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

                                    FORM 10-K

(Mark One)

[x]      ANNUAL  REPORT  PURSUANT  TO  SECTION  13 OR 15 (d)  OF THE  SECURITIES
         EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2000

                                       OR

[        ] TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                        For the transition period from to


                         Commission file number 0-22485

                           CNL INCOME FUND XVII, LTD.
             (Exact name of registrant as specified in its charter)

          Florida                    59-329393
 (State or other jurisdiction of     (I.R.S. Employer Identification No.)
 incorporation or organization)

                             450 South Orange Avenue
                           Orlando, Florida 32801-3336
          (Address of principal executive offices, including zip code)

       Registrant's telephone number, including area code: (407) 540-2000

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

Title of each class:           Name of exchange on which registered:
             None             Not Applicable

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

              Units of limited partnership interest ($10 per Unit)
                                (Title of class)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the preceding 12 months (or such shorter  period that the registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days: Yes X No ___

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. No [x]

         Aggregate market value of the voting stock held by nonaffiliates of the
registrant:  The registrant registered an offering of 3,000,000 units of limited
partnership  interest  (the  "Units") on Form S-11 under the  Securities  Act of
1933, as amended. Since no established market for such Units exists, there is no
market for such Units. Each Unit was originally sold at $10 per Unit.

                      DOCUMENTS INCORPORATED BY REFERENCE:
                                      None



<PAGE>


4

                                     PART I

Item 1.  Business

         CNL Income Fund XVII, Ltd. (the "Registrant" or the "Partnership") is a
limited  partnership  which was  organized  pursuant to the laws of the State of
Florida on February 10, 1995. The general partners of the Partnership are Robert
A.  Bourne,  James  M.  Seneff,  Jr.  and  CNL  Realty  Corporation,  a  Florida
corporation  (the  "General  Partners").  Beginning on  September  2, 1995,  the
Partnership offered for sale up to $30,000,000 of limited partnership  interests
(the  "Units")  (3,000,000  Units at $10 per Unit)  pursuant  to a  registration
statement on Form S-11 under the Securities  Act of 1933, as amended,  effective
August 11, 1995.  The offering  terminated  on September 19, 1996, at which date
the maximum  offering  proceeds of $30,000,000  had been received from investors
who  were  admitted  to  the  Partnership  as  limited  partners  (the  "Limited
Partners").

         The  Partnership  was organized to acquire both newly  constructed  and
existing  restaurant  properties,  as well as properties upon which  restaurants
were to be  constructed  (the  "Properties"),  which  are  leased  primarily  to
operators of national and regional  fast-food,  family-style  and casual  dining
restaurant  chains (the  "Restaurant  Chains").  Net proceeds to the Partnership
from its  offering of Units,  after  deduction  of  organizational  and offering
expenses, totalled $26,400,000 and were used as of December 31, 1998, to acquire
29 Properties,  pay  acquisition  fees  totalling  $1,350,000 and to establish a
working capital reserve for Partnership purposes. The 29 Properties include four
Properties owned by joint ventures in which the Partnership is a co-venturer and
three   Properties   owned  with   affiliates   of  the   General   Partners  as
tenants-in-common.   During  1998,  the  Partnership   received  $306,100  in  a
reimbursement  from the developer of the Properties in Aiken, South Carolina and
Weatherford,  Texas,  upon final  reconciliation  of total  construction  costs.
During  1999,  the  Partnership  invested  these  amounts,  along with other net
offering proceeds,  in a Property in Zephyrhills,  Florida, with an affiliate as
tenants-in-common,  and entered into a joint venture  arrangement,  Ocean Shores
Joint  Venture,  with an affiliate of the General  Partners to purchase and hold
one Property in Ocean Shores, Washington,  indirectly through a joint venture in
which the  Partnership is a  co-venturer.  In addition,  during 1999,  CNL/GC El
Cajon Joint Venture, in which the Partnership owned an 80 percent interest, sold
its Property to the tenant and the Partnership received a return of capital from
the net sales proceeds. In January 2000, the Partnership reinvested the majority
of the net sales proceeds  received from El Cajon Joint Venture in a Property in
Wilmette,   Illinois.  In  addition,  during  2000,  the  Partnership  sold  its
Properties in Warner Robins, Georgia and Long Beach, California.

         As a result of the above  transactions,  as of December 31,  2000,  the
Partnership  owned 28  Properties.  The 28 Properties  include three  Properties
owned by joint  ventures  in which the  Partnership  is a  co-venturer  and four
Properties  owned with  affiliates as  tenants-in-common.  In January 2001,  the
Partnership  sold its  Property in Houston,  Texas to an  unrelated  third party
resulting in a gain for financial reporting purposes.  The Partnership generally
leases the Properties on a triple-net basis with the lessees responsible for all
repairs and maintenance, property taxes, insurance and utilities.

         The  Partnership  will hold its Properties  until the General  Partners
determine that the sale or other  disposition of the Properties is  advantageous
in view of the Partnership's investment objectives.  In deciding whether to sell
Properties, the General Partners will consider factors such as potential capital
appreciation,  net cash flow and  federal  income  tax  considerations.  Certain
lessees also have been granted options to purchase Properties,  generally at the
Property's  then fair market  value after a specified  portion of the lease term
has elapsed.  The  Partnership has no obligation to sell all or any portion of a
Property  at any  particular  time,  except as may be  required  under  property
purchase options granted to certain lessees.

Leases

         Although there are variations in the specific terms of the leases,  the
following  is  a  summarized   description  of  the  general  structure  of  the
Partnership's  leases.  The leases of the  Properties  provide for initial terms
ranging from 15 to 20 years (the average being 18 years) and expire between 2011
and 2019. The majority of the leases are on a triple-net basis, with the lessees
responsible  for all repairs and  maintenance,  property  taxes,  insurance  and
utilities.  The leases of the Properties  provide for minimum base annual rental
payments (payable in monthly installments) ranging from approximately $57,300 to
$190,000. The majority of the leases provide for percentage rent, based on sales
in excess of a specified amount. In addition, the majority of the leases provide
that,  commencing in specified lease years (generally the sixth lease year), the
annual base rent required under the terms of the lease will increase.

         Generally,  the  leases  of the  Properties  provide  for  two to  five
five-year  renewal  options  subject  to the same  terms and  conditions  as the
initial lease.  Lessees of 21 of the  Partnership's 28 Properties also have been
granted options to purchase  Properties at the Property's then fair market value
after a specified portion of the lease term has elapsed.  Fair market value will
be determined  through an appraisal by an independent  appraisal firm. Under the
terms of certain leases,  the option purchase price may equal the  Partnership's
original cost to purchase the Property  (including  acquisition  costs),  plus a
specified percentage from the date of the lease or a specified percentage of the
Partnership's purchase price, if that amount is greater than the Property's fair
market value at the time the purchase option is exercised.

         The leases also  generally  provide that, in the event the  Partnership
wishes to sell the Property  subject to the terms of the lease,  the Partnership
first must offer the lessee the right to purchase the Property on the same terms
and  conditions,  and for the same price, as any offer which the Partnership has
received for the sale of the Property.

         During 1998,  the tenants of three  Boston  Market  Properties,  Boston
Chicken,  Inc., Bostonwest L.L.C. and BCBM Southwest L.P., filed for bankruptcy.
In April 1999 and July 2000, the tenant rejected two and one,  respectively,  of
the leases relating to these Properties.  The Partnership sold one of the vacant
Properties in October 2000 and another of the vacant Properties in January 2001.
The Partnership  will not recognize  rental and earned income from the remaining
vacant  Property  until a new tenant for this  Property  is located or until the
Property is sold and the proceeds from such sale are reinvested in an additional
Property.  The lost revenues  resulting from the remaining vacant Property could
have an adverse  effect on the results of operations of the  Partnership  if the
Partnership is not able to re-lease the Property in a timely manner. The General
Partners  are  currently  seeking  either a new  tenant or a  purchaser  for the
Property.

         In January 2000,  the  Partnership  reinvested  the majority of the net
sales  proceeds  received from the sale of the Property owned by CNL/GC El Cajon
Joint Venture (as described above), in a Property located in Wilmette, Illinois.
The  lease  terms  for  this  Property  are   substantially   the  same  as  the
Partnership's other leases, as described above.

Major Tenants

         During  2000,   three  lessees  of  the   Partnership,   Golden  Corral
Corporation,  National Restaurant  Enterprises,  Inc., and Jack in the Box Inc.,
each  contributed  more than ten percent of the  Partnership's  total rental and
earned income,  the  Partnership's  share of rental and earned income from three
Properties owned by unconsolidated joint ventures and four Properties owned with
affiliates  of the General  Partners as  tenants-in-common.  As of December  31,
2000, Golden Corral Corporation and National Restaurant  Enterprises,  Inc. were
each the lessee under leases relating to three restaurants,  and Jack in the Box
Inc. was the lessee under leases relating to four restaurants. It is anticipated
that based on the minimum rental  payments  required by the leases,  these three
lessees  each  will  continue  to  contribute  more  than  ten  percent  of  the
Partnership's  total  rental  and  earned  income  in 2001.  In  addition,  four
Restaurant  Chains,  Golden  Corral  Family  Steakhouse  Restaurants,   ("Golden
Corral"), Jack in the Box, Burger King, and Arby's, each accounted for more than
ten percent of the  Partnership's  total  rental and earned  income  during 2000
(including  the  Partnership's  share of rental  and  earned  income  from three
Properties owned by unconsolidated joint ventures and four Properties owned with
affiliates  of the  General  Partners  as  tenants-in-common).  In  2001,  it is
anticipated  that  each  of  these  four  Restaurant  Chains  will  continue  to
contribute more than ten percent of the  Partnership's  rental and earned income
to which the Partnership is entitled under the terms of the leases.  Any failure
of these lessees or Restaurant  Chains could have a material  adverse  affect on
the  Partnership's  income  if the  Partnership  is not  able  to  re-lease  the
Properties  in a timely  manner.  As of December 31, 2000,  no single  lessee or
group of affiliated  lessees leased Properties with an aggregate  carrying value
in excess of 20 percent of the total assets of the Partnership.

Joint Venture and Tenancy in Common Arrangements

         In 1997, the Partnership  entered into two joint venture  arrangements:
CNL Mansfield  Joint Venture with CNL Income Fund VII, Ltd., an affiliate of the
General  Partners,  to purchase and hold one  Property;  and CNL Kingston  Joint
Venture with CNL Income Fund XIV, Ltd., an affiliate of the General Partners, to
purchase and hold one  Property.  In  addition,  during  1999,  the  Partnership
entered  into  Ocean  Shores  Joint  Venture  with CNL Income  Fund X, Ltd.,  an
affiliate of the General Partners, to purchase and hold one Property. Each joint
venture arrangement  provides for the Partnership and its joint venture partners
to share  in all  costs  and  benefits  associated  with the  joint  venture  in
proportion  to each  partner's  percentage  interest in the joint  venture.  The
Partnership owns a 21 percent interest in CNL Mansfield Joint Venture,  a 60.06%
interest in CNL Kingston  Joint Venture,  and a 30.94%  interest in Ocean Shores
Joint Venture.  The Partnership and its joint venture  partners are also jointly
and severally  liable for all debts,  obligations  and other  liabilities of the
respective  joint  venture.  Each of the  affiliates  is a  limited  partnership
organized pursuant to the laws of the State of Florida.

         Each  joint  venture  has an initial  term of 20 years  and,  after the
expiration of the initial term,  continues in existence from year to year unless
terminated  at the  option of either  of the  joint  venturer  or by an event of
dissolution.  Events  of  dissolution  include  the  bankruptcy,  insolvency  or
termination of either of the joint venturer partner,  sale of the Property owned
by the joint  venture  and mutual  agreement  of the  Partnership  and its joint
venture partners to dissolve the joint venture.

         The Partnership  shares  management  control equally with affiliates of
the  General  Partners  for each of these  joint  ventures.  The  joint  venture
agreements restrict any venturer's ability to sell, transfer or assign its joint
venture  interest  without  first  offering  it for  sale to its  joint  venture
partner,  either upon such terms and  conditions  as to which the  venturers may
agree or,  in the  event  the  venturers  cannot  agree,  on the same  terms and
conditions  as any offer  from a third  party to  purchase  such  joint  venture
interest.

         Net cash flow from  operations  of CNL  Mansfield  Joint  Venture,  CNL
Kingston Joint Venture and Ocean Shores Joint Venture is distributed 21 percent,
60.06%  and  30.94%  respectively,   to  the  Partnership  and  the  balance  is
distributed  to  each  other  joint  venture  partner  in  accordance  with  its
percentage ownership in the respective joint venture. Any liquidation  proceeds,
after  paying  joint  venture  debts and  liabilities  and funding  reserves for
contingent liabilities,  will be distributed first to the joint venture partners
with positive capital account balances in proportion to such balances until such
balances  equal  zero,  and  thereafter  in  proportion  to each  joint  venture
partner's percentage interest in the joint venture.

         In addition to the above joint venture  arrangements,  the  Partnership
entered into an agreement to hold a Property in Fayetteville, North Carolina, as
tenants-in-common  with CNL Income Fund XVI,  Ltd.,  an affiliate of the General
Partners;  an  agreement  to  hold a  Property  in  Corpus  Christi,  Texas,  as
tenants-in-common,  with CNL Income Fund XI,  Ltd.,  an affiliate of the General
Partners;  an agreement to hold a Property in Akron, Ohio, as tenants-in-common,
with CNL Income Fund XIII,  Ltd., an affiliate of the General  Partners,  and an
agreement to hold a Property in Zephyrhills, Florida, as tenants-in-common, with
CNL Income Fund IV, Ltd., an affiliate of the General  Partners.  The agreements
provide  for the  Partnership  and the  affiliates  to share in the  profits and
losses of the  Properties and net cash flow from the Properties in proportion to
each co-tenant's  percentage  interest.  The Partnership owns a 19.56%,  27.42%,
36.91%  and  24  percent  interest  in the  Properties  in  Fayetteville,  North
Carolina;  Corpus  Christi,  Texas;  Akron,  Ohio;  and  Zephryhills,   Florida,
respectively.

         Each of the affiliates is a limited  partnership  organized pursuant to
the laws of the State of Florida. The tenancy in common agreement restricts each
co-tenant's ability to sell, transfer,  or assign its interest in the tenancy in
common's Property without first offering it for sale to the remaining co-tenant.

         The use of joint venture and tenancy in common  arrangements allows the
Partnership  to fully invest its available  funds at times at which it would not
have  sufficient  funds to purchase an additional  property,  or at times when a
suitable  opportunity to purchase an additional  property is not available.  The
use of joint  venture  and  tenancy in common  arrangements  also  provides  the
Partnership  with  increased  diversification  of its portfolio  among a greater
number of properties. In addition,  tenancy in common arrangements may allow the
Partnership  to defer the gain for federal  income tax purposes upon the sale of
the property if the proceeds are reinvested in an additional property.

Certain Management Services

         CNL Fund Advisors, Inc., an affiliate of the General Partners, provides
certain  services  relating to management of the  Partnership and its Properties
pursuant to a management  agreement with the Partnership.  Under this agreement,
CNL  Fund  Advisors,   Inc.  is  responsible  for  collecting  rental  payments,
inspecting  the  Properties  and the tenant's  books and records,  assisting the
Partnership  in  responding  to  tenant  inquiries  and  notices  and  providing
information  to  the  Partnership  about  the  status  of  the  leases  and  the
Properties.  CNL Fund  Advisors,  Inc.  also  assists  the  General  Partners in
negotiating the leases.  For these  services,  the Partnership has agreed to pay
CNL Fund Advisors,  Inc. an annual fee of one percent of the sum of gross rental
revenues from Properties  wholly owned by the Partnership plus the Partnership's
allocable  share of gross revenues of joint ventures in which the Partnership is
a co-venturer, but not in excess of competitive fees for comparable services.

         The management agreement continues until the Partnership no longer owns
an interest in any Properties unless terminated at an earlier date upon 60 days'
prior notice by either party.

Competition

         The fast-food,  family-style and casual dining  restaurant  business is
characterized  by intense  competition.  The  restaurants  on the  Partnership's
Properties compete with independently  owned restaurants,  restaurants which are
part of local or regional chains,  and restaurants in other well-known  national
chains, including those offering different types of food and service.

Employees

         The  Partnership   has  no  employees.   The  officers  of  CNL  Realty
Corporation  and the  officers and  employees of APF, the parent  company of CNL
Fund Advisors,  Inc. perform certain services for the Partnership.  In addition,
the General  Partners have  available to them the resources and expertise of the
officers and employees of CNL Financial  Group,  Inc., a diversified real estate
company,  and its  affiliates,  who may also  perform  certain  services for the
Partnership.


Item 2.  Properties

         As of December 31, 2000, the Partnership owned 28 Properties. Of the 28
Properties,  21 are  owned by the  Partnership  in fee  simple,  three are owned
through joint venture  arrangements and four are owned through tenancy in common
arrangements.  See Item 1.  Business  - Joint  Venture  and  Tenancy  in  Common
Arrangements.  The Partnership is not permitted to encumber its Properties under
the terms of its  partnership  agreement.  Reference  is made to the Schedule of
Real Estate and  Accumulated  Depreciation  for a listing of the  Properties and
their  respective  costs,  including  acquisition  fees and certain  acquisition
expenses.

Description of Properties

         Land. The Partnership's  Property sites range from approximately 15,200
to 91,400  square  feet  depending  upon  building  size and  local  demographic
factors.  Sites  purchased  by  the  Partnership  are  in  locations  zoned  for
commercial use which have been reviewed for traffic patterns and volume.



<PAGE>


         The following table lists the Properties owned by the Partnership as of
December 31, 2000 by state. More detailed information  regarding the location of
the  Properties  is  contained  in the  Schedule of Real Estate and  Accumulated
Depreciation for the year ended December 31, 2000.

               State                       Number of Properties

               California                            3
               Florida                               3
               Georgia                               1
               Illinois                              4
               Indiana                               2
               Michigan                              1
               North Carolina                        1
               Nevada                                1
               Ohio                                  1
               South Carolina                        1
               Tennessee                             3
               Texas                                 6
               Washington                            1
                                               --------------
               TOTAL PROPERTIES                     28
                                               ==============


         Buildings.  Each of the Properties owned by the Partnership  includes a
building that is one of a Restaurant  Chain's  approved  designs.  The buildings
generally are  rectangular  and are  constructed  from various  combinations  of
stucco,  steel,  wood,  brick and tile. The sizes of the buildings  owned by the
Partnership ranged from approximately 2,100 to 11,300 square feet. All buildings
on Properties  acquired by the  Partnership are  freestanding  and surrounded by
paved  parking  areas.  Buildings  are suitable for  conversion to various uses,
although  modifications  may be required prior to use for other than  restaurant
operations. As of December 31, 2000, the Partnership had no plans for renovation
of  the  Properties.   Depreciation   expense  is  computed  for  buildings  and
improvements using the straight line method using a depreciable life of 40 years
for federal income tax purposes.

