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 August 31, 2004

         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: 333-109667-01

                         TRUST CREATED FEBRUARY 25, 1986
             (Exact name of registrant as specified in its charter)

                OREGON                            51-6162910
   (State or other jurisdiction of     (IRS Employer Identification No.)
    incorporation or organization)

         3850 THREE MILE LANE, MCMINNVILLE, OREGON            97128-9496
          (Address of principal executive offices)            (Zip Code)

                                  503-472-9361
              (Registrant's telephone number, including area code)

                                      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 12 preceding 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 Exchange Act). Yes ( ) No (X)

     Indicate the number of units of beneficial interest outstanding, as of the
latest practicable date:

              CLASS                       OUTSTANDING AS OF OCTOBER 21, 2004
       Beneficial interest                          Not applicable


<PAGE>


                         TRUST CREATED FEBRUARY 25, 1986

                          QUARTERLY REPORT ON FORM 10-Q
            FOR THE THREE MONTHS AND SIX MONTHS ENDED AUGUST 31, 2004

                                TABLE OF CONTENTS


                                                                            PAGE

PART I.   Financial Information...............................................3

 Item 1.  Financial Statements................................................3
             Balance Sheets...................................................3
             Statements of Operations (Unaudited).............................4
             Statements of Cash Flows (Unaudited).............................5
 Item 2.  Management's Discussion and Analysis of Financial Condition
             and Results of Operations.......................................12
 Item 3.  Quantitative and Qualitative Disclosures About Market Risk.........16
 Item 4.  Controls and Procedures............................................17

PART II.  Other Information

 Item 6.  Exhibits and Reports on Form 8-K...................................18

SIGNATURES...................................................................19

EXHIBIT INDEX................................................................20


                                       2
<PAGE>
                          PART I. FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS.
<TABLE>

                                    TRUST CREATED FEBRUARY 25, 1986
                                             BALANCE SHEETS
                                            (in thousands)

                                                                  August 31,
                                                                     2004      February 29,
                                                                  (Unaudited)       2004
                                                                  ----------    -----------
                               ASSETS
<S>                                                                <C>           <C>
Assets
        Aircraft and equipment, net ..........................     $ 11,919      $ 12,105
        Notes receivable from affiliate ......................         --             604
        Due from affiliates ..................................          640           637
                                                                    --------      --------
                      Total assets ...........................     $ 12,559      $ 13,346
                                                                    ========      ========

                    LIABILITIES AND TRUST EQUITY
Current liabilities:
        Accrued liabilities ..................................     $     53      $   --
        Current portion of long-term debt ....................        5,912         5,059
                                                                    --------      --------
               Total current liabilities .....................        5,965         5,059

Long-term debt ...............................................         --           2,898
Deferred rental income .......................................        5,289         4,799
                                                                    --------      --------
                      Total liabilities ......................       11,254        12,756
                                                                    --------      --------

Trust equity .................................................       21,019        18,409
Less: Accounts and notes receivable from affiliates ..........      (19,714)      (17,819)
                                                                    --------      --------
                      Total trust equity .....................        1,305           590
                                                                    --------      --------
                            Total liabilities and trust equity     $ 12,559      $ 13,346
                                                                    ========      ========

</TABLE>
     The accompanying condensed notes to the unaudited financial statements are
an integral part of these statements.

                                       3
<PAGE>
<TABLE>

                                     TRUST CREATED FEBRUARY 25, 1986
                                  STATEMENTS OF OPERATIONS (UNAUDITED)
                                        (in thousands of dollars)


                                           For the Three Months       For the Six Months
                                             Ended August 31,           Ended August 31,
                                         ----------------------      ----------------------
                                            2004          2003         2004           2003
                                         ---------     ---------     ---------     ---------
<S>                                      <C>           <C>           <C>           <C>
Operating revenue:
Rental income from affiliate .......     $  1,881      $  1,881      $  3,761      $  3,761

Expense (other income)
  Depreciation .....................           93            94           186           187
  Interest expense .................          169           321           366           801
  Interest income ..................           (3)          (26)           (9)          (59)
                                         ---------     ---------     ---------     ---------
    Total expense (other income) ...          259           389           543           929
                                         ---------     ---------     ---------     ---------
    Net income .....................        1,622         1,492         3,218         2,832

Trust equity at beginning at period        19,703        16,478        18,409        15,138
Less: Distributions to beneficiaries         (306)       (1,275)         (608)       (1,275)
                                         ---------     ---------     ---------     ---------
Trust equity at end of period ......     $ 21,019      $ 16,695      $ 21,019      $ 16,695
                                         =========     =========     =========     =========

</TABLE>
     The accompanying condensed notes to the unaudited financial statements are
an integral part of these statements.

