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 September 30, 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 #0-21606


                          InLand Capital Fund, L.P. 
            (Exact name of registrant as specified in its charter)


         Delaware                                     #36-3767977
  (State or other jurisdiction      (I.R.S. Employer Identification Number) 
of incorporation or organization)


       2901 Butterfield Road, Oak Brook, Illinois         60523
        (Address of principal executive office)         (Zip Code)


    Registrant's telephone number, including area code:  630-218-8000


                                   N/A                        
                (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   







                                      -1-


                           INLAND CAPITAL FUND, L.P.
                            (a limited partnership)

                                Balance Sheets

                   September 30, 1998 and December 31, 1997
                                  (unaudited)

                                    Assets
                                    ------

                                                       1998          1997
Current assets:                                        ----          ----
  Cash and cash equivalents (Note 1).............. $ 3,522,910       304,452
  Investments in marketable securities (Note 1)...        -          174,800
  Accrued interest and other receivables..........      96,742         1,018
  Current portion of mortgage loans 
    receivable (Note 5)...........................     683,366          -
  Other current assets............................       3,816         2,632
                                                   ------------  ------------
Total current assets..............................   4,306,834       482,902
                                                   ------------  ------------
Other assets......................................     116,574       169,139
Mortgage loans receivable, less current
  portion (Note 5)................................     400,000          -
Investment properties and improvements
  (including acquisition fees paid to
  Affiliates of $1,190,773 and $1,409,967 at 
  September 30, 1998 and December 31, 1997, 
  respectively) (Notes 1, 3 and 4)................  25,013,871    28,301,315
                                                   ------------  ------------
Total assets...................................... $29,837,279    28,953,356
                                                   ============  ============























                See accompanying notes to financial statements.


                                      -2-


                           INLAND CAPITAL FUND, L.P.
                            (a limited partnership)

                                Balance Sheets
                                  (continued)

                   September 30, 1998 and December 31, 1997
                                  (unaudited)

                       Liabilities and Partners' Capital
                       ---------------------------------


                                                       1998          1997
Current liabilities:                                   ----          ----
  Accounts payable................................ $     3,707         8,590
  Accrued real estate taxes.......................      61,082        73,097
  Due to Affiliates (Note 2)......................      30,084        10,343
  Unearned income.................................       3,748        20,802
                                                   ------------  ------------
Total current liabilities.........................      98,621       112,832
                                                   ------------  ------------
Deferred gain on sale (Note 5)....................       7,597          -

Partners' capital (Notes 1 and 2):
  General Partner:
    Capital contribution..........................         500           500
    Cumulative net income.........................      13,651        13,675
                                                   ------------  ------------
                                                        14,151        14,175
  Limited Partners:                                ------------  ------------
    Units of $1,000.  Authorized 60,000 Units,
      32,352.11 Units outstanding at September 30,
      1998 and December 31, 1997, respectively
      (net of offering costs of $4,466,765, of
      which $3,488,574 was paid to Affiliates)....  27,886,551    27,886,551
    Cumulative cash distributions.................  (1,646,334)   (1,646,334)
    Cumulative net income.........................   3,476,693     2,586,132
                                                   ------------  ------------
                                                    29,716,910    28,826,349
                                                   ------------  ------------
Total Partners' capital...........................  29,731,061    28,840,524
                                                   ------------  ------------
Total liabilities and Partners' capital........... $29,837,279    28,953,356
                                                   ============  ============











                See accompanying notes to financial statements.

                                      -3-


                           INLAND CAPITAL FUND, L.P.
                            (a limited partnership)

                           Statements of Operations

        For the three and nine months ended September 30, 1998 and 1997
                                  (unaudited)


