UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K

  X             Annual Report Pursuant to Section 13 or 15(d) of
-----                 the Securities Exchange Act of 1934

                   For the fiscal year ended December 31, 1998

                                       OR

              Transition Report Pursuant to Section 13 or 15(d) of
-----                  the Securities Exchange Act of 1934

             For the transition period from _________ to __________

                         Commission file number: 0-13532
                                                 -------

                       EQUIPMENT ASSET RECOVERY FUND, L.P.
              Exact name of registrant as specified in its charter

           Texas                                          11-2661586
           -----                                          ----------
State or other jurisdiction of                I.R.S. Employer Identification No.
incorporation or organization 

Attn.:  Andre Anderson
3 World Financial Center, 29th Floor,
New York, New York                                        10285-2900
--------------------------------------                    ----------
Address of principal executive offices                     Zip code

Registrant's telephone number, including area code:  (212) 526-3183
                                                     --------------

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

Securities registered pursuant to Section 12(g) of the Act:

                      Units of Limited Partnership Interest
                      -------------------------------------
                                 Title of Class

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 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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]

No market for the limited partnership interests exists and therefore a market
value for the interests cannot be determined.

Documents Incorporated by Reference:

Portions of the Registrant's Prospectus dated February 2, 1984 filed pursuant to
rule 424(b) are incorporated by reference in PART I of this report.

Annual Report to Unitholders for the year ended December 31, 1998 is
incorporated by reference in PARTS I, II, III and IV of this report.
<PAGE>
2

                                     PART I

Item 1.  Business

a.  General Development of Business
    -------------------------------
Equipment Asset Recovery Fund, L.P. (the "Partnership") (formerly Hutton Asset
Recovery Fund), a Texas limited partnership, was formed to engage in the
business of acquiring various types of distressed assets in the energy and
construction industries, either directly or through partnerships, joint ventures
or other forms of indirect ownership, operating such assets under management
agreements with experienced operators (who may be affiliated with the General
Partners) or leasing such assets to users, and ultimately selling such assets.
The general partners of the Partnership are Equipment Management, Inc. ("EMI")
(formerly Hutton Equipment Management, Inc.), a Delaware corporation and an
affiliate of Lehman Brothers Inc. ("Lehman") (formerly Shearson Lehman Brothers
Inc.) and Mr. Steven A. Webster (together, the "General Partners") (see Item
10).

On February 2, 1984, the Partnership began the offering of limited partnership
interests in the Partnership (the "Units"). As of July 31, 1984, the termination
date of the offering, the Partnership had accepted subscriptions for 32,722
Units for an aggregate of $16,361,000 (the holders of such Units are referred to
herein as "Limited Partners"). The net proceeds of the offering after payment of
organizational and offering costs aggregated $14,114,418. The General Partners
made an aggregate cash contribution of $1,000. San Felipe Investors, a Texas
general partnership, (the "Special Limited Partner") made a cash contribution to
the Partnership of $1,000.

b.  Financial Information About Industry Segments
    ---------------------------------------------
The Partnership's sole business was the acquisition, ownership and operation of
such assets described above. All of the Partnership's revenues, operating profit
or loss related solely to such industry segment.

c.  Narrative Description of Business
    ---------------------------------
The business of the Partnership was the acquisition of distressed assets,
directly or indirectly, for the purpose of operating them, either directly or
through partnerships or joint ventures in which the Partnership participated,
under management agreements with experienced operators and ultimately selling
such assets. Reference is made to the section captioned "Investment and
Operating Objectives and Policies" contained on pages 18 through 24 of the
Prospectus for a description of the Partnership's objectives and policies
regarding the selection, operation, liquidation and financing of such assets,
which pages are incorporated herein by reference thereto.

