FORM 10-KSB--ANNUAL OR TRANSITIONAL REPORT
                             UNDER SECTION 13 OR 15(d)

                                   Form 10-KSB

(Mark One)
[X]ANNUAL REPORT UNDER SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934
   [No Fee Required]

                    For the fiscal year ended December 31, 2000


[ ]TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
   1934
   [No Fee Required]

                For the transition period from _________to _________

                         Commission file number 0-13530

                      DAVIDSON DIVERSIFIED REAL ESTATE I, L.P.
                   (Name of small business issuer in its charter)

         Delaware                                                62-1181565
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                          55 Beattie Place, PO Box 1089
                        Greenville, South Carolina 29602
                      (Address of principal executive offices)

                    Issuer's telephone number (864) 239-1000

           Securities registered under Section 12(b) of the Exchange Act:

                                      None

           Securities registered under Section 12(g) of the Exchange Act:

                      Units of Limited Partnership Interest
                                (Title of class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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___

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the best of the  registrant's  knowledge,  in  definitive  proxy or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year.  $3,428,000

State the aggregate  market value of the voting  partnership  interests  held by
non-affiliates  computed  by  reference  to the price at which  the  partnership
interests  were sold,  or the average bid and asked  prices of such  partnership
interests as of December 31, 2000. No market exists for the Limited  Partnership
interests of the Registrant,  and,  therefore,  no aggregate market value can be
determined.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None
<PAGE>

                                     PART I

Item 1.     Description of Business

Davidson  Diversified Real Estate I, L.P. (the "Registrant" or "Partnership") is
a Delaware limited  partnership  organized in January 1983. The general partners
of the  Partnership  are  Davidson  Diversified  Properties,  Inc.,  a Tennessee
corporation  ("Managing  General  Partner");  Diversified  Equities,  Limited, a
Tennessee limited partnership ("Associate General Partner"); and David W. Talley
("Individual  General  Partner")  (collectively,  the "General  Partners").  The
Managing  General  Partner  was  wholly  owned  by MAE GP  Corporation  ("MAE").
Effective  February 25, 1998, MAE GP was merged into Insignia  Properties  Trust
("IPT"), a subsidiary of Apartment  Investment and Management Company ("AIMCO").
Thus, the Managing  General Partner is now  wholly-owned by AIMCO (see "Transfer
of Control").  The  Partnership  Agreement  provides that the  Partnership is to
terminate on December 31, 2007, unless terminated prior to such date.

The offering of the Partnership's  limited partnership units ("Units") commenced
on November 16, 1983,  and  terminated  on September 14, 1984.  The  Partnership
received  gross  proceeds from the offering of  $15,008,000  and net proceeds of
$13,507,200.  Since its initial offering,  the Registrant has not received,  nor
are limited partners required to make additional capital contributions.

The Partnership's business is to own and operate existing real estate properties
for investment.  The Partnership  does not engage in any foreign  operations nor
derive any income from foreign sources.  All of the net proceeds of the offering
were  invested  in six  properties,  four  of  which  have  since  been  sold or
foreclosed  upon.  The  Partnership  continues  to own  and  operate  two of the
properties.  See "Item 2. Description of Properties"  below for a description of
the Partnership's remaining properties.

The  Partnership  receives  income from its properties  and is  responsible  for
operating  expenses,  capital  improvements  and  debt  service  payments  under
mortgage  obligations  secured by the properties.  The Partnership  financed its
properties  primarily  through  non-recourse  debt.  Therefore,  in the event of
default, the lender can generally only look to the subject property for recovery
of amounts due.

The Partnership  has no employees.  Management and  administrative  services are
provided by the  Managing  General  Partner and agents  retained by the Managing
General  Partner.  An affiliate of the Managing  General  Partner  provided such
management services for the years ended December 31, 2000 and 1999.

Both  the  income  and  expenses  of  operating  the  properties  owned  by  the
Partnership are subject to factors outside of the Partnership's control, such as
changes in the supply and demand of similar  properties  resulting  from various
market  conditions,  increases/decreases  in unemployment or population  shifts,
changes in the availability of permanent mortgage funds, changes in zoning laws,
or changes in patterns or needs of users. In addition,  there are risks inherent
in owning and  operating  residential  properties  because such  properties  are
susceptible  to the  impact of  economic  and other  conditions  outside  of the
control of the Partnership.

There have been, and it is possible there may be other, Federal, state and local
legislation  and  regulations   enacted   relating  to  the  protection  of  the
environment.  The Partnership is unable to predict the extent,  if any, to which
such new  legislation  or  regulations  might occur and the degree to which such
existing or new legislation or regulations might adversely affect the properties
owned by the Partnership.

The Partnership  monitors its properties for evidence of pollutants,  toxins and
other dangerous substances, including the presence of asbestos. In certain cases
environmental  testing has been performed which resulted in no material  adverse
conditions or liabilities.  In no case has the Partnership  received notice that
it is a potentially  responsible party with respect to an environmental clean up
site.

The  real  estate  business  in which  the  Partnership  is  engaged  is  highly
competitive.  There are other  residential  properties within the market area of
the Partnership's properties.  The number and quality of competitive properties,
including  those which may be managed by an affiliate  of the  Managing  General
Partner in such market area,  could have a material  effect on the rental market
for apartments at the Partnership's properties and the rents that may be charged
for such  apartments.  While the Managing General Partner and its affiliates own
and/or  control a significant  number of apartment  units in the United  States,
such units represent an insignificant percentage of the total apartment units in
the United States and  competition  for the  apartments  is local.  In addition,
various limited  partnerships  have been formed by the Managing  General Partner
and/or  affiliates  to engage in  business  which  may be  competitive  with the
Partnership.

A further description of the Partnership's business is included in "Management's
Discussion  and  Analysis or Plan of  Operations"  included in "Item 6." of this
Form 10-KSB.

Transfer of Control

Pursuant  to a series  of  transactions  which  closed  on  October  1, 1998 and
February 26, 1999,  Insignia  Financial Group, Inc. and IPT merged into AIMCO, a
publicly  traded real estate  investment  trust,  with AIMCO being the surviving
corporation (the "Insignia Merger").  As a result, AIMCO acquired 100% ownership
interest in the Managing General Partner.  The Managing General Partner does not
believe  that this  transaction  has had or will have a  material  effect on the
affairs and operations of the Partnership.

Item 2.     Description of Properties

The following table sets forth the Partnership's investments in properties:
<TABLE>
<CAPTION>

                                Date of
Property                        Purchase          Type of Ownership           Use

Versailles on the Lake          04/05/84    Fee ownership subject to      Apartment
<S>                                                                       <C>
  Ft. Wayne, Indiana                        first and second mortgages.   156 units

Ashley Woods                    07/31/84    Fee ownership subject to      Apartment
  Cincinnati, Ohio                          first mortgage. (1)           352 units
</TABLE>

(1)   Property is held by a Limited  Liability  Company of which the  Registrant
      owns 100%.

Schedule of Properties

Set forth below for each of the  Registrant's  properties is the gross  carrying
value,  accumulated  depreciation,  depreciable life, method of depreciation and
Federal tax basis.
<TABLE>
<CAPTION>

                           Gross
                          Carrying   Accumulated    Useful               Federal
Property                   Value    Depreciation     Life    Method     Tax Basis
                              (in thousands)                         (in thousands)

<S>                       <C>          <C>         <C>                   <C>
Versailles on the Lake    $ 4,921      $ 3,015     5-25 yrs    S/L       $ 1,019
Ashley Woods               10,008        5,584     5-25 yrs    S/L         3,200
                          $14,929      $ 8,599                           $ 4,219
</TABLE>

See  "Note A" of the  consolidated  financial  statements  included  in "Item 7.
Financial  Statements"  for a  description  of  the  Partnership's  depreciation
policy.

Schedule of Property Indebtedness

The  following  table  sets  forth  certain  information  relating  to the loans
encumbering the Registrant's properties.
<TABLE>
<CAPTION>

                           Principal                                      Principal
                           Balance At    Stated                            Balance
                          December 31,  Interest   Period     Maturity      Due At
        Property              2000        Rate    Amortized     Date     Maturity (2)
                         (in thousands)                                 (in thousands)
Versailles on the Lake
<S>                         <C>          <C>      <C>         <C>   <C>    <C>
  1st mortgage              $ 2,265      7.60%    21.42 yrs   11/15/02     $ 2,071
  2nd mortgage                   88      7.60%       (1)      11/15/02          88

Ashley Woods                  7,752      7.29%     30 yrs     12/01/04       7,334
                             10,105                                        $ 9,493
Less unamortized
  discounts                     (45)
  Total                     $10,060
</TABLE>

(1)   The loan requires interest only payments.

(2)   See "Item 7. Financial  Statements - Note C" for information  with respect
      to the Registrant's ability to prepay the loans and other specific details
      about the loans.

The Partnership exercised an interest rate buy-down option for Versailles on the
Lake  reducing the stated rate from 8.76% to 7.60% during 1992.  The fee for the
interest rate reduction was  approximately  $205,000 and is being amortized as a
loan discount  using the effective  interest  method over the term of the loans.
The discount fee is reflected as a reduction of the mortgage  notes  payable and
increases the effective rate of the debt to 8.76%.