                                        Three months            Nine months
                                           ended                  ended
                                        September 30,          September 30,
                                        -------------          -------------
                                       1998       1997       1998        1997
Income:                                ----       ----       ----        ----
  Sale of investment property
    (Notes 1 and 3)................ $4,124,129   650,724  4,435,750    779,900
  Rental income....................     74,450    81,048    220,734    227,554
  Interest income..................     45,938    13,370     60,749     42,390
  Other income.....................       -           25       -        28,025
                                    ---------- ---------- ---------- ----------
                                     4,244,517   745,167  4,717,233  1,077,869
Expenses:                           ---------- ---------- ---------- ----------
  Cost of investment property sold.  3,376,178   104,075  3,542,808    125,537
  Professional services to
    Affiliates.....................     12,197     9,500     24,788     29,074
  Professional services to
    non-affiliates.................        500       841     23,602     44,612
  General and administrative
    expenses to Affiliates.........      2,117     2,815     12,850     15,902
  General and administrative
    expenses to non-affiliates.....      2,333     1,924     17,645     11,610
  Marketing expenses to Affiliates.     12,131    25,313     25,260     75,044
  Marketing expenses to
    non-affiliates.................      7,076     7,444     31,428     42,458 
  Land operating expenses to
    Affiliates.....................     15,698    15,924     47,421     47,838
  Land operating expenses to
    non-affiliates.................     26,494    26,121    100,894     64,779
                                    ---------- ---------- ---------- ----------
                                     3,454,724   193,957  3,826,696    456,854
                                    ---------- ---------- ---------- ----------
Net income......................... $  789,793   551,210    890,537    621,015
                                    ========== ========== ========== ==========












                See accompanying notes to financial statements.


                                      -4-


                           INLAND CAPITAL FUND, L.P.
                            (a limited partnership)

                           Statements of Operations
                                  (continued)

        For the three and nine months ended September 30, 1998 and 1997
                                  (unaudited)


                                        Three months            Nine months
                                           ended                  ended
                                        September 30,          September 30,
                                        -------------          -------------
                                       1998       1997       1998        1997
Net income (loss) allocated to:        ----       ----       ----        ----
  General Partner.................. $     418         46        (24)      (333)
  Limited Partners.................   789,375    551,164    890,561    621,348
                                    ---------- ---------- ---------- ----------
Net income......................... $ 789,793    551,210    890,537    621,015 
                                    ========== ========== ========== ==========

Net income (loss) allocated to the
  one General Partner Unit......... $     418         46        (24)      (333)
                                    ========== ========== ========== ==========

Net income per Unit, basic and 
  diluted, allocated to Limited 
  Partners per weighted average
  Limited Partnership Units
  (32,352.11 and 32,372.11 for 
  the three months ended September
  30, 1998 and 1997, and 32,352.11
  and 32,373.19 for the nine months
  ended September 30, 1998 and 
  1997, respectively).............. $   24.40      17.02      27.53      19.19
                                    ========== ========== ========== ==========



















                See accompanying notes to financial statements.


                                      -5-


                           INLAND CAPITAL FUND, L.P.
                            (a limited partnership)

                           Statements of Cash Flows

             For the nine months ended September 30, 1998 and 1997
                                  (unaudited)

                                                       1998          1997
Cash flows from operating activities:                  ----          ----
  Net income...................................... $   890,537       621,015
  Adjustments to reconcile net income to net
      cash used in operating activities:
    Gain on sale of land..........................    (892,942)     (654,363)
    Changes in assets and liabilities:
      Accrued interest and other receivables......     (95,724)      (67,796)
      Other current assets........................      (1,184)       (1,472)
      Accounts payable............................      (4,883)     (471,574)
      Accrued real estate taxes...................     (12,015)      (18,142)
      Due to Affiliates...........................      19,741        46,295
      Unearned income.............................     (17,054)      (24,478)
      Deferred gain on sale.......................        (292)         -
                                                   ------------  ------------
Net cash used in operating activities.............    (113,816)     (570,515)
                                                   ------------  ------------
Cash flows from investing activities:
  Sale (purchase) of marketable securities, net...     174,800       903,002
  Additions to investment properties..............    (255,364)     (491,925)
  Principal payments collected on mortgage loans
    receivable....................................      41,634          -
  Other assets....................................      52,565      (130,856)
  Proceeds from sale of investment properties.....   3,318,639       779,900
                                                   ------------  ------------
Net cash provided by investing activities.........   3,332,274     1,060,121
                                                   ------------  ------------
Cash flows from financing activities:
  Repurchase of Limited Partnership Units.........        -          (14,702)
  Distributions paid..............................        -             (194)
                                                   ------------  ------------
Net cash used in financing activities.............        -          (14,896)
                                                   ------------  ------------
Net increase in cash and cash equivalents.........   3,218,458       474,710
Cash and cash equivalents at beginning of period..     304,452       581,693
                                                   ------------  ------------
Cash and cash equivalents at end of period........ $ 3,522,910     1,056,403
                                                   ============  ============

Supplemental schedule of non-cash investing activities:
Mortgage loans receivable......................... $(1,125,000)         -
Reduction of investment properties................   3,542,808          -
Deferred gain on sale.............................       7,889          -
Gain on sale of land..............................     892,942          -
                                                   ------------  ------------
Proceeds from sale of investment properties....... $ 3,318,639          -
                                                   ============  ============

                See accompanying notes to financial statements.