Investments
-----------
The Partnership used the net proceeds of the public offering to acquire three
types of assets. The Partnership purchased (i) four land drilling rigs, (ii) an
interest in a Texas partnership, GCH Venture ("GCH"), that purchased five barge
drilling rigs, nine crew boats and related property, and (iii) ten construction
cranes and an interest in a joint venture, DSC Venture ("DSC"), which owned 49
cranes and related equipment and rented those cranes, the cranes owned by the
Partnership, and cranes owned by third parties. Due primarily to the severe
decline in the oil and gas drilling industry that occurred in 1986, after the
purchase of assets in that industry, all of the Partnership's assets in the oil
and gas industry were either foreclosed on or sold at a loss. During 1991, the
Partnership received the final payments it was owed by Falcon Drilling Inc.
("Falcon") from the disposition of its interest in GCH.

Investment in Construction Cranes
---------------------------------
As of December 31, 1995, the Partnership owned nine cranes outright, a
ninety-nine percent interest in DSC, which owned forty-four cranes and related
equipment, and a controlling interest in SFN Corporation ("SFN"), which owned
four cranes and two pieces of related equipment. During the first nine months of
1996, DSC and SFN sold a total of 12 cranes and two pieces of related equipment
for a total consideration of approximately $6,650,000.
<PAGE>
3

Liquidating Sale
----------------
On November 27, 1996, the Partnership, DSC and SFN executed a sale (the
"Liquidating Sale") of their crane fleets, related equipment and existing
customer crane rental agreements to Western Crane Supply, Inc. ("Western"), a
Kennewick, Washington-based operator of construction cranes and an affiliate of
Neil F. Lampson, Inc., for a total consideration of $15.9 million cash. A
detailed discussion of the Liquidating Sale is contained in Item 2,
"Properties," and Note 1 and Note 6 of the Notes to the Consolidated Financial
Statements contained in the Partnership's Annual Report to Unitholders for the
year ended December 31, 1998, filed as an exhibit under Item 14. As a result of
the Liquidating Sale, the General Partners are in the process of liquidating the
Partnership. However, the Partnership will not be dissolved prior to the
resolution of the pending class action suit. A detailed discussion of this
litigation is provided in Note 9 "Litigation" of the Notes to the Consolidated
Financial Statements contained in the Partnership's Annual Report to Unitholders
for the year ended December 31, 1998, filed as an exhibit under Item 14. herein.
SFN was liquidated in January 1997.

Structure of DSC
----------------
Effective October 1, 1984, the Partnership purchased ten Manitowoc crawler type
cranes (the "EARF Cranes") from Dayton-Scott Corporation, a Texas corporation
("Dayton-Scott"). One EARF crane was subsequently sold. The Partnership leased
the EARF Cranes to DSC, a joint venture formed by the Partnership and
Dayton-Scott, with each having an equal interest. DSC was formed to operate (i)
the EARF Cranes, (ii) forty-nine cranes and seven pieces of related equipment
consisting of Towers and Ringers (the "Venture Cranes") contributed by
Dayton-Scott to DSC, and (iii) the five cranes, one Tower and one Ringer owned
by SFN Corporation (the "SFN Cranes") (the EARF Cranes, the Venture Cranes and
the SFN Cranes, together with all related Towers, Ringers and equipment are
referred to herein as the "Fleet"). A discussion of the acquisition of the Fleet
is incorporated by reference to Notes 4, 5 and 6 of the Notes to the
Consolidated Financial Statements contained in the Partnership's Annual Report
to Unitholders for the year ended December 31, 1998, filed as an exhibit under
Item 14. Dayton-Scott no longer holds an ownership interest in DSC (please see
the reference in Note 4 to the Consolidated Financial Statements contained in
the Partnership's Annual Report to Unitholders for the year ended December 31,
1998, filed as an exhibit under Item 14).

The cranes and related equipment owned by DSC were in turn managed and operated
by Dayton-Scott Equipment Company ("DSEC") pursuant to a management agreement
between DSC and DSEC dated January 1, 1990, as last amended on November 27,
1996. DSEC had managed the cranes since their acquisition by Dayton-Scott in
early 1982 until disposition of the Fleet on November 27, 1996. The management
agreement provided for the reimbursement by DSC of all expenses related to the
operation of the cranes and related equipment, including salaries of DSEC's
employees. The agreement also provided for incentive compensation to DSEC and
for a sales commission to be paid to DSEC upon the sale of certain cranes. DSEC
earned $558,772 in sales commission from the sale of the remaining assets in the
Fleet in 1996. For the year ended December 31, 1996, an incentive management fee
of $221,513 was earned by DSEC. Due to the Liquidating Sale, no incentive
management fee was earned for the years ended December 31, 1997 and 1998.
Additionally, DSEC was paid severance/termination fees of $1,000,000 for the
year ended December 31, 1996.