         As of December 31, 2000, the aggregate cost of the Properties  owned by
the Partnership and joint ventures  (including  Properties owned through tenancy
in common  arrangements)  for federal  income tax purposes was  $22,690,518  and
6,217,380, respectively.

         The following table lists the Properties owned by the Partnership as of
December 31, 2000 by Restaurant Chain.

                Restaurant Chain               Number of Properties

                Arby's                                   4
                Bakers Square                            1
                Black-eyed Pea                           1
                Boston Market                            3
                Burger King                              5
                Denny's                                  2
                Fazoli's                                 1
                Golden Corral                            3
                Jack in the Box                          4
                Mr. Fable's                              1
                Taco Bell                                1
                Wendy's                                  2
                                                   --------------

                TOTAL PROPERTIES                        28
                                                   ==============

         The General Partners consider the Properties to be well-maintained  and
sufficient for the Partnership's operations.

         The General Partners believe that the Properties are adequately covered
by  insurance.  In  addition,  the General  Partners  have  obtained  contingent
liability and property coverage for the Partnership.  This insurance is intended
to reduce the Partnership's  exposure in the unlikely event a tenant's insurance
policy lapses or is insufficient to cover a claim relating to the Property.

         Leases.  The Partnership leases the Properties to operators of selected
national and  regional  fast-food,  family-style  and casual  dining  restaurant
chains. The leases are generally on a long-term "triple net" basis, meaning that
the tenant is responsible for repairs,  maintenance,  property taxes,  utilities
and  insurance.  Generally,  a lessee is required,  under the terms of its lease
agreement, to make such capital expenditures, as may be reasonably necessary, to
refurbish  buildings,  premises,  signs and equipment,  so as to comply with the
lessee's  obligations,  if applicable,  under the franchise agreement to reflect
the current commercial image of its Restaurant Chain. These capital expenditures
are required to be paid by the lessee during the term of the lease. The terms of
the leases of the Properties  owned by the  Partnership are described in Item 1.
Business - Leases.

         As of December 31, 2000, 1999, 1998, 1997, and 1996 the Properties were
92  percent,  93 percent,  100  percent,  100 percent and 100 percent  occupied,
respectively.  The  following is a schedule of the average rent per Property for
the years ended December 31:

<TABLE>
<CAPTION>
<S><C>

                                       2000              1999              1998             1997              1996
                                   --------------    -------------     -------------    -------------     --------------

Rental Income(1)                     $ 2,353,394      $ 2,667,611       $ 2,983,830      $ 2,762,605         $1,190,656
Properties(2)                                 26               29                28               28                 24
Average Rent per Property              $  90,515        $  91,987         $ 106,565        $  98,664          $  49,611

</TABLE>

(1)      Rental income  includes the  Partnership's  share of rental income from
         the  Properties  owned  through  joint  venture  arrangements  and  the
         Properties owned with affiliates as tenants-in-common.  Rental revenues
         have  been  adjusted,  as  applicable,  for any  amounts  for which the
         Partnership has established an allowance for doubtful accounts.

(2)      Excludes  Properties  that were  vacant  at  December  31,  and did not
         generate rental revenues during the year ended December 31.

         The following is a schedule of lease expirations for leases in place as
         of  December  31,  2000 for  each  year  for the  next  ten  years  and
         thereafter.

<TABLE>
<CAPTION>
<S><C>
                                                                                     Percentage of
             Expiration Year          Number               Annual Rental             Gross Annual
                                     of Leases                Revenues               Rental Income
             -----------------    ----------------        -----------------    --------------------------

              2001                             --                       --                      --
              2002                             --                       --                      --
              2003                             --                       --                      --
              2004                             --                       --                      --
              2005                             --                       --                      --
              2006                             --                       --                      --
              2007                             --                       --                      --
              2008                             --                       --                      --
              2009                             --                       --                      --
              2010                             --                       --                      --
              Thereafter                       26                2,608,715                 100.00%
                                        ----------        -----------------           -------------
              Total (1)                        26             $  2,608,715                 100.00%
                                        ==========        =================           =============

</TABLE>


         (1)      Excludes one Property which was vacant at December 31, 2000.

         Leases  with Major  Tenants.  The terms of each of the leases  with the
Partnership's  major  tenants as of December  31,  2000 (see Item 1.  Business -
Major  Tenants),  are  substantially  the  same as  those  described  in Item 1.
Business - Leases.

         Golden Corral Corporation leases three Golden Corral  restaurants.  The
initial  term of each  lease is 15 years  (expiring  in  2011)  and the  average
minimum base annual rent is approximately  $146,100 (ranging from  approximately
$107,600 to $190,000).

         National  Restaurant   Enterprises,   Inc.  leases  three  Burger  King
restaurants.  The initial term of each lease is 20 years (expiring  between 2016
and 2017) and the average  minimum  base annual rent is  approximately  $138,163
(ranging from approximately $123,200 to $146,900).

         Jack in the Box,  Inc.  leases  four Jack in the Box  restaurants.  The
initial term of each lease is 18 years (expiring  between 2014 and 2015) and the
average  minimum  base  annual  rent  is  approximately  $93,900  (ranging  from
approximately $80,100 to $117,900).

Item 3.  Legal Proceedings

         Neither the  Partnership,  nor its General Partners or any affiliate of
the General Partners,  nor any of their respective  Properties,  is party to, or
subject to, any material pending legal proceedings.


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

         Not applicable.


                                     PART II


Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

(a) As of March 15, 2001, there were 1,601 holders of record of the Units. There
is no public  trading  market for the Units,  and it is not  anticipated  that a
public  market for the Units will  develop.  During 2000,  Limited  Partners who
wished to sell their Units may have  offered the Units for sale  pursuant to the
Partnership's  distribution reinvestment plan (the "Plan"), and Limited Partners
who wished to have their  distributions used to acquire additional Units (to the
extent Units were  available  for  purchase),  may have done so pursuant to such
Plan. The General  Partners had the right to prohibit  transfers of Units.  From
inception  through  December 31, 2000,  the price paid for any Unit  transferred
pursuant to the Plan ranged from $9.14 to $9.50 per Unit. The price paid for any
Unit  transferred  other than pursuant to the Plan was subject to negotiation by
the purchaser and the selling Limited  Partner.  The Partnership will not redeem
or repurchase Units.

         The following table reflects,  for each calendar quarter, the high, low
and average sales prices for transfers of Units during 2000 and 1999, other than
pursuant to the Plan, net of commissions.

<TABLE>
<CAPTION>
<S><C>

                                                2000                                      1999
                                --------------------------------------    -------------------------------------
                                  High         Low           Average       High          Low          Average
                                ---------    ---------      ----------    --------     ---------     ----------

        First Quarter              $7.63       $ 7.63          $ 7.63         (2)           (2)            (2)
        Second Quarter             $8.50       $ 6.66          $ 8.13         (2)           (2)            (2)
        Third Quarter              $7.63       $ 7.00          $ 7.32      $10.00        $10.00         $10.00
        Fourth Quarter             $7.03       $ 6.50          $ 6.83         (2)           (2)            (2)

</TABLE>


(1)      A total of 12,000 and 5,500 Units were transferred  other than pursuant
         to  the  Plan  for  the  years  ended   December  31,  2000  and  1999,
         respectively.

         (2) No  transfer  of Units took place  during  the  quarter  other than
         pursuant to the Plan.

         The  capital  contribution  per Unit was $10.  All cash  available  for
         distribution  will  be  distributed  to the  partners  pursuant  to the
         provisions of the Partnership Agreement.

         For each of the years ended December 31, 2000 and 1999, the Partnership
declared cash distributions of $2,400,000 to the Limited Partners. Distributions
of $600,000  were  declared at the close of each of the  Partnership's  calendar
quarters  during 2000 and 1999 to the Limited  Partners.  These amounts  include
monthly  distributions  made in arrears  for the  Limited  Partners  electing to
receive such distributions on this basis. No amounts distributed to partners for
the years  ended  December  31, 2000 and 1999,  are  required to be or have been
treated by the  Partnership  as a return of capital for purposes of  calculating
the  Limited  Partners'  return  on their  adjusted  capital  contributions.  No
distributions have been made to the General Partners to date.

         The  Partnership  intends to  continue  to make  distributions  of cash
available  for  distribution  to the  Limited  Partners  on a  quarterly  basis,
although some Limited  Partners,  in  accordance  with their  election,  receive
monthly distributions for an annual fee.

(b)      Not applicable.


Item 6.  Selected Financial Data

<TABLE>
<CAPTION>
<S><C>

                               Year Ended        Year Ended        Year Ended       Year Ended        Year Ended
                              December 31,      December 31,      December 31,     December 31,      December 31,
                                  2000              1999              1998             1997              1996
                             ---------------- ----------------- ----------------- ---------------- -----------------

 Revenues (1)                   $  2,282,652       $ 2,611,294       $ 2,946,048      $ 2,772,714       $ 1,444,503
 Net income (2)                      673,138         1,839,269         2,394,158        2,203,557         1,095,759
 Cash distributions
     declared                      2,400,000         2,400,000         2,400,000        2,287,500         1,166,689
 Net income per Unit
     (2)(3)                             0.22              0.61              0.80             0.73              0.52
 Cash distributions
     declared per Unit
     (3)                                0.80              0.80              0.80             0.76              0.55

                                  2000              1999              1998             1997              1996
                             ---------------- ----------------- ----------------- ---------------- -----------------
 At December 31:
     Total assets               $ 24,675,610      $ 26,561,963      $ 27,365,705     $ 27,524,148      $ 28,675,007
     Partners' capital            23,942,768        25,669,630        26,230,361       26,236,203        26,320,146

</TABLE>


(1)      Revenues include equity in earnings of  unconsolidated  joint ventures,
         minority  interest  in income of the  consolidated  joint  venture  and
         adjustments  to accrued rental income as a result of tenants filing for
         bankruptcy.

(2)      Net income for the year ended December 31, 2000 includes  $918,692 from
         provision  for loss on assets and $17,447  from gain on sale of assets.
         Net income for the year ended  December 31, 1999 includes  $82,914 from
         loss on dissolution of joint venture.

(3)      Based  on  the  weighted   average  number  of  Limited  Partner  Units
         outstanding  during the years ended December 31, 2000, 1999, 1998, 1997
         and 1996.

         The above selected  financial  data should be read in conjunction  with
         the financial statements and related notes contained in Item 8 hereof.

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

         The  Partnership  was  organized on February  10, 1995,  to acquire for
cash,  either  directly  or  through  joint  venture  arrangements,  both  newly
constructed  and  existing  restaurant  Properties,  as well as land upon  which
restaurant  Properties  were to be  constructed,  which are leased  primarily to
operators of selected national and regional  fast-food,  family-style and casual
dining Restaurant Chains. The leases are generally  triple-net leases,  with the
lessees generally  responsible for all repairs and maintenance,  property taxes,
insurance  and  utilities.  As of December 31, 2000,  the  Partnership  owned 28
Properties,  either  directly  or  through  joint  venture  or tenancy in common
arrangements.

Capital Resources

         Net  proceeds to the  Partnership  from its  offering  of Units,  after
deduction of organizational and offering expenses,  totalled $26,400,000.  As of
December 31, 1996, the Partnership had invested  $23,406,500 of its net offering
proceeds.  During 1997, the  Partnership  used the majority of its remaining net
offering proceeds to acquire two additional  Properties,  as  tenants-in-common,
with  affiliates  of  the  General  Partners.  In  addition,  during  1997,  the
Partnership  entered into two joint venture  arrangements,  CNL Mansfield  Joint
Venture and CNL Kingston Joint Venture, with affiliates of the General Partners,
to own an approximate 21 percent interest and 60.06% interest,  respectively, in
the profits  and losses of the joint  ventures.  During  1998,  the  Partnership
contributed   $124,500  to  Kingston   Joint  Venture  to  pay  for   additional
construction costs. In addition,  during 1998, the Partnership received $306,100
in  reimbursements  from  the  developer  upon  final  reconciliation  of  total
construction  costs  relating to the  Properties  in Aiken,  South  Carolina and
Weatherford,  Texas,  in  accordance  with the related  development  agreements.
During  1999,  the  Partnership  invested  these  amounts,  along with other net
offering proceeds,  in a Property in Zephyrhills,  Florida, with an affiliate as
tenants-in-common for a 24 percent interest in the property,  and entered into a
joint venture  arrangement,  Ocean Shores Joint Venture,  with affiliates of the
General  Partners,  to own a 30.94%  interest  in the  profits and losses of the
joint venture. As a result of the above  transactions,  as of December 31, 1999,
the Partnership had acquired 29 Properties,  including three Properties owned by
joint  ventures in which the  Partnership is a co-venturer  and four  properties
owned  with  affiliates  as  tenants-in-common,  and had paid  acquisition  fees
totalling $1,350,000 to an affiliate of the General Partners.  The remaining net
offering  proceeds  from the  Partnership's  offering of Units were reserved for
Partnership purposes.

         Until  Properties  were acquired by the  Partnership,  all  Partnership
proceeds were held in short-term,  highly liquid  investments  which the General
Partners  believed to have  appropriate  safety of  principal.  This  investment
strategy provided high liquidity in order to facilitate the Partnership's use of
these  funds to  acquire  Properties  at such time as  Properties  suitable  for
acquisition were located.

         Currently,  the  Partnership's  primary  source of capital is cash from
operations  (which includes cash received from tenants,  distributions  from the
joint ventures and interest  received,  less cash paid for expenses).  Cash from
operations  was  $1,846,222,  $2,450,018,  and  $2,520,919  for the years  ended
December  31,  2000,  1999 and 1998,  respectively.  The  decrease  in cash from
operations during 2000 as compared to 1999, and during 1999 as compared to 1998,
is  primarily  a result of  changes in the  Partnership's  working  capital  and
changes in income and expenses as described in "Results of Operations" below.

         Other  sources and uses of capital  included the  following  during the
years ended December 31, 2000, 1999 and 1998.

         In  December  1999,  CNL/GC  El  Cajon  Joint  Venture,  in  which  the
Partnership  owned an 80 percent  interest,  sold its Property to its tenant for
$2,094,231.  Due to the fact that the joint venture had recorded  accrued rental
income (income the joint venture had recognized since the inception of the lease
relating to the  straight-lining of future schedule rent increases in accordance
with  generally  accepted  accounting  principles)  the joint  venture wrote off
$172,496 in accrued rental income in connection with the sale. In addition, as a
result  of the  sale  of the  Property,  the  joint  venture  was  dissolved  in
accordance  with the  joint  venture  agreement.  As a result,  the  Partnership
received  approximately  $1,675,400,  representing  its prorata share of the net
sales proceeds  received by the joint venture and recorded a loss on dissolution
of $82,914 as of December 31, 1999, which represented the balance of unamortized
costs recorded by the joint venture. In January 2000, the Partnership reinvested
the majority of the return of capital in a Baker's Square  Property in Wilmette,
Illinois. The Partnership acquired the Property from an affiliate of the General
Partners. The affiliate had purchased and temporarily held title to the Property
in order to facilitate the acquisition of the Property by the  Partnership.  The
purchase  price paid by the  Partnership  represented  the costs incurred by the
affiliate to acquire the Property,  including  closing  costs.  The  Partnership
distributed amounts sufficient to enable the Limited Partners to pay federal and
state  income  taxes,  if any  (at a level  reasonably  assumed  by the  General
Partners), resulting from the sale.

         In September 2000, the Partnership  sold its Popeyes Property in Warner
Robins,  Georgia to a third party for a total of $609,861 and received net sales
proceeds of approximately $607,400, resulting in a gain of $17,447 for financial
reporting purposes.  This property was originally acquired by the Partnership in
October  1996  and  had  costs  totaling   approximately   $563,000,   excluding
acquisition  fees  and  miscellaneous   acquisition   expenses;   therefore  the
Partnership sold this property for a total of approximately $44,400 in excess of
its original purchase price. The Partnership  anticipates it will reinvest these
net sales  proceeds  in an  additional  Property.  The  Partnership  distributed
amounts  sufficient  to enable the  Limited  Partners  to pay  federal and state
income taxes, if any (at a level  reasonably  assumed by the General  Partners),
resulting from the sale.

         In addition,  in October 2000, the  Partnership  sold its Boston Market
Property in Long Beach, California, for $533,500 and received net sales proceeds
of approximately $530,000. Due to the fact that in 2000 the Partnership recorded
an  allowance  for  loss of  $353,622  for  this  Property,  no gain or loss was
recognized for financial  reporting purposes in 2000,  relating to the sale. The
Partnership  anticipates  it  will  reinvest  these  net  sales  proceeds  in an
additional  Property.  The Partnership  distributed amounts sufficient to enable
the Limited  Partners to pay federal and state income taxes,  if any (at a level
reasonably assumed by the General Partners), resulting from the sale.

         In January 2001,  the  Partnership  sold its Boston Market  Property in
Houston,  Texas for $812,696 and  received net sales  proceeds of $782,648.  The
Partnership  intends  to  reinvest  the  net  sales  proceeds  in an  additional
Property.

         None of the Properties owned by the Partnership,  or the joint ventures
or tenancy in common arrangements in which the Partnership owns an interest,  is
or may be encumbered. Subject to certain restrictions on borrowing, however, the
Partnership  may borrow  funds but will not encumber  any of the  Properties  in
connection  with any such  borrowing.  The  Partnership  will not borrow for the
purpose of returning capital to the Limited  Partners.  The Partnership will not
borrow  under  arrangements  that  would  make the  Limited  Partners  liable to
creditors of the Partnership. The General Partners further have represented that
they will use their  reasonable  efforts to structure  any  borrowing so that it
will not constitute  "acquisition  indebtedness" for federal income tax purposes
and also will limit the Partnership's  outstanding indebtedness to three percent
of the  aggregate  adjusted  tax  basis  of its  Properties.  In  addition,  the
Partnership  will not borrow  unless it first obtains an opinion of counsel that
such borrowing will not constitute acquisition  indebtedness.  Affiliates of the
General Partners from time to time incur certain operating expenses on behalf of
the  Partnership  for which the  Partnership  reimburses the affiliates  without
interest.

         Currently,  rental income from the  Partnership's  Properties  and cash
reserves  are  invested in money  market  accounts or other  short-term,  highly
liquid  investments such as demand deposit accounts at commercial  banks,  money
market  accounts and  certificates  of deposit with less than a 30-day  maturity
date, pending the Partnership's use of such funds to pay Partnership expenses or
to make  distributions  to partners.  At December 31, 2000, the  Partnership had
$1,597,502 invested in such short-term  investments as compared to $2,644,465 at
December 31, 1999. The decrease in the amount invested in short-term investments
at  December  31,  2000,   as  compared  to  December  31,  1999,  is  primarily
attributable to the Partnership reinvesting the net sales proceeds from the 1999
return of capital from CNL/El Cajon Joint Venture in a Bakers Square Property in
Wilmette,  Illinois,  as described  above.  As of December 31, 2000, the average
interest rate earned by the  Partnership  on rental  income  deposited in demand
deposit accounts at commercial banks was approximately 5.38% annually. The funds
remaining  at  December  31,  2000,  after  payment  of  distribution  and other
liabilities,  will be used to meet the  Partnership's  working capital and other
needs and to invest in additional Properties.