                                      -6-


                           INLAND CAPITAL FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements

                              September 30, 1998
                                  (unaudited)


Readers of this  Quarterly  Report  should  refer  to the Partnership's audited
financial statements for the  fiscal  year  ended  December 31, 1997, which are
included  in  the  Partnership's  1997   Annual  Report,  as  certain  footnote
disclosures which would substantially duplicate those contained in such audited
financial statements have been omitted from this Report.

(1)  Organization and Basis of Accounting

InLand Capital Fund, L.P. (the "Partnership") was organized on June 21, 1991 by
the filing of a Certificate  of  Limited  Partnership under the Revised Uniform
Limited Partnership Act of the  State  of  Delaware.  On December 13, 1991, the
Partnership commenced an Offering of  60,000 Limited Partnership Units pursuant
to a Registration under the  Securities  Act  of 1933. The Amended and Restated
Agreement of Limited  Partnership  (the  "Partnership  Agreement") provides for
Inland Real Estate  Investment  Corporation  to  be  the  General Partner.  The
Offering terminated on August 23, 1993, with total sales of 32,399.28 Units, at
$1,000 per Unit,  resulting  in  $32,399,282  in  gross  offering proceeds, not
including the  General  Partner's  capital  contribution  of  $500.  All of the
holders of these Units  have  been  admitted  to  the Partnership.  The Limited
Partners of  the  Partnership  will  share  in  their  portion  of  benefits of
ownership of  the  Partnership's  real  property  investments  according to the
number of Units held. As of September 30, 1998, the Partnership has repurchased
and canceled a total of 47.17  Units  for $45,967 from various Limited Partners
through the Units Repurchase Program.  Under this program, Limited Partners may
under certain circumstances have their Units repurchased for an amount equal to
their Invested Capital.

The preparation of financial  statements  in conformity with generally accepted
accounting principles requires  management  to  make  estimates and assumptions
that affect the reported amounts  of  assets  and liabilities and disclosure of
contingent assets and liabilities at  the  date of the financial statements and
the reported amounts of  revenues  and  expenses  during the reporting periods.
Actual results could differ from those estimates.

Offering costs have been offset against the Limited Partners' capital accounts.

The Partnership  considers  all  highly  liquid  investments  purchased with an
original maturity of three months or less to be cash equivalents.

Investments purchased with an  original  maturity  of  three months or more are
considered to be investments in marketable securities.








                                      -7-


                           INLAND CAPITAL FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)

                              September 30, 1998
                                  (unaudited)


For  vacant  land  parcels   and   parcels  with  insignificant  buildings  and
improvements,  the  Partnership  uses  the  area  method  of  allocation, which
approximates the relative sales method of  allocation, whereby a per acre price
is used as the standard allocation  method  for  land purchases and sales.  The
total cost of the parcel is divided by the total number of acres to arrive at a
per acre price.  Repair and  maintenance  expenses are charged to operations as
incurred.

Statement of Financial Accounting Standards  No.  121 ("SFAS 121") requires the
Partnership to record  an  impairment  loss  on  its  property  to  be held for
investment whenever  its  carrying  value  cannot  be  fully  recovered through
estimated undiscounted future cash flows  from  their operations and sale.  The
amount of the impairment loss to  be recognized would be the difference between
the property's carrying value  and  the  property's  estimated fair value.  The
adoption of SFAS 121 did  not  have  any  effect on the Partnership's financial
position, results of operations or liquidity.     As of September 30, 1998, the
Partnership has not recognized any such impairment.

Statement of Financial Accounting  Standards  No.  128 "Earnings per Share" was
adopted by the Partnership for the  year  ended  December 31, 1997 and has been
applied to all prior  earnings  periods  presented in the financial statements.
The Partnership has no dilutive securities.