DSC's Debt to SFN
-----------------
Effective April 30, 1992, SFN acquired all of the secured indebtedness of DSC
from Security Pacific (the "Security Pacific Debt") which had an aggregate
outstanding balance of principal and interest as of April 28, 1992 of
$11,968,171 (represented by four separate promissory notes). In connection with
the acquisition of the Security Pacific Debt by SFN, Security Pacific conveyed
the following assets to SFN: (i) six cranes, one Ringer, and one Tower (the
"Security Pacific Equipment") previously owned by Security Pacific and leased to
DSC pursuant to an equipment lease (the "Security Pacific Lease"), and (ii) the
rights and obligations of Security Pacific under a Net Profits Agreement
("Profits Agreement") previously entered into by and among DSC, Security
Pacific, and the Partnership. The Security Pacific Debt, the Security Pacific
Equipment, the Security Pacific Lease, and the Profits Agreement are
collectively referred to as the "Security Pacific Assets." On August 26, 1993, a
SFN-owned crane was sold pursuant to the terms of SFN's agreement with Security
Pacific to acquire the debt. A second SFN-owned crane was sold on May 15, 1995
pursuant to the terms of SFN's agreement to acquire the debt. A discussion of
DSC's debt refinancing is incorporated by reference to Notes 5 and 7 of the
Consolidated Financial Statements contained in the Partnership's Annual Report
to Unitholders for the year ended December 31, 1998, filed as an exhibit under
Item 14.
<PAGE>
4

Employees
---------
The Partnership has no employees. Certain administrative and managerial services
are provided by the General Partners and certain affiliates.

Item 2.  Properties

On November 27, 1996, the Partnership, DSC and SFN executed the Liquidating
Sale. The purchase price was determined by arms-length negotiations. There is no
material relationship between Western and the Partnership or any of its
affiliates, any director or officer of the Partnership, or any associate of any
such director or officer. The Partnership received net proceeds of $2,772,051
for its crane fleet and received $7,366,940 in distributions from DSC
attributable to its interest in the proceeds from the sale of the DSC crane
fleet.

As a result of the Liquidating Sale, as of December 31, 1998, the Partnership,
DSC and SFN owned no assets other than cash and the General Partners are in the
process of dissolving the Partnership. However, the Partnership will not be
dissolved prior to the resolution of the pending class action suit. A detailed
discussion of this litigation is provided in Note 9 "Litigation" of the Notes to
the Consolidated Financial Statements contained in the Partnership's Annual
Report to Unitholders for the year ended December 31, 1998, filed as an exhibit
under Item 14. herein.


Item 3.  Legal Proceedings

Incorporated by reference to Note 9 "Litigation" of the Notes to the
Consolidated Financial Statements contained in the Partnership's Annual Report
to Unitholders for the year ended December 31, 1998, filed as an exhibit under
Item 14.


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

No matter was submitted to a vote of security holders of the Partnership during
the quarter ended December 31, 1998, through the solicitation of proxies or
otherwise.


                                     PART II

Item 5.  Market for the Partnership's Limited Partnership
         Interests and Related Security Holder Matters.

The Units are not traded on any market, and it is not contemplated that any
public trading for the Units will develop. As of December 31, 1998, the number
of Limited Partners was 1,841.

On March 6, 1997, the Partnership paid a special cash distribution, in the
amount of $300 per Unit, to Unitholders of record as of November 27, 1996. Such
distribution represented a substantial portion of the net sales proceeds and
distributions from DSC received by the Partnership from the Liquidating Sale.
There were no distributions in 1997 or 1998. The Partnership's remaining cash
reserves will first be used to provide for the Partnership's remaining
liabilities and obligations through dissolution following which any remaining
cash will be distributed to the partners upon liquidation.


