)      $ 16,893,096         $   (96,056,589)
--------------------------------------------------------------------------------------------------------------------

                                                            Tax-Managed
                                                              Growth               Real
At March 31, 2004                                           Portfolio*            Estate                Total
--------------------------------------------------------------------------------------------------------------------
Segment assets                                           $ 2,809,547,176       $ 1,011,668,268      $ 3,821,215,444
Segment liabilities                                               98,834         1,128,846,935        1,128,945,769
--------------------------------------------------------------------------------------------------------------------
Net assets (liabilities) of reportable segments          $ 2,809,448,342       $  (117,178,667)     $ 2,692,269,675
--------------------------------------------------------------------------------------------------------------------


At December 31, 2003
--------------------------------------------------------------------------------------------------------------------
Segment assets                                           $ 2,801,412,510       $ 1,099,020,956      $ 3,900,433,466
Segment liabilities                                                1,059         1,197,408,196        1,197,409,255
--------------------------------------------------------------------------------------------------------------------
Net assets (liabilities) of reportable segments          $ 2,801,411,451       $   (98,387,240)     $ 2,703,024,211
--------------------------------------------------------------------------------------------------------------------
</TABLE>
*    Belcrest Capital invests indirectly in Tax-Managed Growth Portfolio through
     Belvedere Company.

The following tables reconcile the reported segment information to the condensed
consolidated financial statements for the periods indicated:

                                       14
<PAGE>

<TABLE>
<CAPTION>
                                                                                   Three Months       Three Months
                                                                                      Ended              Ended
                                                                                  March 31, 2004     March 31, 2003
                                                                                 ----------------   ----------------
<S>                                                                               <C>                 <C>
Revenue:
 Revenue from reportable segments                                                 $ 43,764,133        $ 47,436,738
 Unallocated amounts:
  Interest earned on cash not invested in the Portfolio or in subsidiaries             101,148             116,781
                                                                                 ----------------   ----------------
Total revenue                                                                     $ 43,865,281        $ 47,553,519
                                                                                 ----------------   ----------------
Net increase (decrease) in net assets from operations:
 Net increase (decrease) in net assets from operations of reportable segments     $ 46,297,926        $(96,056,589)
Unallocated amounts:
 Interest earned on cash not invested in the Portfolio or in subsidiaries              101,148             116,781
Unallocated amounts (1):
 Distribution and servicing fees                                                    (1,002,601)           (788,949)
 Interest expense on Credit Facility                                                   (98,910)            (72,441)
 Audit, tax and legal fees                                                             (53,304)            (32,125)
 Other operating expenses                                                              (18,468)            (21,461)
                                                                                 ----------------   ----------------
Total net increase (decrease) in net assets from operations                       $ 45,225,791        $(96,854,784)
                                                                                 ----------------   ----------------


                                                                                  March 31, 2004     December 31, 2003
                                                                                 ----------------   -------------------
Net assets:
     Net assets of reportable segments                                            $2,692,269,675      $2,703,024,211
     Unallocated cash (2)                                                              7,068,939              20,001
     Short-term investments(2)                                                        39,746,000          48,059,348
     Loan payable-Credit Facility(3)                                                 (22,444,861)        (14,989,056)
     Other liabilities                                                                  (119,883)         (6,929,912)
                                                                                 ----------------   -------------------
Total net assets                                                                  $2,716,519,870      $2,729,184,592
                                                                                 ----------------   -------------------
</TABLE>
(1)  Unallocated amounts represent expenses incurred that pertain to the overall
     operation  of  Belcrest  Capital,  and do not  pertain to either  operating
     segment.
(2)  Unallocated  cash  and  short-term  investments  represents  cash  and cash
     equivalents not invested in the Portfolio or real estate assets.
(3)  Unallocated amount of loan payable - Credit Facility represents  borrowings
     not specifically used to fund real estate investments.  Such borrowings are
     generally used to pay selling commissions,  organization expenses and other
     liquidity needs of the Fund.

7    Subsequent Events

On May 3, 2004,  Belcrest  Realty  entered into an  agreement  to establish  and
acquire  a  majority  interest  in  a  controlled  subsidiary.  This  controlled
subsidiary will indirectly own certain  industrial  properties with an estimated
value of approximately $461,000,000 at acquisition.  Belcrest Realty is expected
to own an 80% interest in the controlled  subsidiary and a minority  shareholder
will own the remaining  interest.  Based on the terms of the current agreements,
Belcrest  Realty expects to acquire the investment in the third quarter of 2004.
The minority shareholder of the controlled subsidiary,  or an affiliate thereof,
will manage the real property.

It is expected that the real property  will be financed  through first  mortgage
loans secured by the  properties  and an assignment of certain leases and rents.
The loans are expected to be without  recourse to Belcrest  Capital and Belcrest
Realty. No financing agreement has been entered into at this time.

                                       15
<PAGE>

On May 3, 2004,  Belcrest  Capital  entered  into a forward  interest  rate swap
agreement  with Merrill  Lynch Capital  Services,  Inc. in  anticipation  of its
future  investment in the  controlled  subsidiary for the purpose of hedging the
interest rate of substantially all of the expected fixed-rate mortgage financing
of the real  property  over an  expected  8-year  term.  Under  such  agreement,
Belcrest Capital has agreed to made periodic payments at fixed rates in exchange
for  payments  at  floating  rates.  The  notional  amount  of the  contract  is
$248,800,000, which approximates Belcrest Capital's expected 80% interest in the
anticipated  secured debt of the controlled  subsidiary.  The floating  interest
rate to be  received  by  Belcrest  Capital is  three-month  LIBOR and the fixed
interest  rate to be paid by  Belcrest  Capital  is 4.875%.  The swap  agreement
entered into by Belcrest  Capital is effective  in June 2004 and  terminates  in
June 2012.