Short-Term Liquidity

         The Partnership's  short-term liquidity  requirements consist primarily
of the operating expenses of the Partnership.

         The Partnership's  investment strategy of acquiring Properties for cash
and  leasing  them under  triple-net  leases to  operators  who  generally  meet
specified financial  standards  minimizes the Partnership's  operating expenses.
The General  Partners  believe that the leases will generate cash flow in excess
of operating expenses.

         Due to low  operating  expenses  and  ongoing  cash flow,  the  General
Partners do not believe that  working  capital  reserves  are  necessary at this
time. In addition,  because generally all leases of the Partnership's Properties
are on a triple-net  basis, it is not anticipated  that a permanent  reserve for
maintenance and repairs is necessary at this time. To the extent,  however, that
the Partnership has insufficient  funds for such purposes,  the General Partners
will contribute to the  Partnership an aggregate  amount of up to one percent of
the offering proceeds for maintenance and repairs. The General Partners have the
right to cause the  Partnership  to maintain  reserves if, in their  discretion,
they  determine  such  reserves are required to meet the  Partnership's  working
capital needs.

         The General  Partners have the right,  but not the obligation,  to make
additional capital  contributions if they deem it appropriate in connection with
the operations of the Partnership.

         The Partnership  generally  distributes cash from operations  remaining
after the payment of the operating  expenses of the  Partnership,  to the extent
that  the  General  Partners   determine  that  such  funds  are  available  for
distribution.  Based on  current  cash from  operations,  and for the year ended
December 31, 2000,  anticipated  future cash from  operations,  the  Partnership
declared  distributions  to the Limited  Partners of $2,400,000  for each of the
years ended December 31, 2000, 1999 and 1998. This represents  distributions  of
$0.80 per Unit for each of the years ended December 31, 2000,  1999 and 1998. No
distributions were made to the General Partners for the years ended December 31,
2000,  1999 and 1998.  No amounts  distributed  to the Limited  Partners for the
years ended  December  31,  2000,  1999 and 1998 are required to be or have been
treated by the  Partnership  as a return of capital for purposes of  calculating
the  Limited  Partners'  return on their  adjusted  capital  contributions.  The
Partnership  intends to continue to make  distributions  of cash  available  for
distribution to Limited Partners on a quarterly basis.

         During 2000, the General  Partners waived their right to receive future
distributions  from the Partnership,  including both  distributions of operating
cash flow and  distributions  of  liquidation  proceeds,  to the extent that the
cumulative amount of such distributions  would exceed the balance in the General
Partners'  capital  account as of December  31, 1999.  Accordingly,  the General
Partners were not allocated any net income and did not receive any distributions
during the year ended December 31, 2000.

         As of December 31, 2000, 1999 and 1998, the  Partnership  owed $13,819,
$23,597  and  $14,448,  respectively,  to related  parties  for  accounting  and
administrative  services  and  management  fees.  As  of  March  15,  2001,  the
Partnership had reimbursed the affiliates all such amounts.  Other  liabilities,
including  distributions  payable,  decreased  to $719,023 at December 31, 2000,
from  $868,736 at December 31, 1999,  partially due to amounts that were accrued
at  December  31,  1999  relating  to  transaction  costs for the  proposed  and
terminated merger with APF, as described in "Termination of Merger." The General
Partners  believe that the  Partnership  has sufficient cash on hand to meet its
current working capital needs.

Long-Term Liquidity

         The  Partnership  has no long-term  debt or other  long-term  liquidity
requirements.

Results of Operations

         During 1999 and 1998, the Partnership  owned and leased 22 wholly owned
Properties,  and during 2000, the  Partnership  owned and leased 23 wholly owned
Properties  (including two Properties which were sold during 2000). In addition,
during 1998, the Partnership was a co-venturer in three joint ventures that each
owned and leased one Property and also owned and leased  three  Properties  with
affiliates of the General Partners, as tenants-in-common.  During 2000 and 1999,
the  Partnership  was also a co-venturer  in one  additional  joint venture that
owned and leased one Property and also owned and leased one additional  Property
with affiliates of the General  Partners,  as  tenants-in-common  (including one
Property in CNL/GC El Cajon Joint Venture,  which was sold in December 1999). As
of December 31, 2000, the  Partnership  owned,  either directly or through joint
venture  arrangements,  28 Properties which are generally  subject to long-term,
triple-net  leases. The leases of the Properties provide for minimum base annual
rental payments  (payable in monthly  installments)  ranging from  approximately
$57,300 to $190,000.  The  majority of the leases  provide for  percentage  rent
based on sales in excess of a specified amount. In addition, the majority of the
leases provide that,  commencing in specified  lease years  (generally the sixth
lease  year),  the annual base rent  required  under the terms of the lease will
increase.  For further  description of the Partnership's  leases and Properties,
see Item 1. Business - Leases and Item 2. Properties, respectively.

         During the year ended December 31, 2000, the  Partnership,  and for the
years ended December 31, 1999 and 1998,  the  Partnership  and its  consolidated
joint venture, CNL/GC El Cajon Joint Venture, earned $2,043,609,  $2,392,160 and
$2,813,442,  respectively,  in  rental  income  from  operating  leases  (net of
adjustments to accrued  rental  income) and earned income from direct  financing
leases.  The decrease in rental and earned  income  during 2000,  as compared to
1999,  was  partially  attributable  to the fact that in 2000,  the  Partnership
established an allowance for doubtful  accounts of  approximately  $173,700,  in
accordance with its collection policy relating to two Denny's Properties and one
Mr. Fable's Property. The tenant of the Mr. Fable's Property defaulted under the
terms  of its  lease  and  ceased  making  rental  payments.  During  2000,  the
Partnership  also  reversed  approximately  $154,100  of accrued  rental  income
relating to these  Properties.  The  General  Partners  will  continue to pursue
collection of the past due rental amounts  relating to these Properties and will
recognize such amounts as income if collected.

         The decrease in rental and earned income during 2000 and 1999,  each as
compared to the previous  year, was partially  attributable  to the fact that in
1999,  the  Partnership's  consolidated  joint  venture,  CNL/GC El Cajon  Joint
Venture,  sold its Property. As a result of the sale, the joint venture reversed
approximately  $172,500 of accrued  rental  income that had been  recognized  as
income in prior  periods.  The decrease was  partially  offset by an increase of
approximately  $42,000,  in unamortized  interim rental income.  The balance was
recognized  in 1999 due to the fact that the property was sold and the lease was
terminated.  The  decrease  during 2000 was  partially  offset by an increase in
rental and earned income due to the fact that in January 2000,  the  Partnership
reinvested the return of capital from the 1999 sale of El Cajon Joint Venture in
a Property in Wilmette, Illinois.

         Rental and earned  income  were also  impacted  by the fact that during
1998, the tenant of three Boston Market  Properties  filed for  bankruptcy,  but
continued  making rental payments on the  Properties.  In April 1999, the tenant
rejected,  vacated and ceased making rental  payments on two of the three leases
resulting in a decrease in rental and earned income during 1999 of approximately
$135,800.  In addition,  during 1999,  the  Partnership  reversed  approximately
$59,700 of accrued rental income (non-cash accounting adjustment relating to the
straight-lining  of future scheduled rent increases over the terms of the leases
in accordance with generally accepted accounting principles) relating to the two
rejected  leases during 1999.  In July 2000,  the tenant  rejected,  vacated and
ceased  making  rental  payments on the third lease  resulting  in a decrease of
rental and earned income during 2000 of approximately  $59,800 relating to these
three   Properties.   In  addition,   during  2000,  the  Partnership   reversed
approximately $35,100 of accrued rental income amounts relating to the one lease
that was rejected during 2000. In January 2001, the Partnership  sold one of the
vacant Properties, as described in "Capital Resources." The Partnership will not
recognize  rental and earned  income from the two  remaining  vacant  Properties
until new tenants for these  Properties  are located or until the Properties are
sold and the proceeds from the sale are reinvested in additional Properties. The
lost  revenues  resulting  from the two  rejected  leases  could have an adverse
effect on the results of operations of the Partnership if the Partnership is not
able to re-lease these Properties in a timely manner.

         The decrease in rental and earned  income  during 1999,  as compared to
1998,  was also partially  attributable  to a decrease in rental income due from
the tenants of the Properties in Aiken,  South Carolina and Weatherford,  Texas,
as a result of receiving reimbursements of construction costs from the developer
during 1999 which  reduced the cost of the  Property on which  rental  income is
computed.

         In addition,  for the years ended December 31, 2000, 1999 and 1998, the
Partnership earned $176,088, $182,132 and $140,595,  respectively,  attributable
to net income earned by  unconsolidated  joint ventures in which the Partnership
is a  co-venturer.  The decrease in net income  earned by  unconsolidated  joint
ventures  during 2000,  as compared to 1999,  was partially a result of the fact
that during 2000 the tenant of the Property in Corpus Christi, Texas experienced
financial  difficulties.  As  a  result  the  tenants-in-common  established  an
allowance for doubtful  accounts of  approximately  $42,900 relating to past due
rental  amounts.  The Partnership  owns a 27.42% interest in this Property.  The
increase in net income earned by  unconsolidated  joint ventures during 1999, as
compared  to 1998,  was  primarily  due to the fact that in  January  1999,  the
Partnership  entered  into a  joint  venture  arrangement,  Ocean  Shores  Joint
Venture, with CNL Income Fund X, Ltd., an affiliate of the General Partners, and
invested in a Property in Zephyrhills,  Florida, as  tenants-in-common  with CNL
Income Fund IV, Ltd., an affiliate of the General Partners.

         During  the  year  ended  December  31,  2000,  three  lessees  of  the
Partnership,  Golden Corral Corporation,  National Restaurant Enterprises,  Inc.
and  Jack in the Box  Inc.,  each  contributed  more  than  ten  percent  of the
Partnership's total rental and earned income (including rental and earned income
from the  Partnership's  share of rental income from three  Properties  owned by
unconsolidated joint ventures and four Properties owned with separate affiliates
of the General Partners as  tenants-in-common).  As of December 31, 2000, Golden
Corral Corporation and National  Restaurant  Enterprises,  Inc. were each lessee
under leases relating to three restaurants,.  and Jack in the Box Inc. were each
the lessee under leases  relating to four  restaurants.  It is anticipated  that
based on the minimum rental payments required by the leases, these three lessees
each will  continue to  contribute  more than ten  percent of the  Partnership's
total rental and earned income in 2001.  In addition,  four  Restaurant  Chains,
Golden Corral, Burger King, Jack in the Box, and Arby's, each accounted for more
than ten percent of the Partnership's  total rental and earned income during the
year ended  December  31,  2000  (including  rental and earned  income  from the
Partnership's   share  of  rental   income  from  three   Properties   owned  by
unconsolidated joint ventures and four Properties owned with separate affiliates
of the General Partners as  tenants-in-common).  In 2001, it is anticipated that
each of these four  Restaurant  Chains will continue to contribute more than ten
percent of the  Partnership's  rental and earned income to which the Partnership
is  entitled  under the terms of the  leases.  Any  failure of these  lessees or
Restaurant  Chains  could have a material  adverse  affect on the  Partnership's
income if the  Partnership  is not able to re-lease the  Properties  in a timely
manner.

         During  the  years  ended  December  31,  2000,  1999,  and  1998,  the
Partnership also earned $33,149,  $24,279,  and $3,403,  respectively,  in other
income.  The increase in other  income  during  1999,  as compared to 1998,  was
primarily due to the fact that the Partnership  reversed  $13,399 in transaction
costs during 1999. These  represented  amounts that had previously been expensed
related to the General Partners retaining financial and legal advisors to assist
them in evaluating and negotiating the proposed and terminated  merger with APF,
as described  below. The General Partners and APF agreed that it would be in the
best interest of the Partnership  that it not be acquired in the acquisition due
to the Limited Partners' loss of passive income in the acquisition, as described
below.

         Operating expenses,  including  depreciation and amortization  expense,
were  $708,269,  $689,111 and  $551,890  for the years ended  December 31, 2000,
1999, and 1998, respectively. The increase in operating expenses during 2000 and
1999,  each as compared to the previous year, was partially  attributable to the
fact that the Partnership  incurred certain  expenses,  such as legal fees, real
estate taxes,  insurance,  and  maintenance  relating to the three Boston Market
Properties whose leases were rejected by the tenant,  the two Denny's Properties
and the one Mr.  Fable's  Property,  as described  above.  In January 2001,  the
Partnership  sold one of the vacant Boston  Market  Properties,  therefore,  the
Partnership  will  not  continue  to incur  these  expenses  for this  Property.
However, the Partnership will continue to incur certain expenses,  such as legal
fees, real estate taxes,  insurance,  and maintenance  relating to the remaining
vacant  Properties until new tenants or purchasers are located.  The Partnership
is currently  seeking  either  replacement  tenants or purchasers for the vacant
Properties.

         The increase in operating  expenses  during 2000,  as compared to 1999,
was partially  attributable  to an increase in  depreciation  expense due to the
purchase of a Property  during 2000,  as described in "Capital  Resources."  The
increase in operating  expenses  during 2000,  as compared to 1999, is partially
offset by, and the  increase  during  1999,  as compared to 1998,  is  partially
attributable  to,  the  amount of  transaction  costs the  Partnership  incurred
related to the General Partners retaining financial and legal advisors to assist
them in evaluating and negotiating the proposed and terminated  Merger with APF,
as described below in "Termination of Merger."

         In  addition,  the  increase in  operating  expenses  during  1999,  as
compared  to 1998,  is  partially  attributable  to the fact  that  depreciation
expense  was lower  during  1998 as a result of an  adjustment  to  depreciation
expense relating to the reimbursement  from the developer of construction  costs
relating to the Properties in Aiken,  South Carolina and Weatherford,  Texas, as
described above, which reduced the depreciable basis of each Property.

         As described above in "Capital Resources," during 2000, the Partnership
sold it Property in Warner Robins,  Georgia,  resulting in a gain of $17,447 for
financial reporting purposes.

         During the year ended  December 31, 2000,  the  Partnership  recorded a
provision for loss on assets in the amount of $353,622,  for financial reporting
purposes for its Property in Long Beach, California. The tenant of this Property
filed for  bankruptcy  in October  1998,  and during  1999,  rejected  the lease
relating to the Property.  The allowance  represented the difference between the
carrying value of the Property and the net sales proceeds received from the sale
of this  Property.  In addition,  during the year ended  December 31, 2000,  the
Partnership  established  a  provision  for  loss on  assets  in the  amount  of
$477,971,  for  financial  reporting  purposes  for its  Property in  Inglewood,
California. The tenant of this Property filed for bankruptcy in October 1998 and
during 1999,  rejected the lease relating to the Property.  In addition,  during
the year ended December 31, 2000, the Partnership established provision for loss
on assets in the amount of $87,099  for  financial  reporting  purposes  for its
Property in Kentwood,  Michigan. The tenant of this Property defaulted under the
terms of its lease and ceased restaurant  operations.  The allowance represented
the  difference  between the carrying value of the Property at December 31, 2000
and the estimated net realizable value of the Property.  No such provisions were
recorded during the years ended December 31, 1999 and 1998.

         As a result of the dissolution of the Partnership's  consolidated joint
venture,  CNL/GC El Cajon Joint Venture,  the  Partnership  recognized a loss on
dissolution  of $82,914  during the year ended  December 31, 1999, for financial
reporting purposes,  as described above in "Capital Resources." No such loss was
recorded during 2000 and 1998.

         The  Partnership's  leases  as of  December  31,  2000,  are  generally
triple-net  leases and  contain  provisions  that the General  Partners  believe
mitigate  the adverse  effect of  inflation.  Such  provisions  include  clauses
requiring the payment of percentage rent based on certain restaurant sales above
a specified  level and/or  automatic  increases in base rent at specified  times
during the term of the lease.  Management  expects that  increases in restaurant
sales volume due to inflation and real sales growth should result in an increase
in  rental  income  over  time.  Continued  inflation  also  may  cause  capital
appreciation of the  Partnership's  Properties.  Inflation and changing  prices,
however,  also may have an adverse impact on the sales of the restaurants and on
potential capital appreciation of the Properties.

         In December 1999, the Securities and Exchange  Commission  released SAB
101, which provides the staff's view in applying generally  accepted  accounting
principles  to  selected  revenue  recognition  issues.  SAB  101  requires  the
Partnership  to defer  recognition  of certain  percentage  rental  income until
certain defined  thresholds are met. The  Partnership  adopted SAB 101 beginning
January 1, 2000. Implementation of SAB 101 did not have a material impact on the
Partnership's result of operations.

         In June 1998, the Financial Accounting Standards Board issued Statement
of  Financial   Accounting   Standards  No.  133,   "Accounting  for  Derivative
Instruments and Hedging  Activities." The Statement  establishes  accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instruments,   embedded  in  other  contracts   (collectively   referred  to  as
derivatives),  and for hedging activities. The Statement requires that an entity
recognize all  derivatives  as either assets or liabilities in the balance sheet
and  measure  those  instruments  at fair  value.  In June 1999,  the  Financial
Accounting  Standards Board issued Statement of Financial  Accounting  Standards
No.  137,  "Accounting  for  Derivative  Instruments  and Hedging  Activities  -
Deferral of the Effective  Date of FASB  Statement No. 133, an Amendment of FASB
Statement No. 133." FAS 137 deferred the effective date of FAS 133 for one year.
FAS 133,  as amended,  is now  effective  for all fiscal  quarters of all fiscal
years  beginning  after  June  15,  2000.  The  partnership  has  reviewed  both
statements and has determined  that both FAS 133 and FAS 137 do not apply to the
Partnership as of December 31, 2000.

Termination of Merger

         On March 11, 1999, the  Partnership  entered into an Agreement and Plan
of Merger with APF,  pursuant to which the Partnership  would be merged with and
into a subsidiary of APF. Subsequent to entering into the Merger agreement,  the
General  Partners  received  a number  of  comments  from  brokers  who sold the
Partnership's units concerning the loss of passive income treatment in the event
the  Partnership  merged with APF. On June 3, 1999,  the  General  Partners,  on
behalf of the Partnership, and APF agreed that it would be in the best interests
of the  Partnership  and APF that APF not attempt to acquire the  Partnership in
the  acquisition.  Therefore  in  June  1999,  APF  entered  into a  termination
agreement with the General Partners of the Partnership.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

         Not applicable.

Item 8.  Financial Statements and Supplementary Data



<PAGE>




                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                                    CONTENTS








                                                                     Page

Report of Independent Certified Public Accountants                    16

Financial Statements:

     Balance Sheets                                                   17

     Statements of Income                                             18

     Statements of Partners' Capital                                  19

     Statements of Cash Flows                                      20-21

     Notes to Financial Statements                                 22-37








<PAGE>









               Report of Independent Certified Public Accountants




To the Partners
CNL Income Fund XVII, Ltd.