Item 6.  Selected Financial Data.

The information set forth below should be read in conjunction with Item 7.
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained herein, and the Notes to the Consolidated Financial
Statements contained in the Partnership's Annual Report to Unitholders for the
year ended December 31, 1998, filed as an exhibit under Item 14.
<PAGE>
5
<TABLE>
Financial Highlights
(in thousands except per Unit data)
<CAPTION>
                                       1998        1997        1996         1995       1994
    ---------------------------------------------------------------------------------------
<S>                                 <C>        <C>         <C>           <C>       <C>     
    Rental Revenues                 $    --    $     --    $  4,239      $ 4,562   $  4,818
    Gain on Sale of Equipment            --          --      16,218          918        516
    Net Income (Loss)                  (285)       (547)     11,600          354        255
    Net Income (Loss) per Unit        (8.28)     (15.87)     324.72           --       (.46)
    Total Assets                      1,586       1,910      15,584        8,422     10,534
    Loans Payable                        --          --          --        4,453      7,047
    Cash Distributions per Unit          --          --      300.00(a)        --         --
    ---------------------------------------------------------------------------------------

<FN>
    (a) Paid on March 6, 1997 to Unitholders of record as of November 27, 1996.  Reflects
        1996 equipment sale activity including the November 1996 Liquidating Sale. Please
        refer to Note 6 of the Notes to the Consolidated Financial Statements.
</FN>
</TABLE>


Item 7.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations

Liquidity and Capital Resources

On November 27, 1996, the Partnership, DSC Venture ("DSC") and SFN Corporation
("SFN") executed a sale (the "Liquidating Sale") of their crane fleets, related
equipment and existing customer crane rental agreements to Western Crane Supply,
Inc. ("Western"), a Kennewick, Washington-based operator of construction cranes
and an affiliate of Neil F. Lampson, Inc., for a total consideration of $15.9
million cash. A discussion of the terms and conditions of the Liquidating Sale
is contained in Note 1 of the Notes to the Consolidated Financial Statements
contained in the Partnership's Annual Report to Unitholders for the year ended
December 31, 1998, filed as an exhibit under Item 14. As a result of the
Liquidating Sale, the General Partners are in the process of dissolving the
Partnership. However, the Partnership will not be dissolved prior to the
resolution of the pending class action suit. A detailed discussion of this
litigation is provided in Note 9 of the Notes to the Consolidated Financial
Statements contained in the Partnership's Annual Report to Unitholders for the
year ended December 31, 1998, filed as an exhibit under Item 14 herein.

At December 31, 1998, the Partnership's cash and cash equivalents balance
totaled $1,585,699 compared to $1,909,899 at December 31, 1997. The decrease
primarily is due to the payment of legal expenses associated with the
Partnership's pending class action suit, continuing general and administrative
expenses for 1998 and the absence of cash flow from operations due to the
Liquidating Sale. The Partnership's remaining cash reserves will first be used
to provide for the Partnership's remaining liabilities and obligations,
including any associated with the litigation, following which any remaining cash
will be distributed to the partners upon liquidation.

Accounts payable and accrued expenses decreased from $1,605,246 at December 31,
1997 to $1,566,319 at December 31, 1998. The change is due to differences in the
timing of payments, primarily for legal and other professional fees.

Market Risk
-----------
The Partnership's principal market risk exposure is interest rate risk. As a
result of the Liquidating Sale, the Partnership no longer has any equipment or
debt, and its sole asset consists of cash and cash equivalents. Accordingly, the
Partnership's interest risk exposure is limited to interest earned on the
Partnership's cash and cash equivalents which are invested at short-term rates.
Such risk is not considered material to the Partnership's operations.
<PAGE>
6

Year 2000 Initiatives
---------------------
The Year 2000 compliance issue concerns the ability of computerized information
systems to accurately calculate, store or use a date after 1999. This could
result in computer system failures or miscalculations causing disruptions of
operations. The Year 2000 issue affects almost all companies and organizations.