                                       16
<PAGE>
Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations.

The information in this report contains  forward-looking  statements  within the
meaning of the federal securities laws. Forward-looking statements typically are
identified by use of terms such as "may," "will," "should,"  "might,"  "expect,"
"anticipate,"  "estimate,"  and similar  words,  although  some  forward-looking
statements are expressed  differently.  The actual  results of Belcrest  Capital
Fund  LLC (the  Fund)  could  differ  materially  from  those  contained  in the
forward-looking  statements due to a number of factors.  The Fund  undertakes no
obligation  to update  publicly  any  forward-looking  statements,  whether as a
result of new information,  future events,  or otherwise,  except as required by
applicable  law.  Factors  that could  affect the Fund's  performance  include a
decline in the U.S.  stock markets or in general  economic  conditions,  adverse
developments  affecting the real estate  industry,  or  fluctuations in interest
rates.

The following discussion should be read in conjunction with the Fund's unaudited
condensed consolidated financial statements and related notes in Item 1 above.

Results of  Operations  for the Quarter  Ended  March 31,  2004  Compared to the
Quarter Ended March 31, 2003

(a) Results of Operations.

Increases and decreases in the Fund's net asset value per share are derived from
net investment  income or loss, and realized and unrealized  gains and losses on
investments.  The  Fund's  net  investment  income  (or loss) is  determined  by
subtracting  the  Fund's  total  expenses  from its  investment  income and then
deducting the minority interest in net income of the controlled  subsidiaries of
Belcrest Realty  Corporation  (Belcrest  Realty).  The Fund's  investment income
includes the net investment  income allocated to the Fund from Belvedere Capital
Fund Company LLC (Belvedere Company), rental income from the properties owned by
Belcrest Realty's controlled  subsidiaries,  partnership income allocated to the
income-producing   preferred   equity   interests   in  real  estate   operating
partnerships  (Partnership  Preference  Units)  owned  by  Belcrest  Realty  and
interest  earned  on  the  Fund's  short-term  investments  (if  any).  The  net
investment income of Belvedere Company allocated to the Fund includes dividends,
interest and  expenses  allocated to  Belvedere  Company by  Tax-Managed  Growth
Portfolio (the  Portfolio) less the expenses of Belvedere  Company  allocated to
the Fund. The Fund's total expenses include the Fund's  investment  advisory and
administrative  fees,  distribution  and servicing fees,  interest  expense from
mortgages on  properties  owned by Belcrest  Realty's  controlled  subsidiaries,
interest  expense on the  Fund's  credit  arrangements  (the  Credit  Facility),
property  management  fees,  property  taxes,  insurance,  maintenance and other
expenses  relating  to the  properties  owned by  Belcrest  Realty's  controlled
subsidiaries,   and  other  miscellaneous  expenses.  The  Fund's  realized  and
unrealized  gains and losses are the  result of  transactions  in, or changes in
value of,  security  investments  held  through  the  Fund's  indirect  interest
(through  Belvedere  Company) in the  Portfolio,  real estate  investments  held
through Belcrest Realty,  the Fund's interest rate swap agreements and any other
direct  investments  of the Fund, as well as periodic  payments made by the Fund
pursuant to interest rate swap agreements.

Realized  and  unrealized   gains  and  losses  on  investments  have  the  most
significant  impact on the Fund's net asset value per share and result primarily
from sales of such  investments  and  changes  in their  underlying  value.  The
investments of the Portfolio  consist primarily of common stocks of domestic and
foreign  growth  companies  that  are  considered  to be  high  in  quality  and
attractive  in their  long-term  investment  prospects.  Because the  securities
holdings  of the  Portfolio  are broadly  diversified,  the  performance  of the
Portfolio  cannot  be  attributed  to one  particular  stock  or one  particular
industry or market  sector.  The  performance  of the Portfolio and the Fund are
substantially influenced by the overall performance of the U.S. stock market, as
well as by the relative performance versus the overall market of specific stocks
and classes of stocks in which the Portfolio maintains large positions.

Performance  of the  Fund.(1)  The  Fund's  investment  objective  is to achieve
long-term,  after-tax  returns for  Shareholders.  Eaton Vance Management (Eaton
Vance),  as the Fund's  manager,  measures the Fund's  success in achieving  its
objective  based on the  investment  returns of the Fund,  using the  Standard &
Poor's  500  Composite  Index (the S&P 500) as the  Fund's  primary  performance
benchmark.  The S&P 500 is a broad-based unmanaged index of common stocks widely
used as a measure of U.S. stock market performance.  Eaton Vance's primary focus
in pursuing total return is on the Fund's common stock portfolio, which consists
of its indirect  interest in the Portfolio.  In measuring the performance of the
Fund's  real  estate  investments  held  through  Belcrest  Realty,  Eaton Vance
considers  whether,  through current returns and changes in valuation,  the real