In our opinion,  the financial  statements  listed in the index  appearing under
item 14(a)(1) present fairly, in all material  respects,  the financial position
of CNL Income Fund XVII,  Ltd. (a Florida  limited  partnership) at December 31,
2000 and 1999,  and the results of its operations and its cash flows for each of
the three  years in the  period  ended  December  31,  2000 in  conformity  with
accounting  principles  generally  accepted in the United States of America.  In
addition,  in our opinion, the financial statement schedules listed in the index
appearing under item 14(a)(2)  present  fairly,  in all material  respects,  the
information  set  forth  therein  when  read in  conjunction  with  the  related
financial  statements.  These financial  statements and the financial  statement
schedules  are  the   responsibility  of  the  Partnership's   management;   our
responsibility  is to express an opinion on these  financial  statements and the
financial  statement  schedules based on our audits.  We conducted our audits of
these statements in accordance with auditing standards generally accepted in the
United  States of America,  which  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,  assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.



/s/ PricewaterhouseCoopers LLP

Orlando, Florida
February 2, 2001



<PAGE>



                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
<S><C>
                                                                                          December 31,
                                                                                  2000                   1999
                                                                            -----------------      ------------------

                          ASSETS

Land and buildings on operating leases, less
     accumulated depreciation and allowance
     for loss on assets                                                         $ 18,604,190            $ 19,301,187
Net investment in direct financing leases                                          1,805,572               1,840,583
Investment in joint ventures                                                       1,978,787               1,967,017
Cash and cash equivalents                                                          1,597,502               2,644,465
Receivables, less allowance for doubtful
     accounts of $254,586 and $48,138,      respectively
                                                                                      33,711                  77,686
Due from related parties                                                               4,893                   3,939
Prepaid expenses                                                                      13,868                   3,652
Accrued rental income, less allowance for
     doubtful accounts of $47,435 in 2000                                            633,062                 693,671
Other assets                                                                           4,025                  29,763
                                                                            -----------------      ------------------

                                                                                $ 24,675,610            $ 26,561,963
                                                                            =================      ==================

            LIABILITIES AND PARTNERS' CAPITAL

Accounts payable                                                                    $  4,385               $  87,143
Accrued real estate taxes payable                                                     22,277                   2,041
Distributions payable                                                                600,000                 600,000
Due to related parties                                                                13,819                  23,597
Rents paid in advance and deposits                                                    35,403                 119,113
Deferred rental income                                                                56,958                  60,439
                                                                            -----------------      ------------------
         Total liabilities                                                           732,842                 892,333

Partners' capital                                                                 23,942,768              25,669,630
                                                                            -----------------      ------------------

                                                                                $ 24,675,610            $ 26,561,963
                                                                            =================      ==================
See accompanying notes to financial statements.
</TABLE>


<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                              STATEMENTS OF INCOME

<TABLE>
<CAPTION>
<S><C>

                                                                               Year Ended December 31,
                                                                      2000               1999              1998
                                                                 ----------------   ---------------   ----------------

 Revenues:
      Rental income from operating leases                           $  2,088,220      $  2,271,450       $  2,447,938
      Adjustments to accrued rental income                              (189,227  )       (232,140  )              --
      Earned income from direct financing leases                         144,616           352,850            365,504
      Interest                                                            29,806            44,184             51,240
      Other income                                                        33,149            24,279              3,403
                                                                 ----------------   ---------------   ----------------
                                                                       2,106,564         2,460,623          2,868,085
                                                                 ----------------   ---------------   ----------------
 Expenses:
      General operating and administrative                               146,978           130,270            110,537
      Professional services                                               50,721            30,086             19,504
      Management fee to related party                                     22,591            25,246             26,690
      Real estate taxes                                                   61,764            20,254                 --
      State and other taxes                                               12,064            13,505             11,811
      Depreciation and amortization                                      395,456           384,985            369,209
      Transaction costs                                                   18,695            84,765             14,139
                                                                 ----------------   ---------------   ----------------
                                                                         708,269           689,111            551,890
                                                                 ----------------   ---------------   ----------------
 Income Before Loss on Dissolution of Consolidated Joint
      Venture, Minority Interest in Income of Consolidated
      Joint Venture, Equity in Earnings of Unconsolidated
      Joint Ventures, Gain on Sale of Assets, and Provision
      for Losses on Assets                                             1,398,295         1,771,512          2,316,195

 Loss on Dissolution of Consolidated Joint Venture                            --           (82,914  )              --

 Minority Interest in Income of Consolidated
      Joint Venture                                                           --           (31,461  )         (62,632 )

 Equity in Earnings of Unconsolidated Joint Ventures                     176,088           182,132            140,595

 Gain on Sale of Assets                                                   17,447                --                 --

 Provision for Loss on Assets                                           (918,692  )             --                 --
                                                                 ----------------   ---------------   ----------------

 Net Income                                                              673,138      $  1,839,269         $2,394,158
                                                                 ================   ===============   ================

 Allocation of Net Income
      General partners                                                  $     --       $   (3,850)          $     (59 )
      Limited partners                                                   673,138         1,843,119          2,394,217
                                                                 ----------------   ---------------   ----------------
                                                                     $   673,138      $  1,839,269       $  2,394,158
                                                                 ================   ===============   ================

 Net Income Per Limited Partner Unit                                   $    0.22        $     0.61         $     0.80
                                                                 ================   ===============   ================

 Weighted Average Number of Limited Partner Units
      Outstanding                                                      3,000,000         3,000,000          3,000,000
                                                                 ================   ===============   ================

</TABLE>
See accompanying notes to condensed financial statements.

<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                         STATEMENTS OF PARTNERS' CAPITAL

                  Years Ended December 31, 2000, 1999, and 1998
<TABLE>
<CAPTION>
<S><C>

                                                          General Partners
                                                -------------------------------------
                                                                       Accumulated
                                                  Contributions         Earnings
                                                 -----------------   ----------------   -

Balance, December 31, 1997                            $     1,000        $    (1,551 )

    Distributions to limited partners
       ($0.80 per limited partner unit)                        --                 --
    Net income                                                 --                (59 )
                                                 -----------------   ----------------   -

Balance, December 31, 1998                                  1,000             (1,610 )

    Distributions to limited partners
       ($0.80 per limited partner unit)                        --                 --
    Net income                                                 --             (3,850 )
                                                 -----------------   ----------------   -

Balance, December 31, 1999                                  1,000             (5,460 )

    Distributions to limited partners
       ($0.80 per limited partner unit)                        --                 --
    Net income                                                 --                 --
                                                 -----------------   ----------------   -

Balance, December 31, 2000                            $     1,000        $    (5,460 )
                                                 =================   ================   =


                           Limited Partners
------------------------------------------------------------------------
                                        Accumulated        Syndication
Contributions       Distributions         Earnings            Costs            Total
----------------   ----------------   -----------------   --------------   --------------

  $  30,000,000       $ (3,482,464 )      $  3,309,218     $ (3,590,000 )    $26,236,203


             --         (2,400,000 )                --               --       (2,400,000 )
             --                 --           2,394,217               --        2,394,158
----------------   ----------------   -----------------   --------------   --------------

     30,000,000         (5,882,464 )         5,703,435       (3,590,000 )     26,230,361


             --         (2,400,000 )                --               --       (2,400,000 )
             --                 --           1,843,119               --        1,839,269
----------------   ----------------   -----------------   --------------   --------------

     30,000,000         (8,282,464 )         7,546,554       (3,590,000 )     25,669,630


             --         (2,400,000 )                --               --       (2,400,000 )
             --                 --             673,138               --          673,138
----------------   ----------------   -----------------   --------------   --------------

  $  30,000,000      $ (10,682,464 )        $8,219,692     $ (3,590,000 )    $23,942,768
================   ================   =================   ==============   ==============

See accompanying notes to financial statements.
</TABLE>

<PAGE>



                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
<S><C>

                                                                                      Year Ended December 31,
                                                                            2000               1999                1998
                                                                       ---------------    ----------------    ----------------

Increase (Decrease) in Cash and Cash Equivalents:

      Cash Flows from Operating Activities:
         Cash received from tenants                                       $ 2,046,220         $ 2,436,836         $ 2,493,780
         Distributions from unconsolidated joint
             ventures                                                         158,725             182,752             145,839
         Cash paid for expenses                                              (388,529 )          (213,754 )          (169,940 )
         Interest received                                                     29,806              44,184              51,240
                                                                       ---------------    ----------------    ----------------
                Net cash provided by operating activities                   1,846,222           2,450,018           2,520,919
                                                                       ---------------    ----------------    ----------------

      Cash Flows from Investing Activities:
         Additions to land and buildings on
             operating leases                                              (1,630,164 )                --                  --
         Proceeds from sale of assets                                       1,136,991                  --                  --
         Reimbursement of construction costs from
             developer                                                             --                  --             306,100
         Investment in joint ventures                                             (12 )          (527,864 )          (124,452 )
         Proceeds from dissolution of consolidated joint
             venture                                                               --           2,094,231                  --
                                                                       ---------------    ----------------    ----------------
                Net cash provided by (used in) investing
                  activities                                                 (493,185 )         1,566,367             181,648
                                                                       ---------------    ----------------    ----------------

      Cash Flows from Financing Activities:
         Distributions to limited partners                                 (2,400,000 )        (2,400,000 )        (2,400,000 )
         Distributions to holder of minority interest                              --             (46,567 )           (49,023 )
         Distribution to holder of minority interest on
             dissolution of consolidated joint venture                             --            (417,696 )                --
                                                                       ---------------    ----------------    ----------------
                                                                       ---------------    ----------------    ----------------
                Net cash used in financing activities                      (2,400,000 )        (2,864,263 )        (2,449,023 )
                                                                       ---------------    ----------------    ----------------

Net Increase (Decrease) in Cash and Cash Equivalents                       (1,046,963 )         1,152,122             253,544

Cash and Cash Equivalents at Beginning of Year                              2,644,465           1,492,343           1,238,799
                                                                       ---------------    ----------------    ----------------

Cash and Cash Equivalents at End of Year                                  $ 1,597,502         $ 2,644,465         $ 1,492,343
                                                                       ===============    ================    ================

</TABLE>



<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                      STATEMENTS OF CASH FLOWS - CONTINUED
<TABLE>
<CAPTION>
<S><C>

                                                                                      Year Ended December 31,
                                                                            2000               1999                1998
                                                                       ---------------    ----------------    ----------------

Reconciliation of Net Income to Net Cash
   Provided by Operating Activities:

      Net income                                                           $  673,138         $ 1,839,269         $ 2,394,158
                                                                       ---------------    ----------------    ----------------
      Adjustments to  reconcile  net income to net cash  provided  by  operating
         activities:
             Depreciation                                                     391,244             372,148             358,063
             Amortization                                                       4,212              12,837              11,146
             Loss on dissolution of joint venture                                  --              82,914                  --
             Minority interest in income of consolidated
                joint venture                                                      --              31,461              62,632
             Equity in earnings of unconsolidated joint
                ventures, net of distributions                                (15,970 )               620               5,244
             Gain on sale of assets                                           (17,447 )                --                  --
             Provision for loss on assets                                     918,692                  --                  --
             Increase in receivables                                           13,632             (47,223 )           (29,850 )
             Increase in due from related parties                                (954 )              (439 )            (3,500 )
             Increase in prepaid expenses                                     (10,216 )            (3,122 )              (510 )
             Decrease in net investment in direct financing
                leases                                                         35,011              38,950              34,640
             Decrease (increase) in accrued rental income                      18,396             (67,188 )          (287,397 )
             Increase in other assets                                          (4,025 )                --                  --
             Increase (decrease) in accounts payable                          (62,522 )            85,586                 676
             Increase (decrease) in due to related parties                     (9,778 )             9,149              11,573
             Increase (decrease) in rents paid in advance
                and deposits                                                  (83,710 )            98,535             (35,184 )
             Decrease in deferred rental income                                (3,481 )            (3,479 )              (772 )
                                                                       ---------------    ----------------    ----------------
                                                                       ---------------    ----------------    ----------------
                   Total adjustments                                        1,173,084             610,749             126,761
                                                                       ---------------    ----------------    ----------------

Net Cash Provided by Operating Activities                                 $ 1,846,222         $ 2,450,018         $ 2,520,919
                                                                       ===============    ================    ================

Supplemental Schedule of Non-Cash Investing and
    Financing Activities:

      Land and building under operating lease exchanged
         for land and building under operating lease                          $    --             $    --          $  899,654
                                                                       ===============    ================    ================

      Distributions declared and unpaid at December 31                     $  600,000          $  600,000          $  600,000
                                                                       ===============    ================    ================

</TABLE>


<PAGE>



                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2000, 1999, and 1998


1.       Significant Accounting Policies:
         -------------------------------

         Organization  and Nature of Business - CNL Income Fund XVII,  Ltd. (the
         "Partnership") is a Florida limited  partnership that was organized for
         the purpose of acquiring both newly constructed and existing restaurant
         properties,  as well as properties  upon which  restaurants  were to be
         constructed,  which are leased  primarily  to operators of national and
         regional  fast-food,  family-style and casual dining restaurant chains.
         Under the terms of a registration  statement  filed with the Securities
         and Exchange  Commission,  the  Partnership  was  authorized  to sell a
         maximum  of  3,000,000  units   ($30,000,000)  of  limited  partnership
         interest.   A  total  of  3,000,000  units   ($30,000,000)  of  limited
         partnership interest were sold.

         The general partners of the Partnership are CNL Realty Corporation (the
         "Corporate  General  Partner"),  James M.  Seneff,  Jr.  and  Robert A.
         Bourne.  Mr. Seneff and Mr. Bourne are also 50 percent  shareholders of
         the Corporate General Partner. The general partners have responsibility
         for managing the day-to-day operations of the Partnership.

         Real  Estate  and  Lease  Accounting  -  The  Partnership  records  the
         acquisition of land and buildings at cost,  including  acquisition  and
         closing costs. Land and buildings are leased to unrelated third parties
         generally  on a  triple-net  basis,  whereby  the  tenant is  generally
         responsible  for  all  operating  expenses  relating  to the  property,
         including  property  taxes,  insurance,  maintenance  and repairs.  The
         leases are  accounted  for using  either the  direct  financing  or the
         operating methods. Such methods are described below:

                  Direct  financing  method - The leases accounted for using the
                  direct  financing  method are recorded at their net investment
                  (which at the inception of the lease generally  represents the
                  cost of the asset) (see Note 4).  Unearned  income is deferred
                  and  amortized to income over the lease terms so as to produce
                  a constant  periodic rate of return on the  Partnership's  net
                  investment in the leases.

                  Operating  method - Land and  building  leases  accounted  for
                  using the  operating  method are recorded at cost,  revenue is
                  recognized as rentals are earned and  depreciation  is charged
                  to operations as incurred.  Buildings are  depreciated  on the
                  straight-line  method over their estimated  useful lives of 30
                  years. When scheduled rentals  (including rental payments,  if
                  any,  required  during the  construction  of a property)  vary
                  during the lease term, income is recognized on a straight-line
                  basis so as to produce a constant periodic rent over the lease
                  term commencing on the date the property is placed in service.


<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


1.       Significant Accounting Policies - Continued:
         -------------------------------------------

                  Accrued  rental  income  represents  the  aggregate  amount of
                  income  recognized  on a  straight-line  basis  in  excess  of
                  scheduled  rental  payments  to date.  In  contrast,  deferred
                  rental income  represents  the  aggregate  amount of scheduled
                  rental payments to date (including  rental payments due during
                  construction  and  prior  to  the  property  being  placed  in
                  service)  in excess of income  recognized  on a  straight-line
                  basis over the lease term  commencing on the date the property
                  is placed in  service.  Whenever a tenant  defaults  under the
                  terms of its  lease,  or events  or  changes  in  circumstance
                  indicate  that the tenant will not lease the property  through
                  the end of the lease term, the Partnership  either reserves or
                  reverses the cumulative accrued rental income balance.

         When  the  properties  are  sold,  the  related  cost  and  accumulated
         depreciation  for operating  leases and the net  investment  for direct
         financing  leases,  plus any accrued rental income,  or deferred rental
         income,  are removed  from the  accounts and gains or losses from sales
         are reflected in income. The general partners of the Partnership review
         properties for impairment  whenever events or changes in  circumstances
         indicate that the carrying  amount of the assets may not be recoverable
         through   operations.   The  general  partners   determine  whether  an
         impairment  in value has occurred by  comparing  the  estimated  future
         undiscounted cash flows,  including the residual value of the property,
         with the carrying cost of the individual property. Although the general
         partners  have made their best estimate of the factors based on current
         conditions,  it is  reasonably  possible that change could occur in the
         near term which  could  adversely  affect the  general  partners'  best
         estimate of net cash flows expected to be generated from its properties
         and the need for asset  impairment  write downs.  If an  impairment  is
         indicated, the assets are adjusted to their fair value.

         When the  collection  of amounts  recorded as rental or other income is
         considered  to be  doubtful,  an  adjustment  is made to  increase  the
         allowance for doubtful accounts,  which is netted against  receivables,
         and to decrease rental or other income or increase bad debt expense for
         the  current  period,  although  the  Partnership  continues  to pursue
         collection of such amounts.  If amounts are subsequently  determined to
         be  uncollectible,  the  corresponding  receivable  and  allowance  for
         doubtful accounts are decreased accordingly.


<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


1.       Significant Accounting Policies - Continued:
         -------------------------------------------

                  Investment  in Joint  Ventures - Prior to the  liquidation  of
         CNL/GC  El Cajon  Joint  Venture  in  December  1999,  the  Partnership
         accounted  for its 80 percent  interest in such joint venture using the
         consolidation  method.  Minority interest represents the minority joint
         venture   partner's   proportionate   share  of  the   equity   in  the
         Partnership's consolidated joint venture.

         The  Partnership's  investments  in CNL  Kingston  Joint  Venture;  CNL
         Mansfield Joint Venture; and Ocean Shores Joint Venture; and a property
         in Corpus  Christi,  Texas;  a property in Akron,  Ohio;  a property in
         Fayetteville,  North Carolina;  and a property in Zephyrhills,  Florida
         for which each property is held as tenants-in-common, are accounted for
         using the equity  method  since the  Partnership  shares  control  with
         affiliates which have the same general partners.

         Cash and Cash Equivalents - The Partnership considers all highly liquid
         investments  with a maturity of three months or less when  purchased to
         be cash  equivalents.  Cash  and cash  equivalents  consist  of  demand
         deposits at commercial banks,  certificates of deposit and money market
         funds  (some  of which  are  backed  by  government  securities).  Cash
         equivalents   are  stated  at  cost  plus   accrued   interest,   which
         approximates market value.

         Cash  accounts  maintained  on  behalf  of the  Partnership  in  demand
         deposits at commercial banks,  certificates of deposit and money market
         funds may exceed federally insured levels; however, the Partnership has
         not experienced any losses in such accounts.

         Income Taxes - Under  Section 701 of the  Internal  Revenue  Code,  all
         income,  expenses and tax credit items flow through to the partners for
         tax  purposes.  Therefore,  no  provision  for federal  income taxes is
         provided in the accompanying  financial statements.  The Partnership is
         subject to certain state taxes on its income and property.