As noted above, all of the Partnership's properties have been sold and it is
anticipated that the Partnership will dissolve prior to December 31, 1999. In
the event that the Partnership is not liquidated prior to December 31, 1999,
potential Year 2000 issues relate primarily to outside vendors which provide the
Partnership's administrative services including accounting, tax preparation and
transfer agent services. Such services are heavily reliant on computer systems,
software products and equipment which may or may not be Year 2000 compliant. It
is anticipated that the cost of vendor compliance with Year 2000 problems will
be borne primarily by vendors. Although it is not possible at present to give an
estimate of the cost of this work to the Partnership, the General Partner does
not expect such costs to have a material adverse impact on the Partnership's
long term results of operations.

Results of Operations

1998 vs. 1997
-------------

For the year ended December 31, 1998, the Partnership generated a net loss of
$285,273, compared to a net loss of $546,682 in fiscal 1997. The lower net loss
in fiscal 1998 is primarily due to the minority interest expense of $492,868 for
the 1997 period. Excluding the benefit for income taxes and minority interest,
the Partnership generated losses from operations of $285,273 for the year ended
December 31, 1998, and $433,295 in fiscal 1997. The decreased loss from
operations in fiscal 1998 is attributable to a decrease in general, selling and
administrative expenses in 1998, as a result of the Liquidating Sale.

Interest income for the year ended December 31, 1998 was $149,352, compared to
$213,557 in fiscal 1997. The decrease is primarily due to the Partnership
maintaining a lower average cash balance in 1998, due to the payment of a
special cash distribution to partners in March 1997 representing the majority of
the proceeds from the Liquidating Sale, and the pending termination of the
Partnership. Other income was $-0- for the year ended December 31, 1998 compared
to $5,662 in fiscal 1997, down due to management fees no longer being earned
during 1998.

General and administrative expenses for the year ended December 31, 1998 totaled
$434,625, compared to $652,514 in fiscal 1997. The decrease is primarily due to
the absence of operating expenses during 1998 as a result of the Liquidating
Sale, partially offset by an increase in legal expenses relating to the
litigation, and other professional fees.

1997 vs. 1996
-------------
For the year ended December 31, 1997, the Partnership generated a net loss of
$546,682, compared to net income of $11,599,902 for the year ended December 31,
1996. The change is primarily due to a $16,217,725 gain recognized on the sale
of twelve cranes and two pieces of related equipment during the first nine
months of 1996 and Liquidating Sale in November 1996. Excluding the gains
recognized on the sale of equipment, the Partnership generated losses from
operations, before provision for income taxes and minority interest, of $433,295
and $3,204,434 for 1997 and 1996, respectively. The decreased loss from
operations during 1997 is primarily attributable to the absence of operating
activity, and particularly by a decrease in total expenses in the 1997 period,
as a result of the Liquidating Sale.

Rental income decreased to $0 for the year ended December 31, 1997, compared to
$4,239,442 for the year ended December 31, 1996, reflecting the absence of
rental revenue in 1997 as a result of the Liquidating Sale.

Interest income for the year ended December 31, 1997 totaled $213,557, compared
to $123,965 for the year ended December 31, 1996. The increase is primarily due
to the Partnership maintaining a higher average cash balance during 1997 as a
result of the proceeds from the Liquidating Sale.

As a result of the Liquidating Sale, rental expenses, depreciation and
amortization, interest expense and management fee expense decreased from their
respective balances for the year ended December 31, 1996 to $0 during the same
periods in 1997.
<PAGE>
7

General, selling and administrative expenses decreased to $652,514 for the year
ended December 31, 1997 from $4,118,219 for the year ended December 31, 1996.
The decrease is primarily attributable to the wind down of Partnership
operations subsequent to the Liquidating Sale.

Item 8.  Financial Statements and Supplementary Data.

See Item 14 for a listing of the financial statements filed with this report.


Item 9.  Changes in and Disagreements with Accountants
         on Accounting and Financial Disclosure.

None.


                                    PART III

Item 10.  Directors and Executive Officers of the Partnership.