Rental Rates and Occupancy

Average annual rental rates and occupancy for 2000 and 1999 for each property:

                                           Average Annual             Average
                                            Rental Rates             Occupancy
                                             (per unit)
 Property                                 2000        1999        2000      1999

 Versailles on the Lake                  $6,548      $6,131        94%       92%
 Ashley Woods                             7,239       6,821        93%       92%

As noted under "Item 1.  Description of Business",  the real estate  industry is
highly competitive.  All of the properties are subject to competition from other
residential  apartment  complexes  in the area.  The  Managing  General  Partner
believes that all of the properties are adequately insured.  Each property is an
apartment  complex  which  leases  units  for  terms  of one  year or  less.  No
residential  tenant  leases  10% or  more  of the  available  space.  All of the
properties are in good physical  condition,  subject to normal  depreciation and
deterioration as is typical for assets of this type and age.

Real Estate Taxes and Rates

Real estate taxes and rates in 2000 for each property were:


                                                 2000            2000
                                                 Taxes           Rate
                                            (in thousands)

Versailles on the Lake                           $ 82*           8.91%
Ashley Woods                                      183            5.33%

*Amount per 1999 billings.  Taxes are paid a year in arrears.

Capital Improvements

Versailles on the Lake

During the year ended December 31, 2000, the Partnership completed approximately
$217,000  of capital  improvements  at the  property,  consisting  primarily  of
parking  lot  improvements,  carpet and vinyl  replacement,  major  landscaping,
exterior painting, and structural  improvements.  These improvements were funded
from the  Partnership's  operating  cash  flow.  The  Partnership  is  currently
evaluating the capital  improvement needs of the property for the upcoming year.
The  minimum  amount to be  budgeted is expected to be $275 per unit or $42,900.
Additional  improvements  may be  considered  and will  depend  on the  physical
condition of the property as well as replacement  reserves and anticipated  cash
flow generated by the property.

Ashley Woods

During the year ended December 31, 2000, the Partnership completed approximately
$387,000  of capital  improvements  at the  property,  consisting  primarily  of
building improvements,  parking area improvements, carpet and vinyl replacement,
electrical upgrades, lighting upgrades, cabinets,  countertop replacements,  and
structural  improvements.  These improvements were funded from the Partnership's
operating cash flow and reserves.  The  Partnership is currently  evaluating the
capital  improvement  needs of the property for the upcoming  year.  The minimum
amount to be budgeted  is  expected  to be $275 per unit or $96,800.  Additional
improvements may be considered and will depend on the physical  condition of the
property as well as replacement  reserves and anticipated cash flow generated by
the property.

The  capital  improvements  planned  for  the  year  2001  at the  Partnership's
properties will be made only to the extent of cash available from operations and
Partnership  reserves. To the extent that such budgeted capital improvements are
completed,  the Registrant's  distributable  cash flow, if any, may be adversely
affected at least in the short term.

Item 3.     Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial  Group,  Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs  named as defendants,  among others,
the  Partnership,  its Managing  General Partner and several of their affiliated
partnerships  and corporate  entities.  The action  purports to assert claims on
behalf of a class of limited  partners and derivatively on behalf of a number of
limited  partnerships  (including  the  Partnership)  which are named as nominal
defendants,  challenging,  among other things,  the  acquisition of interests in
certain general partner entities by Insignia Financial Group, Inc.  ("Insignia")
and entities which were, at one time, affiliates of Insignia; past tender offers
by the Insignia affiliates to acquire limited  partnership units;  management of
the  partnerships  by the  Insignia  affiliates;  and the Insignia  Merger.  The
plaintiffs  seek  monetary  damages and  equitable  relief,  including  judicial
dissolution of the  Partnership.  On June 25, 1998, the Managing General Partner
filed a motion  seeking  dismissal of the action.  In lieu of  responding to the
motion, the plaintiffs filed an amended complaint.  The Managing General Partner
filed demurrers to the amended complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December 14, 1999, the Managing  General  Partner and its affiliates  terminated
the  proposed  settlement.  In  February  2000,  counsel  for some of the  named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated  the  settlement.  On June  27,  2000,  the  Court  entered  an order
disqualifying  them  from the case and an  appeal  was  taken  from the order on
October 5, 2000. On December 4, 2000, the Court  appointed the law firm of Lieff
Cabraser  Heimann & Bernstein  LLP as new lead  counsel for  plaintiffs  and the
putative class.  Plaintiffs filed a third amended  complaint on January 19, 2001
and  defendants  are  scheduled to respond to the complaint by March 2, 2001. On
March 2, 2001, the Managing  General Partner and its affiliates filed a demurrer
to the third amended complaint. The Managing General Partner does not anticipate
that  costs  associated  with this case will be  material  to the  Partnership's
overall operations.

The Partnership is unaware of any pending or outstanding  litigation that is not
of a routine nature arising in the ordinary course of business.

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

During the quarter ended  December 31, 2000, no matters were submitted to a vote
of Unit holders through the solicitation of proxies or otherwise.



                                     PART II

Item 5.     Market for the Partnership Equity and Related Partner Matters

The Partnership,  a publicly-held  limited partnership,  offered and sold 751.84
Limited  Partnership  Units  aggregating  $15,008,000.  As of December 31, 2000,
there were 601 holders of record owning an aggregate of 751.59 Units. Affiliates
of the  Managing  General  Partner  owned 304.25 units or 40.48% at December 31,
2000.

The following table sets forth the distributions made by the Partnership for the
years ended December 31, 2000 and 1999 and subsequent to December 31, 2000:

                                                  Distributions
                                            Aggregate        Per Unit
                                          (in thousands)

          01/01/99 - 12/31/99                $314 (1)        $417.78
          01/01/00 - 12/31/00                 430 (2)         546.84
         Subsequent to 12/31/00               184 (3)         232.84

(1)   Consists of a portion of the  previously  undistributed  net proceeds from
      the mortgage  refinancing of Ashley Woods  Apartments  during 1997 and was
      paid entirely to limited partners.

(2)   Consists of approximately $381,000 of cash from operations  (approximately
      $362,000 to the limited partners) and  approximately  $49,000 of a portion
      of the previously undistributed net proceeds from the mortgage refinancing
      of Ashley Woods Apartments  during 1997 which was paid entirely to limited
      partners.

(3)   Consists of cash from operations.

Future cash  distributions  will depend on the levels of net cash generated from
operations, the availability of cash reserves and the timing of debt maturities,
refinancings,  and/or property sales. The Partnership's  distribution  policy is
reviewed on a quarterly  basis.  There can be no  assurance,  however,  that the
Partnership  will  generate  sufficient  funds from  operations  after  required
capital  improvements  to  permit  distributions  to its  partners  in  2001  or
subsequent  periods.  Distributions  may be  restricted by the  requirements  to
deposit net operating  income (as defined in the mortgage note) into the Reserve
Account until the Reserve Account is funded in an amount equal to $400 to $1,000
per apartment unit for Versailles on the Lake  Apartments for a total of $62,400
to  $156,000.  As  of  December  31,  2000,  the  Partnership  had  deposits  of
approximately $63,000 in the Reserve Account.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  currently own 304.25 limited partnership
units in the Partnership  representing 40.48% of the outstanding units. A number
of these  units were  acquired  pursuant  to tender  offers made by AIMCO or its
affiliates.  It is possible that AIMCO or its  affiliates  will make one or more
additional offers to acquire  additional  limited  partnership  interests in the
Partnership  for cash or in exchange for units in the operating  partnership  of
AIMCO. Under the Partnership  Agreement,  unitholders  holding a majority of the
Units are  entitled to take action with  respect to a variety of matters,  which
would  include  without   limitation,   voting  on  certain  amendments  to  the
Partnership  Agreement and voting to remove the Managing General  Partner.  As a
result  of its  ownership  of  40.48% of the  outstanding  units,  AIMCO is in a
position to  significantly  influence all voting  decisions  with respect to the
Registrant. When voting on matters, AIMCO would in all likelihood vote the Units
it acquired  in a manner  favorable  to the  interest  of the  Managing  General
Partner because of their affiliation with the Managing General Partner.

Item 6.     Management's Discussion and Analysis or Plan of Operation

The  matters  discussed  in this Form  10-KSB  contain  certain  forward-looking
statements  and  involve  risks and  uncertainties  (including  changing  market
conditions,   competitive  and  regulatory   matters,   etc.)  detailed  in  the
disclosures  contained in this Form 10-KSB and other filings with the Securities
and Exchange Commission made by the Registrant from time to time. The discussion
of  the   Registrant's   business   and   results   of   operations,   including
forward-looking  statements  pertaining  to such  matters,  does not  take  into
account the effects of any changes to the  Registrant's  business and results of
operation.  Accordingly,  actual  results  could  differ  materially  from those
projected in the forward-looking  statements as a result of a number of factors,
including those identified herein.

This  item  should  be read  in  conjunction  with  the  consolidated  financial
statements and other items contained elsewhere in this report.