The Partnership is required to  pay  a  withholding tax to the Internal Revenue
Service with  respect  to  a  Partner's  allocable  share  of the Partnership's
taxable net income, if the  Partner  is  a foreign person. The Partnership will
first pay the withholding tax from the distributions to any foreign person, and
to the extent that the tax exceeds  the amount of distributions withheld, or if
there have been no distributions to  withhold, the excess will be accounted for
as a distribution to the  foreign  person. Future withholding tax payments will
be made every April, June, September and December.

No provision for Federal income taxes  has  been made as the liability for such
taxes is that of the Partners rather than the Partnership.

In  the  opinion  of  management,  the  financial  statements  contain  all the
adjustments necessary, which  are  of  a  normal  recurring  nature, to present
fairly  the  financial  position  and  results  of  operations  for  the period
presented herein.  Results of interim periods are not necessarily indicative of
results to be expected for the year.








                                      -8-


                           INLAND CAPITAL FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)

                              September 30, 1998
                                  (unaudited)


(2)  Transactions with Affiliates

The General  Partner  and  its  Affiliates  are  entitled  to reimbursement for
salaries and expenses of employees  of  the  General Partner and its Affiliates
relating to the administration of the  Partnership.  Such costs are included in
professional services and general and administrative expenses to Affiliates, of
which $12,614 and $3,822 was unpaid  as  of September 30, 1998 and December 31,
1997, respectively.

The General Partner is entitled to  receive Asset Management Fees equal to one-
quarter of 1% of  the  original  cost  to  the  Partnership of undeveloped land
annually, limited to a cumulative total over  the life of the Partnership of 2%
of the land's original  cost  to  the  Partnership.    Such fees of $47,421 and
$47,838 have been incurred and paid and are included in land operating expenses
to  Affiliates  for  the  nine  months  ended  September  30,  1998  and  1997,
respectively.

An Affiliate of the General  Partner  performed sales marketing and advertising
services for the Partnership and  was  reimbursed  (as set forth under terms of
the Partnership Agreement) for direct costs.  Such costs of $25,260 and $75,044
have been incurred and are included in marketing expenses to Affiliates for the
nine months ended September 30,  1998  and 1997, respectively, of which $11,744
and $6,521  was  unpaid  as  of  September  30,  1998  and  December  31, 1997,
respectively.

An Affiliate of  the  General  Partner  performed  property upgrades, rezoning,
annexation and other activities  to  prepare the Partnership's land investments
for sale and  was  reimbursed  (as  set  forth  under  terms of the Partnership
Agreement) for salaries and direct costs.   The Affiliate did not take a profit
on any project.  Such  costs  are  included  in investment properties, of which
$5,726 was unpaid as of September 30, 1998.

















                                      -9-


<TABLE>                                                INLAND CAPITAL FUND, L.P.
                                                        (a limited partnership)

                                                     Notes to Financial Statements
(3) Investment Properties                                      (continued)
<CAPTION>
                                                                                                            Total
                   Gross                           Initial Costs                 Costs       Cumulative   Remaining     Current
                   Acres    Purchase/ --------------------------------------  Capitalized     Costs of     Costs of    Year Gain
Parcel Location: Purchased   Sales      Original   Acquisition     Total     Subsequent to    Property    Parcels at    On Sale
  #      County   /(Sold)     Date        Costs       Costs        Costs      Acquisition       Sold       9/30/98     Recognized
------ --------- --------- ---------- ------------ ------------ ------------ -------------- ------------ ------------ ------------
<S>    <C>       <C>       <C>          <C>           <C>         <C>             <C>           <C>         <C>          <C>
  1    Kendall   108.8960  07/22/92   $   707,566       57,926      765,492         80,217         -         845,709         -

  2    McHenry   201.0000  11/09/93     2,020,314      122,145    2,142,459      1,614,945      509,825    3,247,579       77,589
                 (17.7420) 08/02/95
                  (8.6806) Var 1997
                  (1.9290) Var 1998

  3    Will       34.0474  03/04/94     1,235,830       88,092    1,323,922         34,936         -       1,358,858         -

  4    Will       86.9195  03/30/94     1,778,820      143,817    1,922,637        337,308      124,067    2,135,878      255,274
                  (2.3050) Var 1997
                  (1.5000) 08/13/98

  5    LaSalle   190.9600  04/01/94       532,000       18,145      550,145         62,950        6,655      606,440       56,765
                  (2.0600) 04/08/98