The Partnership does not have any officers, directors or employees. The General
Partners of the Partnership are Equipment Management, Inc. and Steven A.
Webster. The Partnership has entered into a Management Agreement with the
General Partners, pursuant to which they will perform certain management
functions for the Partnership as well as provide certain administrative
services.

Steven A. Webster, 47, currently serves as President and Chief Executive Officer
of R & B Falcon Corporation, a publicly-held offshore drilling contractor, of
which he is also a director. Mr. Webster serves as a director of the following
publicly-held companies: Crown Resources Corporation, a precious metals mining
concern; Grey Wolf, Inc., a land drilling contractor; Geokinetics, Inc., a
seismic acquisition company; and Ponder Industries, Inc., an oil field service
company.

Officers and Directors of EMI
-----------------------------
Certain officers and directors of EMI are now serving (or in the past have
served) as officers or directors of entities which act as general partners of a
number of limited partnerships which have sought protection under the provisions
of the Federal Bankruptcy Code. These partnerships sought the protection of the
bankruptcy laws to protect the partnerships' assets from loss through
foreclosure.

The directors and executive officers of EMI are as follows:

      Name                       Office
      ----                       ------
      Rocco F. Andriola          Director
      Michael T. Marron          Director, President and Chief Financial Officer
      William T. McDermott       Vice President

Rocco F. Andriola, 40, is a Managing Director of Lehman Brothers in its
Diversified Asset Group and has held such position since October 1996. Since
joining Lehman in 1986, Mr. Andriola has been involved in a wide range of
restructuring and asset management activities involving real estate and other
direct investment transactions. From June 1991 through September 1996, Mr.
Andriola held the position of Senior Vice President in Lehman's Diversified
Asset Group. From June 1989 through May 1991, Mr. Andriola held the position of
First Vice President in Lehman's Capital Preservation and Restructuring Group.
From 1986 to 1989, Mr. Andriola served as a Vice President in the Corporate
Transactions Group of Shearson Lehman Brothers' office of the general counsel.
Prior to joining Lehman, Mr. Andriola practiced corporate and securities law at
Donovan Leisure Newton & Irvine in New York. Mr. Andriola received a B.A. from
Fordham University, a J.D. from New York University School of Law, and an LL.M
in Corporate Law from New York University's Graduate School of Law.
<PAGE>
8

Michael T. Marron, 35, is a Vice President of Lehman Brothers and has been a
member of the Diversified Asset Group since 1990 where he has actively managed
and restructured a diverse portfolio of syndicated limited partnerships. Prior
to joining Lehman Brothers, Mr. Marron was associated with Peat Marwick Mitchell
& Co. serving in both its audit and tax divisions from 1985 to 1989. Mr. Marron
received his B.S. degree from the State University of New York at Albany and an
M.B.A. from Columbia University.

William T. McDermott, 35, is a Vice President of Lehman Brothers and has been a
member of the Diversified Asset Group since 1998. Mr. McDermott joined Lehman
Brothers in 1993 and held various positions within the firm before joining the
Diversified Asset Group. Prior to joining Lehman Brothers, Mr. McDermott was a
financial analyst with Cantor Fitzgerald Inc. from 1991 - 1993 and was
associated with Arthur Andersen & Co. serving in both its audit and bankruptcy
consulting divisions from 1985 to 1991. Mr. McDermott received his B.B.A. degree
from the University of Notre Dame and is a Certified Public Accountant.


Item 11.  Executive Compensation.

The Partnership does not pay the officers or directors of EMI any remuneration.
In addition, EMI does not pay any remuneration to any of its officers or
directors, all of whom receive salaries from an affiliate of EMI. Reference is
made to Note 3 to the Consolidated Financial Statements contained in the
Partnership's Annual Report to Unitholders for the year ended December 31, 1998,
filed as an exhibit under Item 14, for a discussion of the allocations of
Partnership income, losses, distributions and gains from the disposition of
assets.

Item 12.  Security Ownership of Certain Beneficial Owners and Management.

(a) Security Ownership of Certain Beneficial Owners.
    ------------------------------------------------
No person was known by the Partnership to be the beneficial owner of more than
5% of the Units of the Partnership.