                                       4
<PAGE>

                          TRUST CREATED FEBRUARY 25, 1986
                       STATEMENTS OF CASH FLOWS (UNAUDITED)
                                  (in thousands)


                                                         For the Six Months
                                                          Ended August 31,
                                                       -----------------------
                                                         2004           2003
                                                       -------         -------
Net income ....................................        $ 3,218         $ 2,832

Adjustments to reconcile net income to
  net cash provided by operating activities:
    Depreciation and amortization .............            186             187
  Change in operating assets and liabilities
    Accounts receivable from affiliate ........         (1,895)            336
    Accrued liabilities .......................             53              96
    Due from affiliate ........................             (3)            321
    Deferred rental income ....................            490             490
                                                       -------         -------
      Net cash provided by operating activities          2,049           4,262

Cash flows from investing activities:
  Notes receivable from affiliate .............            604             638
                                                       -------         -------
      Net cash provided by investing activities            604             638

Cash flows from financing activities:
  Distributions to beneficiaries ..............           (608)         (1,275)
  Payments on long term debt ..................         (2,045)         (3,625)
                                                       -------         -------
      Net cash used in financing activities ...         (2,653)         (4,900)
                                                       -------         -------
Net change in cash ............................           --              --

Cash, beginning of period .....................           --              --
                                                       -------         -------
Cash, end of period ...........................        $  --           $  --
                                                       =======         =======

         The accompanying condensed notes to the unaudited financial statements
are an integral part of these statements.


                                       5
<PAGE>


                         TRUST CREATED FEBRUARY 25, 1986
                             CONDENSED NOTES TO THE
                         UNAUDITED FINANCIAL STATEMENTS
                       FOR THE THREE MONTHS AND SIX MONTHS
                              ENDED AUGUST 31, 2004

NOTE 1 - BASIS FOR PRESENTATION

     The interim financial statements included in this report have been prepared
pursuant to the rules and regulations of the United States Securities and
Exchange Commission ("SEC"). Certain information and note disclosures normally
included in the annual financial statements prepared in accordance with
accounting principles generally accepted in the United States of America have
been condensed or omitted pursuant to the rules and regulations of the SEC.

     As used in these condensed notes to unaudited financial statements, the
term "Trust" refers to that certain Trust created pursuant to the Trust
Agreement, dated as of February 25, 1986, as amended and restated pursuant to
the Amended and Restated Trust Agreement, dated as of August 31, 1987, as
amended on August 31, 1988, and as amended and restated pursuant to the Second
Amended and Restated Trust Agreement, dated as of September 29, 1995, as amended
by the First Amendment thereto as of May 8, 2003, as amended by the Second
Amendment thereto as of January 14, 2004, and as amended by the Third Amendment
thereto as of May 10, 2004, among Evergreen International Aviation, Inc. (an
assignee of Evergreen Holdings, Inc., as successor to B-747, Inc. and King
Christian, Inc.) and Delford M. Smith, as Beneficiaries, and Wilmington Trust
Company, not in its individual capacity, but solely as Owner Trustee. The Trust
is a majority-owned subsidiary of Evergreen International Aviation, Inc.
("Evergreen Aviation"), which is a wholly-owned subsidiary of Evergreen
Holdings, Inc. ("Holdings"). The Trust's sole business purpose is to lease
airplanes to Evergreen International Airlines, Inc. ("Airlines"), which is a
wholly-owned subsidiary of Evergreen Aviation. Because the Trust and Airlines
are both subsidiaries of Evergreen Aviation, the aircraft leasing services
provided by the Trust to Airlines result in intercompany transactions that also
produce intercompany receivables and payables between affiliates.

     In the opinion of management, the interim financial statements included in
this report contain all adjustments necessary to present fairly the financial
position, results of operations, and cash flows of the Trust for the periods
indicated. Such adjustments, other than non-recurring adjustments that have been
separately disclosed, are of a normal, recurring nature.

     Interim results presented in this report are not necessarily indicative of
operating results for a full year. The interim financial statements included in
this report should be read in conjunction with the Trust's financial statements
and the accompanying notes that were included in the Trust's 2004 Annual Report
on Form 10-K for the year ended February 29, 2004 filed with the SEC on June 14,
2004.