  6    DeKalb     59.0800  05/11/94       670,207       58,373      728,580        486,869    1,215,449         -          10,929
                  (4.9233) Apr 1998
                 (54.1567) 07/23/98

  7    Kendall   200.8210  07/28/94     1,506,158       82,999    1,589,157         23,932         -       1,613,089         -

  8    Kendall   133.0000  08/17/94     1,300,000      106,949    1,406,949          5,598         -       1,412,547         -

  9    LaSalle   335.9600  08/30/94       993,441       79,329    1,072,770        110,830         -       1,183,600         -

  10   Kendall   223.7470  09/16/94     2,693,025      205,660    2,898,685         28,394         -       2,927,079         -

10A(a) Kendall     7.0390  09/16/94       206,975       15,806      222,781          1,327      221,078         -            -
                  (7.0390) 04/21/95

  11   Kane      123.0000  09/26/94     1,353,000       75,551    1,428,551          6,202         -       1,434,753         -

  12   Kendall   110.2530  09/28/94       600,001       51,220      651,221         54,886         -         706,107         -

  13   LaSalle   352.7390  10/06/94     1,032,666       91,117    1,123,783         22,723    1,146,506         -         143,987
                 (10.0000) 07/27/98
                (342.7390) 08/31/98

  14   Kendall   134.7760  10/26/94     1,000,000       81,674    1,081,674          5,971         -       1,087,645         -

  15   McHenry   169.5400  10/31/94     2,900,000       79,196    2,979,196        240,206         -       3,219,402         -

  16   McHenry   207.0754  11/30/94     1,760,256      101,388    1,861,644        237,536         -       2,099,180         -

  17   LaSalle   236.4400  12/07/94     1,060,286       74,735    1,135,021            984         -       1,136,005         -

  18   Kendall   386.9900  11/02/95       934,993      126,329    1,061,322            501    1,061,823         -         348,398
                (386.9900) 08/31/98   ------------ ------------ ------------ -------------- ------------ ------------ ------------
                                      $24,285,539    1,660,450   25,945,989      3,356,315    4,285,403   25,013,871      892,942
                                      ============ ============ ============ ============== ============ ============ ============
</TABLE>
                                                              -10-


                                     -10-


                           INLAND CAPITAL FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)

                              September 30, 1998
                                  (unaudited)


(3) Investment Properties (continued)

(a) Included in the purchase of Parcel 10 was a house and several outbuildings,
    located on approximately seven acres, which was sold on April 21, 1995.

(b) Reconciliation of real estate owned:

                                                   September 30, December 31,
                                                       1998          1997
                                                   ------------- ------------
  Balance at January 1,........................... $28,301,315    27,714,600
  Additions during period.........................     255,364       911,759
                                                   ------------  ------------
                                                    28,556,679    28,626,359
  Sales during period.............................   3,542,808       325,044
                                                   ------------  ------------
  Balance at end of period........................ $25,013,871    28,301,315 
                                                   ============  ============


(4) Farm Rental Income

The Partnership has determined that all leases relating to the farm parcels are
operating leases.  Accordingly, rental income is reported when earned.

As of September 30, 1998, the Partnership had farm leases of generally one year
in duration, for approximately  2,381  acres  of  the approximately 2,462 acres
owned.


(5) Mortgage Loans Receivable

As a result of the sale of the remaining acres of Parcel 6 for a sales price of
$1,125,000 on July 7, 1998, the Partnership received a mortgage loan receivable
of $1,125,000 and recorded a  deferred  gain  on  sale of $7,889.  The deferred
gain will be recognized over the  life  of the related mortgage loan receivable
as principal payments are received,  of  which  $292  has been recognized as of
September 30, 1998.    Of  the  $1,125,000  mortgage  loan receivable received,
$725,000 accrues interest at 9% per  annum  and has a maturity date of November
30, 1998 (extended from September  30,  1998),  at  which time all principal is
due.  The  remaining  $400,000  accrues  interest  at  9%  per  annum and has a
maturity date of July 7, 2001, at  which  time all accrued interest, as well as
principal, is due.   As  of  September  30,  1998,  the remaining mortgage loan
receivable balance was $1,083,366 and accrued interest totaled $22,973.