         Additionally,  for tax  purposes,  syndication  costs are  included  in
         Partnership equity and in the basis of each partner's  investment.  For
         financial  reporting  purposes,  syndication  costs are netted  against
         partners' capital and represent a reduction of Partnership equity and a
         reduction in the basis of each partner's investment.


<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


1.       Significant Accounting Policies - Continued:
         -------------------------------------------

         Use of Estimates - The general  partners of the Partnership have made a
         number of estimates and assumptions relating to the reporting of assets
         and liabilities and the disclosure of contingent assets and liabilities
         to prepare these  financial  statements in  conformity  with  generally
         accepted  accounting  principles.  The more significant areas requiring
         the use of  management  estimates  relate to the allowance for doubtful
         accounts  and future  cash flows  associated  with  long-lived  assets.
         Actual results could differ from those estimates.

         Reclassifications  -  Certain  items  in  the  prior  years'  financial
         statements  have been  reclassified  to conform  to 2000  presentation.
         These  reclassifications  had no effect  on  partners'  capital  or net
         income.

         Staff Accounting  Bulleting No. 101 ("SAB 101") - In December 1999, the
         Securities and Exchange Commission released SAB 101, which provides the
         staff's view in applying  generally accepted  accounting  principles to
         selected revenue  recognition  issues. SAB 101 requires the Partnership
         to defer recognition of certain  percentage rental income until certain
         defined  thresholds are met. The Partnership  adopted SAB 101 beginning
         January  1,  2000.  Implementation  of SAB 101 did not have a  material
         impact on the Partnership's result of operations.

         Statement of  Financial  Accounting  Standards  No. 133 ("FAS 133") and
         Statement of Financial  Accounting  Standards  No. 137 ("FAS 137") - In
         June 1998, the Financial Accounting Standards Board issued Statement of
         Financial  Accounting  Standards No. 133,  "Accounting  for  Derivative
         Instruments  and  Hedging   Activities."   The  Statement   establishes
         accounting  and  reporting   standards  for   derivative   instruments,
         including certain derivative  instruments,  embedded in other contracts
         (collectively referred to as derivatives),  and for hedging activities.
         The Statement  requires that an entity  recognize  all  derivatives  as
         either  assets or  liabilities  in the balance  sheet and measure those
         instruments  at fair  value.  In June 1999,  the  Financial  Accounting
         Standards Board issued Statement of Financial  Accounting Standards No.
         137,  "Accounting for Derivative  Instruments and Hedging  Activities -
         Deferral of the Effective  Date of FASB Statement No. 133, an Amendment
         of FASB  Statement No. 133." FAS 137 deferred the effective date of FAS
         133 for one year. FAS 133, as amended,  is now effective for all fiscal
         quarters  of all  fiscal  years  beginning  after  June 15,  2000.  The
         partnership  has reviewed both  statements and has determined that both
         FAS 133 and FAS 137 do not apply to the  Partnership as of December 31,
         2000.


<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


2.       Leases:
         ------

         The Partnership  leases its land and buildings to operators of national
         and regional fast-food and family-style and casual dining  restaurants.
         The leases are  accounted  for under the  provisions  of  Statement  of
         Financial Accounting Standards No. 13, "Accounting for Leases." Some of
         the leases are  classified  as operating  leases and some of the leases
         have been classified as direct financing leases. For some of the leases
         classified as direct  financing  leases,  the building  portions of the
         property leases are accounted for as direct  financing leases while the
         land portion of the leases are operating  leases.  Leases are generally
         for 15 to 20 years and provide for minimum and contingent  rentals.  In
         addition, generally the tenant pays all property taxes and assessments,
         fully  maintains  the interior and exterior of the building and carries
         insurance  coverage for public  liability,  property  damage,  fire and
         extended  coverage.  The lease options generally allow tenants to renew
         the leases for two to five successive  five-year periods subject to the
         same terms and conditions as the initial lease.  Most leases also allow
         the tenant to  purchase  the  property  at fair  market  value  after a
         specified portion of the lease has elapsed.

3.       Land and Buildings on Operating Leases:
         --------------------------------------

         Land and  buildings on operating  leases  consisted of the following at
December 31:

<TABLE>
<CAPTION>
<S><C>
                                                                     2000                   1999
                                                              -------------------    -------------------

                 Land                                               $  9,294,800           $  9,384,719
                 Buildings                                            11,444,090             11,164,433
                                                              -------------------    -------------------
                                                                      20,738,890             20,549,152
                 Less accumulated depreciation                        (1,569,630 )           (1,247,965 )
                                                              -------------------    -------------------
                                                                      19,169,260             19,301,187
                      Less allowance for loss on
                        assets                                          (565,070 )                   --
                                                              -------------------    -------------------
                                                                    $ 18,604,190           $ 19,301,187
                                                              ===================    ===================
</TABLE>


         In December  1999,  CNL/GC El Cajon Joint  Venture,  the  Partnership's
         consolidated  joint  venture,  sold  its  property  to its  tenant  for
         $2,094,231  (see Note 5). In January 2000, the  Partnership  reinvested
         approximately  $1,630,200 of the net sales  proceeds in a Bakers Square
         located in Wilmette, Illinois (see Note 8).


<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


3.       Land and Buildings on Operating Leases:
         --------------------------------------

         In September 2000, the Partnership  sold its property in Warner Robins,
         Georgia,  to a third party for $609,861 and received net sales proceeds
         of approximately $607,400, resulting in a gain of $17,447 for financial
         reporting  purposes.  This  property  was  originally  acquired  by the
         Partnership  in  1996  at  a  cost  totaling  approximately   $563,000,
         excluding  acquisition  fees and  miscellaneous  acquisition  expenses;
         therefore,   the  Partnership   sold  this  property  for  a  total  of
         approximately $44,400 in excess of its original purchase price.

         In 2000, the Partnership recorded a provision for loss on assets in the
         amount of $353,622 for  financial  reporting  purposes  relating to the
         property in Long  Beach,  California.  The  allowance  represented  the
         difference between the carrying value of the property and the net sales
         proceeds  received from the sale of the property.  In October 2000, the
         Partnership  sold  this  property  to a third  party for  $533,500  and
         received net sales proceeds of approximately  $530,000. Due to the fact
         that in 2000,  the  Partnership  had recorded an allowance for loss for
         this property,  no additional gain or loss was recognized for financial
         reporting purposes during 2000 relating to the sale of the property.

         During 2000, the Partnership established a provision for loss on assets
         of $477,971, relating to the property located in Inglewood, California.
         The tenant of this property  filed for  bankruptcy in October 1998, and
         in 1999,  rejected the lease  relating to the  property.  The allowance
         represented  the difference  between the carrying value of the property
         at December 31, 2000, and the estimated net  realizable  value for this
         property.

         During 2000, the partnership established a provision for loss on assets
         of $87,099, relating to the property located in Kentwood, Michigan. The
         tenant  of this  property  defaulted  under  the terms of its lease and
         ceased restaurant operations.  The allowance represented the difference
         between the carrying  value of the  property at December 31, 2000,  and
         the estimated net realizable value for this property.

         Generally,  leases  provide for  escalating  guaranteed  minimum  rents
         throughout the lease term.  Income from these  scheduled rent increases
         is  recognized on a  straight-line  basis over the terms of the leases.
         For the years ended December 31, 2000,  1999 and 1998, the  Partnership
         recognized a loss of $27,155 (net of $141,492 in reversals  and $47,735
         in  reserves),  income of $19,488 (net of $232,140 in  reversals),  and
         income of $287,397, respectively, of such rental income.


<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


3.       Land and Buildings on Operating Leases - Continued:
         --------------------------------------------------

         The following is a schedule of the future  minimum lease payments to be
         received on noncancellable operating leases at December 31, 2000:

<TABLE>
<CAPTION>
<S><C>

                             2001                                                       $1,965,388
                             2002                                                        2,005,231
                             2003                                                        2,018,788
                             2004                                                        2,021,433
                             2005                                                        2,044,338
                             Thereafter                                                 19,918,237
                                                                                   ----------------

                                                                                       $29,973,415
                                                                                   ================

</TABLE>


         Since  lease  renewal  periods  are  exercisable  at the  option of the
         tenant, the above table only presents future minimum lease payments due
         during  the  initial  lease  terms.  In  addition,  this table does not
         include any amounts for future contingent rentals which may be received
         on the leases based on a percentage of the tenant's gross sales.

4.       Net Investment in Direct Financing Leases:
         -----------------------------------------

         The  following  lists the  components  of the net  investment in direct
financing leases at December 31:

<TABLE>
<CAPTION>
<S><C>
                                                                             2000                  1999
                                                                       -----------------     -----------------

                   Minimum lease payments
                        receivable                                          $ 3,308,029           $ 3,526,271
                   Estimated residual values                                    485,703               485,703
                   Less unearned income                                      (1,988,160 )          (2,171,391 )
                                                                       -----------------
                                                                                             -----------------
                   Net investment in direct
                        financing leases                                    $ 1,805,572           $ 1,840,583
                                                                       =================     =================

</TABLE>


         In December  1999,  CNL/GC El Cajon Joint  Venture,  the  Partnership's
         consolidated joint venture,  sold its property to the tenant, for which
         the building  portion had been classified as a direct  financing lease.
         In connection  therewith,  the gross investment (minimum lease payments
         receivable and estimated  residual  value) and unearned income relating
         to this property were removed from the accounts (see Note 5).

                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


4.       Net Investment in Direct Financing Leases-Continued:
         ---------------------------------------------------

         The  following  is a schedule of future  minimum  lease  payments to be
         received on direct financing leases at December 31, 2000:

<TABLE>
<CAPTION>
<S><C>
                            2001                                                     $ 218,244
                            2002                                                       218,244
                            2003                                                       218,244
                            2004                                                       218,244
                            2005                                                       218,244
                            Thereafter                                               2,216,809
                                                                              -----------------

                                                                                    $3,308,029
                                                                              =================
</TABLE>


         The above table does not include  future  minimum  lease  payments  for
         renewal  periods or for contingent  rental payments that may become due
         in future periods (see Note 3).

5.       Investment in Joint Ventures:
         ----------------------------

         The Partnership owns properties in Fayetteville, North Carolina; Corpus
         Christi, Texas; and Akron, Ohio as tenants-in-common with affiliates of
         the general  partners.  As of December 31, 2000, the Partnership  owned
         interests  in  these   properties  of  19.56%,   27.42%,   and  36.91%,
         respectively.

         The  Partnership  has a 21 percent and a 60.06% interest in the profits
         and  losses of CNL  Mansfield  Joint  Venture  and CNL  Kingston  Joint
         Venture,  respectively. The remaining interests in these joint ventures
         are held by affiliates of the  Partnership  which have the same General
         Partners.

         In  January  1999,  the  Partnership   entered  into  a  joint  venture
         arrangement,  Ocean Shores Joint Venture, with CNL Income Fund X, Ltd.,
         a Florida limited partnership and affiliate of the general partners, to
         own and lease one  restaurant  property.  The  Partnership  contributed
         approximately  $359,500 to the joint  venture as of December  31, 2000.
         The Partnership owns a 30.94% interest in the profits and losses of the
         joint venture.

         In January 1999, the Partnership invested in a property in Zephyrhills,
         Florida as  tenants-in-common  with CNL Income Fund IV, Ltd., a Florida
         limited partnership and affiliate of

                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


5.       Investment in Joint Ventures-Continued:
         --------------------------------------

         the  general  partners.  As  of  December  31,  2000,  the  Partnership
         contributed  approximately  $168,400  for a 24 percent  interest in the
         property.

         In addition,  in December 1999, CNL/GC El Cajon Joint Venture, in which
         the Partnership owned an 80 percent interest,  sold its property to its
         tenant  for  $2,094,231.  Due to the fact  that the joint  venture  had
         recorded accrued rental income (income the joint venture had recognized
         since the  inception of the lease  relating to the  straight-lining  of
         future  scheduled rent increases in accordance with generally  accepted
         accounting  principles) the joint venture wrote-off $172,496 in accrued
         rental income in connection with the sale. In addition,  as a result of
         the sale of the property, the joint venture was dissolved in accordance
         with the joint venture agreement. As a result, the Partnership received
         approximately  $1,675,400  representing  its  prorata  share of the net
         sales  proceeds  received by the joint  venture and  recorded a loss on
         dissolution of $82,914,  during 1999, which  represented the balance of
         unamortized costs recorded by the joint venture.

         CNL Mansfield Joint Venture,  CNL Kingston Joint Venture,  Ocean Shores
         Joint Venture and the Partnership and affiliates,  as tenants-in-common
         in four separate tenancy-in-common arrangements, each own and lease one
         property  to  an  operator  of  national   fast-food  or   family-style
         restaurants.  The following presents the combined,  condensed financial
         information   for  the  joint  ventures  and  the  properties  held  as
         tenants-in-common with affiliates at December 31:

<TABLE>
<CAPTION>
<S><C>

                                                                                2000                 1999
                                                                           ----------------     ---------------
                  Land and buildings on operating leases,
                      less accumulated depreciation                            $ 5,260,304          $5,363,578
                  Net investment in direct financing lease                         792,921             802,684
                  Cash                                                              51,798               2,410
                  Receivables, less allowance for doubtful
                      accounts                                                      66,996              27,737
                  Accrued rental income                                            297,196             215,163
                  Other assets                                                         533                  --
                  Liabilities                                                       33,082              13,042
                  Partners' capital                                              6,436,666           6,398,530
                  Revenues                                                         700,747             726,885
                  Net income                                                       583,366             613,418

</TABLE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


5.       Investment in Joint Ventures - Continued:
         ----------------------------------------

         The  Partnership  recognized  income  totaling  $176,088,  $182,132 and
         $140,595 during the years ended December 31, 2000,  1999, and 1998 from
         these joint ventures and the properties held as tenants-in-common  with
         affiliates.

6.       Allocations and Distributions:
         -----------------------------

         From inception  through  December 31, 1999,  distributions  of net cash
         flow,  as  defined  in  the  limited   partnership   agreement  of  the
         Partnership,  were made 95 percent  to the  limited  partners  and five
         percent  to the  general  partners;  provided,  however,  that  for any
         particular year, the five percent of net cash flow to be distributed to
         the  general  partners  was  subordinated  to  receipt  by the  limited
         partners in that year of an eight percent noncumulative,  noncompounded
         return on their aggregate invested capital  contributions (the "Limited
         Partners' 8% Return").

         From  inception  through  December  31,  1999,  generally,  net  income
         (determined   without  regard  to  any  depreciation  and  amortization
         deductions  and  gains  and  losses  from the sale of  properties)  was
         allocated  between the limited partners and the general partners first,
         in an  amount  not to  exceed  the net  cash  flow  distributed  to the
         partners  attributable to such year in the same proportions as such net
         cash flow is  distributed;  and  thereafter,  99 percent to the limited
         partners and one percent to the general  partners.  All  deductions for
         depreciation and amortization  were allocated 99 percent to the limited
         partners and one percent to the general partners.

         From inception  through  December 31, 1999, net sales proceeds from the
         sale of a property not in liquidation of the Partnership generally were
         distributed  first to the limited  partners in an amount  sufficient to
         provide them with the return of their invested  capital  contributions,
         plus their cumulative Limited Partners' 8% Return. The general partners
         then  received  a return of their  capital  contributions  and,  to the
         extent  previously  subordinated and unpaid, a five percent interest in
         all net cash flow distributions.  Any remaining net sales proceeds were
         distributed 95 percent to the limited  partners and five percent to the
         general partners.



<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


6.       Allocations and Distributions - Continued:
         -----------------------------------------

         Any  gain  from  the  sale of a  property,  not in  liquidation  of the
         Partnership,  was in general, allocated in the same manner as net sales
         proceeds are distributable.  Any loss was, in general, allocated first,
         on a pro rata basis to the  partners  with  positive  balances in their
         capital  accounts;  and thereafter,  95 percent to the limited partners
         and five percent to the general partners.

         Generally,  net sales  proceeds from a liquidating  sale of properties,
         will be used in the following order: (i) first to pay and discharge all
         of  the  Partnership's   liabilities  to  creditors,  (ii)  second,  to
         establish  reserves that may be deemed necessary for any anticipated or
         unforeseen liabilities or obligations of the Partnership,  (iii) third,
         to pay all of the Partnership's liabilities, if any, to the general and
         limited partners,  (iv) fourth,  after allocations of net income, gains
         and/or  losses,  to distribute  to the partners  with positive  capital
         accounts  balances,  in  proportion  to such  balances,  up to  amounts
         sufficient  to  reduce  such  positive   balances  to  zero,   and  (v)
         thereafter, any funds remaining shall then be distributed 95 percent to
         the limited partners and five percent to the general partners.

         Effective  January 1, 2000, the general  partners waived their right to
         receive  future  distributions  from the  Partnership,  including  both
         distributions  of operating cash flow and  distributions of liquidation
         proceeds,   to  the  extent   that  the   cumulative   amount  of  such
         distributions would exceed the balance in the general partners' capital
         account as of December  31,  1999.  Accordingly,  for years  commencing
         January  1,  2000 and  after,  the  Partnership's  net  income  will be
         allocated entirely among the limited partners.  However,  if losses are
         allocated to the general  partners in a year, an amount of income equal
         to the sum of such losses may be allocated  to the general  partners in
         succeeding years. Accordingly,  the general partners were not allocated
         any net income and did not  receive any  distributions  during the year
         ended December 31, 2000.

         During each of the years ended  December 31, 2000,  1999, and 1998, the
         Partnership   declared   distributions   to  the  limited  partners  of
         $2,400,000.  No distributions have been made to the general partners to
         date.


<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


7.       Income Taxes:
         ------------

         The following is a reconciliation of net income for financial reporting
         purposes to net income for federal  income tax  purposes  for the years
         ended December 31:

<TABLE>
<CAPTION>
<S><C>
                                                                       2000            1999            1998
                                                                  ---------------  --------------  --------------

               Net income for financial reporting purposes           $   673,138    $  1,839,269    $  2,394,158

               Depreciation for financial reporting purposes in
                    (excess of) less than depreciation for tax
                    reporting purposes                                    50,099          20,470          (1,069 )

               Amortization for financial reporting purposes
               less than                                                  (5,087 )         2,501           1,539
                    (in excess of) amortization for tax
               reporting
                    purposes

                 Direct financing leases recorded as operating
                    leases for tax reporting purposes                     35,010          38,951          34,640

                 Equity in earnings of unconsolidated joint
               ventures for
                    financial reporting purposes in excess of
               equity in                                                    (747 )       (21,316 )       (13,489 )
                    earnings of unconsolidated joint ventures
               for tax
                    reporting purposes

               Minority interest in timing differences of
                    consolidated joint venture                                --         (23,193 )        23,280

               Capitalization (deduction) of transaction costs
               for tax                                                   (84,765 )        84,765          14,139
                    reporting purposes

               Accrued rental income                                      27,155         (19,488 )      (287,397 )

               Rents paid in advance                                     (11,437 )        14,014         (35,184 )

               Deferred rental income                                    (12,239 )       (51,181 )        (9,208 )

               Allowance for doubtful accounts                           206,448          46,855         (13,050 )

               Gain on sale of assets for financial
                    reporting purposes less than (in excess of)
                    gain for tax reporting purposes                     (327,494 )        74,630              --

               Loss on dissolution for financial reporting
               purposes in                                                    --         (14,866 )            --
                    excess of loss on dissolution for tax
               purposes

               Allowance for loss on assets                              918,692              --              --

               Other                                                          --         (11,318 )         5,680
                                                                  ---------------  --------------  --------------

               Net income for federal income tax purposes            $ 1,468,773     $ 1,980,093     $ 2,114,039
                                                                  ===============  ==============  ==============

</TABLE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


8.       Related Party Transactions:
         --------------------------

         One of the individual general partners, James M. Seneff, Jr., is one of
         the principal  shareholders of CNL Holdings,  Inc. The other individual
         general partner, Robert A. Bourne, serves as President and Treasurer of
         CNL Financial  Group, a wholly owned  subsidiary of CNL Holdings,  Inc.
         CNL Fund Advisors, Inc. (the "Advisor") was a majority owned subsidiary
         of CNL  Financial  Group,  Inc.  until  it  merged  with  CNL  American
         Properties  Fund,  Inc.  ("APF"),  effective  September  1,  1999.  The
         individual general partners are stockholders and directors of APF.