                                       6
<PAGE>

                         TRUST CREATED FEBRUARY 25, 1986
                             CONDENSED NOTES TO THE
                         UNAUDITED FINANCIAL STATEMENTS
                       FOR THE THREE MONTHS AND SIX MONTHS
                              ENDED AUGUST 31, 2004


NOTE 2 - AIRCRAFT

     Aircraft owned by the Trust consists of one Boeing 747 aircraft and three
DC-9 aircraft. As of August 31, 2004 and February 29, 2004, the net book value
of the aircraft was as follows:

                                            (in thousands)
                                      -------------------------
                                      August 31,      February 29,
                                        2004             2004
                                      --------         --------
Boeing 747 aircraft ..........        $ 31,243         $ 31,243
DC9 aircraft .................          17,380           17,380
Less:
      Accumulated depreciation         (36,704)         (36,518)
                                      --------         --------
      Net book value .........        $ 11,919         $ 12,105
                                      ========         ========


     On May 7, 1997, the Trust granted to FINOVA Capital Corporation ("FINOVA")
a first priority security interest in all of the above-listed aircraft. The
security interest was granted in connection with the $30.0 million Secured Loan
Agreement that was executed by the Trust and FINOVA on May 7, 1997. See Note 3 -
Long-Term Debt below.

     The Trust leases all of the above-listed aircraft to Airlines. Because the
Trust and Airlines are both subsidiaries of Evergreen Aviation, the aircraft
leases are related-party transactions. See Note 4 - Related Party Transactions
below.


NOTE  3 - LONG-TERM DEBT

     On May 7, 1997, the Trust and FINOVA entered into a Secured Loan Agreement
whereby FINOVA agreed to loan $30.0 million to the Trust. Outstanding principal
under the Secured Loan Agreement bears interest at the annual rate of 10.44%.
Monthly installments of principal and interest in the amount of approximately
$472,000 per installment are payable through April 2005. Upon maturity of the
Secured Loan Agreement in April 2005, a final payment of approximately
$2.5 million will be due and payable. Performance of the Trust's obligations
under the Secured Loan Agreement are secured by means of a first priority
security interest granted by the Trust to FINOVA in all of the aircraft owned by
the Trust.

                                       7
<PAGE>

                         TRUST CREATED FEBRUARY 25, 1986
                             CONDENSED NOTES TO THE
                         UNAUDITED FINANCIAL STATEMENTS
                       FOR THE THREE MONTHS AND SIX MONTHS
                              ENDED AUGUST 31, 2004


     The outstanding principal balances of the Secured Loan Agreement, as of
August 31, 2004 and February 29, 2004, were as follows:

                                                  August 31,    February 29,
              in thousands)                          2004            2004
                                                   -------         -------
Note payable to FINOVA Capital Corporation        $ 5,912         $ 7,957
Less: current portion ....................         (5,912)         (5,059)
                                                   -------         -------
        Net long-term debt ...............        $     0         $ 2,898
                                                   =======         =======

NOTE  4 - RELATED PARTY TRANSACTIONS

     RENTAL INCOME FROM AFFILIATE - The Trust, as lessor, and Airlines, as
lessee, are parties to an aircraft lease whereby the Trust leases its owned
aircraft to Airlines. During the three months and six months ended August 31,
2004, the Trust recognized lease revenue from the aircraft lease in the amounts
of $1.9 million and $3.8 million, respectively. During the three months and six
months ended August 31, 2003, the Trust recognized lease revenue from the
aircraft lease in the amounts of $1.9 million and $3.8 million, respectively.

     DEFERRED RENTAL REVENUE - Pursuant to the terms of the lease agreement, the
amount of the monthly rental payments increases over the term of the lease.
However, the Trust amortizes the effects of the increasing rental payments over
the term of the lease in order to recognize rental income on a straight-line
basis. As a result, deferred rental income is generated in an amount equal to
the difference between the monthly payment, as set forth in the lease agreement,
and the straight-line recognition of lease income. As of August 31, 2004 and
February 29, 2004, the balance of deferred rental income was $5.3 million and
$4.8 million, respectively.

     ACCOUNTS RECEIVABLE FROM AFFILIATE - In lieu of making monthly rental
payments to the Trust, Airlines pays directly to FINOVA the monthly payments
that become due under the Secured Loan Agreement. Because the monthly debt
payment made by Airlines to FINOVA is less than the monthly rental amount under
the lease agreement, the difference is recognized by the Trust as a receivable
from Airlines. As of August 31, 2004 and February 29, 2004, the amounts of the
Trust's receivable from Airlines were $19.7 million and $17.8 million,
respectively. Due to the uncertainty of the future collection of the Trust's
outstanding receivable from Airlines, the receivable is classified as a
reduction to the Trust's equity on the financial statements.