 1   Past performance is no guarantee of future results.  Investment  return and
     principal value will fluctuate so that shares, when redeemed,  may be worth
     more  or  less  than  their  original  cost.   Returns  are  calculated  by
     determining the percentage change in net asset value with all distributions
     reinvested.  The Portfolio's total return for the period reflects the total
     return of another fund that invests in the Portfolio,  adjusted for certain
     fund  expenses.  Performance  is for the stated time period only and is not
     annualized; due to market volatility, the Fund's current performance may be
     lower or higher.  The performance of the Fund and the Portfolio is compared
     to that of their  benchmark,  the S&P 500.  It is not  possible  to  invest
     directly in an Index.
                                       17
<PAGE>
estate  investments  achieve returns that over the long-term  exceed the cost of
the  borrowing  incurred  to acquire  such  investments  and thereby add to Fund
returns. The Fund has entered into interest rate swap agreements to fix the cost
of its borrowings  under the Credit Facility used to acquire  Belcrest  Realty's
equity in its real  estate  investments  and to  mitigate  in part the impact of
interest rate changes on the Fund's net asset value.

The Fund's  total return was 1.64% for the quarter  ended March 31,  2004.  This
return reflects an increase in the Fund's net asset value per share from $104.87
to  $106.19  and a  distribution  of $0.39  per share  during  the  period.  For
comparison,  the S&P 500 had a total return of 1.69% over the same  period.  The
performance  of the Fund trailed that of the  Portfolio by  approximately  0.48%
during the period. Last year, the Fund's total return was -4.26% for the quarter
ended March 31, 2003 . This return  reflected a decrease in the Fund's net asset
value per share  from  $82.94 to $79.01  and a  distribution  of $0.43 per share
during the period. For comparison, the S&P 500 had a total return of -3.15% over
the same period . The  performance of the Fund exceeded that of the Portfolio by
approximately 0.45% during th at period.

Performance  of the  Portfolio.  For the  quarter  ended  March  31,  2004,  the
Portfolio's  total  return was 2.12%,  compared to -4.71% for the quarter  ended
March 31, 2003.  International unrest coupled with weak employment, a struggling
dollar and surging oil prices pressured domestic markets in the first quarter of
2004.  Like the quarter  ended March 31,  2003,  volatility  was high during the
first quarter of 2004. However,  unlike the first quarter of 2003, major indices
experienced  positive returns in 2004 as fiscal and monetary  stimuli  supported
robust corporate earnings and productivity  growth.  During the first quarter of
2004, companies on average reported better than expected sales trends, increased
dividends  and  initiated  sizeable  share  buybacks  reflecting a steady global
economic  recovery.  While  large  capitalization  stocks  outperformed  smaller
capitalization  stocks  during the first quarter of 2003,  small  capitalization
stocks  outperformed  large-cap  companies  during the later months of 2003, and
continued to do so in the first quarter of 2004.  In addition,  during the first
quarter of 2004 higher quality stocks regained performance  leadership over last
year's prevailing higher volatility stocks.

During the quarter  ended March 31,  2004,  the  Portfolio's  sector  allocation
remained  similar to its allocation at March 31, 2003. The Portfolio's  stronger
quarterly  performance  relative to the S&P 500 during the first quarter of 2004
resulted from its  diversified  industry  exposure and positive stock  selection
decisions.  During the quarter  ended March 31,  2004,  the  Portfolio  remained
underweight  in  the  information   technology   sector,  the  market's  weakest
performing sector. Stock selection by the Portfolio's investment adviser, Boston
Management and Research ( Boston  Management ), in the computer  peripherals and
electronic equipment  industries was particularly  beneficial to the Portfolio's
performance  during the first  quarter of 2004.  Similar to the first quarter of
2003, valuation concerns prompted a de-emphasis of the telecommunication  sector
during the first quarter of 2004.  However,  telecommunication  services  stocks
generally  performed well during the first quarter of 2004. Similar to the first
quarter of 2003, the Portfolio was overweight the industrials sector. During the
first  quarter of 2004,  attractive  valuations  and positive  secular  business
trends  helped  machinery,  building  products  and  airfreight  stocks  of  the
aforementioned sector advance higher.

In the first quarter of 2003, Boston Management began increasing the Portfolio's
exposure to the energy  sector,  a change from its previous  underweight  stance
versus  the S&P  500.  This  allocation  shift  has  aided  performance,  as oil
exploration  and other energy  equipment and service names benefited from rising
oil prices.  Although the  Portfolio's  relative  overweight  of the  financials
sector  contributed  to its positive  return  during the quarter ended March 31,
2004 , the sub-par  performance of its commercial bank and capital market stocks
hindered  returns  during  the  quarter  .  While  Boston  Management   remained
optimistic  on the  consumer,  it  slightly  trimmed  the  Portfolio's  relative
overweight in the consumer discretionary and staples sectors. Portfolio holdings
in leisure,  retail,  and personal  products  benefited from continued  consumer
spending  driven by tax refunds,  strong  refinancing  activity and increases in
wages and salaries.  The Portfolio  maintained an  underweight of the healthcare
sector  relative to the S&P 500 during the quarter  ended  March 31,  2004,  but
added to holdings of stronger quarterly  performers such as healthcare equipment
and service companies.