Results of Operations

The Partnership realized a net loss of approximately  $19,000 for the year ended
December 31, 2000 compared to a net loss of  approximately  $46,000 for the year
ended  December 31, 1999.  The decrease in net loss for the year ended  December
31, 2000 is primarily due to an increase in total  revenues  which was partially
offset by an increase in total expenses.  Total revenues increased primarily due
to an increase in rental  income and, to a lesser  extent,  an increase in other
income.  Rental  income  increased  primarily  due to  increased  occupancy  and
increased average annual rental rates at both of the Partnership's properties as
well as decreased concessions at Ashley Woods Apartments. Other income increased
due to  increased  late  charges  at both of the  Partnership's  properties  and
increased  interest income due to increases in the average cash balances held in
interest-bearing  accounts  partially  offset by a decrease in laundry income at
both of the  Partnership's  properties  and  cleaning  and damage fees at Ashley
Woods.

Total expenses increased primarily due to increased depreciation,  operating and
general and  administrative  expenses.  Depreciation  expense  increased  due to
property improvements and replacements  completed during the past twelve months.
Operating expenses increased primarily due to an increase in utility expenses at
Ashley  Woods  Apartments,  an  increase  in  salary  expenses  at  both  of the
Partnership's  properties,  and an increase in  advertising  costs  primarily at
Ashley Woods  Apartments.  These increases in operating  expenses were partially
offset by reduced maintenance expenses at both of the Partnership's  properties.
General and administrative expense increased due primarily to an increase in the
cost of  services  included in the  management  reimbursements  to the  Managing
General  Partner as allowed under the  Partnership  Agreement and an increase in
professional  fees  associated  with  the  administration  of  the  Partnership.
Included in general and  administrative  expenses at both  December 31, 2000 and
1999,  are  reimbursements  to the Managing  General  Partner  allowed under the
Partnership  Agreement associated with its management of the Partnership.  Costs
associated  with the  quarterly  and annual  communications  with  investors and
regulatory  agencies and the annual audit required by the Partnership  Agreement
are also included.

As part of the ongoing  business plan of the  Partnership,  the Managing General
Partner  monitors  the  rental  market  environment  of both  of its  investment
properties  to assess  the  feasibility  of  increasing  rents,  maintaining  or
increasing  occupancy  levels and protecting the  Partnership  from increases in
expenses. As part of this plan, the Managing General Partner attempts to protect
the Partnership  from the burden of  inflation-related  increases in expenses by
increasing rents and maintaining a high overall occupancy level. However, due to
changing market  conditions,  which can result in the use of rental  concessions
and  rental  reductions  to  offset  softening  market  conditions,  there is no
guarantee that the Managing General Partner will be able to sustain such a plan.

Liquidity and Capital Resources

At December 31, 2000 and 1999, the Partnership had cash and cash  equivalents of
approximately  $681,000.  Cash and cash equivalents  remained unchanged from the
Partnership's  year ended December 31, 1999 due to  approximately  $1,091,000 of
cash provided by operating  activities offset by approximately  $484,000 of cash
used  in  investing  activities  and  approximately  $607,000  of  cash  used in
financing  activities.  Cash used in investing  activities consisted of property
improvements  and  replacements  partially  offset by net  receipts  from escrow
accounts maintained by the mortgage lenders.  Cash used in financing  activities
consisted  primarily  of  distributions  to partners  and,  to a lesser  extent,
payments  of  principal  made  on the  mortgages  encumbering  the  Registrant's
properties. The Partnership invests its working capital reserves in money market
accounts.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures  required at the  properties  to  adequately  maintain the physical
assets and other  operating  needs of the Registrant and to comply with Federal,
state, and local legal and regulatory requirements. The Partnership is currently
evaluating  the capital  improvement  needs of its  properties  for the upcoming
year.  The  minimum  amount to be  budgeted  is  expected to be $275 per unit or
$139,700.  Additional  improvements  may be  considered  and will  depend on the
physical  condition  of the  properties  as well  as  replacement  reserves  and
anticipated cash flow generated by the properties. The capital expenditures will
be  incurred  only if cash is  available  from  operations  or from  Partnership
reserves.  To the extent that such budgeted capital  improvements are completed,
the Registrant's  distributable  cash flow, if any, may be adversely affected at
least in the short term.

The  Registrant's  current assets are thought to be sufficient for any near-term
needs  (exclusive  of capital  improvements)  of the  Registrant.  The  mortgage
indebtedness of approximately  $10,060,000,  net of discount,  is amortized over
periods ranging from 21 to 30 years with balloon  payments due in 2002 and 2004.
The Managing General Partner will attempt to refinance such indebtedness  and/or
sell the properties  prior to such maturity dates.  If the properties  cannot be
refinanced or sold for a sufficient amount, the Registrant will risk losing such
properties through foreclosure.

During the year ended December 31, 2000, the Partnership  paid  distributions of
approximately  $430,000  (approximately  $411,000  to the  limited  partners  or
$546.84 per limited partnership unit) of which approximately $49,000 ($65.19 per
limited partnership unit) represented a portion of the previously  undistributed
net proceeds from the mortgage refinancing of Ashley Woods during 1997 which was
paid entirely to the limited partners and approximately $381,000  (approximately
$362,000 to the limited  partners or $481.65 per limited  partnership  unit) was
paid from operations.  Subsequent to December 31, 2000, the Partnership declared
a distribution from operations of approximately $184,000 (approximately $175,000
to the limited  partners or $232.84 per limited  partnership  unit).  During the
year  ended  December  31,  1999,  the   Partnership   paid  a  distribution  of
approximately $314,000 ($417.78 per limited partnership unit). This distribution
represented  a portion of the  previously  undistributed  net proceeds  from the
mortgage  refinancing of Ashley Woods during 1997 which was paid entirely to the
limited  partners.  Future cash  distributions  will depend on the levels of net
cash generated from operations, the availability of cash reserves and the timing
of debt  maturities,  refinancings,  and/or  property sales.  The  Partnership's
distribution policy is reviewed on a quarterly basis. There can be no assurance,
however,  that the Partnership  will generate  sufficient  funds from operations
after required capital  improvements to permit  distributions to its partners in
the year 2001 or  subsequent  periods.  Distributions  may be  restricted by the
requirements  to deposit net operating  income (as defined in the mortgage note)
into the Reserve  Account until the Reserve Account is funded in an amount equal
to $400 to $1,000 per apartment unit for Versailles on the Lake Apartments for a
total of $62,400 to  $156,000.  As of December  31, 2000,  the  Partnership  had
deposits of approximately $63,000 in the Reserve Account.

Tender Offer

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  currently own 304.25 limited partnership
units in the Partnership  representing 40.48% of the outstanding units. A number
of these  units were  acquired  pursuant  to tender  offers made by AIMCO or its
affiliates.  It is possible that AIMCO or its  affiliates  will make one or more
additional offers to acquire  additional  limited  partnership  interests in the
Partnership  for cash or in exchange for units in the operating  partnership  of
AIMCO. Under the Partnership  Agreement,  unitholders  holding a majority of the
Units are  entitled to take action with  respect to a variety of matters,  which
would  include  without   limitation,   voting  on  certain  amendments  to  the
Partnership  Agreement and voting to remove the Managing General  Partner.  As a
result  of its  ownership  of  40.48% of the  outstanding  units,  AIMCO is in a
position to  significantly  influence all voting  decisions  with respect to the
Registrant. When voting on matters, AIMCO would in all likelihood vote the Units
it acquired  in a manner  favorable  to the  interest  of the  Managing  General
Partner because of their affiliation with the Managing General Partner.
<PAGE>

Item 7.     Financial Statements

DAVIDSON DIVERSIFIED REAL ESTATE I, L.P.

LIST OF FINANCIAL STATEMENTS

  Report of Ernst & Young LLP, Independent Auditors

  Consolidated Balance Sheet - December 31, 2000

  Consolidated Statements of Operations - Years ended December 31, 2000 and 1999

  Consolidated  Statement  of Changes  in  Partners'  Deficit - Years  ended
  December 31, 2000 and 1999

  Consolidated Statements of Cash Flows - Years ended December 31, 2000 and 1999

  Notes to Consolidated Financial Statements

<PAGE>

                 Report of Ernst & Young LLP, Independent Auditors



The Partners
Davidson Diversified Real Estate I, L.P.


We  have  audited  the  accompanying  consolidated  balance  sheet  of  Davidson
Diversified  Real  Estate I, L.P.  as of  December  31,  2000,  and the  related
consolidated  statements of operations,  changes in partners' deficit,  and cash
flows for each of the two years in the period ended  December  31,  2000.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made  by the  Partnership's  management,  as  well  as  evaluating  the  overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,   the  consolidated   financial  position  of  Davidson
Diversified  Real Estate I, L.P.  at December  31,  2000,  and the  consolidated
results  of its  operations  and its cash flows for each of the two years in the
period  ended  December 31,  2000,  in  conformity  with  accounting  principles
generally accepted in the United States.


                                                            /s/ERNST & YOUNG LLP


Greenville, South Carolina
March 2, 2001

<PAGE>

                      DAVIDSON DIVERSIFIED REAL ESTATE I, L.P.