                                       8
<PAGE>

                         TRUST CREATED FEBRUARY 25, 1986
                             CONDENSED NOTES TO THE
                         UNAUDITED FINANCIAL STATEMENTS
                       FOR THE THREE MONTHS AND SIX MONTHS
                              ENDED AUGUST 31, 2004


     INDEBTEDNESS OF MR. DELFORD M. SMITH - The Trust previously held a note
receivable from one of its beneficiaries, Mr. Delford M. Smith. The receivable
was evidenced by a note that was collateralized by Mr. Smith's personal assets.
The note bore interest at an annual rate of 4% and was reduced annually by
Mr. Smith's beneficial share of the Trust's net income.


     Payments of principal on the note were classified as reductions to the
Trust's equity on the financial statements. At February 29, 2004, the
outstanding balance on the note receivable from Mr. Smith was approximately
$604,000. During the six months ended August 31, 2004, distributions of Mr.
Smith's beneficial share of Trust net income were applied to repay in full the
outstanding balance of $604,000. As of August 31, 2004, the note receivable from
Mr. Smith is paid in full.


NOTE  5 - TRUST AS CO-GUARANTOR OF EVERGREEN AVIATION DEBT OBLIGATIONS

     INDENTURE NOTES - On May 16, 2003, Evergreen Aviation issued $215 million
of 12% Senior Second Secured Notes ("Indenture Notes"). The Indenture Notes were
issued pursuant to an Indenture, dated as of May 16, 2003, by and among i)
Evergreen Aviation, as issuer, ii) Holdings and substantially all of the
subsidiaries of Evergreen Aviation, including the Trust, as guarantors, and
iii) Bank One, National Association, as trustee.

     The Indenture Notes bear interest at an annual fixed rate of 12%. Payments
of interest are due semi-annually on May 15 and November 15 of each year. The
next payment of accrued interest in the amount of $12.9 million will be due and
payable on November 15, 2004.

     The Indenture Notes are secured by a second priority lien, subject to
certain permitted liens, on substantially all of the assets of Evergreen
Aviation and its domestic subsidiaries, including the assets of the Trust. The
Indenture Notes are fully and unconditionally guaranteed, both jointly and
severally, by Holdings, substantially all of Evergreen Aviation's subsidiaries,
and the Trust.

                                       9
<PAGE>

                         TRUST CREATED FEBRUARY 25, 1986
                             CONDENSED NOTES TO THE
                         UNAUDITED FINANCIAL STATEMENTS
                       FOR THE THREE MONTHS AND SIX MONTHS
                              ENDED AUGUST 31, 2004


     The Indenture Note imposes certain restrictions on Evergreen Aviation and
its restricted subsidiaries, including the Trust. Such restrictions include, but
are not limited to, restrictions on the ability to:

     o    incur additional debt;
     o    pay dividends;
     o    acquire shares of capital stock;
     o    make payments on subordinated debt or make investments;
     o    make distributions from restricted subsidiaries;
     o    issue or sell capital stock of restricted subsidiaries;
     o    issue guarantees;
     o    sell or exchange assets;
     o    enter into transactions with shareholders and affiliates;
     o    make capital expenditures;
     o    create liens; and
     o    effect mergers and other changes of control.

     SECURED CREDIT FACILITY - On May 13, 2004, Evergreen Aviation and certain
of its subsidiaries, including the Trust, entered into a three-year senior
secured credit facility financing agreement (the "Secured Credit Facility") with
Wells Fargo Foothill, Inc. and Ableco Finance LLC (collectively, "the Wells
Fargo Lenders"). The Secured Credit Facility consists of two loans - a
$50.0 million term loan and a $50.0 million revolving loan. The Secured Credit
Facility is secured by substantially all of the assets of Evergreen Aviation and
its domestic subsidiaries, including the assets of the Trust.

     As of August 31, 2004, the outstanding balance of the Secured Credit
Facility was $88.6 million. As of August 31, 2004, Evergreen Aviation's
availability to obtain additional advances under the Secured Credit Facility was
$5.8 million.

     Evergreen Aviation and its restricted subsidiaries, including the Trust,
are subject to various restrictive covenants under the Secured Credit Facility.
In particular, Evergreen Aviation and its restricted subsidiaries, including the
Trust, have agreed to maintain: i) an undrawn availability of not less than
$5 million on the revolving loan, ii) minimum thresholds with respect to
certain consolidated and non-consolidated earnings before interest, taxes,
depreciation and amortization ("EBITDA"), and iii) a minimum ratio with respect
to fixed charge coverages. In addition, Evergreen Aviation and its restricted
subsidiaries, including the Trust, have agreed to limit the amount of capital
expenditures that may be made in any fiscal year to $75.0 million, of which at
least $10.0 million must be financed from sources other than the Secured Credit
Facility.