Performance of Real Estate  Investments.  The Fund's real estate investments are
held through  Belcrest  Realty . As of March 31, 2004,  real estate  investments
included a majority  interest in a real estate  joint  venture  (the Real Estate
Joint Venture),  a portfolio of Partnership  Preference Units that generally are
affiliated  with  publicly  traded and  private  real estate  investment  trusts
(REITs),  and a property  subject to a  long-term  triple net lease (Net  Leased
Property).  As of March 31, 2004 , the  estimated  fair value of the Fund's real
estate investments  represented 25.7% of the Fund's total assets.  Adjusting for
the minority interest of the real estate operating company that is the principal
minority  investor in the Real Estate Joint  Venture as of March 31,  2004,  the
Fund's real estate investments represented 32.8% of the Fund's net assets.

During the quarter ended March 31, 2004,  Belcrest Realty sold its interest in a
Real Estate Joint Venture, Casco Property Trust LLC ( Casco ), for approximately

                                       18
<PAGE>
$28.7 million to another investment fund advised by Boston Management.  Belcrest
Realty  recognized a loss of $14.2 million on the sale. The loss represented the
realization,  as a  result  of  the  sale,  of  previously  recorded  unrealized
depreciation of the real estate investment value.

Like the quarter ended March 31, 2003, the operations of Belcrest  Realty's Real
Estate Joint  Ventures were  impacted by weak  multifamily  market  fundamentals
during  the  quarter  ended  March 31,  2004.  Rental  income  from real  estate
operations fell to $24.6 million for the quarter ended March 31, 2004 from $28.3
million for the quarter ended March 31, 2003, a decrease of $3.7 million or 13%.
The  decrease in rental  income was due to the sale of Casco  during the quarter
ended  March 31,  2004 and  lower  rental  revenue  at the  properties  owned by
Belcrest Realty's remaining Real Estate Joint Venture.  During the quarter ended
March 31, 2004,  rental revenue was affected by reduced  apartment rental rates,
increased rent concessions and lower occupancy levels at properties owned by the
Real Estate Joint Venture, trends that continued from 2003.

Property  operating  expenses for Belcrest  Realty's Real Estate Joint  Ventures
decreased to  approximately  $13.6  million for the quarter ended March 31, 2004
from  approximately  $13.9  million for the  quarter  ended  March 31,  2003,  a
decrease of $0.3 million or 2% (property  operating  expenses are before certain
operating  expenses of Belcrest  Realty of  approximately  $1.6  million for the
quarter  ended March 31,  2004 and  approximately  $1.9  million for the quarter
ended March 31,  2003).  This decrease in expenses was primarily due to the sale
of Casco,  offset in part by increases in operating  expenses at the  properties
owned by Belcrest Realty's remaining Real Estate Joint Venture.  The Real Estate
Joint  Venture's 3% property  operating  expense  increase was comprised of a 6%
increase in property and maintenance expenses,  offset somewhat by an 8% decline
in taxes and insurance expenses.  The near-term outlook for multifamily property
operations  continues to be weak.  While  anticipated  economic  and  employment
growth is expected to lead to  improvements  over the longer  term,  significant
employment  growth has not yet occurred in most  markets and low interest  rates
have contributed to continued  apartment move-outs due to new home purchases and
increased  competition  for  new  residents  from  ongoing  development  of  new
multifamily  properties.  As a  result,  Boston  Management,  Belcrest  Realty's
manager,  expects that real estate operating results in 2004 will continue to be
similar to 2003's results. Under the net lease agreement,  the tenant of the Net
Leased Property owned by Belcrest Realty pays all property  operating  expenses.
As a result,  Belcrest  Realty does not record  operating  expenses  for the Net
Leased Property.

At March 31, 2004, the estimated fair value of the real  properties held through
Belcrest Realty was $451.1 million compared to $623.8 million at March 31, 2003,
a  decrease  of  $172.7  million  or 28%.  The  decrease  was due to the sale of
Belcrest  Realty's interest in Casco and lower values for the properties held by
Belcrest  Realty's  remaining  Real Estate  Joint  Venture.  Despite weak market
conditions,  declines in asset values for multifamily  properties have generally
been modest as lower near-term  property earnings  expectations have been offset
in part by lower capitalization rates. The Fund saw net unrealized  appreciation
of the estimated fair value in its other real estate investments (which includes
Belcrest  Realty's Net Leased  Property  and its  majority  interest in the Real
Estate Joint  Venture) of  approximately  $11.1 million during the quarter ended
March 31, 2004  compared  to  unrealized  depreciation  of  approximately  $24.6
million for the quarter ended March 31, 2003.  Net  unrealized  appreciation  of
$11.1  million for the quarter ended March 31, 2004  consisted of  approximately
$3.9  million  of  unrealized  depreciation  in the value of  Belcrest  Realty's
remaining Real Estate Joint Venture offset by the reclassification of previously
recorded  unrealized  depreciation  as  realized  losses in the  amount of $15.0
million due to the sale during the  quarter of Casco.  During the quarter  ended
March 31, 2003,  Belcrest Realty experienced modest decreases in property values
resulting  from  declines in near-term  earnings  expectations  and the economic
downturn.  However,  declines in asset values for multifamily  properties during
the  quarter  ended  March  31,  2003 were  generally  modest  as  decreases  in
capitalization rates largely offset declining income levels.