                           CONSOLIDATED BALANCE SHEET
                          (in thousands, except unit data)

                                December 31, 2000

<TABLE>
<CAPTION>


Assets
<S>                                                                          <C>
   Cash and cash equivalents                                                 $  681
   Receivables and deposits                                                      23
   Restricted escrows                                                            83
   Other assets                                                                 148
   Investment properties (Notes C & F):
      Land                                                    $ 1,072
      Buildings and related personal property                  13,857
                                                               14,929
      Less accumulated depreciation                            (8,599)        6,330

                                                                            $ 7,265
Liabilities and Partners' Deficit

Liabilities
   Accounts payable                                                           $  71
   Tenant security deposit liabilities                                           92
   Accrued property taxes                                                       269
   Other liabilities                                                            199
   Due to affiliate (Note E)                                                    321
   Mortgage notes payable (Note C)                                           10,060

Partners' Deficit
   General partners                                            $ (145)
   Limited partners (751.59 units issued and
      outstanding)                                             (3,602)       (3,747)

                                                                            $ 7,265
</TABLE>

           See Accompanying Notes to Consolidated Financial Statements

<PAGE>

                      DAVIDSON DIVERSIFIED REAL ESTATE I, L.P.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                          (in thousands, except unit data)

<TABLE>
<CAPTION>


                                                           Years Ended December 31,
                                                              2000         1999
Revenues:
<S>                                                          <C>          <C>
   Rental income                                             $ 3,139      $ 2,947
   Other income                                                  289          271
      Total revenues                                           3,428        3,218

Expenses:
   Operating                                                   1,462        1,375
   General and administrative                                    191          155
   Depreciation                                                  722          661
   Interest                                                      809          823
   Property taxes                                                263          250
      Total expenses                                           3,447        3,264

Net loss (Note D)                                             $  (19)      $  (46)

Net loss allocated to general partners (5%)                   $   (1)      $   (2)
Net loss allocated to limited partners (95%)                     (18)         (44)
                                                              $  (19)      $  (46)

Net loss per limited partnership unit                        $(23.95)     $(58.54)

Distributions per limited partnership unit                   $546.84      $417.78
</TABLE>

           See Accompanying Notes to Consolidated Financial Statements

<PAGE>

                      DAVIDSON DIVERSIFIED REAL ESTATE I, L.P.

              CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
                          (in thousands, except unit data)

<TABLE>
<CAPTION>


                                        Limited
                                       Partnership    General    Limited
                                          Units       Partners   Partners     Total

<S>                                       <C>          <C>        <C>        <C>
Original capital contributions            751.84       $    1     $15,008    $15,009

Partners' deficit at
  December 31, 1998                       751.59       $ (123)    $(2,815)   $(2,938)

Distribution to partners                      --           --        (314)      (314)

Net loss for the year ended
  December 31, 1999                           --           (2)        (44)       (46)

Partners' deficit at
  December 31, 1999                       751.59       $ (125)    $(3,173)   $(3,298)

Distributions to partners                     --          (19)       (411)      (430)

Net loss for the year ended
  December 31, 2000                           --           (1)        (18)       (19)

Partners' deficit at
  December 31, 2000                       751.59       $ (145)    $(3,602)   $(3,747)
</TABLE>

           See Accompanying Notes to Consolidated Financial Statements

<PAGE>

                      DAVIDSON DIVERSIFIED REAL ESTATE I, L.P.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (in thousands)
<TABLE>
<CAPTION>


                                                             Years Ended December 31,
                                                                 2000        1999
Cash flows from operating activities:
<S>                                                             <C>          <C>
   Net loss                                                     $ (19)       $  (46)
   Adjustments to reconcile net loss to net
    cash provided by operating activities:
      Depreciation                                                 722          661
      Amortization of discounts and loan costs                      60           60
      Change in accounts:
         Receivables and deposits                                  179           (7)
         Other assets                                               (3)         (21)
         Accounts payable                                           11            6
         Tenant security deposit liabilities                        24           (5)
         Accrued property taxes                                     10           (7)
         Other liabilities                                         107          (25)

             Net cash provided by operating activities           1,091          616

Cash flows from investing activities:
   Property improvements and replacements                         (604)        (487)
   Net receipts from restricted escrows                            120          706

             Net cash (used in) provided by investing
               activities                                         (484)         219

Cash flows from financing activities:
   Payments on mortgage notes payable                             (177)        (178)
   Distributions to partners                                      (430)        (314)

             Net cash used in financing activities                (607)        (492)

Net increase (decrease) in cash and cash equivalents                --          343

Cash and cash equivalents at beginning of the year                 681          338
Cash and cash equivalents at end of the year                    $  681        $ 681

Supplemental disclosure of cash flow information:
   Cash paid for interest                                       $  704        $ 812
</TABLE>

           See Accompanying Notes to Consolidated Financial Statements

<PAGE>

                      DAVIDSON DIVERSIFIED REAL ESTATE I, L.P.

                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 2000


Note A - Organization and Significant Accounting Policies

Organization:  Davidson  Diversified  Real Estate I, L.P. (the  "Partnership" or
"Registrant"),  is a Delaware limited partnership organized on January 14, 1983,
to acquire and operate  residential real estate  properties.  As of December 31,
2000, the Partnership operates two residential  properties,  one each located in
Cincinnati,  Ohio and Ft. Wayne,  Indiana.  The  Partnership's  managing general
partner  is  Davidson  Diversified  Properties,  Inc.,  (the  "Managing  General
Partner").  The Managing General Partner is a subsidiary of Apartment Investment
and  Management  Company  ("AIMCO"),  (see "Note B - Transfer of Control").  The
directors and officers of the Managing  General  Partner also serve as executive
officers of AIMCO. The Partnership Agreement provides that the Partnership is to
terminate on December 31, 2007 unless terminated prior to such date.

Principles of Consolidation:  The consolidated  financial statements include the
Partnership's  100% membership  interest in Ashley Woods L.L.C. As a result, the
Partnership  consolidates  its interest in Ashley Woods  whereby all accounts of
Ashley  Woods are  included  in the  consolidated  financial  statements  of the
Partnership with inter-entity accounts being eliminated.

Allocations to Partners: Net income (loss) of the Partnership and taxable income
(loss) are allocated 95% to the limited partners and 5% to the general partners.
Distributions  of  available  cash (cash flow) are  allocated  among the limited
partners and the general  partners in  accordance  with the agreement of limited
partnership.

Allocation of net income for tax purposes, arising from the occurrence of a sale
or refinancing shall be allocated as follows:

      First, an amount equal to the aggregate deficit in the capital accounts of
      the general and limited partners having deficits in their capital accounts
      shall be  allocated  to each such partner in the same ratio as the deficit
      such  partner's  capital  account  bears  to the  aggregate  of  all  such
      partner's deficits.

      Second, to the limited partners in an amount equal to the cash distributed
      to them from a sale or refinancing.

      Third,  the remainder,  if any, 5% to the general  partners and 95% to the
      limited partners.

Distributions  of cash from sales or  refinancings  shall be  distributed in the
following order of priority.

      First,  to the limited  partners,  an amount which when added to all prior
      distributions  of cash  from  sales  or  refinancings  shall  equal  their
      original invested  capital,  plus an amount which, when added to all prior
      distributions to the limited partners  (excluding  distributions which are
      deducted in the calculation of adjusted invested  capital),  will equal 8%
      per annum  cumulative  noncompounded on their adjusted  invested  capital,
      commencing  the last day of the  calendar  quarter in which  each  limited
      partner is admitted to the Partnership through the date of payment.

      Second,  to an affiliate of the general  partners,  an amount equal to its
      subordinated real estate  commission,  which fee is equal to the lesser of
      (i) 3% of the gross  sales  price of a property  or (ii)  one-half  of the
      competitive commission, as defined, but may only be paid after the limited
      partners have received  their priority  distributions  as discussed in the
      previous paragraph.

      Third, 85% of the remaining cash from sales or refinancings to the limited
      partners and 15% of the remaining cash from sales or  refinancings  to the
      general partners.

Depreciation:  Depreciation  is  provided by the  straight-line  method over the
estimated lives of the investment properties and related personal property.  For
Federal income tax purposes,  the  accelerated  cost recovery method is used (1)
for real property over 18 years for additions  after March 15, 1984,  and before
May 9, 1985, and 19 years for additions after May 8, 1985, and before January 1,
1987, and (2) for personal  property over 5 years for additions prior to January
1, 1987. As a result of the Tax Reform Act of 1986, for additions after December
31, 1986, the modified accelerated cost recovery method is used for depreciation
of (1) real  property  additions  over 27 1/2 years,  and (2) personal  property
additions over 5 years.

Investment Properties:  Investment properties consist of two apartment complexes
and are  stated  at cost.  Acquisition  fees are  capitalized  as a cost of real
estate. In accordance with Statement of Financial  Accounting Standards ("SFAS")
No. 121,  "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets  to be  Disposed  Of",  the  Partnership  records  impairment  losses  on
long-lived assets used in operations when events and circumstances indicate that
the assets might be impaired  and the  undiscounted  cash flows  estimated to be
generated by those assets are less than the  carrying  amounts of those  assets.
For the years ended December 31, 2000 and 1999, no adjustments for impairment of
value were necessary.