(b) Security Ownership of Management.
    ---------------------------------
The General Partners do not own any Units, and no officer or director of EMI
owns any Units.

(c) Changes in Control.
    -------------------
None.


Item 13.  Certain Relationships and Related Transactions.

The General Partners and their affiliates are entitled to receive annual
Management Fees equal to the greater of $120,000 or 5% of the gross revenues
from the operation of the assets owned directly or indirectly by the
Partnership. The General Partners are also entitled to a disposition fee equal
to 2% of the gross proceeds from the sale of the Partnership's assets. During
1998 and 1997, the General Partners earned no Management Fees or disposition
fees. During the second quarter of 1985, the General Partners elected to defer
the payment of all Management Fees, other than the $10,000 per month payable to
San Felipe Resources Company, a partnership owned primarily for the benefit of
Mr. Webster, until the cash flow of the Partnership improved. In June 1986, the
amount of fees paid currently to San Felipe Resources Company was further
reduced to $5,000 per month.

On November 20, 1996, the Partnership paid EMI deferred management fees of
$1,331,742. Subsequent to December 31, 1996, the Partnership paid San Felipe
Resources (for the benefit of Mr. Webster) $948,197 and EMI $275,974 for
deferred management fees and the accrued disposition fee.

The Partnership also received $459,000 in management fees from SFN during 1997.
In addition, the Partnership received liquidating distributions of approximately
$742,138 from SFN in 1997. (See Note 5 to the Consolidated Financial Statements
contained herein at Item 14 for additional details.)
<PAGE>
9

                                     PART IV

Item 14.  Exhibits, Financial Statements, Schedules and Reports on Form 8-K.

(a)  (1)  Financial Statements and Notes.
          -------------------------------
                                                                            Page
          Independent Auditors' Report
          Arthur Andersen LLP..............................................  (1)

          Consolidated Balance Sheets - December 31, 1998 and 1997.........  (1)

          Consolidated Statements of Operations - For the years ended
          December 31, 1998, 1997 and 1996.................................  (1)

          Consolidated Statements of Partners' Capital (Deficit) - 
          For the years ended December 31, 1998, 1997 and 1996.............  (1)

          Consolidated Statements of Cash Flows - For the years ended
          December 31, 1998, 1997 and 1996.................................  (1)

          Notes to the Consolidated Financial Statements...................  (1)

          (1) Incorporated by reference to the Partnership's Annual Report to
              Unitholders for the year ended December 31, 1998.

(a)  (2)  Schedules
          ---------

          All schedules for which provision is made in the applicable accounting
          regulation of the Securities and Exchange Commission have been omitted
          since (1) the information required is disclosed in the financial
          statements and notes there to; (2) the schedules are not required
          under the related instructions; or (3) the schedules are inapplicable.

     (3)  Exhibits
          --------

          The following exhibits are being filed as a part of this report.
          Documents other than those designated as being filed herewith are
          incorporated herein by reference.

Exhibit
No.       Description
-------   -----------

3.1       Amended and Restated Agreement and Certificate of Limited Partnership
          of the Partnership (Exhibit 4.1 to the Registrant's Registration
          Statement on Form S-1, File No. 2-87488 is incorporated herein by
          reference).

10.1      Management Contract by and among the Partnership, Equipment Management
          Inc., Steven A. Webster, and Paul B. Loyd, Jr. (Exhibit 10.1 to the
          Registrant's Registration Statement on Form S-1, File No. 2-87488, is
          incorporated herein by reference).

10.2      Joint Venture Agreement dated October 9, 1984 between the Partnership,
          Cerrito Partners and GD Investors, Inc. (Exhibit 4 to the Registrant's
          current report on Form 8-K dated October 10, 1984, File No. 2-87488,
          is incorporated herein by reference).