During the quarter  ended March 31, 2004,  certain  rental  properties  that are
owned by Belcrest Realty's  remaining Real Estate Joint Venture and which secure
certain  mortgage  notes  payable  continued to operate at  deficits,  and it is
expected that no financial  resources  will be provided by the Real Estate Joint
Venture to fund such  deficits.  As of December 31, 2003,  the related  mortgage
notes payable balances reported on the Fund's financial  statements were reduced
by $22.4 million to the  estimated  amount at which they could have been settled
in a then current  transaction (which amount equaled the estimated fair value of
such rental properties).  The adjustment was reported as unrealized appreciation
of real estate  investments for the quarter ended December 31, 2003.  Subsequent
net  increases  to the  estimated  fair  value  of such  rental  properties  and
corresponding  increases to the  estimated  amount at which the  mortgage  notes
payable  balances  could be  settled of  approximately  $5.3  million  have been
reported on the Fund's  unaudited  financial  statements  for the quarter  ended
March  31,  2004  included  in  Item 1  above  as  unrealized  appreciation  and
depreciation, respectively, of real estate investments.

                                       19
<PAGE>
On May 3, 2004,  Belcrest Realty entered into  agreements to establish  Allagash
Property  Trust  (Allagash),  form ProLogis Six Rivers Limited  Partnership  (in
association  with  subsidiaries  of other  investment  funds  advised  by Boston
Management and ProLogis, a publicly-held REIT) (Six Rivers) and merge Six Rivers
with Keystone  Property Trust, a publicly-held  REIT (Keystone).  It is expected
that the merger will be consummated during the third quarter of 2004, subject to
the satisfaction of certain conditions precedent. Upon the ultimate consummation
of the  transactions,  Belcrest  Realty will own an 80% interest in Allagash and
ProLogis  will own a 20% interest in Allagash.  Allagash  will own a partnership
interest in Six Rivers  through which it will own 100% of the economic  interest
in certain industrial  properties  acquired through the merger of Six Rivers and
Keystone and valued at  approximately  $461 million at the date of  acquisition.
Prologis, or an affiliate thereof, will manage the properties. It is anticipated
that Keystone's existing direct fixed-rate obligations will be retired after the
merger date. It is  anticipated  that first mortgage  financing  estimated to be
60-65% of the property value will be obtained in connection with the acquisition
and will be  secured  by the  properties.  There  can be no  assurance  that the
conditions  precedent to the  consummation of the  transactions  described above
will be satisfied or that the financing  required to acquire the properties will
be obtained.

During the quarter ended March 31, 2004,  Belcrest  Realty sold (or  experienced
scheduled  redemptions of) certain of its Partnership  Preference Units totaling
approximately  $54.0 million  (including sales to other investment funds advised
by Boston  Management),  recognizing gains of approximately  $1.1 million on the
transactions.  During the quarter  ended March 31,  2004,  Belcrest  Realty also
acquired  interests  in  additional  Partnership  Preference  Units  from  other
investment  funds advised by Boston  Management  totaling  approximately  $139.1
million.  At March 31,  2004,  the  estimated  fair value of  Belcrest  Realty's
Partnership  Preference  Units totaled $537.3 million compared to $574.9 million
at March 31,  2003,  a decrease of $37.6  million or 7%. The decrease was due to
fewer  Partnership  Preference  Units held at March 31, 2004 and to decreases in
the per unit values of the Partnership  Preference  Units held at March 31, 2004
due to their lower  average  coupon  rates.  In the current  low  interest  rate
environment,  many issuers have been redeeming  Partnership  Preference Units as
Belcrest  Realty's  call  protections  expire  or  restructuring  the  terms  of
outstanding  Partnership  Preference  Units in advance of their call dates. As a
result,  many  of the  higher-yielding  Partnership  Preference  Units  held  by
Belcrest  Realty  during the quarter ended March 31, 2003 were no longer held at
March 31, 2004. Boston Management expects this trend to continue through 2004.

The  Fund  saw  unrealized  depreciation  of the  estimated  fair  value  in its
Partnership  Preference Units of  approximately  $6.9 million during the quarter
ended March 31, 2004 compared to unrealized  appreciation of approximately $32.8
million for the quarter  ended March 31, 2003.  For the quarter  ended March 31,
2004, net unrealized  depreciation  of $6.9 million  consisted of  approximately
$5.5  million of  unrealized  depreciation  as a result of decreases in per unit
values of the Partnership  Preference Units held by Belcrest Realty at March 31,
2004  (as  described  above),  and  approximately  $1.4  million  of  unrealized
depreciation   resulting  from  the   reclassification  of  previously  recorded
unrealized appreciation as realized gains due to sales of Partnership Preference
Units during the quarter  ended March 31, 2004.  During the quarter  ended March
31, 2003,  Partnership  Preference  Units  generally  benefited  from  declining
interest   rates  and   tightening   spreads  in   income-oriented   securities,
particularly in real estate-related securities.

Distributions from Partnership  Preference Units for the quarter ended March 31,
2004 totaled $13.5 million compared to $13.8 million for the quarter ended March
31, 2003, a decrease of $0.3 million or 2%. The decrease was  principally due to
fewer Partnership  Preference Units held on average, as well as to lower average
yields for the Partnership  Preference Units held during the quarter ended March
31, 2004.