Cash and Cash  Equivalents:  Includes  cash on hand,  in banks and money  market
accounts.  At certain  times,  the amount of cash deposited at a bank may exceed
the limit on insured deposits.  Cash balances included approximately $482,000 at
December 31, 2000 that are  maintained by the affiliated  management  company on
behalf of affiliated entities in cash concentration accounts.

Tenant  Security  Deposits:  The  Partnership  requires  security  deposits from
lessees for the duration of the lease.  Deposits  are  refunded  when the tenant
vacates,  provided the tenant has not damaged its space and is current on rental
payments.

Use of Estimates:  The  preparation of financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Advertising:  The  Partnership  expenses the costs of  advertising  as incurred.
Advertising expense,  included in operating expenses,  was approximately $76,000
and $55,000 for the years ended December 31, 2000 and 1999, respectively.

Restricted Escrows:

      Reserve  Account:  The  Partnership  has a  general  reserve  account  for
      Versailles  to  cover  necessary  repairs  and  replacements  of  existing
      improvements,  debt service,  out-of-pocket expenses incurred for ordinary
      and necessary administrative tasks, and payment of real property taxes and
      insurance   premiums.   At  December  31,  2000,   this  reserve   totaled
      approximately $63,000.

      Replacement  Reserve:  At the time of the  refinancing  of  Ashley  Woods'
      mortgage  note during 1997, a  replacement  reserve was  established.  The
      Registrant is required to deposit  approximately  $8,000 per month in this
      reserve  account held by the mortgage  lender in order to complete  listed
      capital improvements and replacements.  At December 31, 2000, this reserve
      balance totaled approximately $20,000.

Loan Costs: At December 31, 2000, loan costs of approximately  $283,000,  net of
accumulated amortization of approximately $167,000, are included in other assets
and are being  amortized on a straight-line  basis as interest  expense over the
term of the respective loans.

Leases: The Partnership  generally leases apartment units for twelve-month terms
or less. The Partnership recognizes income as earned on its leases. In addition,
it is the  Partnership's  policy to offer rental  concessions  during periods of
declining  occupancy  or in response  to heavy  competition  from other  similar
complexes  in the  area.  Concessions  are  charged  against  rental  income  as
incurred.

Fair Value of Financial Instruments: SFAS No. 107, "Disclosures about Derivative
Financial  Instruments",   as  amended  by  SFAS  No.  119,  "Disclosures  about
Derivative  Financial  Instruments  and  Fair  Value of  Financial  Instruments"
requires  disclosure  of fair value  information  about  financial  instruments,
whether or not recognized in the balance  sheet,  for which it is practicable to
estimate  fair  value.  Fair value is defined in the SFAS as the amount at which
the  instruments  could be exchanged in a current  transaction  between  willing
parties,  other than in a forced or liquidation  sale. The Partnership  believes
that the  carrying  amount of its  financial  instruments  (except for long term
debt)  approximates  their fair value due to the short  term  maturity  of these
instruments.  The  fair  value  of  the  Partnership's  long  term  debt,  after
discounting the scheduled loan payments to maturity,  approximates  its carrying
balance.

Segment Reporting:  SFAS No. 131, Disclosure about Segments of an Enterprise and
Related  Information  established  standards  for the way that  public  business
enterprises  report  information  about operating  segments in annual  financial
statements and requires that those enterprises report selected information about
operating segments in interim financial reports.  It also establishes  standards
for related disclosures about products and services, geographic areas, and major
customers.  As defined in SFAS No. 131, the  Partnership has only one reportable
segment.  The Managing General Partner believes that  segment-based  disclosures
will  not  result  in a  more  meaningful  presentation  than  the  consolidated
financial statements as currently presented.

Note B - Transfer of Control

Pursuant  to a series  of  transactions  which  closed  on  October  1, 1998 and
February 26, 1999,  Insignia Financial Group, Inc. and Insignia Properties Trust
merged into AIMCO, a publicly traded real estate  investment  trust,  with AIMCO
being the surviving  corporation  (the "Insignia  Merger").  As a result,  AIMCO
acquired 100% ownership  interest in the Managing General Partner.  The Managing
General  Partner does not believe that this  transaction  has had or will have a
material effect on the affairs and operations of the Partnership.

Note C - Mortgage Notes Payable

The principle terms of mortgage notes payable are as follows:
<TABLE>
<CAPTION>

                          Principal     Monthly                           Principal
                         Balance At     Payment     Stated                 Balance
                        December 31,   Including   Interest   Maturity      Due At
       Property             2000        Interest     Rate       Date       Maturity
                             (in thousands)                             (in thousands)
Versailles on the Lake
<S>                        <C>           <C>        <C>       <C>   <C>    <C>
  1st mortgage             $ 2,265       $  22      7.60%     11/15/02     $ 2,071
  2nd mortgage                  88       $   1(1)   7.60%     11/15/02          88

Ashley Woods                 7,752          55      7.29%     12/01/04       7,334
                            10,105       $  78                             $ 9,493
Less unamortized
  Discounts                   (45)

Totals                     $10,060
</TABLE>

(1)   Interest only payments

The  mortgage  notes  payable  are  non-recourse  and are secured by the related
property and  improvements of the Partnership and by pledge of revenues from the
apartment properties.  The notes require prepayment penalties if repaid prior to
maturity and prohibit resale of the properties subject to existing indebtedness.

The Partnership exercised an interest rate buy-down option for Versailles on the
Lake  reducing the stated rate from 8.76% to 7.60% during 1992.  The fee for the
interest rate reduction was  approximately  $205,000 and is being amortized as a
loan discount  using the effective  interest  method over the term of the loans.
The discount fee is reflected as a reduction of the mortgage  notes  payable and
increases the effective rate of the debt to 8.76%.

Scheduled  principal  payments  of the  mortgage  notes  payable  subsequent  to
December 31, 2000, are as follows (in thousands):

                               2001        $   198
                               2002          2,354
                               2003            110
                               2004          7,443

                                           $10,105

Note D - Income Taxes

The Partnership  received a ruling from the Internal  Revenue Service that it is
to be classified as a partnership for Federal income tax purposes.  Accordingly,
no provision for income taxes is made in the consolidated  financial  statements
of the Partnership. Taxable income or loss of the Partnership is reported in the
income tax returns of its partners.

The following is a reconciliation  of reported net loss and Federal taxable loss
(in thousands, except per unit data):

                                     2000          1999
Net loss as reported               $  (19)        $ (46)
Add (deduct):
  Depreciation differences            (25)           (7)
  Unearned income                      --            23
  Miscellaneous                        11            25

Federal taxable loss               $  (33)         $ (5)
Federal taxable loss per
  limited partnership unit        $(41.83)       $(6.48)

The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net liabilities at December 31, 2000 (in thousands):

                                                         2000
Net  liabilities  as  reported                         $(3,747)
Differences in basis of assets and liabilities:
  Buildings and land                                       250
  Accumulated depreciation                              (2,360)
  Other                                                    543
Net liabilities - Federal tax basis                    $(5,314)

Note E - Transactions with Affiliated Parties

The  Partnership  has no employees  and is  dependent  on the  Managing  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
Partnership  activities.  Affiliates  of the Managing  General  Partner  provide
property  management  services to the  Partnership.  The  Partnership  Agreement
provides for payments to affiliates for property  management services based on a
percentage  of revenue and for  reimbursement  of certain  expenses  incurred by
affiliates on behalf of the  Partnership.  The  following  payments were paid to
affiliates  of the  Managing  General  Partner  during  each of the years  ended
December 31, 2000 and 1999:

                                                   2000        1999
                                                    (in thousands)
Property management fees (included in
   operating expenses)                             $174        $166

Reimbursement for services of affiliates
   (included in investment properties and
   general and administrative expenses)             114          85

During the years ended  December 31, 2000 and 1999,  affiliates  of the Managing
General  Partner were entitled to receive 5% of gross  receipts from both of the
Registrant's  properties  as  compensation  for  providing  property  management
services.  The Registrant  paid to such  affiliates  approximately  $174,000 and
$166,000 for the years ended December 31, 2000 and 1999, respectively.

An  affiliate  of  the  Managing  General  Partner  received   reimbursement  of
accountable  administrative  expenses  amounting to  approximately  $114,000 and
$85,000 for the years ended December 31, 2000 and 1999, respectively.