                                     -11-


                           INLAND CAPITAL FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)

                              September 30, 1998
                                  (unaudited)


(6) Subsequent Events

On October 16, 1998, the Partnership  sold  approximately 1.8 acres of Parcel 4
to an unaffiliated third  party  for  $385,000.    The Partnerhsip received net
sales proceeds of $372,322 and recorded a gain on sale of $305,389.











































                                     -12-


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

Certain statements in this  "Management's  Discussion and Analysis of Financial
Condition and Results of Operations" and  elsewhere in this quarterly report on
Form 10-Q constitute  "forward-looking  statements"  within  the meaning of the
Federal Private Securities  Litigation  Reform  Act  of  1995.   These forward-
looking statements involve  known  and  unknown  risks, uncertainties and other
factors which  may  cause  the  Partnership's  actual  results, performance, or
achievements to be materially  different  from any future results, performance,
or achievements  expressed  or  implied  by  these  forward-looking statements.
These factors include, among other things, federal, state or local regulations;
adverse changes in general economic  or local conditions; inability of borrower
to meet financial  obligations;  uninsured  losses;  and potential conflicts of
interest between the  Partnership  and  its  Affiliates,  including the General
Partner.

Liquidity and Capital Resources

On December 13, 1991, the  Partnership  commenced an Offering of 60,000 Limited
Partnership Units ("Units")  at  $1,000  per  Unit,  pursuant to a Registration
Statement  on  Form  S-11  under  the  Securities  Act  of  1933.  The Offering
terminated on August 23, 1993, with  total  sales of 32,399.28 Units, at $1,000
per Unit, resulting in  $32,399,282  in  gross offering proceeds, not including
the General Partner's capital contribution of $500. All of the holders of these
Units have been admitted  to  the  Partnership.    The  Limited Partners of the
Partnership will  share  in  their  portion  of  benefits  of  ownership of the
Partnership's real property investments according to the number of Units held.

The Partnership used $25,945,989 of gross  offering proceeds to purchase, on an
all-cash basis, eighteen parcels of  land  and one building.  These investments
include the payment of  the  purchase  price,  acquisition fees and acquisition
costs of such properties.  One  of  the  parcels was purchased during 1992, one
during 1993, fifteen during 1994  and  one  during  1995.   As of September 30,
1998, the Partnership has had multiple  sales transactions through which it has
disposed of  the  building  and  approximately  840  acres  of  the 3,302 acres
originally owned.  As of  September  30,  1998, cumulative distributions to the
Limited Partners have totaled $1,646,334 (which represents a return of Invested
Capital, as defined the  Partnership  Agreement).   Through September 30, 1998,
the Partnership has used $3,356,315 of working capital reserve for rezoning and
other activities and such amount is included in investment properties.

The Partnership's capital needs and resources will vary depending upon a number
of factors, including the extent to which the Partnership conducts rezoning and
other  activities  relating  to  utility  access,  the  installation  of roads,
subdivision and/or annexation of land to a municipality, changes in real estate
taxes affecting the Partnership's land, and the amount of revenue received from
leasing.  As of September 30, 1998,  the Partnership owns, in whole or in part,
fifteen of its original eighteen parcels,  the  majority of which are leased to
local farmers and are generating sufficient cash flow from farm leases to cover
property taxes and insurance.







                                     -13-


At September  30,  1998,  the  Partnership  had  cash  and  cash equivalents of
$3,522,910 of which approximately  $159,300  is  reserved for the repurchase of
Units through  the  Unit  Repurchase  Program.    The  remaining  $3,363,610 is
available  to  be  used   for   Partnership   expenses  and  liabilities,  cash
distributions to partners, and other activities  with respect to some or all of
its land parcels.  The Partnership plans to maximize its parcel sales effort in
anticipation of rising land values.