Performance  of Interest Rate Swap  Agreements.  For the quarter ended March 31,
2004,  net  realized  and  unrealized  losses on the Fund's  interest  rate swap
agreements totaled  approximately $13.6 million,  compared to approximately $3.4
million of net realized and  unrealized  losses for the quarter  ended March 31,
2003.  Net realized and  unrealized  losses on swap  agreements  for the quarter
ended March 31, 2004 consisted of $8.7 million of unrealized depreciation due to
changes in swap agreement  valuations and $4.9 million of periodic payments made
pursuant to outstanding  swap  agreements (and classified as net realized losses
on interest rate swap  agreements).  For the quarter  ended March 31, 2003,  the
Fund had unrealized appreciation of $8.9 million due to swap agreement valuation
changes,  offset by $12.3  million  of swap  agreement  periodic  payments.  The
negative  impact on Fund  performance  for the quarter ended March 31, 2004 from
changes in swap agreement valuations was attributable to a decline in swap rates
during the period. The positive contribution to Fund performance from changes in
swap  valuations for the quarter ended March 31, 2003 was due to the Fund's swap
agreements  approaching  optional termination dates, as relevant swap rates were
substantially unchanged.

                                       20
<PAGE>
(b) Liquidity and Capital Resources.

Outstanding Borrowings.  The Fund has entered into credit arrangements with DrKW
Holdings,  Inc. and Merrill Lynch  Mortgage  Capital,  Inc.  (collectively,  the
Credit  Facility)  primarily  to finance  the Fund's  equity in its real  estate
investments and will continue to use the Credit Facility for such purpose in the
future.  The Credit Facility may also be used for other purposes,  including any
short-term liquidity needs of the Fund. In the future, the Fund may increase the
size of the  Credit  Facility  (subject  to lender  consent)  and the  amount of
outstanding  borrowings  thereunder.   As  of  March  31,  2004,  the  Fund  had
outstanding  borrowings of $720.0 million and unused loan  commitments of $138.0
million under the Credit Facility.  During the quarter ended March 31, 2004, the
Fund  amended  its loan  agreement  with DrKW  Holdings,  Inc.  to  establish  a
borrowing limit of $860 million under that agreement.

On May 3, 2004,  Belcrest Realty entered an agreement to establish and acquire a
majority  interest in a Real Estate Joint Venture,  Allagash.  Belcrest Realty's
acquisition  of its  interest  in  Allagash  is  expected  to occur in the third
quarter of 2004.  Allagash is expected to indirectly own  industrial  properties
with a value of approximately $461 million at acquisition.  Belcrest Realty will
own 80% of the  interests  in  Allagash.  The amount of  Belcrest  Realty's  net
investment  in  Allagash  will  depend in part on the  terms of the  anticipated
mortgage financing to be obtained for the real estate assets,  closing costs and
other  consideration.  The Fund  plans to  increase  its  borrowings  under  the
existing  Credit  Facility  to  fund  its  equity  in  Allagash  and  has  begun
discussions with DrKW Holdings, Inc. and Merrill Lynch Mortgage Capital, Inc. in
anticipation of its investment in Allagash.

The Fund has entered into interest rate swap agreements with respect to its real
estate investments and associated borrowings.  Pursuant to these agreements, the
Fund makes periodic  payments to the counterparty at predetermined  fixed rates,
in exchange for floating-rate  payments at a predetermined spread plus one-month
LIBOR.  During  the terms of the  outstanding  interest  rate  swap  agreements,
changes in the  underlying  values of the  agreements are recorded as unrealized
appreciation or depreciation.  As of March 31, 2004, the unrealized depreciation
related to the interest rate swap agreements was approximately $5.7 million.  As
of March 31, 2003, the unrealized depreciation related to the interest rate swap
agreements was approximately $52.8 million.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Interest  Rate Risk.  The Fund's  primary  exposure to interest rate risk arises
from its real estate  investments  that are  financed by the Fund with  floating
rate  borrowings  under the Fund's  Credit  Facility and by  fixed-rate  secured
mortgage  debt  obligations  of the Real  Estate  Joint  Venture  and Net Leased
Property.  Partnership  Preference Units are fixed rate instruments whose values
will  generally  decrease  when  interest  rates rise and increase when interest
rates fall.  The interest rates on borrowings  under the Fund's Credit  Facility
are reset at regular  intervals based on one-month  LIBOR.  The Fund has entered
into interest rate swap  agreements to fix the cost of its borrowings  under the
Credit  Facility  used to acquire  Belcrest  Realty's  equity in its real estate
investments  and to mitigate in part the impact of interest  rate changes on the
Fund's net asset value.  Under the terms of the interest  rate swap  agreements,
the Fund makes cash  payments  at fixed  rates in  exchange  for  floating  rate
payments that  fluctuate  with one-month  LIBOR.  The Fund's  interest rate swap
agreements  will  generally  increase  in value  when  interest  rates  rise and
decrease  in value when  interest  rates fall.  In the future,  the Fund may use
other interest rate hedging  arrangements  (such as caps, floors and collars) to
fix or limit borrowing costs. The use of interest rate hedging arrangements is a
specialized activity that can expose the Fund to significant loss.

The following table summarizes the contractual  maturities and  weighted-average
interest rates  associated  with the Fund's  significant  non-trading  financial
instruments.  The Fund has no market risk sensitive instruments held for trading
purposes.  This information should be read in conjunction with Note 4 and Note 5
to the Fund's unaudited condensed  consolidated  financial  statements in Item 1
above.