                                       10
<PAGE>

                         TRUST CREATED FEBRUARY 25, 1986
                             CONDENSED NOTES TO THE
                         UNAUDITED FINANCIAL STATEMENTS
                       FOR THE THREE MONTHS AND SIX MONTHS
                              ENDED AUGUST 31, 2004


     RISK OF DEFAULT ON DEBT OBLIGATIONS - Substantially all of the assets of
Evergreen Aviation and its subsidiaries, including the Trust, are pledged as
collateral under Evergreen Aviation's various debt agreements. Furthermore, the
Indenture Notes and the Secured Credit Facility both contain cross-default
provisions whereby certain events of default under one or more of the debt
obligations of Evergreen Aviation or its subsidiaries, including the Trust, will
result in an event of default under either, or both, the Indenture Notes and the
Secured Credit Facility. In the event that such defaults are not cured or
waived, the Trust is at risk that the Trust's guarantor obligations under
either, or both, the Indenture Notes and the Secured Credit Facility will be
accelerated.

     GOING CONCERN QUALIFICATION FOR HOLDINGS AND EVERGREEN AVIATION - In their
audit opinion report on the financial statements for Holdings for the fiscal
year ended February 29, 2004, PricewaterhouseCoopers, LLP ("PwC"), the
independent registered public accounting firm for Holdings and Evergreen
Aviation, included an explanatory paragraph which noted that Holdings and
Evergreen Aviation have historically had violations of certain debt covenants.
Because of the various cross-default provisions that are contained in Evergreen
Aviation's long-term debt obligations, a failure by Evergreen Aviation or one of
its subsidiaries, including the Trust, to comply with the covenants of Evergreen
Aviation's long-term debt obligations could result in an acceleration of all of
Evergreen Aviation's outstanding debt obligations. Due to the historical
difficulty experienced by Holdings and Evergreen Aviation in meeting debt
covenants, there is substantial doubt as to the ability of Holdings and
Evergreen Aviation to continue as going concerns.

     The Trust's sole source of income is from Airlines, a wholly-owned
subsidiary of Evergreen Aviation. Any event which would result in the
discontinuance of the business operations of Evergreen Aviation and its
subsidiaries would have a materially negative impact upon the Trust.

                                       11
<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     In accordance with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, we note that certain statements in this Quarterly
Report on Form 10-Q and elsewhere are forward-looking and provide other than
historical information. The words "believe," "estimate," anticipate," "project,"
"intend," "expect," "plan," "forecast," and similar expressions are intended to
identify forward-looking statements. Such forward-looking statements are not
guarantees of future performance and are subject to certain risks and
uncertainties that could cause actual events and results to differ materially
from those discussed herein. Because such forward-looking statements are
necessarily dependent on assumptions, data, or methods that may be incorrect or
imprecise, and may not be realized, the statements contained in this Quarterly
Report on Form 10-Q or elsewhere should not be relied upon as predictions of
future events.

     Our 2004 Annual Report on Form 10-K identifies important risks that could
cause actual results to differ materially from assertions made by us in
forward-looking statements. Such risks include, but are not limited to:

     o    our reliance on one customer, an affiliate, Evergreen International
          Airlines, Inc.;
     o    our future compliance with the terms of our debt agreements;
     o    general conditions in the aviation industry;
     o    the effect of government laws and regulations;
     o    the risks related to our operations in dangerous locations; and
     o    weaknesses in our internal controls.

     These are only some of the risks that may affect the forward-looking
statements contained in this Form 10-Q. For further information regarding risks
and uncertainties associated with our business, please see the Trust's other
reports and filings with the Securities and Exchange Commission ("SEC"),
including, but not limited to the Trust's 2004 Annual Report on Form 10-K filed
with the SEC on June 14, 2004.

     Readers of this Quarterly Report on Form 10-Q are cautioned not to place
undue reliance on the forward-looking statements contained herein, which speak
only as of the date hereof. We undertake no obligation to publicly update or
revise our forward-looking statements included in this report, whether as a
result of new information, future events or otherwise, except as required by
law.

     The Trust's annual report on Form 10-K, quarterly reports on Form 10-Q and
current reports on Form 8-K, as well as any amendments to those reports, are
available free of charge through Evergreen Aviation's website at
WWW.EVERGREENAVIATION.COM/CORP.HTML. as soon as reasonably practicable after the
Trust files such reports with, or furnishes them to, the SEC.