         The Advisor  provides  certain  services  relating to management of the
         Partnership and its properties pursuant to a management  agreement with
         the Partnership. In connection therewith, the Partnership has agreed to
         pay the Advisor an annual,  management fee of one percent of the sum of
         gross revenues from properties  wholly owned by the Partnership and the
         Partnership's  allocable  share of gross revenues from joint  ventures.
         The management  fee,  which will not exceed fees which are  competitive
         for similar  services in the same  geographic  area,  may or may not be
         taken,  in whole or in part as to any year,  in the sole  discretion of
         the  Affiliates.  All or any portion of the management fee not taken as
         to any fiscal year shall be deferred  without interest and may be taken
         in such  other  fiscal  year as the  Affiliates  shall  determine.  The
         Partnership  incurred management fees of $22,591,  $25,246 and $26,690,
         for the years ended December 31, 2000, 1999, and 1998, respectively.

         The Advisor is also entitled to receive a deferred,  subordinated  real
         estate disposition fee, payable upon the sale of one or more properties
         based on the lesser of one-half of a competitive real estate commission
         or  three  percent  of the  sales  price  if  the  Advisor  provides  a
         substantial amount of services in connection with the sale. However, if
         the sales  proceeds are reinvested in a replacement  property,  no such
         real estate  disposition  fees will be incurred until such  replacement
         property  is sold  and the net  sales  proceeds  are  distributed.  The
         payment  of the real  estate  disposition  fee is  subordinated  to the
         receipt  by the  limited  partners  of their  aggregate  18%  Preferred
         Return,  plus  their  adjusted  capital  contributions.   No  deferred,
         subordinated  real estate  disposition  fees have been  incurred  since
         inception.

         During the years ended  December 31, 2000,  1999, and 1998, the Advisor
         and its affiliates provided  accounting and administrative  services to
         the Partnership on a day-to-day  basis including  services  relating to
         the proposed and terminated merger.  The Partnership  incurred $77,769,
         $81,811,  and $91,124, for the years ended December 31, 2000, 1999, and
         1998, respectively, for such services.



<PAGE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


8.       Related Party Transactions - Continued:
         --------------------------------------

         During 2000, the  Partnership  acquired a property for a purchase price
         of  approximately  $1,630,200  from CNL BB Corp.,  an  affiliate of the
         general partners. CNL BB Corp. had purchased and temporarily held title
         to this property in order to facilitate the acquisition of the property
         by  the  Partnership.  The  purchase  price  paid  by  the  Partnership
         represented the costs incurred by CNL BB Corp. to acquire and carry the
         property,  including closing costs. In accordance with the Statement of
         Policy  of Real  Estate  programs  for the  North  American  Securities
         Administrators  Association,  Inc., all income,  expenses,  profits and
         losses  generated  by or  associated  with the  property,  or interests
         therein,  purchased  from an affiliate in which the affiliate has acted
         as an interim owner, are treated as belonging to the  Partnership.  For
         the year ended December 31, 2000,  other income included $2,296 of such
         amounts.

         The amount due related  parties at December  31, 2000 and 1999  totaled
         $13,819 and $ 23,597, respectively.

9.       Concentration of Credit Risk:
         ----------------------------

         The  following  schedule  presents  total rental and earned income from
         individual lessees, or affiliated groups of lessees,  each representing
         more than ten  percent  of the  Partnership's  total  rental and earned
         income  (including  rental and  earned  income  from the  Partnership's
         consolidated  joint venture,  the Partnership's  share of rental income
         from the unconsolidated  joint ventures and the four properties held as
         tenants-in-common  with affiliates of the general partners) for each of
         the years ended December 31:

<TABLE>
<CAPTION>
<S><C>

                                                                 2000               1999              1998
                                                             --------------    ---------------    -------------

         Golden Corral Corporation                                $438,299           $439,790         $461,527
         National Restaurant Enterprises, Inc.                     424,696            424,696          421,988
         Jack in the Box Inc. (formerly
              known as Foodmaker, Inc.)                            349,491            349,491          349,514
         Phoenix Restaurant Group, Inc.
              (formerly known as
              DenAmerica Corp.)                                        N/A            386,065          432,423

         San Diego Food Holdings, Inc.                                 N/A                N/A          316,038


</TABLE>

                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


9.       Concentration of Credit Risk - Continued:
         ----------------------------------------

         In addition,  the following  schedule  presents total rental and earned
         income from individual  restaurant chains,  each representing more than
         ten  percent  of the  Partnership's  total  rental  and  earned  income
         (including rental and earned income from the Partnership's consolidated
         joint venture,  the Partnership's share of total rental income from the
         unconsolidated   joint  ventures  and  the  four   properties  held  as
         tenants-in-common  with affiliates of the general partners) for each of
         the years ended December 31:


<TABLE>
<CAPTION>
<S><C>
                                                            2000               1999                1998
                                                       ---------------    ---------------     ---------------

          Burger King                                        $498,959            496,391             459,036
          Golden Corral Family
               Steakhouse Restaurants                         438,299          $ 599,869           $ 777,565
          Jack in the Box                                     349,491            349,491             349,514
          Arby's                                              282,551            283,884                 N/A
          Boston Market                                           N/A                N/A             309,576
</TABLE>

         The  information   denoted  by  N/A  indicates  that  for  each  period
         presented, the tenant or group of affiliated tenants, and the chain did
         not represent more than ten percent of the  Partnership's  total rental
         and earned income.

         Although  the  Partnership's   properties  are  geographically  diverse
         throughout the United States and the  Partnership's  lessees  operate a
         variety of  restaurant  concepts,  default  by any of these  lessees or
         restaurant chains could significantly  impact the results of operations
         of the  Partnership  if the  Partnership  is not able to  re-lease  the
         properties in a timely manner.

         During 1998,  the tenants of three Boston Market  properties  filed for
         bankruptcy  and in April  1999  and  July  2000,  rejected  the  leases
         relating to these  properties.  The lost  revenues  resulting  from the
         rejection of these  leases could have an adverse  effect on the results
         of  operations  of the  Partnership  if the  Partnership  is  unable to
         re-lease  these  Properties in a timely  manner.  In October 2000,  the
         Partnership  sold  one  of the  vacant  properties  (See  Note  3).  In
         addition,  in January 2001, the Partnership sold one additional  Boston
         Market property (See Note 11).



<PAGE>



                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


10.      Selected Quarterly Financial Data:
         ---------------------------------

         The following table presents  selected  unaudited  quarterly  financial
         data for each full quarter during the years ended December 31, 2000 and
         1999:

<TABLE>
<CAPTION>
<S><C>

           2000 Quarter              First            Second            Third                Fourth             Year
       ----------------------    ---------------   -------------    ---------------      ---------------   ---------------

       Revenues (1)                   $ 607,331       $ 540,789          $ 554,011             $580,521        $2,282,652
       Net Income                       170,269         243,827             (9,647    )         268,689           673,138
       Net income per
           limited partner
           unit                            0.06            0.08               0.00                 0.08              0.22

       1999 Quarter                  First            Second            Third                Fourth             Year
                                 ---------------   -------------    ---------------      ---------------   ---------------

       Revenues (1)                   $ 667,110       $ 751,597          $ 551,641             $640,946        $2,611,294
       Net Income                       477,905         612,795            403,836              344,733         1,839,269
       Net income per
           limited partner
           unit                            0.16            0.20               0.14                 0.12              0.61

</TABLE>


(1)               Revenues  include equity in earnings of  unconsolidated  joint
                  ventures,  minority  interest  in income  of the  consolidated
                  joint venture and  adjustments  to accrued  rental income as a
                  result of tenants filing for bankruptcy.

11.      Subsequent Events:
         -----------------

         In January 2001, the Partnership sold its property in Houston, Texas to
         an unrelated  third party for $812,696 and received net sales  proceeds
         of $782,648,  resulting in a gain of approximately $4,300 for financial
         reporting purposes.


<PAGE>


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

         None.


                                    PART III


Item 10.  Directors and Executive Officers of the Registrant

         The General Partners of the Registrant are James M. Seneff, Jr., Robert
         A.  Bourne  and CNL  Realty  Corporation,  a Florida  corporation.  The
         General Partners manage and control the Partnership's  affairs and have
         general  responsibility  and  the  ultimate  authority  in all  matters
         affecting the Partnership's  business. The Partnership has available to
         it the services,  personnel and experience of CNL Fund Advisors,  Inc.,
         CNL  Financial  Group,  Inc.  and  their  affiliates,  all of which are
         affiliates of the General Partners.

         James M. Seneff, Jr., age 54. Since 1971, Mr. Seneff has been active in
         the  acquisition,  development,  and management of real estate projects
         and, directly or through an affiliated  entity, has served as a general
         partner or co-venturer in over 100 real estate ventures. These ventures
         have involved the financing, acquisition,  construction, and leasing of
         restaurants,  office buildings,  apartment complexes, hotels, and other
         real  estate.  Mr.  Seneff has served as Director  and  Chairman of the
         Board of CNL American Properties Fund, Inc. ("APF"), a public, unlisted
         real estate  investment  trust,  since 1994. Mr. Seneff served as Chief
         Executive  Officer of APF from 1994 through  August 1999 and has served
         as Co-Chief  Executive  Officer of APF since  December 2000. Mr. Seneff
         served as Chairman of the Board and Chief Executive Officer of CNL Fund
         Advisors (the  "Advisor")  until it merged with APF in September  1999,
         and in June 2000, was re-elected to those positions of the Advisor. Mr.
         Seneff is a principal  stockholder  of CNL Holdings,  Inc.,  the parent
         company of CNL Financial  Group,  Inc.  (formerly CNL Group,  Inc.),  a
         diversified real estate company, and has served as a director, Chairman
         of the Board and Chief Executive  Officer of CNL Financial Group,  Inc.
         since its formation in 1980.  CNL Financial  Group,  Inc. is the parent
         company,  either directly or indirectly  through  subsidiaries,  of CNL
         Real Estate Services,  Inc., CNL Capital Markets,  Inc., CNL Investment
         Company and CNL Securities  Corp. Mr. Seneff also serves as a Director,
         Chairman of the Board and Chief  Executive  Officer of CNL  Hospitality
         Properties,  Inc., a public,  unlisted real estate investment trust, as
         well as, CNL Hospitality Corp., its advisor. In addition,  he serves as
         a Director,  Chairman of the Board and Chief  Executive  Officer of CNL
         Retirement Properties,  Inc., a public, unlisted real estate investment
         trust and its advisor,  CNL Retirement Corp. Since 1992, Mr. Seneff has
         also  served as a Director,  Chairman of the Board and Chief  Executive
         Officer of  Commercial  Net Lease  Realty,  Inc.,  a public real estate
         investment  trust  that is listed on the New York Stock  Exchange.  Mr.
         Seneff has also served as a  Director,  Chairman of the Board and Chief
         Executive  Officer of CNL Securities  Corp.  since 1979; CNL Investment
         Company since 1990; and CNL Institutional Advisors,  Inc., a registered
         investment  advisor for pension plans,  since 1990. Mr. Seneff formerly
         served as a Director of First Union National Bank of Florida, N.A., and
         currently  serves as the Chairman of the Board of CNL Bank.  Mr. Seneff
         previously  served on the Florida  State  Commission on Ethics and is a
         former  member and past  Chairman  of the State of  Florida  Investment
         Advisory   Council,   which   recommends   to  the  Florida   Board  of
         Administration  investments  for various  Florida  employee  retirement
         funds.  The  Florida  Board  of  Administration,   Florida's  principal
         investment   advisory  and  money  management   agency,   oversees  the
         investment  of more than $60 billion of  retirement  funds.  Mr. Seneff
         received  his degree in  Business  Administration  from  Florida  State
         University in 1968.

         Robert A.  Bourne,  age 53. Mr.  Bourne has  participated  as a general
         partner or co-venturer in over 100 real estate ventures involved in the
         financing,  acquisition,  construction,  and  leasing  of  restaurants,
         office buildings,  apartment complexes,  hotels, and other real estate.
         Mr.  Bourne is Director and Vice  Chairman of the Board of Directors of
         APF. Mr. Bourne  served as President of APF from 1994 through  February
         1999. He also served as Treasurer  from  February  1999 through  August
         1999 and from May 1994 through December 1994. He also served in various
         executive  positions  with the  Advisor  prior to its  merger  with APF
         including,  President  from 1994 through  September  1997, and Director
         from 1994  through  August 1999.  Mr.  Bourne  serves as President  and
         Treasurer of CNL Financial  Group,  Inc.  (formerly  CNL Group,  Inc.);
         Director,  Vice Chairman of the Board and President of CNL  Hospitality
         Properties,  Inc., a public,  unlisted real estate investment trust; as
         well as, Director and President of CNL Hospitality  Corp., its advisor.
         In  addition,  Mr.  Bourne  serves as  Director  and  President  of CNL
         Retirement Properties,  Inc., a public, unlisted real estate investment
         trust;  as well  as, a  Director  and  President  of its  advisor,  CNL
         Retirement  Corp.  Mr. Bourne also serves as a Director of CNL Bank. He
         has served as a Director  since 1992,  Vice Chairman of the Board since
         February 1996, Secretary and Treasurer from February 1996 through 1997,
         and President  from July 1992 through  February 1996, of Commercial Net
         Lease Realty, Inc., a public real estate investment trust listed on the
         New York Stock Exchange. Mr. Bourne also serves as Director,  President
         and Treasurer  for various  affiliates  of CNL  Financial  Group,  Inc.
         including,  CNL  Investment  Company,  CNL  Securities  Corp.  and  CNL
         Institutional  Advisors,  Inc.,  a  registered  investment  advisor for
         pension  plans.  Mr.  Bourne  began his  career as a  certified  public
         accountant employed by Coopers & Lybrand, Certified Public Accountants,
         from 1971 through  1978,  where he attained the position of Tax Manager
         in 1975.  Mr. Bourne  graduated  from Florida State  University in 1970
         where he received a B.A. in Accounting, with honors.

         Curtis B.  McWilliams,  age 45. Mr.  McWilliams  has served as Co-Chief
         Executive  Officer of APF since December 2000 and previously  served as
         Chief  Executive  Officer from  September  1999 through  December 2000.
         Prior to the  acquisition  of the  Advisor,  Mr.  McWilliams  served as
         President of APF from February 1999 until  September  1999.  From April
         1997 to February  1999, he served as Executive  Vice  President of APF.
         Mr. McWilliams  joined CNL Financial Group,  Inc.  (formerly CNL Group,
         Inc.) in April 1997 and served as an  Executive  Vice  President  until
         September 1999. In addition,  Mr. McWilliams served as President of the
         Advisor  and CNL  Financial  Services,  Inc.  from April 1997 until the
         acquisition of such entities by APF in September  1999.  From September
         1983 through March 1997, Mr. McWilliams was employed by Merrill Lynch &
         Co.  The  majority  of his  career at  Merrill  Lynch & Co.  was in the
         Investment Banking division where he served as a Managing Director. Mr.
         McWilliams  received a B.S.E.  in Chemical  Engineering  from Princeton
         University in 1977 and a Master of Business  Administration degree with
         a concentration in finance from the University of Chicago in 1983.

         John T. Walker, age 42. Mr. Walker has served as President of APF since
         September  1999 and as Chief  Operating  Officer since March 1995.  Mr.
         Walker  also  served  as a  board  member  of CNL  Restaurant  Property
         Services,  Inc., a subsidiary of APF from December 1999 until  December
         2000.  Previously,  he served as Executive  Vice  President of APF from
         January  1996 to  September  1999.  Mr.  Walker  joined the  Advisor in
         September  1994, as Senior Vice President  responsible for Research and
         Development.  He served as the Chief  Operating  Officer of the Advisor
         from April 1995 until  September  1999 and as Executive  Vice President
         from January 1996 until  September  1999,  at which time it merged with
         APF.  Mr.  Walker  also  served  as  Executive  Vice  President  of CNL
         Hospitality  Properties,  Inc. and CNL Hospitality Corp.  (formerly CNL
         Hospitality Advisors, Inc.) from 1997 to October 1998. From May 1992 to
         May  1994,   he  was   Executive   Vice   President   for  Finance  and
         Administration  and Chief Financial  Officer of Z Music,  Inc., a cable
         television   network  which  was   subsequently   acquired  by  Gaylord
         Entertainment,  where he was  responsible  for  overall  financial  and
         administrative management and planning. From January 1990 through April
         1992,  Mr.  Walker was Chief  Financial  Officer  of the First  Baptist
         Church in Orlando,  Florida.  From April 1984 through December 1989, he
         was a partner in the  accounting  firm of  Chastang,  Ferrell & Walker,
         P.A.,  where he was the  partner  in  charge  of audit  and  consulting
         services,   and  from   1981  to  1984,   Mr.   Walker   was  a  Senior
         Consultant/Audit Senior at Price Waterhouse.  Mr. Walker is a cum laude
         graduate of Wake Forest University with a Bachelor of Science degree in
         Accountancy and is a certified public accountant.

         Steven  D.  Shackelford,  age  37.  Mr.  Shackelford  was  promoted  to
         Executive  Vice  President and Chief  Financial  Officer of APF in July
         2000. He served as Senior Vice President and Chief Financial Officer of
         APF since January 1997.  Mr.  Shackelford  also served as Secretary and
         Treasurer  of APF  since  September  1999.  He  also  served  as  Chief
         Financial Officer of the Advisor from September 1996 to September 1999.
         From March 1995 to July 1996, Mr.  Shackelford  was a senior manager in
         the national  office of Price  Waterhouse LLP where he was  responsible
         for  advising  foreign  clients  seeking to raise  capital and a public
         listing in the United States.  From August 1992 to March 1995, he was a
         manager  in the  Paris,  France  office  of Price  Waterhouse,  serving
         several multi-national  clients. Mr. Shackelford was an audit staff and
         senior  from  1986 to 1992 in the  Orlando,  Florida  office  of  Price
         Waterhouse.  Mr.  Shackelford  received  a Bachelor  of Arts  degree in
         Accounting, with honors, and a Master of Business Administration degree
         from Florida State University and is a certified public accountant.