                            Interest Rate Sensitivity
                        Cost, Principal (Notional) Amount
                   by Contractual Maturity and Callable Date
                     for the Twelve Months Ended March 31,*

<TABLE>
<CAPTION>
                                                                                                              Estimated
                                       2005         2006-2008      2009       Thereafter        Total        Fair Value
<S>                                    <C>          <C>            <C>        <C>               <C>          <C>
----------------------------------------------------------------------------------------------------------------------------
Rate sensitive liabilities:
----------------------------------
Long-term debt:
----------------------------------

                                       21
<PAGE>
                                                                                                              Estimated
                                       2005         2006-2008      2009       Thereafter        Total        Fair Value
----------------------------------------------------------------------------------------------------------------------------
Fixed-rate mortgages                                           $90,081,831   $324,128,348    $414,210,179    $419,700,000

Average interest rate                                                 7.22%          7.94%           7.78%
----------------------------------
Variable-rate Credit Facility                                                $720,000,000    $720,000,000    $720,000,000

Average interest rate                                                                1.39%          1.39%
----------------------------------------------------------------------------------------------------------------------------
Rate sensitive derivative
financial instruments:
----------------------------------
Pay fixed/receive variable
interest rate swap agreements                                                $627,725,000    $627,725,000    $ (5,687,108)

Average pay rate                                                                     4.68%           4.68%
Average receive rate                                                                 1.39%           1.39%
----------------------------------------------------------------------------------------------------------------------------
Rate sensitive investments:
----------------------------------
Fixed-rate Partnership
Preference Units:
----------------------------------
Cabot Industrial Properties,
L.P., 8.625% Series B Cumulative
Redeemable Preferred Units,
Callable 4/29/04,
Current Yield: 8.30%                $15,569,810                                              $ 15,569,810    $ 15,071,300

Camden Operating, L.P.,
7% Series B Cumulative
Redeemable Perpetual
Preferred Units, Callable
12/2/08, Current Yield: 8.63%                                  $65,626,653                   $ 65,626,653    $ 64,776,900

Colonial Realty Limited
Partnership, 7.25% Series B
Cumulative Redeemable
Perpetual Preferred Units,
Callable 2/24/09, Current
Yield: 7.39%                                                   $39,244,840                   $ 39,244,840    $ 39,232,000

Essex Portfolio, L.P., 7.875%
Series B Cumulative
Redeemable Preferred Units,
Callable 12/31/09, Current
Yield: 7.58%                                                                  $  9,313,677   $  9,313,677    $  9,609,289

Liberty Property L.P., 9.25%
Series B Cumulative
Redeemable Preferred Units,
Callable 7/28/04, Current
Yield: 9.06%                        $46,625,000                                              $ 46,625,000    $ 47,613,450

                                       22
<PAGE>
                                                                                                              Estimated
                                       2005         2006-2008      2009       Thereafter        Total        Fair Value
---------------------------------------------------------------------------------------------------------------------------------
MHC Operating Limited
Partnership, 9% Series D
Cumulative Redeemable
Perpetual Preference Units,
Callable 9/29/04, Current
Yield: 8.86%                        $55,000,000                                              $ 55,000,000    $ 55,880,000

National Golf Operating
Partnership, L.P., 9.30%
Series A Cumulative
Redeemable Preferred Units,
Callable 2/6/03, Current
Yield: 9.26%                        $27,877,518                                              $ 27,877,518    $ 31,692,552

National Golf Operating
Partnership, L.P., 9.30%
Series B Cumulative
Redeemable Preferred Units,
Callable 2/6/03, Current
Yield: 9.26%                        $29,833,200                                              $ 29,833,200    $ 30,120,000

PSA Institutional Partners,
L.P., 6.40% Series NN
Cumulative Redeemable
Perpetual Preferred Units,
Callable 3/17/10, Current
Yield: 6.90%                                                                  $ 55,375,000   $ 55,375,000    $ 51,343,700

Price Development Company,
L.P., 8.95% Series B
Cumulative Redeemable
Preferred Partnership Units,
Callable 7/28/04, Current
Yield: 8.86%                        $44,089,925                                              $ 44,089,925    $ 44,818,750

Regency Centers, L.P., 9.125%
Series D Cumulative Redeemable
Preferred Units, Callable
9/29/04, Current Yield: 8.90%       $50,598,110                                              $ 50,598,110    $ 51,245,000

Sun Communities Operating
L.P., 8.875% Series A
Cumulative Redeemable
Perpetual Preferred Units,
Callable 9/ 29/04, Current
Yield: 8.71%                        $20,942,560                                              $ 20,942,560    $ 20,368,000

Urban Shopping Centers, L.P.,
9.45% Series D Cumulative
Redeemable Perpetual
Preferred Units, Callable
10/1/04, Current Yield: 9.20%       $60,000,000                                              $ 60,000,000    $ 61,662,480

                                       23
<PAGE>
                                                                                                              Estimated
                                       2005         2006-2008      2009       Thereafter        Total        Fair Value
---------------------------------------------------------------------------------------------------------------------------------
Vornado Realty, L.P.,
7% Series D-10 Cumulative
Redeemable Preferred Units,
Callable 11/17/08, Current
Yield: 7.04%(1)                     $13,766,505                                              $ 13,766,505    $ 13,913,367
----------------------------------
Note Receivable:
----------------------------------
Fixed-rate note receivable, 8%                                               $  3,352,436    $  3,352,436    $  3,663,758
</TABLE>

 *   The  investments  listed reflect  holdings as of March 31, 2004. The Fund's
     current holdings may differ.