The  Partnership  is liable to an  affiliate  of the  Managing  General  Partner
through  common  ownership  for  real  estate  commissions  in  the  amounts  of
approximately  $125,000 for Revere Village and approximately  $196,000 for Essex
which were sold in previous years. The total amount of approximately $321,000 is
included on the consolidated balance sheet as "Due to affiliate". Payment of the
commissions  will not be made to the affiliate  until the limited  partners have
received  distributions  equal to their original invested  capital,  plus 8% per
annum cumulative non-compounded on their adjusted invested capital commencing on
the last day of the calendar  quarter in which each limited partner was admitted
to the Partnership through the date of payment.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  currently own 304.25 limited partnership
units in the Partnership  representing 40.48% of the outstanding units. A number
of these  units were  acquired  pursuant  to tender  offers made by AIMCO or its
affiliates.  It is possible that AIMCO or its  affiliates  will make one or more
additional offers to acquire  additional  limited  partnership  interests in the
Partnership  for cash or in exchange for units in the operating  partnership  of
AIMCO. Under the Partnership  Agreement,  unitholders  holding a majority of the
Units are  entitled to take action with  respect to a variety of matters,  which
would  include  without   limitation,   voting  on  certain  amendments  to  the
Partnership  Agreement and voting to remove the Managing General  Partner.  As a
result  of its  ownership  of  40.48% of the  outstanding  units,  AIMCO is in a
position to  significantly  influence all voting  decisions  with respect to the
Registrant. When voting on matters, AIMCO would in all likelihood vote the Units
it acquired  in a manner  favorable  to the  interest  of the  Managing  General
Partner because of their affiliation with the Managing General Partner.

Note F - Real Estate and Accumulated Depreciation

<TABLE>
<CAPTION>

                                                 Initial Cost
                                                To Partnership
                                                (in thousands)

                                                        Buildings         Net Cost
                                                       and Related      Capitalized
                                                         Personal      Subsequent to
Description                Encumbrances      Land        Property       Acquisition
                          (in thousands)                               (in thousands)

<S>                           <C>           <C>          <C>              <C>
Versailles on the Lake        $ 2,353       $  191       $ 3,847          $   883
Ashley Woods                    7,752          881         5,815            3,312
Totals                        $10,105      $ 1,072       $ 9,662          $ 4,195
</TABLE>

<TABLE>
<CAPTION>

                         Gross Amount At Which
                                Carried
                          At December 31, 2000
                             (in thousands)

                               Buildings
                                  And                           Date of
                                Personal          Accumulated  Construc-   Date    Depreciable
     Description        Land    Property   Total  Depreciation   tion    Acquired  Life-Years
                                                (in thousands)
<S>                    <C>      <C>       <C>       <C>          <C>       <C>        <C>
Versailles on the Lake $  191   $ 4,730   $ 4,921   $ 3,015      1970      04/84      5-25
Ashley Woods              881     9,127    10,008     5,584      1971      07/84      5-25

       Totals          $1,072   $13,857   $14,929   $ 8,599
</TABLE>


Reconciliation of "Real Estate and Accumulated Depreciation" (in thousands):


                                               Year Ended December 31,
                                                 2000          1999
Investment Properties

Balance at beginning of year                    $14,325       $13,838
    Property improvements                           604           487
Balance at end of year                          $14,929       $14,325

Accumulated Depreciation

Balance at beginning of year                    $ 7,877       $ 7,216
    Depreciation expense                            722           661
Balance at end of year                          $ 8,599       $ 7,877


The  aggregate  cost of the real  estate  for  Federal  income tax  purposes  at
December  31,  2000 and 1999,  is  approximately  $15,178,000  and  $14,574,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at December 31, 2000 and 1999, is  approximately  $10,959,000  and  $10,212,000,
respectively.

Note G - Distributions

During the year ended December 31, 2000, the Partnership  paid  distributions of
approximately  $430,000  (approximately  $411,000  to the  limited  partners  or
$546.84 per limited partnership unit) of which approximately $49,000 ($65.19 per
limited partnership unit) represented a portion of the previously  undistributed
net proceeds from the mortgage refinancing of Ashley Woods during 1997 which was
paid entirely to the limited partners and approximately $381,000  (approximately
$362,000 to the limited  partners or $481.65 per limited  partnership  unit) was
paid from operations.  Subsequent to December 31, 2000, the Partnership declared
a distribution from operations of approximately $184,000 (approximately $175,000
to the limited  partners or $232.84 per limited  partnership  unit).  During the
year  ended  December  31,  1999,  the   Partnership   paid  a  distribution  of
approximately $314,000 ($417.78 per limited partnership unit). This distribution
represented  a portion of the  previously  undistributed  net proceeds  from the
mortgage  refinancing of Ashley Woods during 1997 which was paid entirely to the
limited partners. Distributions may be restricted by the requirements to deposit
net operating  income (as defined in the mortgage note) into the Reserve Account
until the  Reserve  Account  is funded in an amount  equal to $400 to $1,000 per
apartment unit for  Versailles on the Lake  Apartments for a total of $62,400 to
$156,000.  As of December 31, 2000 the Partnership had deposits of approximately
$63,000 in the Reserve Account.

Note H - Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial  Group,  Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs  named as defendants,  among others,
the  Partnership,  its Managing  General Partner and several of their affiliated
partnerships  and corporate  entities.  The action  purports to assert claims on
behalf of a class of limited  partners and derivatively on behalf of a number of
limited  partnerships  (including  the  Partnership)  which are named as nominal
defendants,  challenging,  among other things,  the  acquisition of interests in
certain general partner entities by Insignia Financial Group, Inc.  ("Insignia")
and entities which were, at one time, affiliates of Insignia; past tender offers
by the Insignia affiliates to acquire limited  partnership units;  management of
the  partnerships  by the  Insignia  affiliates;  and the Insignia  Merger.  The
plaintiffs  seek  monetary  damages and  equitable  relief,  including  judicial
dissolution of the  Partnership.  On June 25, 1998, the Managing General Partner
filed a motion  seeking  dismissal of the action.  In lieu of  responding to the
motion, the plaintiffs filed an amended complaint.  The Managing General Partner
filed demurrers to the amended complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December 14, 1999, the Managing  General  Partner and its affiliates  terminated
the  proposed  settlement.  In  February  2000,  counsel  for some of the  named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated  the  settlement.  On June  27,  2000,  the  Court  entered  an order
disqualifying  them  from the case and an  appeal  was  taken  from the order on
October 5, 2000. On December 4, 2000, the Court  appointed the law firm of Lieff
Cabraser  Heimann & Bernstein  LLP as new lead  counsel for  plaintiffs  and the
putative class.  Plaintiffs filed a third amended  complaint on January 19, 2001
and  defendants  are  scheduled to respond to the complaint by March 2, 2001. On
March 2, 2001, the Managing  General Partner and its affiliates filed a demurrer
to the third amended complaint. The Managing General Partner does not anticipate
that  costs  associated  with this case will be  material  to the  Partnership's
overall operations.

The  Partnership is unaware of any other pending or outstanding  litigation that
is not of a routine nature arising in the ordinary course of business.


Item 8. Changes  in  and  Disagreements   with  Accountants  on  Accounting  and
        Financial Disclosure

        None.



                                    PART III

Item 9. Directors,   Executive   Officers,   Promoters   and  Control   Persons,
        Compliance with Section 16(a) of the Exchange Act

Davidson Diversified Real Estate I, L.P. (the "Partnership" or "Registrant") has
no officers or directors.  Davidson Diversified Properties,  Inc. (the "Managing
General   Partner")  manages  and  controls  the  Partnership  and  has  general
responsibility and authority in all matters affecting its business.

The names of the  directors  and  executive  officers  of the  Managing  General
Partner,  their ages and the nature of all positions  presently held by them are
set forth below. There are no family relationships between or among any officers
and directors.

         Name                     Age     Position

         Patrick J. Foye           43     Executive Vice President and Director

         Martha L. Long            41     Senior Vice President and Controller

Patrick J. Foye has been  Executive  Vice President and Director of the Managing
General  Partner  since October 1, 1998.  Mr. Foye has served as Executive  Vice
President  of AIMCO  since May 1998.  Prior to  joining  AIMCO,  Mr.  Foye was a
partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP from 1989 to
1998 and was  Managing  Partner  of the  firm's  Brussels,  Budapest  and Moscow
offices from 1992  through  1994.  Mr. Foye is also Deputy  Chairman of the Long
Island  Power   Authority  and  serves  as  a  member  of  the  New  York  State
Privatization  Council.  He received a B.A. from Fordham College and a J.D. from
Fordham University Law School.

Martha L. Long has been Senior Vice  President  and  Controller  of the Managing
General  Partner since October 1998 as a result of the  acquisition  of Insignia
Financial  Group,  Inc. As of February 2001, Ms. Long was also appointed head of
the service  business for AIMCO.  From June 1994 until January 1997, she was the
Controller for Insignia, and was promoted to Senior Vice President - Finance and
Controller in January 1997,  retaining that title until October 1998.  From 1988
to June 1994,  Ms. Long was Senior Vice  President and  Controller for The First
Savings Bank, FSB in Greenville, South Carolina.

One or more of the above persons are also directors and/or officers of a general
partner (or general partner of a general partner) of limited  partnerships which
either have a class of  securities  registered  pursuant to Section 12(g) of the
Securities Exchange Act of 1934, or are subject to the reporting requirements of
Section  15(d) of such Act:  Further,  one or more of the above persons are also
directors and/or officers of Apartment Investment and Management Company and the
general  partner  of  AIMCO  Properties,  L.P.,  entities  that  have a class of
securities  registered  pursuant to Section 12(g) of the Securities Exchange Act
of 1934, or are subject to the reporting  requirements of Section 15 (d) of such
Act.