                                       12
<PAGE>

OVERVIEW

     The Trust was created pursuant to the Trust Agreement, dated as of
February 25, 1986, as amended and restated pursuant to the Amended and Restated
Trust Agreement, dated as of August 31, 1987, as amended on August 31, 1988,
and as amended and restated pursuant to the Second Amended and Restated Trust
Agreement, dated as of September 29, 1995, as amended by the First Amendment
thereto as of May 8, 2003, as amended by the Second Amendment thereto as of
January 14, 2004, and as amended by the Third Amendment thereto as of
May 10, 2004, among Evergreen International Aviation, Inc. (an assignee of
Evergreen Holdings, Inc., as successor to B-747, Inc. and King Christian, Inc.)
and Delford M. Smith, as Beneficiaries, and Wilmington Trust Company, not in its
individual capacity, but solely as Owner Trustee. The Trust is a majority-owned
subsidiary of Evergreen International Aviation, Inc. ("Evergreen Aviation"),
which is a wholly-owned subsidiary of Evergreen Holdings, Inc. ("Holdings").

     The Trust does not have directors. Instead, the Trust is operated and
managed pursuant to the terms of the Second Amended and Restated Trust
Agreement, as amended. Mr. Delford M. Smith holds a one-third beneficial
ownership interest in that portion of the Trust that owns a Boeing 747 aircraft.
Evergreen Aviation holds the remaining two-thirds beneficial interest in that
portion of the Trust that owns the Boeing 747 and all of the beneficial interest
in that portion of the Trust that owns the three DC-9 aircraft. The Trust's sole
business purpose is to lease airplanes to Evergreen International Airlines, Inc.
("Airlines"), which is a wholly-owned subsidiary of Evergreen Aviation.



                                       13
<PAGE>

RESULTS OF OPERATIONS

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED AUGUST 31, 2004 AND
AUGUST 31,2003

     The following table sets forth information with respect to the Trust's
operations for the three months ended August 31, 2004 and August 31, 2003.
<TABLE>

                                              RESULTS OF OPERATIONS
                                                    Unaudited
                                                  (in thousands)

                                     For the Three Months         2004 vs. 2003
                                        Ended August 31,       Increase (decrease)
                                     ---------------------     --------------------
                                       2004         2003        Amount          %
                                     --------     --------     --------       ------
<S>                                  <C>          <C>          <C>           <C>
Rental income from affiliate ...     $ 1,881      $ 1,881      $  --           0.0 %

Expense (other income)
  Depreciation .................          93           94           (1)       (1.1)
  Interest expense .............         169          321         (152)      (47.4)
  Interest income ..............          (3)         (26)          23       (88.5)
                                     --------     --------     --------      ------
    Total expense (other income)         259          389         (130)      (33.4)
                                     --------     --------     --------      ------
           Net income ..........     $ 1,622      $ 1,492      $   130         8.7 %
                                     ========     ========     ========      ======
</TABLE>
     RENTAL INCOME FROM AFFILIATE - Rental income from affiliate is derived
solely from rental income related to the lease of the Trust's aircraft to
Airlines. Rental income earned from affiliate was $1.9 million during the three
months ended August 31, 2004, which was the same amount of revenue earned from
affiliate during the three months ended August 31, 2003. Rental income is earned
by the Trust in accordance with the terms of the aircraft lease.

     DEPRECIATION - Depreciation consists of depreciation on the Trust's
aircraft. Depreciation expense was approximately $93,000 for the three months
ended August 31, 2004, as compared to approximately $94,000 for the three months
ended August 31, 2003.

     INTEREST EXPENSE - Interest expense is comprised primarily of interest paid
on the outstanding loan payable to FINOVA Capital Corporation ("FINOVA").
Interest expense for the three months ended August 31, 2004 was approximately
$169,000, as compared to approximately $321,000 for the three months ended
August 31, 2003. The reduction in interest expense is primarily due to a
$4.7 million reduction in the outstanding principal balance of the note payable
over the past twelve months, of which $1.5 million was insurance proceeds from
damages attributable to a runway landing incident in fiscal year 2003.

     INTEREST INCOME - Interest income is comprised primarily of interest earned
on the outstanding note receivable from Mr. Smith. Interest income for the three
months ended August 31, 2004 was approximately $3,000, as compared to
approximately $26,000 for the three months ended August 31, 2003. The decrease
in interest income is due to approximately $1.0 million of reductions over the
past twelve months in the outstanding principal balance of the note receivable
from Mr. Smith. As of August 31, 2004 the notes receivable from Mr. Smith is
paid in full.