(1)  Belcrest Realty's  interest in these  Partnership  Preference Units is held
     through Bel Holdings LLC.

Item 4. Controls and Procedures.

Eaton Vance, as the Fund's manager, conducted an evaluation of the effectiveness
of the Fund's  disclosure  controls and procedures (as defined by Rule 13a-15(e)
of the 1934 Act) as of the end of the period  covered by this  report,  with the
participation of the Fund's Chief Executive Officer and Chief Financial Officer.
Based on that  evaluation,  the Chief  Executive  Officer  and  Chief  Financial
Officer  concluded  that the Fund's  disclosure  controls  and  procedures  were
effective.  There were no changes in the Fund's internal  control over financial
reporting  that  occurred  during the  quarter  ended  March 31,  2004 that have
materially  affected,  or are reasonably likely to materially affect, the Fund's
internal control over financial reporting.

As the Fund's manager, the complete and entire management, control and operation
of the Fund are vested in Eaton Vance.  The Fund's Chief  Executive  Officer and
Chief  Financial  Officer  intend to report to the Board of  Directors  of Eaton
Vance, Inc. (the sole trustee of Eaton Vance) any significant  deficiency in the
design or operation of internal  control over  financial  reporting  which could
adversely  affect the Fund's  ability to record,  process,  summarize and report
financial data, and any fraud, whether or not material, that involves management
or other employees who have a significant  role in the Fund's  internal  control
over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

Although in the  ordinary  course of  business,  the Fund,  Belcrest  Realty and
Belcrest  Realty's   controlled   subsidiaries  may  become  involved  in  legal
proceedings,  the Fund is not aware of any material pending legal proceedings to
which any of them is subject.

Item 2. Changes in  Securities,  Use of Proceeds and Issuer  Purchases of Equity
Securities.

As  described  in the  Fund's  Annual  Report  on Form  10-K for the year  ended
December 31,  2003,  shares of the Fund may be redeemed by  Shareholders  on any
business day.  Redemptions  are met at the net asset value per share of the Fund
(less any  applicable  redemption  fee). The right to redeem is available to all
Shareholders and all outstanding Fund shares are eligible.  During each month in

                                       24
<PAGE>
the quarter  ended March 31, 2004,  the total number of shares  redeemed and the
average price paid per share were as follows:

                          Total No. of Shares        Average Price Paid Per
Month Ended                  Redeemed(1)                    Share
------------------------------------------------------------------------------
January 31, 2004               67,098.824                  $105.76
------------------------------------------------------------------------------
February 29, 2004             302,846.727                  $107.37
------------------------------------------------------------------------------
March 31, 2004                112,710.809                  $104.96
------------------------------------------------------------------------------
Total                         482,656.360                  $105.47
------------------------------------------------------------------------------

(1)  All shares  redeemed  during the  periods  were  redeemed  at the option of
     Shareholders  pursuant to the Fund's  redemption  policy.  The Fund has not
     announced  any plans or programs  to  repurchase  shares  other than at the
     option of Shareholders.

Item 3. Defaults Upon Senior Securities.

None.

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

No matters were submitted to a vote of security holders during the three months
ended March 31, 2004.

Item 5. Other Information.

None.

Item 6. Exhibits and Reports On Form 8-K:

(a)  The following is a list of all exhibits filed as part of this Form 10-Q:

4.1(a)    Amendment  No.  1 dated  March  16,  2004  to the  Loan  and  Security
          Agreement between Belcrest Capital Fund LLC and DrKW Holdings, Inc.

4.2(a)    Amendment  No.  1 dated  March  16,  2004  to the  Loan  and  Security
          Agreement  between  Belcrest  Capital Fund LLC, Merrill Lynch Mortgage
          Capital,  Inc.,  the Lenders  referred  to therein  and Merrill  Lynch
          Capital Services, Inc.

21        List of Subsidiaries

31.1      Certification  Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
          to Section 302 of the Sarbanes-Oxley Act of 2002

31.2      Certification  Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
          to Section 302 of the Sarbanes-Oxley Act of 2002

32.1      Certification  Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002

32.2      Certification  Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002

(b)  Reports on Form 8-K:

     None.

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<PAGE>
                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned duly authorized officer on May 10, 2004.




                                        BELCREST CAPITAL FUND LLC


                                        /s/ Michelle A. Alexander
                                        -------------------------
                                        Michelle A. Alexander
                                        Chief Financial Officer
                                        (Duly Authorized Officer and
                                        Principal Financial Officer)




                                       26
<PAGE>
                                  EXHIBIT INDEX
                                  -------------

4.1(a)    Amendment  No.  1 dated  March  16,  2004  to the  Loan  and  Security
          Agreement between Belcrest Capital Fund LLC and DrKW Holdings, Inc.

4.2(a)    Amendment  No.  1 dated  March  16,  2004  to the  Loan  and  Security
          Agreement  between  Belcrest  Capital Fund LLC, Merrill Lynch Mortgage
          Capital,  Inc.,  the Lenders  referred  to therein  and Merrill  Lynch
          Capital Services, Inc.

21        List of Subsidiaries

31.1      Certification  Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
          to Section 302 of the Sarbanes-Oxley Act of 2002

31.2      Certification  Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
          to Section 302 of the Sarbanes-Oxley Act of 2002

32.1      Certification  Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002

32.2      Certification  Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002




                                       27