The executive  officers and director of the Managing General Partner fulfill the
obligations  of the Audit  Committee  and  oversee the  Partnership's  financial
reporting process on behalf of the Managing General Partner.  Management has the
primary  responsibility  for the financial  statements and the reporting process
including  the  systems  of  internal  controls.  In  fulfilling  its  oversight
responsibilities,  the executive  officers and director of the Managing  General
Partner reviewed the audited  financial  statements with management  including a
discussion  of the  quality,  not  just  the  acceptability,  of the  accounting
principles,  the  reasonableness  of significant  judgments,  and the clarity of
disclosures in the financial statements.

The executive  officers and director of the Managing  General  Partner  reviewed
with the independent auditors,  who are responsible for expressing an opinion on
the conformity of those audited  financial  statements  with generally  accepted
accounting  principles,  their  judgments  as  to  the  quality,  not  just  the
acceptability, of the Partnership's accounting principles and such other matters
as are required to be discussed with the Audit Committee or its equivalent under
generally  accepted  auditing  standards.   In  addition,  the  Partnership  has
discussed  with  the  independent  auditors  the  auditors'   independence  from
management and the Partnership  including the matters in the written disclosures
required by the Independence Standards Board and considered the compatibility of
non-audit services with the auditors' independence.

The executive  officers and director of the Managing  General Partner  discussed
with the  Partnership's  independent  auditors  the overall  scope and plans for
their audit. In reliance on the reviews and discussions  referred to above,  the
executive officers and director of the Managing General Partner has approved the
inclusion of the audited  financial  statements  in the Form 10-KSB for the year
ended December 31, 2000 for filing with the Securities and Exchange Commission.

The Managing  General Partner has  reappointed  Ernst & Young LLP as independent
auditors to audit the financial  statements of the  Partnership  for the current
fiscal  year.  Fees for the last  fiscal  year were  annual  audit  services  of
approximately  $31,000  and  non-audit  services  (principally  tax-related)  of
approximately $15,000.

Item 10.    Executive Compensation

None of the directors and officers of the Managing  General Partner received any
remuneration from the Registrant.

Item 11.    Security Ownership of Certain Beneficial Owners and Management

Except as noted below, no person or entity was known by the Registrant to be the
beneficial  owners  of more  than 5% of the  Limited  Partnership  Units  of the
Registrant as of December 31, 2000.

                        Entity                     Number of Units    Percentage

      AIMCO Properties, L.P.                            199.85          26.59%
        (an affiliate of AIMCO)
      Cooper River Properties, LLC                       85.65          11.40%
        (an affiliate of AIMCO)
      Insignia Properties, LP                            18.50           2.46%
        (an affiliate of AIMCO)
      Davidson Diversified Properties, Inc.                .25           0.03%
        (an affiliate of AIMCO)

Cooper  River  Properties,  L.L.C.,  Insignia  Properties,  L.P.,  and  Davidson
Diversified  Properties,  Inc. are indirectly  ultimately owned by AIMCO.  Their
business address is 55 Beattie Place, Greenville, SC 29602.

AIMCO  Properties,  L.P.  is  indirectly  ultimately  controlled  by AIMCO.  Its
business address is 2000 South Colorado Boulevard, Denver, CO 80222.

As of December 31, 2000, no director or officer of the Managing  General Partner
owns,  nor do the directors or officers as a group own any of the  Partnership's
Units. No such director or officer had any right to acquire beneficial ownership
of additional Units of the Partnership.
Item 12.    Certain Relationships and Related Transactions

The  Partnership  has no employees  and is  dependent  on the  Managing  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
Partnership  activities.  Affiliates  of the Managing  General  Partner  provide
property  management  services to the  Partnership.  The  Partnership  Agreement
provides for payments to affiliates for property  management services based on a
percentage  of revenue and for  reimbursement  of certain  expenses  incurred by
affiliates on behalf of the  Partnership.  The  following  payments were paid to
affiliates  of the  Managing  General  Partner  during  each of the years  ended
December 31, 2000 and 1999:

                                                   2000        1999
                                                    (in thousands)

Property management fees                           $174        $166

Reimbursement for services of affiliates            114          85

During the years ended  December 31, 2000 and 1999,  affiliates  of the Managing
General  Partner were  entitled to receive 5% of gross  receipts from all of the
Registrant's  properties  as  compensation  for  providing  property  management
services.  The Registrant  paid to such  affiliates  approximately  $174,000 and
$166,000 for the years ended December 31, 2000 and 1999, respectively.

An  affiliate  of  the  Managing  General  Partner  received   reimbursement  of
accountable  administrative  expenses  amounting to  approximately  $114,000 and
$85,000 for years ended December 31, 2000 and 1999, respectively.

The  Partnership  is liable to an  affiliate  of the  Managing  General  Partner
through  common  ownership  for  real  estate  commissions  in  the  amounts  of
approximately  $125,000 for Revere Village and approximately  $196,000 for Essex
which were sold in previous years. The total amount of approximately $321,000 is
included on the consolidated balance sheet as "Due to affiliate". Payment of the
commissions  will not be made to the affiliate  until the limited  partners have
received  distributions  equal to their original invested  capital,  plus 8% per
annum cumulative non-compounded on their adjusted invested capital commencing on
the last day of the calendar  quarter in which each limited partner was admitted
to the Partnership through the date of payment.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  currently own 304.25 limited partnership
units in the Partnership  representing 40.48% of the outstanding units. A number
of these  units were  acquired  pursuant  to tender  offers made by AIMCO or its
affiliates.  It is possible that AIMCO or its  affiliates  will make one or more
additional offers to acquire  additional  limited  partnership  interests in the
Partnership  for cash or in exchange for units in the operating  partnership  of
AIMCO. Under the Partnership  Agreement,  unitholders  holding a majority of the
Units are  entitled to take action with  respect to a variety of matters,  which
would  include  without   limitation,   voting  on  certain  amendments  to  the
Partnership  Agreement and voting to remove the Managing General  Partner.  As a
result  of its  ownership  of  40.48% of the  outstanding  units,  AIMCO is in a
position to  significantly  influence all voting  decisions  with respect to the
Registrant. When voting on matters, AIMCO would in all likelihood vote the Units
it acquired  in a manner  favorable  to the  interest  of the  Managing  General
Partner because of their affiliation with the Managing General Partner.

Item 13.    Exhibits and Reports on Form 8-K

            (a)   Exhibits:

                  None.

            (b)   Reports on Form 8-K:

                  None filed during the quarter ended December 31, 2000.

<PAGE>


                                   SIGNATURES



In  accordance  with  Section 13 or 15(d) of the Exchange  Act, the  Partnership
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                    DAVIDSON DIVERSIFIED REAL ESTATE I, L.P.


                                    By:   Davidson Diversified Properties, Inc.,
                                          Its Managing General Partner


                                    By:   /s/Patrick J. Foye
                                          Patrick J. Foye
                                          Executive Vice President


                                    By:   /s/Martha L. Long
                                          Martha L. Long
                                          Senior Vice President
                                          and Controller


                                    Date:


In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the Partnership and in the capacities and on the
date indicated.


/s/Patrick J. Foye      Executive Vice President      Date:
Patrick J. Foye         and Director


/s/Martha L. Long       Senior Vice President         Date:
Martha L. Long          and Controller

<PAGE>

                     DAVIDSON DIVERSIFIED REAL ESTATE I, LP

                                  EXHIBIT INDEX

  Exhibit           Description

     2    Agreement  and Plan of Merger,  dated as of  October  1, 1998,  by and
          between AIMCO and IPT;  incorporated by reference to Exhibit 2.1 filed
          with Registrant's Current Report on Form 8-K dated October 1, 1998.

     3A   Partnership  Agreement  dated  January  14,  1983 is  incorporated  by
          reference  to Exhibit A to the  Prospectus  of the  Partnership  dated
          November 16, 1983 as filed with the Commission pursuant to Rule 424(b)
          under the Act.

     3B   Amendment No. 1 dated January 1, 1986 to the Partnership  Agreement is
          incorporated  by reference to Exhibit 3B to the  Partnership's  Annual
          Report on Form 10-K for the fiscal year ended December 31, 1985.

     4    Certificate  of  Limited   Partnership   dated  December  2,  1982  is
          incorporated  by  reference to Exhibit 4 to the  Partnership's  Annual
          Report on Form 10-K for the fiscal year ended December 31, 1987.

     4A   Certificate of Amendment of Certificate of Limited  Partnership  dated
          March 24,  1983 is  incorporated  by  reference  to  Exhibit 4A to the
          Partnership's  Annual  Report on Form 10-K for the  fiscal  year ended
          December 31, 1987.

     4B   Restated  Certificate  of  Limited  Partnership  dated June 8, 1983 is
          incorporated  by reference to Exhibit 4B to the  Partnership's  Annual
          Report on Form 10-K for the fiscal year ended December 31, 1987.

     4C   Amended and Restated  Certificate of Limited Partnership dated January
          1,  1986  is   incorporated   by   reference  to  Exhibit  4C  to  the
          Partnership's  Annual  Report on Form 10-K for the  fiscal  year ended
          December 31, 1987.