                                       14
<PAGE>

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED AUGUST 31, 2004 AND
AUGUST 31, 2003

     The following table sets forth information with respect to the Trust's
operations for the six months ended August 31, 2004 and August 31, 2003.
<TABLE>

                                              RESULTS OF OPERATIONS
                                                    Unaudited
                                                  (in thousands)

                                       For the Six Months          2004 vs. 2003
                                        Ended August 31,        Increase(decrease)
                                     ---------------------     --------------------
                                       2004         2003        Amount          %
                                     --------     --------     --------       -----
<S>                                  <C>          <C>          <C>           <C>
Rental income from affiliate ...     $ 3,761      $ 3,761      $     0         0.0 %
Expense/(other income)
  Depreciation .................         186          187           (1)       (0.5)
  Interest expense .............         366          801         (435)      (54.3)
  Interest income ..............          (9)         (59)          50       (84.7)
                                     --------     --------     --------      ------
    Total expense (other income)         543          929         (386)      (41.6)
                                     --------     --------     --------      ------
           Net income ..........     $ 3,218      $ 2,832      $   386        13.6 %
                                     ========     ========     ========      ======

</TABLE>

     RENTAL INCOME FROM AFFILIATE - Rental income from affiliate is derived
solely from rental income related to the lease of the Trust's aircraft to
Airlines. Rental income earned from affiliate was $3.8 million during the six
months ended August 31, 2004, which was the same amount of revenue earned from
affiliate during the six months ended August 31, 2003. Rental income is earned
by the Trust in accordance with the terms of the aircraft lease.

     DEPRECIATION - Depreciation consists of depreciation on the Trust's
aircraft. Depreciation expense was approximately $186,000 for the six months
ended August 31, 2004, as compared to approximately $187,000 for the six months
ended August 31, 2003.

     INTEREST EXPENSE - Interest expense is comprised primarily of interest paid
on the outstanding note payable to FINOVA. Interest expense for the six months
ended August 31, 2004 was approximately $366,000 as compared to approximately
$801,000 for the six months ended August 31, 2003. The reduction in interest
expense is primarily due to a $4.7 million reduction in the outstanding
principal balance of the note payable, of which $1.5 million was insurance
proceeds from damage to a runway landing incident in fiscal year 2003.

     INTEREST INCOME - Interest income is comprised primarily of interest earned
on the outstanding note receivable from Mr. Smith. Interest income for the six
months ended August 31, 2004 was approximately $9,000, as compared to
approximately $59,000 for the six months ended August 31, 2003. The decrease in
interest income is due to approximately $1.0 million of reductions over the past
twelve months in the outstanding principal balance of the note receivable from
Mr. Smith. As of August 31, 2004 the notes receivable from Mr. Smith was paid in
full.


                                       15
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     CASH FROM OPERATING ACTIVITIES - The Trusts owns one Boeing 747 aircraft
and three DC-9 aircraft. The Trust financed its purchase of the Boeing 747 by
means of a $30.0 million Secured Loan Agreement with FINOVA. The Trust's
obligation to repay the Secured Loan Agreement is secured by a first priority
security interest in all the Trust's owned aircraft. Installments of principal
and interest in the amount of approximatley $472,000 per installment are payable
to FINOVA each month.

     The Trust generates revenue by leasing its owned aircraft to Airlines.
However, under the terms of the aircraft lease, Airlines does not make payments
of cash to the Trust. Instead, Airlines satisfies its lease obligations to the
Trust by paying directly to FINOVA the monthly installments of principal and
interest that are due under the Secured Loan Agreement. Thus, although the Trust
generates cash equivalents because Airlines pays the Trust's monthly debt
obligation, the Trust does not generate cash from its leasing operations. During
the six months ended August 31, 2004, the Trust generated cash equivalents of
$2.0 million from its operating activities.

     The monthly lease rental that is due from Airlines to the Trust is slightly
lower than the monthly installment of principal and interest that is paid by
Airlines to FONOVA. This difference between the monthly rent that is due under
the aircraft lease and the amount of the debt payment actually paid by Airlines
to FINOVA is recognized by the Trust as a receivable from affiliate. Due to the
uncertainty of the future collection of the receivable, the receivable from
affiliate is classified as a reduction to the Trust's equity on the financial
statements.

     CASH FROM INVESTING ACTIVITIES - During the six months ended August 31,
2004, the Trust generated cash equivalents of $0.6 million, from investing
activities. The Trust had a note receivable from one of its beneficiaries,
Mr. Delford M. Smith. The receivable was evidenced by a note which is secured
by Mr. Smith's personal assets. The note bore interest at an annual rate of 4%
and was reduced annually by distributions of Mr. Smith's beneficial share of the
Trust's net income.