The Partnership plans to enhance the  value of its land through pre-development
activities such as rezoning, annexation  and land planning. The Partnership has
already been successful in, or is in the process of pre-development activity on
a majority of the  Partnership's  land  investments.  Parcel  2, annexed to the
village of McHenry and zoned for a business park, has one phase of improvements
complete and sites are being marketed  to  potential buyers, of which eleven of
the 190 lots were sold as of  September  30,  1998. (See Note 3 of the Notes to
Financial Statements.)  Parcel 4,  zoned  for  a  variety of business uses, has
improvements underway and  sites  are  being  marketed  to potential buyers, of
which one site consisting of .87  acres  was  sold  to a hotel chain on June 6,
1997, another site consisting  of  1.435  acres  was  sold to a combination gas
station/convenient store on August 12, 1997  and a third site consisting of 1.5
acres was sold to a national fast-food chain on August 13, 1998. (See Note 3 of
the Notes to Financial Statements.)  Parcels 15 and 16 have been annexed to the
village of Huntley and zoned  for  residential and commercial development.  The
Partnership sold Parcels 13  and  18  and  the  remaining  acres of Parcel 6 to
unaffiliated third-parties.  (See Note 3 of the Notes to Financial Statements.)

Results of Operations

As of  September  30,  1998,  the  Partnership  owned  fifteen  parcels of land
consisting  of  approximately   2,462   acres.   Of   the  2,462  acres  owned,
approximately 2,381 acres are  tillable  and  leased  to  local farmers and are
generating sufficient cash flow  to  cover  property taxes, insurance and other
miscellaneous property expenses.   The  sale  of investment property income and
the cost  of  investment  property  sold  recorded  for  the  nine months ended
September 30, 1998  is  the  result  of  the  sale  of  Parcels  6,  13 and 18,
additional sales at Parcels 2 and  4  and  an  easement sale on Parcel 5.  (See
Note 3 of the Notes to Financial  Statements.)  Rental income decreased for the
three and nine months ended September  30,  1998,  as compared to the three and
nine months ended September 30, 1997, due to the decrease in tillable acres due
to  land  sales  and   pre-development   activity  on  the  Partnership's  land
investments.  This decrease  was  partially  offset  by  the annual increase in
lease amounts from tenants.

Interest income increased for  the  three  and  nine months ended September 30,
1998, as compared to the three  and  nine  months ended September 30, 1997, due
primarily as a  result  of  the  interest  income  earned  on the mortgage loan
receivable the Partnership received from  the  sale of the remaining acreage of
Parcel 6.   See  Note  5  of  the  Notes  to  Financial  Statements for further
discussion of the terms  of  the  mortgage  loan  receivable received from this
sale.

The other income recorded  for  the  nine  months  ended  September 30, 1997 is
primarily the result of the Partnership receiving a non-refundable deposit on a
land sale which did not occur.  




                                     -14-


Professional  services  to  Affiliates  decreased  for  the  nine  months ended
September 30, 1998, as compared  to  the  nine months ended September 30, 1997,
due primarily to a  decrease  in  legal  services  required by the Partnership.
Professional services to non-affiliates decreased for the three and nine months
ended September 30,  1998,  as  compared  to  the  three  and nine months ended
September 30, 1997, due  to  a  decrease  in  legal services. This decrease was
partially offset by an increase in accounting fees.

General and administrative expenses to  Affiliates  decreased for the three and
nine months ended September 30, 1998, as  compared to the three and nine months
ended September 30,  1997,  due  primarily  to  decreases  in investor services
expenses.  General and administrative  expenses to non-affiliates increased for
the three and nine months ended  September  30,  1998, as compared to the three
and nine months ended September 30,  1997,  due primarily to an increase in the
Illinois Replacement tax.

Marketing expenses to Affiliates decreased for  the three and nine months ended
September 30, 1998, as compared  to  the  three and nine months ended September
30, 1997, due to  the  identification  of  such  costs  which are specific to a
particular parcel, and accordingly, have  been  capitalized and are included in
investments in land.   Marketing  expenses  to non-affiliates decreased for the
three and nine months ended September  30,  1998,  as compared to the three and
nine months ended September  30,  1997,  due  to  a decrease in advertising and
travel  expenses  relating  to  marketing  the  land  portfolio  to prospective
purchasers.

Land operating expenses to non-affiliates  increased  for the nine months ended
September 30, 1998, as compared  to  the  nine months ended September 30, 1997,
due to an  increase  in  real  estate  taxes  and  maintenance  expenses of the
Partnership's land investments.



Year 2000 Issues

GENERAL

Many computer operating systems  and  software  applications were designed such
that the year 1999 is the  maximum  date  that can be processed accurately.  In
conducting business, the Partnership relies  on computers and operating systems
provided by equipment manufacturers, and also on application software developed
internally and,  to  a  limited  extent,  by  outside  software  vendors.   The
Partnership has assessed its  vulnerability  to the so-called "Year-2000 Issue"
with respect to its equipment and computer systems.