10.3      Agreement and Plan of Merger dated December 2, 1987. (Incorporated by
          reference to Form 8-K dated December 2, 1987 filed pursuant to Section
          13 or 15(d) of the Securities Exchange Act of 1934 by the E.F. Hutton
          Group Inc., commission file number 1-7376).
<PAGE>
10

Exhibit
No.       Description
-------   -----------

10.4      Press Release, New York, New York dated December 3, 1987.
          (Incorporated by reference to Form 8-K dated December 2, 1987 filed
          pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
          by the E.F. Hutton Group Inc., commission file number 1-7376).

10.5      DSC Venture Amended and Restated Joint Venture Agreement dated as of
          October 1, 1984, executed April 2, 1987. (Exhibit 10.13 to the
          Registrant's report on Form 10-K for the year ended December 31, 1987,
          File No. 2-87488, is incorporated herein by reference).

10.6      Net profits agreement dated April 2, 1987 by and among Security
          Pacific Business Credit Inc., DSC Venture and the Registrant.
          (Exhibit 10.14 to the Registrant's report on Form 10-K for the year
          ended December 31, 1987, File No. 2-87488, is incorporated herein by
          reference).

10.7      Purchase Agreement dated October 23, 1989 between Falcon Drilling Inc.
          and the Registrant. (Exhibit 10.11 to the Registrant's report on Form
          10-K for the year ended December 31, 1989, File No. 2-87488, is
          incorporated herein by reference).

10.8      Agreement dated October 23, 1989 by and among the Registrant, CP-1,
          Ltd. and GD Investors, Inc. (Exhibit 10.12 to the Registrant's report
          on Form 10-K for the year ended December 31, 1989, File No. 2-87488,
          is incorporated herein by reference).

10.9      Management Agreement effective January 1, 1990 between DSC Venture and
          Dayton-Scott Equipment Company (Exhibit 10.9 to the Registrant's
          Report on Form 10-K for the year ended December 31, 1990, File
          No. 2-87488, is incorporated herein by reference).

10.10     Loan and Security Agreement by and between SFN Corporation and the CIT
          Group/Equipment Financing, Inc. Dated as of April 30, 1992. (Exhibit
          10.10 to the Registrant's report on Form 10-K for the year ended
          December 31, 1987, File No. 2-87488, is incorporated herein by
          reference).

13.1      Annual Report to Unitholders for the year ended December 31, 1998.

22.1      Subsidiaries of the Registrant: DSC Venture, a Texas joint venture and
          SFN Corporation, a Delaware Corporation (previously filed).

27.1      Financial Data Schedule.

28.1      Portions of prospectus of Registrant dated February 2, 1984
          (incorporated by reference).

99.1      Asset Purchase & Sale Agreement dated November 20, 1996, and
          accompanying exhibits, by and among Neil F. Lampson, Inc. as buyer and
          DSC, EARF and SFN as Sellers (incorporated by reference to the
          Partnership's Annual Report to Unitholders for the year ended
          December 31, 1996).

(b)       Reports on Form 8-K filed in the fourth quarter of fiscal 1998:

          No reports on Form 8-K were filed during the quarter for which this
          report was filed.
<PAGE>
11

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                            EQUIPMENT ASSET RECOVERY FUND

                            BY: Equipment Management, Inc.
                                General Partner


Dated:  March 26, 1999
                                BY:    /s/ Michael T. Marron
                                       ---------------------
                                Name:  Michael T. Marron
                                Title: President, Director and
                                       Chief Financial Officer


                                BY:    /s/Steven A. Webster
                                       --------------------
                                Name:  Steven A. Webster
                                Title: General Partner
<PAGE>
12

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant in
the capacities and on the dates indicated.


                            EQUIPMENT MANAGEMENT, INC.
                            A General Partner


Date:  March 26, 1999
                            BY:    /s/Rocco F. Andriola
                                   --------------------
                            Name:  Rocco F. Andriola
                            Title: Director


Date:  March 26, 1999
                            BY:    /s/Michael T. Marron
                                   --------------------
                            Name:  Michael T. Marron
                            Title: President, Director and
                                   Chief Financial Officer


Date:  March 26, 1999
                            BY:    /s/William T. McDermott
                                   -----------------------
                            Name:  William T. McDermott
                            Title: Vice President