     Payments of principal on the note were classified as additions to the
Trust's equity on the financial statements. At February 29, 2004, the
outstanding balance on the note receivable from Mr. Smith was approximately $0.6
million. During the six months ended August 31, 2004, distributions of Mr.
Smith's beneficial share of Trust net income were applied to repay in full the
outstanding balance of $0.6 million. As of August 31, 2004, the note receivable
from Mr. Smith is paid in full.

     CASH USED IN FINANCING ACTIVITIES - During the six months ended August 31,
2004, the Trust used cash and cash equivalents of $2.7 million, in payments of
its debt obligations under the Secured Loan Agreement. All of the Trust's debt
obligations, in the principal amount of $5.9 million as of August 31, 2004, will
mature within the next twelve months. The Trust anticipates that future rental
income from aircraft lease with Airlines will be sufficient to satisfy these
debt obligations.


ITEM 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     There have been no material changes in the market risk of the Trust during
the six months ended August 31, 2004.


                                       16
<PAGE>
ITEM 4.       CONTROLS AND PROCEDURES.

     DISCLOSURE CONTROLS AND PROCEDURES - The Trust's management, with
participation of the Trust's principal executive officer and principal financial
officer, have performed an evaluation of the Company's disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended ("Exchange Act")) to ensure that information
required to be disclosed by the Trust in the reports that the Trust files or
submits under the Exchange Act is recorded, processed, summarized, and reported
within the time period specified by the SEC's rules and forms. At this time, the
Trust's principal executive officer and principal financial officer have
determined that such disclosure controls and procedures may not be sufficient
i) to ensure that data errors, control problems, or acts of fraud are detected,
and ii) to confirm that appropriate corrective action, including process
improvements, is undertaken.

     In connection with its audit of, and in the issuance of an unqualified
report on, the Trust's financial statements for the year ended February 29,
2004, the Trust's independent registered public accounting firm,
PricewaterhouseCoopers LLP ("PwC"), delivered to the Trust's disclosure
committee and management a letter identifying deficiencies that PwC considered
to be material weaknesses in the effectiveness of the Trust's disclosure
controls and procedures. The material weaknesses identified by PwC involve
non-reconciliation of certain accounts and a lack of independent review by
management of significant journal entries and monthly financial statements.

     In response to the internal disclosure control deficiencies identified by
the Trust's management and PwC, the Trust has developed a plan for implementing
critical enhancements in the Trust's internal disclosure control procedures. As
of August 31, 2004, the Trust's management has made significant progress in the
areas of (1) monthly review of transactional account activity and financial
statements by management, and (2) monthly reconciliations of significant Trust
accounts.

     INTERNAL CONTROL OVER FINANCIAL REPORTING - Except as described above,
there have not been any changes in the Trust's internal control over financial
reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) during the fiscal quarter to which this report relates that have
materially affected, or are reasonably likely to materially affect, the Trust's
internal control over financial reporting.


                                       17
<PAGE>

                            PART II OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)      A list of exhibits that are filed as part of, or incorporated by
         reference into this Quarterly Report on Form 10-Q are set forth below.


EXHIBIT NO.                DESCRIPTION OF DOCUMENT
-----------------------------------------------------------------------------

31.1 Certification pursuant to Exchange Act Rule 13a-14(a) of Principal
     Executive Officer.

31.2 Certification pursuant to Exchange Act Rule 13a-14(a) of Principal
     Financial Officer.

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


                                       18
<PAGE>

                                   SIGNATURES

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


                                                 TRUST CREATED FEBRUARY 25, 1986
                                                 -------------------------------
                                                 (Registrant)


Date:    October 21, 2004                        /s/ John A. Irwin
                                                 -----------------
                                                 John A. Irwin
                                                 Principal Executive Officer


Date:    October 21, 2004                        /s/ Lawrence J. Bolton
                                                 ----------------------
                                                 Lawrence J. Bolton
                                                 Principal Financial Officer



                                       19
<PAGE>


                                  EXHIBIT INDEX


EXHIBIT NO.                 DESCRIPTION OF DOCUMENT
-------------------------------------------------------------------------------

31.2 Certification pursuant to Exchange Act Rule 13a-14(a) of Principal
     Executive Officer.

31.2 Certification pursuant to Exchange Act Rule 13a-14(a) of Principal
     Financial Officer.

32.1 Certification of Principal Executive Officer and Principal Financial
     Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
     906 of the Sarbanes-Oxley Act of 2002.




                                       20