Item 11.  Executive Compensation

         Other than as  described in Item 13, the  Partnership  has not paid and
         does  not  intend  to pay any  executive  compensation  to the  General
         Partners or any of their affiliates. There are no compensatory plans or
         arrangements regarding termination of employment or change of control.




<PAGE>


Item 12.  Security Ownership of Certain Beneficial Owners and Management

         As of March 15,  2001,  no person was known to the  Registrant  to be a
         beneficial owner of more than five percent of the Units.

         The following  table sets forth,  as of March 15, 2001,  the beneficial
         ownership interests of the General Partners in the Registrant.

<TABLE>
<CAPTION>
<S><C>

                    Title of Class                           Name of Partner                 Percent of Class
                    --------------                           ---------------                 ----------------

           General Partnership Interests                James M. Seneff, Jr.                           45%
                                                        Robert A. Bourne                               45%
                                                        CNL Realty Corporation                         10%
                                                                                                   --------
                                                                                                      100%
                                                                                                   ========

</TABLE>


         Neither the General  Partners,  nor any of their  affiliates,  owns any
interest in the Registrant, except as noted above.




<PAGE>



Item 13.  Certain Relationships and Related Transactions

         The  table  below   summarizes  the  types,   recipients,   methods  of
computation and amounts of compensation,  fees and distributions paid or payable
by the  Partnership  to the General  Partners and their  affiliates for the year
ended  December 31, 2000,  exclusive of any  distributions  to which the General
Partners or their  affiliates  may be entitled by reason of their  purchase  and
ownership of Units.

<TABLE>
<CAPTION>
<S><C>
                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         and Recipient                         Method of Computation                  Ended December 31, 2000
---------------------------------      --------------------------------------      ------------------------------

Reimbursement  to affiliates for       Operating  expenses are reimbursed at       Accounting                and
operating expenses                     the  lower of cost or 90  percent  of       admin-istrative     services:
                                       the   prevailing    rate   at   which       $77,769
                                       comparable  services  could have been
                                       obtained   in  the  same   geographic
                                       area.   Affiliates   of  the  General
                                       Partners  from  time  to  time  incur
                                       certain operating  expenses on behalf
                                       of  the  Partnership  for  which  the
                                       Partnership       reimburses      the
                                       affiliates without interest.

Annual    management    fee   to       One  percent  of  the  sum  of  gross       $22,591
affiliates                             revenues   (excluding   noncash   and
                                       lease  accounting  adjustments)  from
                                       Properties wholly owned by the
                                       Partnership plus the Partnership's
                                       allocable share of gross revenues of
                                       joint    ventures    in   which   the
                                       Partnership  is  a  co-venturer.  The
                                       management fee, which will not
                                       exceed     competitive    fees    for
                                       comparable services in the same
                                       geographic area, may or may not be
                                       taken,  in whole or in part as to any
                                       year, in the sole discretion of the
                                       affiliates.  All  of any  portion  of
                                       the management fee not taken as to
                                       any fiscal year shall be deferred
                                       without interest and may be taken in
                                       such   other   fiscal   year  as  the
                                       affiliates shall determine.




<PAGE>



                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         and Recipient                         Method of Computation                  Ended December 31, 2000
---------------------------------      --------------------------------------      ------------------------------

Deferred,    subordinated   real       A deferred,  subordinated real estate       $-0-
estate  disposition  fee payable       disposition  fee,  payable  upon sale
to affiliates.                         of  one  or  more  Properties,  in an
                                       amount  equal  to the  lesser  of (i)
                                       one-half of a competitive real
                                       estate commission, or (ii) three
                                       percent of the sales price of such
                                       Property or Properties. Payment of
                                       such  fee   shall  be  made  only  if
                                       affiliates of the General Partners
                                       provide a substantial amount of
                                       services in connection with the sale
                                       of a Property or Properties and
                                       shall be subordinated to certain
                                       minimum returns to the Limited
                                       Partners.  However,  if the net sales
                                       proceeds   are    reinvested   in   a
                                       replacement Property, no such real
                                       estate disposition fee will be
                                       incurred until such replacement
                                       Property   is  sold  and  the  net  sales
                                       proceeds are distributed.

General   Partners'    deferred,       A deferred,  subordinated share equal       $-0-
subordinated       share      of       to  five   percent   of   Partnership
Part-nership net cash flow             distributions   of  net  cash   flow,
                                       subordinated to certain minimum
                                       returns to the Limited Partners.

General   Partners'    deferred,       A deferred,  subordinated share equal       $-0-
subordinated       share      of       to  five   percent   of   Partnership
Part-nership  net sales proceeds       distributions   of  such  net   sales
from  a  sale  or  sales  not in       proceeds,   subordinated  to  certain
liquidation of the Partnership         minimum   returns   to  the   Limited
                                       Partners


<PAGE>



                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         and Recipient                         Method of Computation                  Ended December 31, 2000
---------------------------------      --------------------------------------      ------------------------------

General   Partners'   share   of       Distributions  of net sales  proceeds       $-0-
Partnership  net sales pro-ceeds       from   a    sale    or    sales    of
from  a   sale   or   sales   in       substantially      all     of     the
liquidation of the Partnership         Partnership's    assets    will    be
                                       distributed in the following order
                                       or priority: (i) first, to pay all
                                       debts   and    liabilities   of   the
                                       Partnership    and    to    establish
                                       reserves; (ii) second, to Partners
                                       with positive capital account
                                       balances, determined after the
                                       allocation  of net income,  net loss,
                                       gain and loss, in proportion to such
                                       balances, up to amounts sufficient
                                       to reduce such balances to zero; and
                                       (iii) thereafter, 95% to the Limited
                                       Partners and 5% to the General Partners.

</TABLE>


In addition,  during 2000, the  Partnership  acquired a Baker's Square  Property
from CNL BB Corp.,  an  affiliate  of the  General  Partners,  for an  aggregate
purchase  price of  approximately  $1,630,200.  CNL BB Corp.  had  purchased and
temporarily  held title to this Property in order to facilitate the  acquisition
of the Property by the  Partnership.  The purchase price paid by the Partnership
represents the costs incurred by CNL BB Corp. to acquire and carry the Property,
including closing costs.


<PAGE>


                                     PART IV


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

(a)      The following documents are filed as part of this report.

         1.  Financial Statements

                  Report of Independent Certified Public Accountants

                  Balance Sheets at December 31, 2000 and 1999

                  Statements  of Income for the year ended  December  31,  2000,
                  1999, and 1998

                  Statements  of Partners'  Capital for the year ended  December
                  31, 2000, 1999, and 1998

                  Statements of Cash Flows for the year ended December 31, 2000,
                  1999, and 1998

                  Notes to Financial Statements

         2.  Financial Statement Schedule

                  Schedule II - Valuation and Qualifying  Accounts for the years
                  ended December 31, 2000, 1999, and 1998

                  Schedule  III - Real Estate and  Accumulated  Depreciation  at
                  December 31, 2000

                  Notes  to  Schedule   III  -  Real   Estate  and   Accumulated
                  Depreciation at December 31, 2000

                  All other Schedules are omitted as the required information is
                  inapplicable  or is presented in the  financial  statements or
                  notes thereto.

         3.  Exhibits

                **3.1      Affidavit and  Certificate of Limited  Partnership of
                           CNL Income Fund XVII,  Ltd.  (Filed as Exhibit 3.2 to
                           the Registrant's Registration Statement on Form S-11,
                           No. 33-90998, incorporated herein by reference.)

                **3.2      Amended and Restated Agreement of Limited Partnership
                           of CNL Income Fund XVII,  Ltd.  (Included  as Exhibit
                           4.2 to  Form  10-K  filed  with  the  Securities  and
                           Exchange   Commission   on  March   21,   1996,   and
                           incorporated herein by reference.)

                **4.1      Affidavit and  Certificate of Limited  Partnership of
                           CNL Income Fund XVII,  Ltd.  (Included as Exhibit 3.2
                           to  Registration  Statement No.  33-90998-01  on Form
                           S-11 and incorporated herein by reference.)

                **4.2      Amended and Restated Agreement of Limited Partnership
                           of CNL Income Fund XVII,  Ltd.  (Included  as Exhibit
                           4.2 to  Form  10-K  filed  with  the  Securities  and
                           Exchange   Commission   on  March   21,   1996,   and
                           incorporated herein by reference.)

                **4.3      Form of Agreement  between CNL Income Fund XVII, Ltd.
                           and MMS Escrow and Transfer Agency,  Inc. and between
                           CNL  Income  Fund  XVIII,  Ltd.  and MMS  Escrow  and
                           Transfer  Agency,  Inc.  relating to the Distribution
                           Reinvestment  Plans  (Filed  as  Exhibit  4.4  to the
                           Registrant's Registration Statement on Form S-11, No.
                           33-90998, incorporated herein by reference.)


                **8.3      Opinion  of  Baker  &  Hostetler   regarding  certain
                           material   issues   relating   to  the   Distribution
                           Reinvestment  Plan  of CNL  Income  Fund  XVII,  Ltd.
                           (Filed as Exhibit 8.3 to  Amendment  No. Three to the
                           Registrant's Registration Statement on Form S-11, No.
                           33-90998, incorporated herein by reference.)

                **10.1     Management  Agreement  between  CNL Income Fund XVII,
                           Ltd. and CNL Fund Advisors, Inc. (Included as Exhibit
                           10.1 to Form  10-K  filed  with  the  Securities  and
                           Exchange   Commission   on  March   20,   1997,   and
                           incorporated herein by reference.)

                **10.2     Form of Joint Venture  Agreement  for Joint  Ventures
                           with Unaffiliated  Entities (Filed as Exhibit 10.2 to
                           the Registrant's Registration Statement on Form S-11,
                           No. 33-90998, incorporated herein by reference.)

                **10.3     Form of Joint Venture  Agreement  for Joint  Ventures
                           with  Affiliated  Programs  (Filed as Exhibit 10.3 to
                           the Registrant's Registration Statement on Form S-11,
                           No. 33-90998,
                           incorporated herein by reference.)

                **10.4     Form of Development  Agreement (Filed as Exhibit 10.5
                           to the  Registrant's  Registration  Statement on Form
                           S-11,   No.   33-90998,    incorporated   herein   by
                           reference.)

                **10.5     Form of  Indemnification  and Put Agreement (Filed as
                           Exhibit   10.6  to  the   Registrant's   Registration
                           Statement on Form S-11,  No.  33-90998,  incorporated
                           herein by reference.)

                **10.6     Form  of  Unconditional   Guarantee  of  Payment  and
                           Performance   (Filed   as   Exhibit   10.7   to   the
                           Registrant's Registration Statement on Form S-11, No.
                           33-90998, incorporated herein by reference.)

                **10.7     Form  of  Lease  Agreement  for  Existing  Restaurant
                           (Filed   as   Exhibit   10.8   to  the   Registrant's
                           Registration  Statement on Form S-11,  No.  33-90998,
                           incorporated herein by reference.)

                **10.8     Form  of  Lease   Agreement  for   Restaurant  to  be
                           Constructed   (Filed   as   Exhibit   10.9   to   the
                           Registrant's Registration Statement on Form S-11, No.
                           33-90998, incorporated herein by reference.)

                **10.9     Form of Premises  Lease for Golden Corral  Restaurant
                           (Filed   as   Exhibit   10.10  to  the   Registrant's
                           Registration  Statement on Form S-11,  No.  33-90998,
                           incorporated herein by reference.)

                **10.10    Form of Agreement  between CNL Income Fund XVII, Ltd.
                           and MMS Escrow and Transfer Agency,  Inc. and between
                           CNL  Income  Fund  XVIII,  Ltd.  and MMS  Escrow  and
                           Transfer  Agency,  Inc.  relating to the Distribution
                           Reinvestment  Plans  (Filed  as  Exhibit  4.4  to the
                           Registrant's Registration Statement on Form S-11, No.
                           33-90998, incorporated herein by reference.)

                **10.11    Form of Cotenancy  Agreement with Unaffiliated Entity
                           (Filed as Exhibit  10.12 to Amendment  No. One to the
                           Registrant's Registration Statement on Form S-11, No.
                           33-90998, incorporated herein by reference.)

                **10.12    Form of Cotenancy  Agreement with  Affiliated  Entity
                           (Filed as Exhibit  10.13 to Amendment  No. One to the
                           Registrant's Registration Statement on Form S-11, No.
                           33-90998, incorporated herein by reference.)

                **10.13    Form of Registered  Investor Advisor Agreement (Filed
                           as  Exhibit   10.14  to  Amendment  No.  One  to  the
                           Registrant's Registration Statement on Form S-11, No.
                           33-90998, incorporated herein by reference.)

                (b)        The  Registrant  filed no  reports on Form 8-K during
                           the period October 1, 2000 through December 31, 2000.


**previously filed




<PAGE>






                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the  undersigned,  thereunto duly  authorized,  on the 30th day of
March, 2001.

                                CNL INCOME FUND XVII, LTD.

                                By:      CNL REALTY CORPORATION
                                         General Partner

                                         /s/ Robert A. Bourne
                                         -----------------------------------
                                         ROBERT A. BOURNE, President


                                By:      ROBERT A. BOURNE
                                         General Partner

                                         /s/ Robert A. Bourne
                                         -----------------------------------
                                         ROBERT A. BOURNE


                                By:      JAMES M. SENEFF, JR.
                                         General Partner

                                         /s/ James M. Seneff, Jr.
                                         -----------------------------------
                                         JAMES M. SENEFF, JR.



<PAGE>





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

<TABLE>
<CAPTION>
<S><C>
               Signature                                  Title                                  Date



/s/ Robert A. Bourne                     President,   Treasurer   and   Director            March 30, 2001
------------------------------------
Robert A. Bourne                         (Principal   Financial  and  Accounting
                                         Officer)

/s/ James M. Seneff, Jr.                 Chief  Executive  Officer and  Director            March 30, 2001
------------------------------------
James M. Seneff, Jr.                     (Principal Executive Officer)

</TABLE>



<PAGE>


                                       F-1




                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                  Years Ended December 31, 2000, 1999, and 1998

<TABLE>
<CAPTION>
<S><C>
                                                      Additions                           Deductions
                                          ----------------------------------      ----------------------------
                                                                                                          Collected
                                                                                                          or Deter-
                                   Balance at       Charged to       Charged to           Deemed          mined to       Balance
                                    Beginning       Costs and           Other           Uncollec-          be Col-       at End
  Year          Description          of Year         Expenses         Accounts            tible           lectible       of Year
----------    -----------------   --------------  ---------------  ----------------    -------------     ------------  ------------

----------
  1998        Allowance for
                  doubtful
                  accounts (a)        $  14,333          $    --        $    1,896 (b)    $   4,923 (c)     $ 10,023      $  1,283
----------                        ==============  ===============  ================    =============     ============  ============

----------
  1999        Allowance for
                  doubtful
                  accounts (a)        $   1,283          $    --        $   48,138 (b)       $   -- (c)     $  1,283      $ 48,138
----------
                                  ==============  ===============  ================    =============     ============  ============

----------
----------
  2000        Allowance for
                  doubtful
                  accounts (a)        $  48,138       $   34,572        $  250,711 (b)    $   3,966 (c)     $ 27,434     $ 302,021
                                  ==============  ===============  ================    =============     ============  ============

</TABLE>


(a)    Deducted from receivables and accrued rental income on the balance sheet.

(b)    Reduction of rental, earned and other income.

(c)    Amounts written off as uncollectible.




<PAGE>
<TABLE>
<CAPTION>
<S><C>
                                                                                    Costs Capitalized
                                                                                    Subsequent to
                                                         Initial Cost               Acquisition
                                             --------------------------  ---------------------
                               Encum-                      Buildings and  Improve-    Carrying
                              brances           Land        Improvements   ments       Costs
                                             ------------  ------------  -----------  --------
Properties the Partnership
  has Invested in Under
  Under Operating Leases:

     Arby's Restaurants:
       Muncie, Indiana           -              $242,759       $     -    $       -    $    -
       Schertz, Texas            -               348,245       470,577            -         -
       Plainfield, Indiana       -               296,025       557,809            -         -

     Baker's Square:
       Wilmette, Illinois        -               832,288       827,640            -         -

     Boston Market Restaurants:
       Houston, Texas            -               373,112       477,383            -         -
       Inglewood, California (j) -               327,924       535,518            -

     Burger King Restaurants:
       Harvey, Illinois          -               489,341       734,010            -
       Chicago Ridge, Illinois   -               771,965             -      699,556         -
       Lyons, Illinois           -               887,767             -      597,381         -

     Denny's Restaurants:
       Mesquite, Nevada          -               373,078             -            -         -
       Pensacola, Florida        -               305,509       670,990            -         -

     Fazoli's Restaurant:
       Warner Robins, Georgia    -               300,482             -      421,898         -

     Golden Corral Family
       Steakhouse Restaurants:
           Orange Park, Florida  -               711,838     1,162,406            -         -
           Aiken, South Carolina -g)             508,790             -      862,570         -
           Weatherford, Texas (g)-               345,926             -      691,222         -

     Jack in the Box Restaurants:
       Dinuba, California        -               324,970             -      509,982         -
       LaPorte, Texas            -               355,929             -      560,485         -
       El Dorado, California     -               617,416             -      548,187         -

     Mr. Fables's Restaurant:
       Kentwood, Michigan (i)    -               287,732       626,865            -         -

     Wendy's Old Fashioned
       Hamburgers Restaurants:
           Knoxville, Tennessee  -               332,003             -      489,610         -
           Livingston, Tennessee -               261,701             -            -         -
                                             ------------  ------------  -----------  --------

                                              $9,294,800    $6,063,198   $5,380,891         -
                                             ============  ============  ===========  ========

Properties the Partnership has
  Invested in Under Direct
  Financing Leases:

     Arby's Restaurant:
       Muncie, Indiana           -                     -      $629,847            -         -

     Denny's Restaurant:
       Mesquite, Nevada          -                     -             -      857,390         -


     Wendy's Old Fashioned
       Hamburgers Restaurant:
           Livingston, Tennessee -                     -             -      455,575         -
                                             ------------  ------------  -----------  --------

                                                       -      $629,847   $1,312,965         -
                                             ============  ============  ===========  ========

Property in Which the Partner- ship has a 19.56%  Interest as  Tenants-in-Common
     and has Invested in Under an Operating Lease:

         Boston Market Restaurant:
             Fayetteville, North -arolina       $377,800      $587,700            -         -
                                             ============  ============  ===========  ========

Property in Which the Partner- ship has a 27.42%  Interest as  Tenants-in-Common
     and has Invested in Under an Operating Lease:

         Black-eyed Pea Restaurant:
             Corpus Christi, Texa- (f)          $715,052      $726,004            -         -
                                             ============  ============  ===========  ========