                                     -15-


STATE OF READINESS

The  Partnership  has  identified  the  following  two  areas  for  "Year-2000"
compliance efforts:

Business  Computer  Systems:  The  majority  of  the  Partnership's information
technology systems  were  developed  internally  and  include accounting, lease
management, investment portfolio  tracking,  and  tax  return preparation.  The
Partnership has rights to the  source  code  for these applications and employs
programmers who are  knowledgeable  regarding  these  systems.   The process of
testing these internal  systems  to  determine  year  2000 compliance is nearly
complete.  The Partnership does  not  anticipate any material costs relating to
its  business  computer  systems  regarding  year  2000  compliance  since  the
Partnership's  critical  hardware  and  software  systems  use  four  digits to
represent the applicable year.  The Partnership does use various computers, so-
called "PC's", that may run software that  may not use four digits to represent
the applicable year.  The  Partnership  is  in  the  process  of testing the PC
hardware and software to determine year  2000  compliance, but it must be noted
that such PC's  are  incidental  to  the  Partnership's  critical systems.  The
Partnership is considering independent testing of its critical systems.

Tenants and Suppliers: The Partnership is  in the process of surveying tenants,
suppliers and other parties with whom the Partnership does a significant amount
of business to identify the Partnership's  potential exposure in the event such
parties are not  year  2000  compliant  in  a  timely  manner.  Since this area
involves some parties over which the Partnership has no control, such as public
utility companies, it is difficult, at best, to judge the status of the outside
companies' year 2000 compliance.  The  Partnership  is working closely with all
suppliers of goods and services  in  an  effort  to  minimize the impact of the
failure of any supplier to become year 2000 compliant by December 31, 1999. The
Partnership's investigations and assessments  of  possible year 2000 issues are
in a preliminary stage,  and  currently  the  Partnership  is  not aware of any
material impact on its business, operations  or financial condition due to year
2000 non-compliance by any of the Partnership's tenants or suppliers. 

YEAR 2000 COSTS

The Partnership's General Partner  and  its  Affiliates  estimate that costs to
achieve  year  2000  compliance   will   not   exceed  $50,000.  However,  only
approximately 1% of these costs will  be  directly allocated to and paid by the
Partnership. The balance of the  year 2000 compliance costs, approximately 99%,
will be paid by  the  General  Partner  and  its  Affiliates.   Total year 2000
compliance  costs  incurred  through  September   30,  1998  are  estimated  at
approximately $5,000.

YEAR 2000 RISKS

The most reasonable likely worst case scenario for the Partnership with respect
to the year 2000 non-compliance of  its  business computer systems would be the
inability to access information  which  could  result  in  the failure to issue
financial reports.  The  most  reasonable  likely  worst  case scenario for the
Partnership with respect to  the  year  2000  non-compliance  of its tenants is
failure to receive rental income  which  could  result in the Partnership being
unable to meet cash requirements for monthly expenses.

CONTINGENCY PLAN

The Partnership is in the process  of formulating a contingency plan which will
be developed by July of 1999.


                                     -16-


                          PART II - Other Information

Items 1 through 6(b) are  omitted  because  of  the absence of conditions under
which they are required.

Item 7.  Exhibits and Reports on Form 8-K

     (a) Exhibits:

         (27) Financial Data Schedule

     (b) Reports on Form 8-K:

         None












































                                     -17-


                                  SIGNATURES



Pursuant to the  requirements  of  the  Securities  Exchange  Act  of 1934, the
Registrant has duly caused  this  report  to  be  signed  on  its behalf by the
undersigned, thereunto duly authorized.



                            INLAND CAPITAL FUND, L.P.

                            By:   Inland Real Estate Investment Corporation
                                  General Partner


                                  /S/ ROBERT D. PARKS

                            By:   Robert D. Parks
                                  Chairman
                            Date: November 12, 1998


                                  /S/ PATRICIA A. CHALLENGER

                            By:   Patricia A. Challenger
                                  Senior Vice President
                            Date: November 12, 1998


                                  /S/ KELLY TUCEK

                            By:   Kelly Tucek
                                  Principal Financial Officer and
                                  Principal Accounting Officer
                            Date: November 12, 1998






















                                     -18-