     10A  Agent's  Agreement  dated November 1, 1983 between the Partnership and
          Harvey Freeman & Sons,  Inc. is  incorporated  by reference to Exhibit
          10B to the  Partnership's  Annual  Report on Form 10-K for the  fiscal
          year ended December 31, 1983.

     10B  Agreement  among  Agents  dated  November 1, 1983 by and among  Harvey
          Freeman & Sons, Inc., Harvey Freeman & Sons, Inc. of Arkansas,  Harvey
          Freeman & Sons,  Inc.  of  Florida,  Harvey  Freeman & Sons,  Inc.  of
          Georgia,  Harvey  Freeman & Sons,  Inc. of Indiana,  Harvey  Freeman &
          Sons,  Inc. of Kentucky,  Harvey Freeman & Sons,  Inc. of Mississippi,
          Harvey Freeman & Sons, Inc. of North Carolina,  Harvey Freeman & Sons,
          Inc. of Ohio, and Harvey Freeman & Sons,  Inc. of South  Carolina,  is
          incorporated by reference to Exhibit 10C to the  Partnership's  Annual
          Report on Form 10-K for the fiscal year ended December 31, 1983.

     10C  Acquisition and Disposition  Services  Agreement dated October 3, 1983
          between the Partnership  and Criswell  Freeman Company is incorporated
          by reference to Exhibit 10D to the Partnership's Annual Report on Form
          10-K for the fiscal year ended December 31, 1983.

     10D  Contract  for Sale of Real  Estate  for  Versailles  on the Lake dated
          March 16, 1984 between Versailles on the Lake Associates,  an Illinois
          limited   partnership  and  Tennessee  Trust  Company,   Trustee,   is
          incorporated  by  reference  to  Exhibit  10(b)  to the  Partnership's
          Current Report on Form 8-K dated April 4, 1984.

     10E  Assignment of Contract for Sale dated April 2, 1984 between  Tennessee
          Trust Company,  Trustee and the Partnership (relating to Versailles on
          the Lake  Apartments) is  incorporated  by reference to Exhibit 10L to
          the Partnership's Annual Report on Form 10-K for the fiscal year ended
          December 31, 1984.

     10F  Note dated  November 19, 1984 executed by the  Partnership  payable to
          American   Fletcher  National  Bank  and  Trust  Company  relating  to
          Versailles  on the Lake  Apartments  is  incorporated  by reference to
          Exhibit 10W to the  Partnership's  Annual  Report on Form 10-K for the
          fiscal year ended December 31, 1985.

     10G  Real Estate Mortgage, Assignment of Rents and Security Agreement dated
          November  19,  1984  executed by the  Partnership  payable to American
          Fletcher National Bank and Trust Company relating to Versailles on the
          Lake is incorporated by reference to Exhibit 10EE to the Partnership's
          Annual  Report on Form 10-K for the  fiscal  year ended  December  31,
          1985.

     10H  Memorandum  of  Understanding   among  SEC  Realty  Corp.,   Tennessee
          Properties, L.P., Freeman Mortgage Corporation, J. Richard Freeman, W.
          Criswell Freeman and Jacques-Miller  Properties,  Inc. is incorporated
          by  reference to Exhibit 10BB to the  Partnership's  Annual  Report on
          Form 10-K for the fiscal year ended December 31, 1988.

     10I  Partnership  Administration  and Consultation  Agreement among Freeman
          Properties,  Inc.,  Freeman  Diversified  Properties,  Inc.,  Residual
          Equities Limited and Jacques-Miller  Properties,  Inc. is incorporated
          by  reference to Exhibit 10CC to the  Partnership's  Annual  Report on
          Form 10-K for the fiscal year ended December 31, 1988.

     10J  Partnership  Agreement of Ashley Woods  Associates  dated May 16, 1990
          owned 99.9% by the Partnership relating to refinancing of Ashley Woods
          Apartments  is  incorporated  by  reference  to  Exhibit  10EE  to the
          Partnership's  Annual  Report on Form 10-K for the  fiscal  year ended
          December 31, 1991.

     10K  Multifamily  Note with Addendum dated June 14, 1990 executed by Ashley
          Woods Associates  payable to PW Funding Inc.  relating to Ashley Woods
          Apartments  is  incorporated  by  reference  to  Exhibit  10FF  to the
          Partnership's  Annual  Report on Form 10-K for the  fiscal  year ended
          December 31, 1991.

     10L  Multifamily  Open-end Mortgage with Rider dated June 14, 1990 executed
          by Ashley Woods  Associates  in favor of PW Funding  Inc.  relating to
          Ashley Woods  Apartments is  incorporated by reference to Exhibit 10GG
          to the  Partnership's  Annual  Report on Form 10-K for the fiscal year
          ended December 31, 1991.

     10M  Termination  Agreement  dated December 31, 1991 among  Jacques-Miller,
          Inc.,   Jacques-Miller   Property  Management,   Davidson  Diversified
          Properties,  Inc.,  and Supar,  Inc. is  incorporated  by reference to
          Exhibit 10HH to the  Partnership's  Annual Report on Form 10-K for the
          fiscal year ended December 31, 1991.

     10N  Assignment  of  Limited  Partnership  Interest  of  Freeman  Equities,
          Limited,   dated  December  31,  1991  between  Davidson   Diversified
          Properties, Inc. and Insignia Jacques-Miller,  L.P. is incorporated by
          reference to Exhibit 10II to the  Partnership's  Annual Report on Form
          10-K for the fiscal year ended December 31, 1991.

     10O  Assignment of General Partner Interests of Freeman Equities,  Limited,
          dated December 31, 1991 between Davidson Diversified Properties,  Inc.
          and MAE GP Corporation is incorporated by reference to Exhibit 10JJ to
          the Partnership's Annual Report on Form 10-K for the fiscal year ended
          December 31, 1991.

     10P  Stock certificate,  dated December 31, 1991 showing ownership of 1,000
          shares of Davidson Diversified Properties,  Inc. by MAE GP Corporation
          is  incorporated  by reference  to Exhibit  10KK to the  Partnership's
          Annual  Report on Form 10-K for the  fiscal  year ended  December  31,
          1991.

     10Q  Contracts related to refinancing of debt:

                  (a)   First Deed of Trust and Security Agreement dated October
                        28, 1992  between  Davidson  Diversified  Real Estate I,
                        Limited Partnership and First Commonwealth Realty Credit
                        Corporation, a Virginia Corporation, securing Versailles
                        on the Lake is  incorporated by reference to Exhibit 10Q
                        (a) to the  Partnership's  Annual  Report on Form 10-KSB
                        for the fiscal year ended December 31, 1992.

                  (b)   Second  Deed  of  Trust  and  Security  Agreement  dated
                        October  28,  1992  between  Davidson  Diversified  Real
                        Estate I,  Limited  Partnership  and First  Commonwealth
                        Realty  Credit  Corporation,   a  Virginia  Corporation,
                        securing  Versailles  on the  Lake  is  incorporated  by
                        reference to Exhibit 10Q (b) to the Partnership's Annual
                        Report on Form 10-KSB for the fiscal year ended December
                        31, 1992.

                  (c)   First  Assignment  of Leases and Rents dated October 28,
                        1992 between Davidson Diversified Real Estate I, Limited
                        Partnership   and  First   Commonwealth   Realty  Credit
                        Corporation, a Virginia Corporation, securing Versailles
                        on the Lake is  incorporated by reference to Exhibit 10Q
                        (c) to the  Partnership's  Annual  Report on Form 10-KSB
                        for the fiscal year ended December 31, 1992.

                  (d)   Second  Assignment of Leases and Rents dated October 28,
                        1992 between Davidson Diversified Real Estate, I Limited
                        Partnership   and  First   Commonwealth   Realty  Credit
                        Corporation, a Virginia Corporation, securing Versailles
                        on the Lake is  incorporated by reference to Exhibit 10Q
                        (d) to the  Partnership's  Annual  Report on Form 10-KSB
                        for the fiscal year ended December 31, 1992.

                  (e)   First Deed of Trust Note dated  October 28, 1992 between
                        Davidson  Diversified Real Estate I Limited  Partnership
                        and  First  Commonwealth   Realty  Credit   Corporation,
                        relating to  Versailles on the Lake is  incorporated  by
                        reference to Exhibit 10Q (e) to the Partnership's Annual
                        Report on Form 10-KSB for the fiscal year ended December
                        31, 1992.

                  (f)   Second Deed of Trust Note dated October 28, 1992 between
                        Davidson  Diversified Real Estate I, Limited Partnership
                        and  First   Commonwealth   Realty  Credit   Corporation
                        relating to  Versailles on the Lake is  incorporated  by
                        reference to Exhibit 10Q (f) to the Partnership's Annual
                        Report on Form 10-KSB for the fiscal year ended December
                        31,1992.

     10R  Promissory  Note dated November 20, 1997, by and between Ashley Woods,
          L.L.C.,  a  South  Carolina  limited  liability  company,  and  Lehman
          Brothers Holdings, Inc., a Delaware corporation.

     16   Letter from the Partnership's former independent  accountant regarding
          its  concurrence  with  the  statements  made  by the  Partnership  is
          incorporated  by  reference  to the exhibit  filed with Form 8-K dated
          September 30, 1992.