Property in Which the Partner- ship has a 36.91%  Interest as  Tenants-in-Common
     and has Invested in Under an Operating Lease:

       Burger King Restaurant:
           Akron, Ohio (f)       -              $355,594      $517,030            -         -
                                             ============  ============  ===========  ========




Property of Joint  Venture in Which the  Partnership  has a 21% Interest and has
     Invested in Under an Operating Lease:

         Jack in the Box Restaurant:
             Mansfield, Texas    -              $297,295      $482,914            -         -
                                             ============  ============  ===========  ========

Property of Joint Venture in Which the Partnership has a 60.06% Interest and has
     Invested in Under an Operating Lease:

         Taco Bell Restaurant:
             Kingston, Tennessee -              $189,452      $328,444            -         -
                                             ============  ============  ===========  ========

Property of Joint Venture in Which the Partnership has a 30.94% Interest and has
     Invested in Under an Operating Lease:

       Burger KinghRestaurantaurant:
             Ocean Shores, WA    -              $351,015             -            -         -
                                             ============  ============  ===========  ========

Property in which the Partnership
       has a 24% Interest as
     Tenants-in-Common and has invested in Under an Operating Lease:

         Arby's Restaurant:
             Zephyrhills, FL     -              $260,146      $441,434            -         -
                                             ============  ============  ===========  ========

Property of Joint Venture in
     Which the Partnership has
     a 30.94% Interest and
     has Invested in Under a
     Direct Financing Lease:

         Burger King Restaurant:
             Ocean Shores, WA    -                     -      $810,902            -         -
                                             ============  ============  ===========  ========


                                                                                          Life on Which
                 Gross Amount at Which                                                    Depreciation in
                 Carried at Close of Period (b)                  Date                     Latest Income
----------------------------------------------
                 Buildings and                   Accumulated    of Con-      Date         Statement is
    Land         Improvements        Total       Depreciation   struction  Acquired         Computed
--------------   ------------     ------------   ------------   -------    ---------      ------------





     $242,759      $      (d)        $242,759       $     (e)    1995       03/96             (e)
      348,245        470,577          818,822         71,102     1996       06/96             (c)
      296,025        557,809          853,834         77,839     1996       10/96             (c)


      832,288        827,640        1,659,928         25,289     2000       01/00             (c)


      373,112        477,383          850,495         72,131     1996       06/96             (c)
      327,924        535,518          863,442         45,971     1996       06/98             (c)


      489,341        734,010        1,223,351        117,961     1996       03/96             (c)
      771,965        699,556        1,471,521        108,160     1996       03/96             (c)
      887,767        597,381        1,485,148         72,663     1997       11/96             (c)


      373,078             (d)         373,078             (e)    1996       12/95             (e)
      305,509        670,990          976,499         98,488     1996       08/96             (c)


      300,482        421,898          722,380         58,488     1996       08/96             (c)



      711,838      1,162,406        1,874,244        186,914     1996       03/96             (c)
      508,790        862,571        1,371,361        130,983     1996       04/96             (c)
      345,926        691,222        1,037,148         99,778     1996       03/96             (c)


      324,970        509,982          834,952         73,924     1996       05/96             (c)
      355,929        560,485          916,414         79,864     1996       07/96             (c)
      617,416        548,187        1,165,603         77,910     1996       07/96             (c)


      287,732        626,865          914,597         99,998     1980       03/96             (c)



      332,003        489,610          821,613         72,167     1996       05/96             (c)
      261,701             (d)         261,701             (e)    1996       06/96             (e)
--------------   ------------     ------------   ------------

   $9,294,800    $11,444,090      $20,738,890     $1,569,630
==============   ============     ============   ============






            -             (d)              (d)            (e)    1995       03/96             (e)


            -             (d)              (d)            (e)    1996       12/95             (e)




            -             (d)              (d)            (e)    1996       06/96             (e)
--------------

            -
==============








     $377,800       $587,700         $965,500        $83,128     1996       10/96             (c)
==============   ============     ============   ============








     $715,052       $726,004       $1,441,056        $95,049     1992       01/97             (c)
==============   ============     ============   ============








     $355,594       $517,030         $872,624        $67,690     1970       01/97             (c)
==============   ============     ============   ============











     $297,295       $482,914         $780,209        $61,158     1997       02/97             (c)
==============   ============     ============   ============








     $189,452       $328,444         $517,896        $33,817     1997       09/97             (c)
==============   ============     ============   ============








     $351,015             (d)        $351,015             (e)    1998       01/99             (e)
==============   ============     ============   ============








     $260,146       $441,434         $701,580        $28,733     1990       01/99             (c)
==============   ============     ============   ============








            -             (d)              (d)            (e)    1998       01/99             (e)
==============   ============     ============   ============



</TABLE>




                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

        NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2000


(a)      Transactions in real estate and accumulated  depreciation  during 2000,
         1999, and 1998 are summarized as follows:

<TABLE>
<CAPTION>
<S><C>
                                                                                              Accumulated
                                                                              Cost            Depreciation
                                                                         ----------------   -----------------
            Properties the Partnership has Invested
              in Under Operating Leases:

                 Balance, December 31, 1997                                 $ 21,882,839         $   553,968
                 Acquisitions                                                    499,431                   -
                 Dispositions                                                   (858,323 )           (36,214 )
                 Depreciation expense                                                 --             358,063
                                                                         ----------------   -----------------

                 Balance, December 31, 1998                                   21,523,947             875,817
                 Dispositions                                                   (974,793 )                --
                 Depreciation expense                                                 --             372,148
                                                                         ----------------   -----------------

                 Balance, December 31, 1999                                   20,549,154           1,247,965
                 Acquisitions                                                  1,659,928                  --
                 Dispositions                                                 (1,470,192 )           (69,579 )
                 Depreciation expense                                                 --             391,244
                                                                         ----------------   -----------------

                 Balance, December 31, 2000                                 $ 20,738,890        $  1,569,630
                                                                         ================   =================

            Property  in  Which  the  Partnership  has  an  19.56%  Interest  as
              Tenants-in-Common and has Invested in Under an Operating Lease:

                 Balance, December 31, 1997                                  $   965,500         $    24,358
                 Depreciation expense                                                 --              19,590
                                                                         ----------------   -----------------

                 Balance, December 31, 1998                                      965,500              43,948
                 Depreciation expense                                                 --              19,590
                                                                         ----------------   -----------------

                 Balance, December 31, 1999                                      965,500              63,538
                 Depreciation expense                                                 --              19,590
                                                                         ----------------   -----------------

                 Balance, December 31, 2000                                  $   965,500         $    83,128
                                                                         ================   =================


</TABLE>

<PAGE>

                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

               NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
                            DEPRECIATION - CONTINUED

                                December 31, 2000

<TABLE>
<CAPTION>
<S><C>

                                                                                                Accumulated
                                                                               Cost            Depreciation
                                                                          ----------------    ------------------

            Property  in  Which  the   Partnership  has  a  27.42%  Interest  as
              Tenants-in-Common and has Invested in Under an Operating Lease:

                 Balance, December 31, 1997                                  $  1,441,056         $    22,448
                 Depreciation expense                                                  --              24,200
                                                                          ----------------    ----------------

                 Balance, December 31, 1998                                     1,441,056              46,648
                 Depreciation expense                                                  --              24,200
                                                                          ----------------    ----------------

                 Balance, December 31, 1999                                     1,441,056              70,848
                 Depreciation expense                                                  --              24,201
                                                                          ----------------    ----------------

                 Balance, December 31, 2000                                  $  1,441,056         $    95,049
                                                                          ================    ================

            Property  in  Which  the   Partnership  has  a  36.91%  Interest  as
              Tenants-in-Common and has Invested in Under an Operating Lease:

                 Balance, December 31, 1997                                   $   872,624         $    15,988
                 Depreciation expense                                                  --              17,234
                                                                          ----------------    ----------------

                 Balance, December 31, 1998                                       872,624              33,222
                 Depreciation expense                                                  --              17,234
                                                                          ----------------    ----------------

                 Balance, December 31, 1999                                       872,624              50,456
                 Depreciation expense                                                  --              17,234
                                                                          ----------------    ----------------

                 Balance, December 31, 2000                                   $   872,624         $    67,690
                                                                          ================    ================

            Property  of  Joint  Venture  in  Which  the  Partnership  has a 21%
              Interest and has Invested in Under an Operating Lease:

                 Balance, December 31, 1997                                   $   780,209         $    12,866
                 Depreciation expense                                                  --              16,097
                                                                          ----------------    ----------------

                 Balance, December 31, 1998                                       780,209              28,963
                 Depreciation expense                                                  --              16,097
                                                                          ----------------    ----------------

                 Balance, December 31, 1999                                       780,209              45,060
                 Depreciation expense                                                  --              16,098
                                                                          ----------------    ----------------

                 Balance, December 31, 2000                                   $   780,209         $    61,158
                                                                          ================    ================

</TABLE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

               NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
                            DEPRECIATION - CONTINUED

                                December 31, 2000

<TABLE>
<CAPTION>
<S><C>

                                                                                                Accumulated
                                                                               Cost            Depreciation
                                                                          ----------------    ------------------

            Property  of Joint  Venture  in which the  Partnership  has a 60.06%
              Interest and has Invested in under an Operating Lease:

                 Balance, December 31, 1997                                   $   512,925           $     983
                 Acquisition                                                        4,971                  --
                 Depreciation expense                                                  --              10,937
                                                                          ----------------    ----------------

                 Balance, December 31, 1998                                       517,896              11,920
                 Depreciation expense                                                  --              10,948
                                                                          ----------------    ----------------

                 Balance, December 31, 1999                                       517,896              22,868
                 Depreciation expense                                                  --              10,949
                                                                          ----------------    ----------------

                 balance, December 31, 2000                                   $   517,896         $    33,817
                                                                          ================    ================

            Property of Joint  Ventures  in which the  Partnership  has a 30.94%
              Interest and has Invested in under an Operating Lease:

                 Balance, December 31, 1998                                      $     --            $     --
                 Acquisitions                                                     351,015                  --
                 Depreciation expense (e)                                              --                  --
                                                                          ----------------    ----------------

                 Balance, December 31, 1999                                       351,015                  --
                 Depreciation expense (e)                                              --                  --
                                                                          ----------------    ----------------

                 Balance, December 31, 2000                                   $   351,015            $     --
                                                                          ================    ================


            Property  of Joint  Ventures  in  which  the  Partnership  has a 24%
              Interest  as  Tenants-in-Common  and  has  Invested  in  under  an
              Operating Lease:

                 Balance, December 31, 1998                                      $     --            $     --
                 Acquisitions                                                     701,580                  --
                 Depreciation expense                                                  --              13,532
                                                                          ----------------    ----------------

                 Balance, December 31, 1999                                       701,580              13,532
                 Depreciation expense                                                  --              15,201
                                                                          ----------------    ----------------

                 Balance, December 31, 2000                                   $   701,580         $    28,733
                                                                          ================    ================


</TABLE>


                           CNL INCOME FUND XVII, LTD.
                         (A Florida Limited Partnership)

               NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
                            DEPRECIATION - CONTINUED

                                December 31, 2000


(b)      As of December 31, 2000, the aggregate cost of the Properties  owned by
         the  Partnership  and the joint venture for federal income tax purposes
         was  $22,690,518 and  $6,217,380,  respectively.  All of the leases are
         treated as operating leases for federal income tax purposes.

(c)      Depreciation  expense is computed for buildings and improvements  based
         upon estimated lives of 30 years.

(d)      For  financial  reporting  purposes,  certain  components  of the lease
         relating to land and building have been recorded as a direct  financing
         lease.  Accordingly,  costs relating to these  components of this lease
         are not shown.

(e)      For financial reporting purposes,  the portion of the lease relating to
         the building has been recorded as a direct financing lease. The cost of
         the building has been included in net  investment  in direct  financing
         leases; therefore, depreciation is not applicable.

(f)      During the years  ended  December  31, 1997 and 1996,  the  Partnership
         purchased land and buildings  from  affiliates of the  Partnership  for
         aggregate costs of approximately $718,932 and $1,667,100, respectively.
         Such  amounts are included in land and  buildings on operating  leases,
         net investment in direct financing leases, investment in joint ventures
         and other assets at December 31, 2000.

(g)      During the year ended  December  31,  1998,  the  Partnership  received
         reimbursements   from  the   developer  of  the  property   upon  final
         reconciliation of total  construction  costs. In connection  therewith,
         the land and building value was adjusted accordingly.

(h)      This property was exchanged  for a Boston Market  previously  owned and
         located in Troy, Ohio, during 1998.

(i)      For  financial  reporting  purposes,  the  undepreciated  cost  of  the
         Property in  Kentwood,  Michigan,  was written  down to net  realizable
         value due to an impairment in value.  The  Partnership  recognized  the
         impairment  by recording  an allowance  for loss on the building in the
         amount of $87,099 for the year ended  December 31, 2000. The impairment
         at December 31, 2000, represented the difference between the Property's
         carrying  value and the  estimated of the net  realizable  value of the
         Property.  The cost of the Property  presented on this  schedule is the
         gross  amount at which the  Property  was carried at December 31, 2000,
         excluding the allowance for loss on the building.

(j)      For  financial  reporting  purposes,  the  undepreciated  cost  of  the
         Property in Inglewood,  California,  was written down to net realizable
         value due to an impairment in value.  The  Partnership  recognized  the
         impairment  by recording an allowance for loss on the land and building
         in the amount of $477,971 for the year ended  December  31,  2000.  The
         impairment at December 31, 2000, represented the difference between the
         Property's carrying value and the estimated of the net realizable value
         of the Property. The cost of the Property presented on this schedule is
         the gross  amount at which the  Property  was carried at  December  31,
         2000, excluding the allowance for loss on the land and building.







                                    EXHIBITS




<PAGE>




                                  EXHIBIT INDEX


Exhibit Number

**3.1    Affidavit and  Certificate  of Limited  Partnership  of CNL Income Fund
         XVII,  Ltd.  (Filed as  Exhibit  3.1 to the  Registrant's  Registration
         Statement  on  Form  S-11,  No.   33-90998,   incorporated   herein  by
         reference.)

**3.2    Amended and  Restated  Agreement of Limited  Partnership  of CNL Income
         Fund XVII,  Ltd.  (Included  as Exhibit 4.2 to Form 10-K filed with the
         Securities and Exchange  Commission on March 21, 1996, and incorporated
         herein by reference.)

**4.1    Affidavit and  Certificate  of Limited  Partnership  of CNL Income Fund
         XVII, Ltd. (Filed as Exhibit 3.1 to Registration Statement No. 33-90998
         on Form S-11 and incorporated herein by reference.)

**4.2    Amended and  Restated  Agreement of Limited  Partnership  of CNL Income
         Fund XVII,  Ltd.  (Included  as Exhibit 4.2 to Form 10-K filed with the
         Securities and Exchange  Commission on March 21, 1996, and incorporated
         herein by reference.)

**4.3    Form of Agreement between CNL Income Fund XVII, Ltd. and MMS Escrow and
         Transfer Agency,  Inc. and between CNL Income Fund XVIII,  Ltd. and MMS
         Escrow  and  Transfer  Agency,   Inc.   relating  to  the  Distribution
         Reinvestment   Plans   (Filed  as  Exhibit  4.4  to  the   Registrant's
         Registration Statement on Form S-11, No. 33-90998,  incorporated herein
         by reference.)

**8.3    Opinion of Baker & Hostetler regarding certain material issues relating
         to the  Distribution  Reinvestment  Plan of CNL Income Fund XVII,  Ltd.
         (Filed  as  Exhibit  8.3 to  Amendment  No.  Three to the  Registrant's
         Registration Statement on Form S-11, No. 33-90998,  incorporated herein
         by reference.)

**10.1   Management  Agreement  between CNL Income Fund XVII,  Ltd. and CNL Fund
         Advisors,  Inc.  (Included  as Exhibit 10.1 to Form 10-K filed with the
         Securities and Exchange  Commission on March 21, 1996, and incorporated
         herein by reference.)

**10.2   Form of Joint Venture  Agreement for Joint  Ventures with  Unaffiliated
         Entities  (Filed  as  Exhibit  10.2  to the  Registrant's  Registration
         Statement  on  Form  S-11,  No.   33-90998,   incorporated   herein  by
         reference.)

**10.3   Form of Joint  Venture  Agreement for Joint  Ventures  with  Affiliated
         Programs  (Filed  as  Exhibit  10.3  to the  Registrant's  Registration
         Statement  on  Form  S-11,  No.   33-90998,   incorporated   herein  by
         reference.)

**10.4   Form  of   Development   Agreement   (Filed  as  Exhibit  10.5  to  the
         Registrant's   Registration  Statement  on  Form  S-11,  No.  33-90998,
         incorporated herein by reference.)

**10.5   Form of Indemnification and Put Agreement (Filed as Exhibit 10.6 to the
         Registrant's   Registration  Statement  on  Form  S-11,  No.  33-90998,
         incorporated herein by reference.)

**10.6   Form of  Unconditional  Guarantee of Payment and Performance  (Filed as
         Exhibit 10.7 to the Registrant's  Registration  Statement on Form S-11,
         No. 33-90998, incorporated herein by reference.)

**10.7   Form of Lease Agreement for Existing  Restaurant (Filed as Exhibit 10.8
         to the Registrant's  Registration Statement on Form S-11, No. 33-90998,
         incorporated herein by reference.)

**10.8   Form of Lease  Agreement  for  Restaurant to be  Constructed  (Filed as
         Exhibit 10.9 to the Registrant's  Registration  Statement on Form S-11,
         No. 33-90998, incorporated herein by reference.)


<PAGE>




**10.9   Form of Premises Lease for Golden Corral  Restaurant  (Filed as Exhibit
         10.10 to the  Registrant's  Registration  Statement  on Form S-11,  No.
         33-90998, incorporated herein by reference.)

**10.10  Form of Agreement between CNL Income Fund XVII, Ltd. and MMS Escrow and
         Transfer Agency,  Inc. and between CNL Income Fund XVIII,  Ltd. and MMS
         Escrow  and  Transfer  Agency,   Inc.   relating  to  the  Distribution
         Reinvestment   Plans   (Filed  as  Exhibit  4.4  to  the   Registrant's
         Registration Statement on Form S-11, No. 33-90998,  incorporated herein
         by reference.)

**10.11  Form of Cotenancy  Agreement with Unaffiliated Entity (Filed as Exhibit
         10.12 to Amendment No. One to the Registrant's  Registration  Statement
         on Form S-11, No. 33-90998, incorporated herein by reference.)

**10.12  Form of Cotenancy  Agreement with  Affiliated  Entity (Filed as Exhibit
         10.13 to Amendment No. One to the Registrant's  Registration  Statement
         on Form S-11, No. 33-90998, incorporated herein by reference.)

**10.13  Form of Registered  Investor Advisor  Agreement (Filed as Exhibit 10.14
         to Amendment No. One to the Registrant's Registration Statement on Form
         S-11, No. 33-90998, incorporated herein by reference.)


**previously filed